Concept for optimised operation of distribution networks

The EU Energy Market has been opened to limited competition, as the EU Energy Ministers adopted the proposed Directive on these issues. This Directive shall transpose into national Deregulation Laws in each EU member state, at the latest by 1 January 1999. The important provision of the Directive, relevant for this paper, is the goal of Creating More Competitive Production and Distribution Utilities. The message of this paper is that electric utilities will have to continuously analyse their situation on their network operational performance, find and optimise their operational cost object function. This function will comprise mainly cost for reactive and active compensation, quality (availability, reliability, voltage quality, etc.), component operation and maintenance. These analyses will reveal the weak areas of each utility's network operation and help finding where the efforts for improvement shall take place. This also implies that the network design and upgrading philosophy constantly have to be developed, in order to decide whether traditional reinforcements and/or expansions are cost beneficial, or when new technology solutions compete and beat the traditional investment schemes.