Transmission Management and Pricing
Transmission system operators (TSOs) face new operational challenges: they need to integrate new generation, such as intermittent wind and embedded generation. They are also expected to enhance interconnectivity with neighbouring operators and countries.
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Christoph Riechmann1 Dan Roberts2
Abstract Transmission system operators (TSOs) face new operational challenges: they need to integrate new generation, such as intermittent wind and embedded generation. They are also expected to enhance interconnectivity with neighbouring operators and countries. TSOs need to optimise their strategies subject to regulatory and market constraints and ensure system reliability while also improving operating and investment efficiency. TSOs which are vertically bundled with generation face a further challenge of vertical separation (unbundling). Their interaction with stakeholders, such as generators, traders and retail suppliers, has to evolve into a market-based or regulated coordination. In this chapter we outline the tasks of TSOs; the operating environment and key value drivers of transmission operation; possible management actions and tools to inform management decisions; possible organisational responses; and implications for the pricing of transmission services. Keywords: transmission, unbundling, regulation
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Dr. Christoph Riechmann is Director at Frontier Economics Ltd., Germany.
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Dan Roberts is Associate Director at Frontier Economics Ltd., United Kingdom.
A. Bausch and B. Schwenker (eds.), Handbook Utility Management, DOI: 10.1007/978-3-540-79349-6_27, © Springer-Verlag Berlin Heidelberg 2009
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27.1
Introduction – the Tasks of Transmission System Operators
Transmission system operators (TSOs) are responsible for connecting energy production and demand centres and transporting the energy from source to sink in extra-high-voltage or high-pressure systems. Electricity TSOs operate, maintain and expand the extra-high-voltage power systems (typically at voltage levels of 220 kV and above), which are composed of lines and transformer stations. The precise tasks allocated to TSOs vary by jurisdiction. However, across most jurisdictions there are a number of core tasks that a TSO must undertake. One way of categorising these core tasks is shown in Figure 27.1. System management
Commercial
Asset operations
Network development
Operational studies
Revenue collection
Operational planning
Strategy & planning
Procurement analysis
Agreements
Maintenance strategy/ health analysis
Design
Balancing
Capital plan management
Work scheduling
Real-time dispatch
Long term statement
Maintenance
Customer contracts
Physical network operations
Procurement/ contract management Build management, testing etc.
Demand forecasting
Figure 27.1: TSO tasks (Frontier Economics, 2007) The tasks vary from those relevant to the short term to those which are more forward looking:
System management involves activities based on the existing grid leading up to the physical real-time dispatch of the system – directing generation production and network switching. These tasks involve receiving nominations from production and demand connected to the network, undertaking an analysis of the balancing and other ancillary services required and then proc
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