Restructuring models-a comparison based on numerical simulation results

Restructuring of the electric power industry requires network open access, and has many objectives, the first of which is to lower prices for consumers. Various models for restructuring the electric power business have appeared and others proposed. Those models can be classified into three categories: (1) models based on regulation; (2) models based on marginal cost theory; and (3) models based on a mixture of marginal cost theory and bilateral contracts. The paper presents illustrative, numerical simulation results for these models. The results indicate that models based on marginal cost theory are not the best for consumers. Numerical results indicate that models based on regulation perform better-they yield completely satisfactory results for the suppliers and lower costs for consumers. The co-existence of a pool does not hinder the role of bilateral contracts. The remaining load, which corresponds to low-level consumers and partly to large consumers, must be satisfied by pool resources. Consumers on bilateral contracts benefit from less expensive energy, as compared to pool prices. Consumers whose load is not satisfied by a contract arrangement get energy at pool prices.