Requirements for an Electricity Trading Infrastructure in a Small Deregulated Hydro-system

The paper discusses roles, issues and possible conflicts concerning the electricity trading infrastructure of a small hydro-system, such as that of Iceland. Some critical elements of successfully implementing the infrastructure are discussed. In particular, the metering and settlement (M&S) systems are discussed and the arguments for an single independent M&S entity are provided. Furthermore, the case of Iceland provides an example for analyzing implementation and design issues with the deregulation process in a small isolated hydrobased power system. The paper discusses those issues. The separation of monopolistic and competitive parts of the deregulated environment is well known. The paper discusses the need for a similar separation between actors and entities with supportive or regulatory roles. The main conclusions are that the M&S entity needs to be an independent organization in a similar way as an independent ISO although the functions of an ISO are of different nature. In addition, codes, design documents, regulations and further research is needed as a foundation before initiating deregulation under conditions in a small isolated power system.