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Parties to the Internal Electricity Market of the European Union (IEM) decided in 2001 to abolish the method of pan-caking of transmission tariffs for cross-border transactions that was originally in place. Instead, they have agreed to implement a system whereby national transmission tariffs provide access to the entire IEM. This system is supplemented by a scheme of inter-TSO payments. However, conflict may arise if the compensation that a country must pay another one is not in accordance with the electrical usage that the former is making of the grid of the latter. For instance, Inter TSO Compensation methods (ITC methods) implicitly allocate the cost of any existing or new transmission line. Therefore, the adoption of an inefficient method may be an obstacle for building some needed regional grid investments. Consequently, one should give careful consideration to the selection of the ITC method. This paper analyzes, both qualitatively and quantitatively, the implementation of the most relevant ITC methods that have been considered so far in the European debate. When assessing each method from a conceptual point of view, considerable attention is devoted to the critical examination of its main underlying assumptions. Index Terms--Cross-border tariffs, European electricity market, game theory, interconnected power systems, power transmission economics, power transmission planning, regional markets, transmission lines, transmission pricing.

Electricity transmission contracts allocate scarce resources, allow hedging against locational price differences, and provide information to guide investment. However, ownership of transmission contracts might enhance market power of strategic generators. If the allocation mechanism for transmission contracts does not prevent generators from obtaining market power-enhancing contracts, explicit restrictions on owning transmission contracts might be required. To ensure that these restrictions do not interfere with the need to hedge for transmission price risk, one proposal is to define all transmission contracts to a balancing point at which energy is traded. Generators are only allowed to own transmission contracts toward this balancing point. Traders or load hedge the price risk from this balancing point to the location of load with transmission contracts. We propose an algorithm and apply it to the European electricity network to identify a balancing point that reduces market power of generation companies and is well connected. Market-level data or detailed information about demand are not required. The only critical input is assumptions on future transmission constraint patterns. Index Terms--Balancing point, electricity market design, market power, transmission contracts.

This paper investigates the application of adaptive control to the Spanish toad-frequency regulation scheme, Automatic Generation Control (AGC). The Spanish AGC system regulates the frequency and the power exchange between France and Spain. The system is hierarchically structured with one master regulator that coordinates four control areas. Each control area is composed of several generating units providing AGC service. Coordinating signals are sent to the control areas so that the global system response achieves the objective established by the System Operator. The participation of each control area in the service is set according to the rated share that it has obtained in the secondary-reserve market and its relative response speed compared to that of the rest of the control areas. Some problems, such as the lack of sensitivity to the quality of the reserve provided by the control areas, have been detected in the operation of the current AGC scheme. A new design, which is presented in this paper, has been developed in order to overcome these problems. This paper attempts to outline how this new design improves the global AGC system response and the distribution of the regulation effort among the control areas. The proposed strategy is compared with the present design by means of simulation. Index Terms--Adaptive control, Automatic Generation Control (AGC), load-frequency regulation, system identification.

Transmission charges aim to recover the cost of transmission network investments and provide efficient locational signals to new generators. In this paper, we investigate the effect of these charges on the development of new generation capacities in the system. Generation expansion planning is decided by strategic generation planners (SGPs) trying to maximize their profits, while transmission line investments are planned by a central planner and regulatory body aimed at minimizing the overall operation and network investment costs of the system. Regulatory transmission charges (RTCs) are calculated according to the marginal responsibility of generation investment on transmission network investment costs. An iterative algorithm is proposed to model the interaction taking place between the central planner and SGPs. The developed methodology is applied to a 2-node illustrative example and the IEEE-RTS96, and effects of RTCs on investment decisions of SGPs are analyzed. [ABSTRACT FROM AUTHOR]