Modeling the influence of power quality on the creation of market value

This paper deals with the modeling of electric markets whenever certain imperfections pollute the supplied electrical energy. These imperfections are described in terms of a lack in power quality, and must be quantitatively introduced in the model as an additional economic factor which influences the consumption of electrical energy and its market price. In the model of a commodity market, where electrical energy is an undifferentiated good, power quality - if it exists - is considered of no consequence on the economics of such market. This is not the case in practice: imperfections have indeed a notorious influence on the trade of electrical energy and their insertion in a market model is an urgent need. The model here proposed allows the analysis of such spurious conditions and to point out the optimum values to be attained either from the point of view of the utility or the public interest expressed across the incentive regulation of the market. Several examples illustrate the application of the model on the grounds of optimum investments and quality targets.