An efficiency oriented model of electricity market in transition period

Abstract Generation efficiency is a key factor to save energy and reduce emissions. Many countries have resorted to the market liberalization for higher efficiency. The reformers usually expect the price could guide the efficiency through the competition between the generators. But the market will not get matured enough in a short time, especially in developing countries. In this efficiency oriented model, the security constraint economic dispatch (SCED) is adopted to achieve the physical efficiency, and virtual generation right (VGR) is proposed as the coordinated financial tool to adjust the performance of the generators to be aligned with the efficiency. The simulation demonstrates a typical case with modified 39-bus New England system. The result confirms the feasibility of the model.