Electricity Markets and Power System Economics: 1st Edition (Hardback) book cover

Electricity Markets and Power System Economics

1st Edition

By Deqiang Gan, Donghan Feng, Jun Xie

CRC Press

220 pages | 101 B/W Illus.

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pub: 2013-11-12
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After the first power plant in history was commissioned for commercial operation by Thomas Edison on Pearl Street in New York in 1882, electricity was sold as a consumer product at market prices. After a period of rapid development, electricity had become such a fundamental product that regulation was believed to be necessary. Since then, the power industry had been considered a natural monopoly and undergone periods of tight regulation. Deregulation started in the early 1980s and as a result, most developed countries run their power industries using a market approach.

With the theories and rules of electricity markets developing rapidly, it is often difficult for beginners to start learning and difficult for those in the field to keep up. Bringing together information previously scattered among various journals and scholarly articles, Electricity Markets and Power System Economics provides a comprehensive overview of the current state of development in the electricity market. It introduces the fundamental principles of power system operation so that even those with a basic understanding can benefit from the book.  

The book includes a series of consistent mathematical models of market operation of power systems, and original cases with solutions. Systematically describing the basic building blocks of electricity market theory, the book provides a guide to underlying theory and mainstream market rules.

Table of Contents


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

Load Flow Calculation

Load Flow under Outages

Fundamentals of Constrained Optimization

Security-Constrained Economic Dispatch

Load Frequency Control

Spinning Reserve

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


Transmission Costs

Unit Start-Up Cost

Peaking Cost Compensation

Transmission Rights

Microeconomic Analysis


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 Risk

About the Authors


Deqiang Gan has been with the faculty of Zhejiang University since 2002. He visited the University of Hong Kong in 2004, 2005, and 2006. Deqiang worked for ISO New England, Inc. from 1998 to 2002. He held research positions in Ibaraki University, University of Central Florida, and Cornell University from 1994 to 1998. Deqiang received his Ph.D. in Electrical Engineering from Xian Jiaotong University, China, in 1994. He currently serves as an editor of European Transactions on Electric Power. His research interests are power system stability and market operations. Deqiang is a senior member of the IEEE.

Subject Categories

BISAC Subject Codes/Headings:
COMPUTERS / Information Technology
SCIENCE / Energy
TECHNOLOGY & ENGINEERING / Power Resources / Electrical