Benefits of Employing an On-line Security Limit Derivation Tool in Electricity Markets

Security limits in both re-structured and vertically integrated power systems are usually derived based on a limited number of off-line system studies using a previously defined portfolio of demand and generation scenarios, which may incur risk in real-time operation as well as driving high electricity prices. This work addresses the existing challenges facing independent system operators to provide reliable, competitively priced electricity to meet demand. An on-line security limit derivation (OLSLD) tool is suggested to improve both the real-time system security and the market efficiency; existing challenges from both technical and business process point of view in employing such a tool are discussed. As a benchmark system, the Ontario's electricity market is used in this paper to demonstrate the existing security requirements and potential gains to the market in employing OLSLD tool along with recommendations and guidelines in a successful implementation.