The economics of electricity markets /

• Κύριος συγγραφέας: Biggar, Darryl R. (Darryl Ross)
• Άλλοι συγγραφείς: Hesamzadeh, Mohammad
• Μορφή: Ηλ. βιβλίο
• Γλώσσα: English
• Έκδοση: Chichester, West Sussex, United Kingdom : Wiley, 2014.
• Θέματα: Electric power consumption.; Electric power > Economic aspects.; Electric utilities.; SCIENCE > Energy.; Electric power / Economic aspects.; Electronic books.

"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"--

Πίνακας περιεχομένων:

• Pt. I INTRODUCTION TO ECONOMIC CONCEPTS
• 1.Introduction to Micro-economics
• 1.1.Economic Objectives
• 1.2.Introduction to Constrained Optimisation
• 1.3.Demand and Consumers' Surplus
• 1.3.1.The Short-Run Decision of the Customer
• 1.3.2.The Value or Utility Function
• 1.3.3.The Demand Curve for a Price-Taking Customer Facing a Simple Price
• 1.4.Supply and Producers' Surplus
• 1.4.1.The Cost Function
• 1.4.2.The Supply Curve for a Price-Taking Firm Facing a Simple Price
• 1.5.Achieving Optimal Short-Run Outcomes Using Competitive Markets
• 1.5.1.The Short-Run Welfare Maximum
• 1.5.2.An Autonomous Market Process
• 1.6.Smart Markets
• 1.6.1.Smart Markets and Generic Constraints
• 1.6.2.A Smart Market Process
• 1.7.Longer-Run Decisions by Producers and Consumers
• 1.7.1.Investment in Productive Capacity
• 1.8.Monopoly
• 1.8.1.The Dominant Firm
• Competitive Fringe Structure
• 1.8.2.Monopoly and Price Regulation
• 1.9.Oligopoly
• 1.9.1.Cournot Oligopoly
• 1.9.2.Repeated Games
• 1.10.Summary
• Questions
• Further Reading
• pt. II INTRODUCTION TO ELECTRICITY NETWORKS AND ELECTRICITY MARKETS
• 2.Introduction to Electric Power Systems
• 2.1.DC Circuit Concepts
• 2.1.1.Energy, Watts and Power
• 2.1.2.Losses
• 2.2.AC Circuit Concepts
• 2.3.Reactive Power
• 2.3.1.Mathematics of Reactive Power
• 2.3.2.Control of Reactive Power
• 2.3.3.Ohm's Law on AC Circuits
• 2.3.4.Three-Phase Power
• 2.4.The Elements of an Electric Power System
• 2.5.Electricity Generation
• 2.5.1.The Key Characteristics of Electricity Generators
• 2.6.Electricity Transmission and Distribution Networks
• 2.6.1.Transmission Networks
• 2.6.2.Distribution Networks
• 2.6.3.Competition and Regulation
• 2.7.Physical Limits on Networks
• 2.7.1.Thermal Limits
• 2.7.2.Voltage Stability Limits
• 2.7.3.Dynamic and Transient Stability Limits
• 2.8.Electricity Consumption
• 2.9.Does it Make Sense Distinguish Electricity Producer's and Consumers?
• 2.9.1.The Service Provided by the Electric Power Industry
• 2.10.Summary
• Questions
• Further Reading
• 3.Electricity Industry Market Structure and Competition
• 3.1.Tasks Performed in an Efficient Electricity Industry
• 3.1.1.Short-Term Tasks
• 3.1.2.Risk-Management Tasks
• 3.1.3.Long-Term Tasks
• 3.2.Electricity Industry Reforms
• 3.2.1.Market-Orientated Reforms of the Late Twentieth Century
• 3.3.Approaches to Reform of the Electricity Industry
• 3.4.Other Key Roles in a Market-Orientated Electric Power System
• 3.5.An Overview of Liberalised Electricity Markets
• 3.6.An Overview of the Australian National Electricity Market
• 3.6.1.Assessment of the NEM
• 3.7.The Pros and Cons of Electricity Market Reform
• 3.8.Summary
• Questions
• Further Reading
• pt. III OPTIMAL DISPATCH: THE EFFICIENT USE OF GENERATION, CONSUMPTION AND NETWORK RESOURCES
• 4.Efficient Short-Term Operation of an Electricity Industry with no Network Constraints
• 4.1.The Cost of Generation
• 4.2.Simple Stylised Representation of a Generator
• 4.3.Optimal Dispatch of Generation with Inelastic Demand
• 4.3.1.Optimal Least Cost Dispatch of Generation Resources
• 4.3.2.Least Cost Dispatch for Generators with Constant Variable Cost
• 4.3.3.Example
• 4.4.Optimal Dispatch of Both Generation and Load Assets
• 4.5.Symmetry in the Treatment of Generation and Load
• 4.5.1.Symmetry Between Buyer-Owned Generators and Stand-Alone
• Generators
• 4.5.2.Symmetry Between Total Surplus Maximisation and Generation Cost Minimisation
• 4.6.The Benefit Function
• 4.7.Nonconvexities in Production: Minimum Operating Levels
• 4.8.Efficient Dispatch of Energy-Limited Resources
• 4.8.1.Example
• 4.9.Efficient Dispatch in the Presence of Ramp-Rate Constraints
• 4.9.1.Example
• 4.10.Startup Costs and the Unit-Commitment Decision
• 4.11.Summary
• Questions
• Further Reading
• 5.Achieving Efficient Use of Generation and Load Resources using a Market Mechanism in an Industry with no Network Constraints
• 5.1.Decentralisation, Competition and Market Mechanisms
• 5.2.Achieving Optimal Dispatch Through Competitive Bidding
• 5.3.Variation in Wholesale Market Design
• 5.3.1.Compulsory Gross Pool or Net Pool?
