Bilateral transactions considered as interconnections in a deregulated environment

Under deregulation, the electricity market will generate numerous bilateral transactions between the buying and selling entities. In this paper, all bilateral transactions are treated as a form of interconnections so that the classical methodology can be applied to study the feasibility of any proposed transaction on the basis of system security and the existence of other simultaneous bilateral transactions. Indices are developed to quantify the probability of success of any proposed bilateral transaction, referenced to as POST-the Probability of Secure Transaction. These values of POST are suitable to be integrated into the technical and economic evaluation of a proposed transaction to determine its feasibility and justify its implementation.