Q8Power System Planning

(a) Wheeling in Power Systems and Its Objectives

Wheeling is the transmission of electrical power belonging to one party (a generator or a buyer) through the transmission and/or distribution network owned and operated by another party (a transmission or distribution licensee), in exchange for a wheeling charge, without the network owner itself buying or selling that power. It is the mechanism that operationalizes the principle of open access, allowing a generator located in one area to supply a specific buyer located elsewhere using the intervening utility's wires as a common-carrier service rather than requiring the generator and buyer to build a dedicated private line.

• Enabling competition in the generation business: wheeling allows independent power producers and merchant generators to sell power to any willing buyer connected anywhere on the grid, rather than being restricted to selling only to the utility in whose license area they are physically located, thereby fostering competitive generation markets.
• Facilitating power trading between distant buyers and sellers: wheeling makes it possible for bilateral contracts and power exchange transactions to be physically delivered across the shared transmission/distribution network, supporting the broader power trading and pooling framework.
• Optimal utilization of existing transmission and distribution capacity: by allowing multiple parties to use available spare capacity in the network for wheeling transactions, the overall network asset is used more efficiently rather than remaining idle capacity.
• Enabling captive and renewable generation to reach remote consumers: wheeling allows a captive power plant or a renewable generator (e.g., a wind farm) to supply power to a consumer or group of consumers located far from the generation site, supporting captive generation arrangements and renewable energy procurement through open access.
• Supporting third-party sale and group captive schemes: wheeling underpins arrangements where multiple consumers jointly own or contract with a generator and receive their share of power via the wheeling mechanism, promoting distributed ownership of generation assets.

(b) Technological Impacts of the Greenhouse Effect

The greenhouse effect - the trapping of outgoing infrared radiation by atmospheric gases such as carbon dioxide and methane, intensified by large-scale fossil fuel combustion - has driven a range of technological responses within the power sector as utilities and regulators attempt to reduce their contribution to global warming while continuing to meet growing electricity demand.

• Emission control retrofits: existing coal and gas-fired plants are increasingly fitted with flue-gas desulphurization units, low-NOx combustion technology and electrostatic precipitators/bag filters to reduce pollutant and, to some extent, associated greenhouse-relevant emissions.
• Shift in generation mix towards renewables: solar, wind and hydro capacity have been prioritized in expansion planning, supported by renewable purchase obligations, feed-in tariffs and competitive renewable bidding, directly displacing fossil generation and its associated emissions.
• Improved thermal efficiency technologies: adoption of supercritical and ultra-supercritical boiler technology, and combined-cycle gas turbine plants, increases the electrical output obtained per unit of fuel burnt, reducing emissions per unit of energy generated.
• Carbon capture, utilization and storage (CCUS) research and pilot deployment: technology aimed at capturing CO2 from power plant flue gas before it is released to the atmosphere and storing or utilizing it, although currently limited by high cost and is mainly at the demonstration stage.
• Energy efficiency and demand-side technology mandates: appliance efficiency standards, smart metering, and building energy codes are promoted to reduce overall electricity demand and hence indirectly reduce associated generation emissions.
• Carbon pricing and regulatory mechanisms: instruments such as carbon taxes, emission trading schemes or perform-achieve-trade energy efficiency schemes create an economic incentive for utilities and industry to invest in lower-emission technology as part of their planning decisions.

Wheeling charges are typically regulated by the electricity regulatory commission and are designed to recover the incremental cost that the wheeling transaction imposes on the network owner, including a share of network losses incurred in transporting the wheeled power and a contribution towards the fixed cost of the shared transmission/distribution infrastructure; getting this charge right is important, since a wheeling charge set too high discourages legitimate open-access transactions and undermines competition, while a charge set too low fails to compensate the network owner adequately and can discourage investment in network capacity.

The technological responses to the greenhouse effect within the power sector are also closely tied to grid-planning decisions about energy storage and flexible transmission technology, since higher renewable penetration driven by decarbonization targets increases the need for batteries, pumped hydro storage and flexible AC transmission system (FACTS) devices to manage variability and maintain voltage/frequency stability, all of which must now be treated as standard candidate options within the generation and network expansion planning process rather than as niche or experimental additions.

Wheeling arrangements also require careful metering and settlement infrastructure at the injection and drawal points of the wheeled transaction, since the network owner must be able to verify the actual quantum of energy wheeled on behalf of the third party in order to correctly apply wheeling charges and to account for transmission losses attributable to that specific transaction, distinct from the network owner own generation and supply transactions.

Wheeling is closely related to, but distinct from, the concept of open access itself: open access is the broader regulatory right granted to eligible consumers and generators to use the transmission/distribution network on a non-discriminatory basis, while wheeling is the specific technical and commercial mechanism (including the associated wheeling charge and loss allocation) through which that right of access is actually exercised to physically deliver power from the chosen generator to the chosen consumer across the intervening network.

The technological impact of the greenhouse effect on power-sector planning is also visible in the growing emphasis on lifecycle emissions assessment, whereby not only the direct combustion emissions of a generation technology but also the emissions associated with fuel extraction, transportation and plant construction are increasingly considered when comparing generation options, giving a more complete picture of the true environmental cost differences between competing technologies than a simple point-of-combustion emissions comparison would provide.

In conclusion, wheeling and the technological responses to the greenhouse effect both represent ways in which the traditional, purely engineering-focused power system planning discipline has had to expand to incorporate market-design and environmental-policy considerations, reflecting the broader evolution of the power sector from a simple cost-of-service utility model towards a more competitive, environmentally accountable and consumer-choice-oriented industry structure.