EPNES: Dynamic Transmission Provision and Pricing for Electric Power Systems

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This project concerns one of the most difficult aspects of the changing electric power industry, i.e. the delivery of market-driven power trades. In particular, the problem of transmission provision and pricing for the evolving electric power industry organizations is posed as a dynamically evolving process jointly driven by the technological, regulatory and business factors. The objective is to model and analyze this process for its short-term and longer-term performance under various technological and regulatory solutions. Ultimately, a decision-making problem for transmission delivery and its valuation is attempted as the problem of multi-rate feedback design in response to technical, economic and regulatory output variables. The major challenge here concerns management of various uncertainties, both physical (real) and market-related (Pigouvian) and their interdependencies. The intellectual merit of this project comes from viewing the transmission provision, pricing and regulation as a single dynamic system. The current-state-of-art in any of the sub-disciplines underlying this complex problem (engineering, economics, regulation, industry organization, finance) is such that only particular aspects of the problem get studied, assuming the other inputs to be exogenous. The approach envisioned in this project would be to thrive on formalizing the interdependencies between the technical, economic and regulatory signals. For this reason the project has a potentially huge broad impact on the way electric power is delivered and valued in the future. The same approach is used to develop new paradigms for the industry, as well as for developing educational frameworks necessary for thinking about transmission delivery and its valuation as a complex problem with many interdependencies.