Pricing power system stabilisers using game theory

A method to quantify the individual contribution of power system stabilisers (PSSs) to enhance system performance is proposed. Enhancement in system performance from PSS is measured through increased system transfer capability and the margin of stability thus achieved, and considering an N-1 contingency criterion. The method is based on cooperative game theory and makes use of the Shapley value concept, pinpointing the importance of a particular PSS to the system performance in all possible combinations in which it can operate. Based on this quantification of the contribution of a PSS, a feasible financial compensation mechanism to pay generators for the services rendered is proposed and illustrated using a sample system. It is argued that, within a deregulated environment, it would be appropriate that generators having an online and optimally tuned PSS be regarded as PSS-control ancillary service providers.