• 5.3.2.Single Price or Pay-as-Bid?
• 5.4.Day-Ahead Versus Real-Time Markets
• 5.4.1.Improving the Quality of Short-Term Price Forecasts
• 5.4.2.Reducing the Exercise of Market Power
• 5.5.Price Controls and Rationing
• 5.5.1.Inadequate Metering and Involuntary Load Shedding
• 5.6.Time-Varying Demand, the Load-Duration Curve and the Price-Duration Curve
• 5.7.Summary
• Questions
• Further Reading
• 6.Representing Network Constraints
• 6.1.Representing Networks Mathematically
• 6.2.Net Injections, Power Flows and the DC Load Flow Model
• 6.2.1.The DC Load Flow Model
• 6.3.The Matrix of Power Transfer Distribution Factors
• 6.3.1.Converting between Reference Nodes
• 6.4.Distribution Factors for Radial Networks
• 6.5.Constraint Equations and the Set of Feasible Injections
• 6.6.Summary
• Questions
• 7.Efficient Dispatch of Generation and Consumption Resources in the Presence of Network Congestion
• 7.1.Optimal Dispatch with Network Constraints
• 7.1.1.Achieving Optimal Dispatch Using a Smart Market
• 7.2.Optimal Dispatch in a Radial Network
• 7.3.Optimal Dispatch in a Two-Node Network
• 7.4.Optimal Dispatch in a Three-Node Meshed Network
• 7.5.Optimal Dispatch in a Four-Node Network
• 7.6.Properties of Nodal Prices with a Single Binding Constraint
• 7.7.How Many Independent Nodal Prices Exist?
• 7.8.The Merchandising Surplus, Settlement Residues and the Congestion Rents
• 7.8.1.Merchandising Surplus and Congestion Rents
• 7.8.2.Settlement Residues
• 7.8.3.Merchandising Surplus in a Three-Node Network
• 7.9.Network Losses
• 7.9.1.Losses, Settlement Residues and Merchandising Surplus
• 7.9.2.Losses and Optimal Dispatch
• 7.10.Summary
• Questions
• Further Reading
• 8.Efficient Network Operation
• 8.1.Efficient Operation of DC Interconnectors
• 8.1.1.Entrepreneurial DC Network Operation
• 8.2.Optimal Network Switching
• 8.2.1.Network Switching and Network Contingencies
• 8.2.2.A Worked Example
• 8.2.3.Entrepreneurial Network Switching?
• 8.3.Summary
• Questions
• Further Reading
• pt. IV EFFICIENT INVESTMENT IN GENERATION AND CONSUMPTION ASSETS
• 9.Efficient Investment in Generation and Consumption Assets
• 9.1.The Optimal Generation Investment Problem
• 9.2.The Optimal Level of Generation Capacity with Downward Sloping Demand
• 9.2.1.The Case of Inelastic Demand
• 9.3.The Optimal Mix of Generation Capacity with Downward Sloping Demand
• 9.4.The Optimal Mix of Generation with Inelastic Demand
• 9.5.Screening Curve Analysis
• 9.5.1.Using Screening Curves to Assess the Impact of Increased Renewable Penetration
• 9.5.2.Generation Investment in the Presence of Network Constraints
• 9.6.Buyer-Side Investment
• 9.7.Summary
• Questions
• Further Reading
• 10.Market-Based Investment in Electricity Generation
• 10.1.Decentralised Generation Investment Decisions
• 10.2.Can We Trust Competitive Markets to Deliver an Efficient Level of Investment in Generation?
