1 Introduction: Basic Assumptions and Concepts.- 1.1 Importance of the envisioned control structures in a changing industry.- 1.2 System regulation issues affected by the vertical separation of the transmission grid from generation.- 1.3 Organization of this text.- 2 The Nested Hierarchy as a System Structure in a Changing Industry.- 2.1 Principles of existing horizontally structured electric power systems.- 2.2 Industry changes leading to the nested hierarchy structure.- 2.3 Examples of new industry arrangements as particular cases of the nested hierarchy structure.- 2.4 The need for new control structures.- 2.5 Can generation-based regulation be made price-competitive?.- 2.6 Relevance of dynamic problem formulation over mid- and long-term horizons.- 3 Performance Criteria Relevant to Operating Interconnected Electric Power Systems.- 3.1 Dynamics of system inputs to which the control responds.- 3.2 Time frames for present performance objectives.- 3.3 Modeling for systems control services in a changing industry.- 3.4 Performance criteria at the subsystem level.- 3.4.1 Static optimization objectives.- 3.4.2 Dynamic optimization objectives.- 3.5 Static optimization in an open access system.- 3.5.1 Some assumptions under which present optimal scheduling algorithms are designed at the system level.- 3.5.2 Generation cost minimization: Ideal technical efficiency.- 3.5.3 Basic operating cost of keeping the system together.- 3.5.4 Achievable technical efficiency in the regulated industry.- 3.5.5 Assumptions that do not hold in a deregulated industry.- 3.5.6 Need for relaxing the demand-related assumptions (2 and 4).- 3.5.7 Need to reconsider the performance objectives (assumptions 1–3).- 3.5.8 Hierarchical structures in a distributed industry.- 3.5.9 Achievable efficiency under open access-ISO market level.- 3.5.10 Achievable efficiency of competitive supply and demand.- 3.5.11 Achievable economic efficiency of generation-based systems control.- 3.5.12 Need for coordinated generation-based systems control in support of competitive markets.- 3.5.13 Optimal structure for operating and pricing electric power systems under open access.- 3.6 Static optimization of a horizontally structured system.- 3.7 Present criteria for mid- and long-term dynamic performance.- 3.7.1 Criteria for load frequency control (LFC)/ automatic generation control (AGC).- 3.7.2 Dynamic performance objectives over long-term horizons in a horizontally structured industry.- 3.7.3 Functional requirements for advanced LFC/AGC in a changing industry.- 3.7.4 Conceptual problems with meeting mid-term dynamic performance objectives by means of present AGC in a changing industry.- 3.7.5 Conceptual problems with meeting long-term performance objectives in a changing industry.- 3.8 Static performance criteria for reactive power/voltage support.- 3.8.1 Criteria for mid- and long-term voltage control (AVC) at a subsystem level.- 3.9 Summary.- 4 Structural Modeling and Control Design Using Interaction Variables.- 4.1 Structural modeling.- 4.1.1 Modeling issues.- 4.1.2 Modeling process.- 4.1.3 Local dynamics.- 4.1.4 Network constraints.- 4.1.5 Structural dynamic model.- 4.1.6 Control-induced time scale separation.- 4.2 Hierarchical control design.- 4.2.1 Controllability.- 4.2.2 Conventional secondary-level control.- 4.2.3 Improved secondary-level control.- 4.2.4 Quasi-static interaction variables.- 4.3 Tertiary level coordination.- 4.4 New tertiary-level aggregate model.- 4.5 Comparison of the proposed control structures to those used at present.- 4.6 Summary.- 5 Generation-Based Regulation of Real Power/Frequency.- 5.1 State of the art and potential problems of frequency regulation.- 5.2 New modeling.- 5.2.1 Local dynamics.- 5.2.2 Network coupling.- 5.2.3 Regional dynamics.- 5.3 Analysis.- 5.3.1 Network properties.- 5.3.2 Structural singularity.- 5.3.3 Inter-area dynamics.- 5.3.4 Computation of inter-area variables.- 5.3.5 Interpretation of inter-area variables.- 5.3.6 Comparisons with conventional models.- 5.3.7 An example.- 5.4 Model derivations.- 5.4.1 Quasi-static model.- 5.4.2 Generator power model.- 5.5 Control design.- 5.5.1 Regulating frequency at the secondary level.- 5.5.2 Automated regulation of tie-line flows at the tertiary level.- 5.6 Summary.- 6 Generation-Based Regulation of Reactive Power/Voltage.- 6.1 Modeling.- 6.1.1 Local dynamics.- 6.1.2 Network constraints.- 6.1.3 Structural dynamic model.- 6.2 Quasi-static voltage model.- 6.3 Quasi-static interaction variables.- 6.4 Voltage regulation.- 6.5 Regional voltage control.- 6.5.1 Conventional secondary-level control.- 6.5.2 Improved secondary-level control.- 6.5.3 The 9-bus example.- 6.6 Tertiary coordination.- 6.6.1 Performance criteria.- 6.7 New tertiary level-aggregate models.- 6.7.1 Centralized aggregate models.- 6.7.2 The 9-bus example.- 6.7.3 Fully centralized optimization.- 6.7.4 Fully decentralized optimization.- 6.7.5 Combined centralized/decentralized optimization.- 6.7.6 Simulations study of the French power network.- 6.7.7 IAVC.- 6.7.8 Control at the tertiary level.- 6.8 Summary.- 7 The Value of Generation-Based Regulation: Competition Versus Coordination.- 7.1 Relevant optimality questions for determining the value of control services.- 7.2 Control-dependent values of subsystems in a competitive environment.- 7.3 Systems control structure-related issues.- 7.4 Long-term stability of decentralized systems control services.- 7.5 Achievable optimality as a function of the level of control co-ordination.- 7.6 Limitations of existing systems control in a competitive environment.- 7.7 Proposed approach to real-time systems control and its pricing in a competitive market.- 7.7.1 Basic steps for linking technical and pricing processes.- 7.7.2 Operations planning for the anticipated contract at the tertiary level.- 7.7.3 Estimating at the tertiary level the economic value of systems control services to the contract participants i1 and i2.- 7.7.4 Pricing for systems control at the ISO (tertiary) level to accommodate transaction i1 – i2.- 7.7.5 Contribution of individual components to the economic values at buses i1 and i2.- 7.7.6 Interpretation of our approach in terms of generalized localized marginal costs.- 7.7.7 From cost-based to value-based future pricing: incentives for high-quality systems control services.- 7.7.8 Revisiting the “poolco” structure.- 7.7.9 Revisiting the bilateral structure.- 7.8 Summary.- 8 Network-Based System Regulation.- 8.1 Engineering issues and opportunities in operating power transmission grids of the future.- 8.2 Recent changes affecting the transmission grid and their relation to the basic engineering issues.- 8.3 A brief review of the present principles for regulating a transmission grid and the power system.- 8.4 The basic planning problem on a transmission grid.- 8.5 Operating problems using mechanically switched reactive devices.- 8.6 Opportunities and problems presented by very fast regulation of the transmission grid: FACTS trends.- 8.7 Direct flow control via FACTS devices.- 8.7.1 All tie lines directly controlled.- 8.7.2 Only a subset of tie lines directly controlled.- 8.8 Summary.- 9 Conclusions.- 9.1 Summary of our approach to linking technical and economic processes under competition.- 9.2 Relevance of our proposed modeling and control framework.- 9.3 A Final Word.