A Conceptual View of Power Quality Regulation Using Market-Driven Mechanism

Power quality is a compatibility issue between the supply system and the connected loads. It is therefore difficult to quantify power quality as a product as one that is adequate for certain loads may be totally unacceptable to the others. It is also being mooted as more of a financial consideration than a technical problem. Unless a disturbance is causing significant monetary losses, it is not worthwhile to invest in technologies to prevent it from occurring or to protect sensitive equipment from it. Therefore, it appears logical to employ market mechanism that has been widely adopted in the restructuring of power industry to regulate power quality. However, power quality encompasses many phenomena with distinct characteristics, making it difficult for one to agree on a generic definition. This perhaps causes the issues to be treated as a form of ancillary services and being managed in the same manner as before deregulation. This paper evaluates the potential of using market oriented approach in regulating power quality. It takes a conceptual view of the related issues, and identifies the challenges that need to be overcome before the free-market idea can be employed.