• 10.2.1.Episodes of High Prices as an Essential Part of an Energy-Only Market
• 10.2.2.The M̀issing Money' Problem
• 10.2.3.Energy-Only Markets and the Investment Boom
• Bust Cycle
• 10.3.Price Caps, Reserve Margins and Capacity Payments
• 10.3.1.Reserve Requirements
• 10.3.2.Capacity Markets
• 10.4.Time-Averaging of Network Charges and Generation Investment
• 10.5.Summary
• Questions
• Pt. V HANDLING CONTINGENCIES: EFFICIENT DISPATCH IN THE VERY SHORT RUN
• 11.Efficient Operation of the Power System in the Very Short-Run
• 11.1.Introduction to Contingencies
• 11.2.Efficient Handling of Contingencies
• 11.3.Preventive and Corrective Actions
• 11.4.Satisfactory and Secure Operating States
• 11.5.Optimal Dispatch in the Very Short Run
• 11.6.Operating the Power System Ex Ante as though Certain Contingencies have Already Happened
• 11.7.Examples of Optimal Short-Run Dispatch
• 11.7.1.A Second Example, Ignoring Network Constraints
• 11.7.2.A Further Example with Network Constraints
• 11.8.Optimal Short-Run Dispatch Using a Competitive Market
• 11.8.1.A Simple Example
• 11.8.2.Optimal Short-Run Dispatch through Prices
• 11.8.3.Investment Incentives
• 11.9.Summary
• Questions
• Further Reading
• 12.Frequency-Based Dispatch of Balancing Services
• 12.1.The Intradispatch Interval Dispatch Mechanism
• 12.2.Frequency-Based Dispatch of Balancing Services
• 12.3.Implications of Ignoring Network Constraints when Handling Contingencies
• 12.3.1.The Feasible Set of Injections with a Frequency-Based IDIDM
• 12.4.Procurement of Frequency-Based Balancing Services
• 12.4.1.The Volume of Frequency Control Balancing Services Required
• 12.4.2.Procurement of Balancing Services
• 12.4.3.Allocating the Costs of Balancing Services
• 12.5.Summary
• Questions
• Further Reading
• pt. VI MANAGING RISK
• 13.Managing Intertemporal Price Risks
• 13.1.Introduction to Forward Markets and Standard Hedge Contracts
• 13.1.1.Instruments for Managing Risk: Swaps, Caps, Collars and Floors
• 13.1.2.Swaps
• 13.1.3.Caps
• 13.1.4.Floors
• 13.1.5.Collars (and Related Instruments)
• 13.2.The Construction of a Perfect Hedge: The Theory
• 13.2.1.The Design of a Perfect Hedge
• 13.3.The Construction of a Perfect Hedge: Specific Cases
• 13.3.1.Hedging by a Generator with no Cost Uncertainty
• 13.3.2.Hedging Cost-Shifting Risks
• 13.4.Hedging by Customers
• 13.4.1.Hedging by a Customer with a Constant Utility Function
• 13.4.2.Hedging Utility-Shifting Risks
• 13.5.The Role of the Trader
• 13.5.1.Risks Facing Individual Traders
• 13.6.Intertemporal Hedging and Generation Investment
• 13.7.Summary
• Questions
• 14.Managing Interlocational Price Risk
• 14.1.The Role of the Merchandising Surplus in Facilitating Interlocational Hedging
• 14.1.1.Packaging the Merchandising Surplus in a Way that Facilitates Hedging
• 14.2.Interlocational Transmission Rights: CapFTRs
• 14.3.Interlocational Transmission Rights: Fixed-Volume FTRs
• 14.3.1.Revenue Adequacy
• 14.3.2.Are Fixed-Volume FTRs a Useful Hedging Instrument?
• 14.4.Interlocational Hedging and Transmission Investment
• 14.4.1.Infinitesimal Investment in Network Capacity
• 14.4.2.Lumpy Investment in Network Capacity
• 14.5.Summary
• Questions
• Further Reading
• pt. VII MARKET POWER
• 15.Market Power in Electricity Markets
• 15.1.An Introduction to Market Power in Electricity Markets
• 15.1.1.Definition of Market Power
• 15.1.2.Market Power in Electricity Markets
• 15.2.How Do Generators Exercise Market Power? Theory
• 15.2.1.The Price
• Volume Trade-Off
• 15.2.2.The Profit-Maximising Choice of Rate of Production for a Generator with Market Power
• 15.2.3.The Profit-Maximising Offer Curve
• 15.3.How do Generators Exercise Market Power? Practice
• 15.3.1.Economic and Physical Withholding
• 15.3.2.Pricing Up and the Marginal Generator
• 15.4.The Incentive to Exercise Market Power: The Importance of the Residual Demand Curve
• 15.4.1.The Shape of the Residual Demand Curve
• 15.4.2.The Importance of Peak Versus Off-Peak for the Exercise of Market Power
• 15.4.3.Other Influences on the Shape of the Residual Demand Curve
• 15.5.The Incentive to Exercise Market Power: The Impact of the Hedge Position of a Generator
• 15.5.1.Short-Term Versus Long-Term Hedge Products and the Exercise of Market Power
• 15.5.2.Hedge Contracts and Market Power
• 15.6.The Exercise of Market Power by Loads and Vertical Integration
• 15.6.1.Vertical Integration
• 15.7.Is the Exercise of Market Power Necessary to Stimulate Generation Investment?
