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Fr. 150.00
Biggar, D Biggar, Darryl Biggar, Darryl Hesamzadeh Biggar, Darryl R Biggar, Darryl R. Biggar...
Economics of Electricity Markets
English · Hardback
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Description
Bridges the knowledge gap between engineering and economics in a complex and evolving deregulated electricity industry, enabling readers to understand, operate, plan and design a modern power system
With an accessible and progressive style written in straight-forward language, this book covers everything an engineer or economist needs to know to understand, operate within, plan and design an effective liberalized electricity industry, thus serving as both a useful teaching text and a valuable reference. The book focuses on principles and theory which are independent of any one market design. It outlines where the theory is not implemented in practice, perhaps due to other over-riding concerns. The book covers the basic modelling of electricity markets, including the impact of uncertainty (an integral part of generation investment decisions and transmission cost-benefit analysis). It draws out the parallels to the Nordpool market (an important point of reference for Europe). Written from the perspective of the policy-maker, the first part provides the introductory background knowledge required. This includes an understanding of basic economics concepts such as supply and demand, monopoly, market power and marginal cost. The second part of the book asks how a set of generation, load, and transmission resources should be efficiently operated, and the third part focuses on the generation investment decision. Part 4 addresses the question of the management of risk and Part 5 discusses the question of market power. Any power system must be operated at all times in a manner which can accommodate the next potential contingency. This demands responses by generators and loads on a very short timeframe. Part 6 of the book addresses the question of dispatch in the very short run, introducing the distinction between preventive and corrective actions and why preventive actions are sometimes required. The seventh part deals with pricing issues that arise under a regionally-priced market, such as the Australian NEM. This section introduces the notion of regions and interconnectors and how to formulate constraints for the correct pricing outcomes (the issue of "constraint orientation"). Part 8 addresses the fundamental and difficult issue of efficient transmission investment, and finally Part 9 covers issues that arise in the retail market.
* Bridges the gap between engineering and economics in electricity, covering both the economics and engineering knowledge needed to accurately understand, plan and develop the electricity market
* Comprehensive coverage of all the key topics in the economics of electricity markets
* Covers the latest research and policy issues as well as description of the fundamental concepts and principles that can be applied across all markets globally
* Numerous worked examples and end-of-chapter problems Companion website holding solutions to problems set out in the book, also the relevant simulation (GAMS) codes
List of contents
Preface xv
Nomenclature xvii
PART I INTRODUCTION TO ECONOMIC CONCEPTS 1
1 Introduction to Micro-economics 3
1.1 Economic Objectives 3
1.2 Introduction to Constrained Optimisation 5
1.3 Demand and Consumers' Surplus 6
1.4 Supply and Producers' Surplus 10
1.5 Achieving Optimal Short-Run Outcomes Using Competitive Markets 14
1.6 Smart Markets 17
1.7 Longer-Run Decisions by Producers and Consumers 20
1.8 Monopoly 22
1.9 Oligopoly 26
1.10 Summary 28
Questions 29
Further Reading 30
PART II INTRODUCTION TO ELECTRICITY NETWORKS AND ELECTRICITY MARKETS 31
2 Introduction to Electric Power Systems 33
2.1 DC Circuit Concepts 33
2.2 AC Circuit Concepts 36
2.3 Reactive Power 38
2.4 The Elements of an Electric Power System 45
2.5 Electricity Generation 46
2.6 Electricity Transmission and Distribution Networks 52
2.7 Physical Limits on Networks 60
2.8 Electricity Consumption 66
2.9 Does it Make Sense to Distinguish Electricity Producers and Consumers? 67
2.10 Summary 70
Questions 71
Further Reading 72
3 Electricity Industry Market Structure and Competition 73
3.1 Tasks Performed in an Efficient Electricity Industry 73
3.2 Electricity Industry Reforms 76
3.3 Approaches to Reform of the Electricity Industry 79
3.4 Other Key Roles in a Market-Orientated Electric Power System 81
3.5 An Overview of Liberalised Electricity Markets 82
3.6 An Overview of the Australian National Electricity Market 85
3.7 The Pros and Cons of Electricity Market Reform 88
3.8 Summary 89
Questions 90
Further Reading 90
PART III OPTIMAL DISPATCH: THE EFFICIENT USE OF GENERATION, CONSUMPTION AND NETWORK RESOURCES 91
4 Efficient Short-Term Operation of an Electricity Industry with no Network Constraints 93
4.1 The Cost of Generation 93
4.2 Simple Stylised Representation of a Generator 96
4.3 Optimal Dispatch of Generation with Inelastic Demand 97
4.4 Optimal Dispatch of Both Generation and Load Assets 102
4.5 Symmetry in the Treatment of Generation and Load 104
4.6 The Benefit Function 105
4.7 Nonconvexities in Production: Minimum Operating Levels 106
4.8 Efficient Dispatch of Energy-Limited Resources 108
4.9 Efficient Dispatch in the Presence of Ramp-Rate Constraints 110
4.10 Startup Costs and the Unit-Commitment Decision 113
4.11 Summary 115
Questions 116
Further Reading 117
5 Achieving Efficient Use of Generation and Load Resources using a Market Mechanism in an Industry with no Network Constraints 119
5.1 Decentralisation, Competition and Market Mechanisms 119
5.2 Achieving Optimal Dispatch Through Competitive Bidding 121
5.3 Variation in Wholesale Market Design 123
5.4 Day-Ahead Versus Real-Time Markets 126
5.5 Price Controls and Rationing 129
5.6 Time-Varying Demand, the Load-Duration Curve and the Price-Duration Curve 133
5.7 Summary 135
Questions 137
Further Reading 137
6 Representing Network Constraints 139
6.1 Representing Networks Mathematically 139
6.2 Net Injections, Power Flows and the DC Load Flow Model 141
6.3 The Matrix of Power Transfer Distribution Factors 145
6.4 Distribution Factors for Radial Networks 146
6.5 Constraint Equations and the Set of Fe
About the author
Dr Biggar is Australia's leading expert on the economics of wholesale electricity markets and the economics of public utility regulation. Since 2002 he has provided economic advice primarily to the Australian Energy Regulator and the Australian Competition and Consumer Commission. He has also provided advice to other government agencies including the Australian Energy Markets Operator, the Australian Energy Markets Commission, and the New Zealand Electricity Authority. He has published a number of papers in academic journals in the economics of electricity markets and the economics of public utility regulation and regularly provides training courses in these areas to government agencies and industry. He has a particular interest in the assessment of market power in wholesale electricity markets and in matters related to wholesale market design.
Dr Hesamzadeh is assistant professor in electric power systems division of the school of electrical engineering at KTH Royal Institute of Technology in Stockholm, Sweden. Dr Hesamzadeh is a world leader in the modelling of market power in wholesale electricity markets, particularly in the context of transmission planning. His special fields of interests include Power Systems Planning and Design, Economics of Wholesale Electricity Markets, and Mathematical Modelling and Computing. Hesamzadeh is currently working towards his Docent degree in Electricity Markets at KTH.
Summary
Bridging the knowledge gap between engineering and economics in a complex and evolving deregulated electricity industry, enabling readers to understand, operate, plan and design a modern power system, this book covers the basic modelling of electricity markets, including the impact of uncertainty. It draws out the parallels to the Nordpool market.
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