THE EFFECT OF DEMAND ELASTICITY ON SECURITY PRICES FOR THE POOLCO ANDMULTI-LATERAL CONTRACT-MODELS

Optimum power flows and security constrained power flows assume that c ustomer demand is a fixed quantity. In the new competitive environment , it is necessary to assume that demand is elastic and will vary as a function of price. A critical element in any competitive model, whethe r it be a PoolCo or a multi-lateral contract model, is for a system op erator to ensure reliability and feasibility of the power system opera ting point. Security pricing for feasibility was first advanced by Sch weppe et al for the case of line flow constraints for a PoolCo model. Using geometry, this paper generalizes the approach to include any sec urity constraint for a general competitive model. The paper discusses interpretations of security pricing and its possible implementation in Energy Management Systems.