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Higher Education Technical Challenges Hub: Module Specification

RE16M3 Energy Markets

pdf version of module specification

Download the module specification

pdf version of module specification








Module name:

Energy Markets

Scope and form:

The students should obtain or develop a set of skills and knowledge regarding the electricity sector structured in terms of markets, as well as several aspects related with Quality of Service.
Form: Elective; face to face.

Duration (weeks; Hours/week):

15 weeks lecturing (3 hours of lectures and 3 hours of laboratory classes/ 2 hours project), 1 week midterm exam, about 50 hours of self-study time

Type of assessment:

Distributed evaluation with final exam. Work groups of 2-3 students.Practical classes based on the analysis of typical examples and development of field works

Qualified Prerequisites:

Power Systems Operation, Operation Research, Optimization and Forecasting techniques.

General module objectives:

The objectives of the module are as follows: acquisition and demonstration of knowledge regarding the structure and operation of the power sector in terms of markets, both regarding theoretical and computational models as well as knowledge regarding Quality of Service in the electricity sector; demonstration ofthe capacity to treat, validate and interpret results obtained in practical assignments; demonstration of understanding of the external, entrepreneurial and commercial environments in which the electricity sector is currently evolving;. Demonstration of capacities to set objectives and manage projectsanalysis.

Topics and short description:

Demand and Supply
Market Equilibrium; Price Elasticity and Competitive Market; Economy of Scale and Natural Monopoly; Brief History of Electricity Markets
Fundamentals of Power System Operation
Economic Dispatch, Fundamentals of Constrained Optimization; Security-Constrained Economic Dispatch
Generation Scheduling; Calculation of Transfer Capabilities of Transmission Interfaces; Overview of Power System Operation
Market Design: Spot Energy Market
Organization after Deregulation; Uniform Pricing; Nodal Pricing; Multiple Block Bidding;Demand Side Bidding; Day-Ahead Market; Ex-Post Spot Pricing; Transmission Losses; Bilateral Trading in United Kingdom; Electricity Market Reform in California
Market Design: Procurement of Ancillary Services
Reserve Market; AGC Market; Energy, Reserve, and AGC Co-Optimization Market
Compensation without Competition
Market Design: Common Cost Allocations
Background; Transmission Costs; Unit Start-Up Cost; Peaking Cost Compensation; Transmission Rights
Microeconomic Analysis
Background, Fundamentals of Non-Cooperative Game Theory; Game Models for Market Analysis; Market Power Analysis; Electricity Market Experiments
Price Forecast and Risk Management
Forecasting Electricity Prices; Managing Price Risks

Learning outcomes:




Demand and Supply of electricity

Capacity to understand the electricity Market Equilibrium

Comprehend the fundamentals of Price Elasticity and Competitive Market

Fundamentals of Power System Economic Operation

Understand the operation of the power system under an economic point of view

Take actions to control the power system under the economic point of view

Market Design: Spot Energy Market

Capacity to understand the electricity marked

To take decisions in the electricity marked

Microeconomic Analysis

Capacity to understand the economics of the electricity market

To take decisions in the electricity market

Price Forecast and Risk Management

Capacity to Forecast the electricity prices in the future and manage the Risk

To forecast the electricity prices for the near future

Recommended literature:

Allen J. and Wollenberg, Bruce F.,Power generation, operation, and control, New York : John Wiley, cop. 1996, ISBN 0-471-58699-4
Stoft, S. (2002), Power System Economics : Designing Markets for Electricity, New York, N.Y. ; Wiley-Interscience.
Sioshansi, F. P. and Pfaffenberger, W. (2006), Electricity Market Reform: An International Perspective, Elsevier.
Shahidehpour, M.,Yamin, H. and Li, Z. (2002), Market Operations in Electric Power Systems: Forecasting, Scheduling, and Risk Management, New York, NY: Institute of Electrical and Electronics Engineers, Wiley-IEEE.
Borghetti, A.,G.Gross and Nucci, C. A. (2001), Auctions With Explicit Demand-Side
Bidding in Competitive Electricity Markets, Norwell, MA: Kluwer Academic
DeqiangGan, Donghan Feng, Jun Xie, Electricity Markets and Power System Economics,( 2013), CRC PressPublishers,. ISBN 9781466501690