• 15.8.The Consequences of the Exercise of Market Power
• 15.8.1.Short-Run Efficiency Impacts of Market Power
• 15.8.2.Longer-Run Efficiency Impacts of Market Power
• 15.8.3.A Worked Example
• 15.9.Summary
• Questions
• Further Reading
• 16.Market Power and Network Congestion
• 16.1.The Exercise of Market Power by a Single Generator in a Radial Network
• 16.1.1.The Exercise of Market Power by a Single Generator in a Radial Network: The Theory
• 16.2.The Exercise of Market Power by a Single Generator in a Meshed Network
• 16.3.The Exercise of Market Power by a Portfolio of Generators
• 16.4.The Effect of Transmission Rights on Market Power
• 16.5.Summary
• Questions
• Further Reading
• 17.Detecting, Modelling and Mitigating Market Power
• 17.1.Approaches to Assessing Market Power
• 17.2.Detecting the Exercise of Market Power Through the Examination of Market Outcomes in the Past
• 17.2.1.Quantity-Withdrawal Studies
• 17.2.2.Price
• Cost Margin Studies
• 17.3.Simple Indicators of Market Power
• 17.3.1.Market-Share-Based Measures and the HHI
• 17.3.2.The PSI and RSI Indicators
• 17.3.3.Variants of the PSI and RSI Indicators
• 17.3.4.Measuring the Elasticity of Residual Demand
• 17.4.Modelling of Market Power
• 17.4.1.Modelling of Market Power in Practice
• 17.4.2.Linearisation
• 17.5.Policies to Reduce Market Power
• 17.6.Summary
• Questions
• Further Reading
• pt. VIII NETWORK REGULATION AND INVESTMENT
• 18.Efficient Investment in Network Assets
• 18.1.Efficient AC Network Investment
• 18.2.Financial Implications of Network Investment
• 18.2.1.The Two-Node Graphical Representation
• 18.2.2.Financial Indicators of the Benefit of Network Expansion
• 18.3.Efficient Investment in a Radial Network
• 18.4.Efficient Investment in a Two-Node Network
• 18.4.1.Example
• 18.5.Coordination of Generation and Network Investment in Practice
• 18.6.Summary
• Questions
• Further Reading
• pt. IX CONTEMPORARY ISSUES
• 19.Regional Pricing and Its Problems
• 19.1.An Introduction to Regional Pricing
• 19.2.Regional Pricing Without Constrained-on and Constrained-off Payments
• 19.2.1.Short-Run Effects of Regional Pricing in a Simple Network
• 19.2.2.Effects of Regional Pricing on the Balance Sheet of the System Operator
• 19.2.3.Long-Run Effects of Regional Pricing on Investment
• 19.3.Regional Pricing with Constrained-on and Constrained-off Payments
• 19.4.Nodal Pricing for Generators/Regional Pricing for Consumers
• 19.4.1.Side Deals and Net Metering
• 19.5.Summary
• Questions
• Further Reading
• 20.The Smart Grid and Efficient Pricing of Distribution Networks
• 20.1.Efficient Pricing of Distribution Networks
• 20.1.1.The Smart Grid and Distribution Pricing
• 20.2.Decentralisation of the Dispatch Task
• 20.2.1.Decentralisation in Theory
• 20.3.Retail Tariff Structures and the Incentive to Misrepresent Local Production and Consumption
• 20.3.1.Incentives for Net Metering and the Effective Price
• 20.4.Incentives for Investment in Controllable Embedded Generation
• 20.4.1.Incentives for Investment in Intermittent Solar PV Embedded Generation
• 20.4.2.Retail Tariff Structures and the Death Spiral
• 20.4.3.An Illustration of the Death Spiral
• 20.5.Retail Tariff Structures
• 20.5.1.Retail Tariff Debates
• 20.6.Declining Demand for Network Services and Increasing Returns to Scale
• 20.7.Summary
• Questions.