Economics Of Electricity

Explains the economics of electricity at each step of the supply chain: production, transportation and distribution, and retail.

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

The Economics of Electricity Markets provides a cutting-edge analysis of the critical issues involved in the design and operation of electricity markets, as well as an assessment of alternative institutional arrangements that have either been implemented or are under discussion in Europe and the US. The book illustrates how a sound market design can render electricity trading and retailing very much like that of other commodities. Social and political concerns, rather than engineering or economics, are what make electricity markets 'special'. The expert contributors address a wide set of issues that arise when competition is introduced to the electricity industry, ranging from the design of spot and real-time power markets to alternative approaches to congestion management, from competition policy in wholesale electricity markets to the benefits and costs of retail competition, and from regulatory measures to ensure generation capacity adequacy to the politicization of generation investment decisions as a way of pursuing sustainability targets. This highly informative book will appeal to academics, students and researchers in the field of advanced energy economics, and will prove essential reading for energy regulators, professionals and executives wishing to explore the theoretical foundations underpinning their day-to-day activities.

Understand the electricity market, its policies and how they drive prices, emissions, and security, with this comprehensive cross-disciplinary book. Author Chris Harris includes technical and quantitative arguments so you can confidently construct pricing models based on the various fluctuations that occur. Whether you?re a trader or an analyst, this book will enable you to make informed decisions about this volatile industry.

Electricity Economics: Production Functions with Electricity studies the production output from analyzing patterns of electricity consumption. Since electricity data can be used to measure scenarios of economic performance due to its accuracy and reliability, it could therefore also be used to help scholars explore new research frontiers that directly and indirectly benefits human society. Our research initially explores a similar pattern to substitute the Cobb–Douglas function with the production function with electricity to track and forecast economic activities. The book systematically introduces the theoretical frameworks and mathematical models of economics from the perspective of electricity consumption. The E-GDP functions are presented for case studies of more than 20 developed and developing countries. These functions also demonstrate substantial similarities between human DNA and production functions with electricity in terms of four major characteristics, namely replication, mutation, uniqueness, and evolution. Furthermore, the book includes extensive data and case studies on the U.S., China, Japan, etc. It is intended for scientists, engineers, financial professionals, policy makers, consultants, and anyone else with a desire to study electricity economics as well as related applications. Dr. Zhaoguang Hu is the vice president and chief energy specialist at the State Grid Energy Research Institute, China. Zheng Hu is a PhD candidate at the Center for Energy and Environmental Policy, University of Delaware, USA.

Electricity is a quirky commodity: more often than not, it cannot be stored, easily transported, or imported from overseas. Before lighting up our homes, it changes hands through specialized electricity markets that rely on engineering expertise to trade competitively while respecting the physical requirements of the electric grid. The Current Economy is an ethnography of electricity markets in the United States that shows the heterogenous and technologically inflected nature of economic expertise today. Based on ethnographic fieldwork among market data analysts, electric grid engineers, and citizen activists, this book provides a deep dive into the convoluted economy of electricity and its reverberations throughout daily life. Canay Özden-Schilling argues that many of the economic formations in everyday life come from work cultures rarely suspected of doing economic work: cultures of science, technology, and engineering that often do not have a claim to economic theory or practice, yet nonetheless dictate forms of economic activity. Contributing to economic anthropology, science and technology studies, energy studies, and the anthropology of expertise, this book is a map of the everyday infrastructures of economy and energy into which we are plugged as denizens of a technological world.

The first systematic presentation of electricity market design-from the basics to the cutting edge. Unique in its breadth and depth. Using examples and focusing on fundamentals, it clarifies long misunderstood issues-such as why today's markets are inherently unstable. The book reveals for the first time how uncoordinated regulatory and engineering policies cause boom-bust investment swings and provides guidance and tools for fixing broken markets. It also takes a provocative look at the operation of pools and power exchanges. * Part 1 introduces key economic, engineering and market design concepts. * Part 2 links short-run reliability policies with long-run investment problems. * Part 3 examines classic designs for day-ahead and real-time markets. * Part 4 covers market power, and * Part 5 covers locational pricing, transmission right and pricing losses. The non-technical introductions to all chapters allow easy access to the most difficult topics. Steering an independent course between ideological extremes, it provides background material for engineers, economists, regulators and lawyers alike. With nearly 250 figures, tables, side bars, and concisely-stated results and fallacies, the 44 chapters cover such essential topics as auctions, fixed-cost recovery from marginal cost, pricing fallacies, real and reactive power flows, Cournot competition, installed capacity markets, HHIs, the Lerner index and price caps. About the Author Steven Stoft has a Ph.D. in economics (U.C. Berkeley) as well as a background in physics, math, engineering, and astronomy. He spent a year inside FERC and now consults for PJM, California and private generators. Learn more at www.stoft.com.

After 2 decades, policymakers and regulators agree that electricity market reform, liberalization and privatization remains partly art. Moreover, the international experience suggests that in nearly all cases, initial market reform leads to unintended consequences or introduces new risks, which must be addressed in subsequent “reform of the reforms. Competitive Electricity Markets describes the evolution of the market reform process including a number of challenging issues such as infrastructure investment, resource adequacy, capacity and demand participation, market power, distributed generation, renewable energy and global climate change. Sequel to Electricity Market Reform: An International Perspective in the same series published in 2006 Contributions from renowned scholars and practitioners on significant electricity market design and implementation issues Covers timely topics on the evolution of electricity market liberalization worldwide