1st Edition

Electricity Markets and Power System Economics

By Deqiang Gan, Donghan Feng, Jun Xie Copyright 2014
    220 Pages 101 B/W Illustrations
    by CRC Press

    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.

    Introduction
    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
    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 Risk

    Biography

    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.