Role of FACTS in a deregulated market

The deregulation process has turned the electric utility world inside out. At the heart of restructuring is the need for competition in the trading of electric energy as a commodity. But that by itself is not enough. In addition to an adequate transmission and distribution infrastructure that can accommodate free trading of this commodity, it is also necessary to maintain balance between ever-changing load and generation, stability, voltage and frequency within the defined bounds and cope with various outages. Since having a fully competitive T&D infrastructure could not be afforded, restructuring of transmission and distribution entities is taking place in a variety of different forms. The key issue for transmission is the rules that motivate or dictate needed investments in transmission. The bottom line is to maximize the value of transmission assets and ensure adequate and timely investment in transmission. In this paper, the author discusses how FACTS technology can complement the conventional options to provide a reliable and adequate transmission system.