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.
By:
Steven Stoft (University of California Energy Institute Berkeley CA)
Imprint: Wiley-IEEE Press
Country of Publication: United States
Dimensions:
Height: 234mm,
Width: 185mm,
Spine: 31mm
Weight: 862g
ISBN: 9780471150404
ISBN 10: 0471150401
Pages: 496
Publication Date: 14 May 2002
Audience:
College/higher education
,
Professional and scholarly
,
Professional & Vocational
,
A / AS level
,
Further / Higher Education
Format: Paperback
Publisher's Status: Active
List of Results and Fallacies xiv Preface xviii Acronyms and Abbreviations xx Symbols xxii Part 1. Power Market Fundamentals Prologue 2 Why Deregulate? 6 What to Deregulate 17 Pricing Power, Energy, and Capacity 30 Power Supply and Demand 40 What Is Competition? 49 Marginal Cost in a Power Market 60 Market Structure 74 Market Architecture 82 Designing and Testing Market Rules 93 Part 2. Reliability, Price Spikes and Investment Reliability and Investment Policy 108 Price Spikes Recover Fixed Costs 120 Reliability and Generation 133 Limiting the Price Spikes 140 Value-of-Lost-Load Pricing 154 Operating-Reserve Pricing 165 Market Dynamics and the Profit Function 174 Requirements for Installed Capacity 180 Inter-System Competition for Reliability 188 Unsolved Problems 194 Part 3. Market Architecture Introduction 202 The Two-Settlement System 208 Day-Ahead Market Designs 217 Ancillary Services 232 The Day-Ahead Market in Theory 243 The Real-Time Market in Theory 254 The Day-Ahead Market in Practice 264 The Real-Time Market in Practice 272 The New Unit-Commitment Problem 289 The Market for Operating Reserves 306 Part 4. Market Power Defining Market Power 316 Exercising Market Power 329 Modeling Market Power 337 Designing to Reduce Market Power 345 Predicting Market Power 356 Monitoring Market Power 365 Part 5. Locational Pricing Power Transmission and Losses 374 Physical Transmission Limits 382 Congestion Pricing Fundamentals 389 Congestion Pricing Methods 395 Congestion Pricing Fallacies 404 Refunds and Taxes 411 Pricing Losses on Lines 417 Pricing Losses at Nodes 424 Transmission Rights 431 Glossary 443 References 455 Index 460
STEVEN STOFT has a BS in engineering mathematics and a PhD in economics from the University of California at Berkeley, and over ten years of experience in power market analysis and design. He has held positions at FERC, the University of California's Energy Institute, and the Lawrence Berkeley National Laboratory. He is currently a consultant to the Pennsylvania-New Jersey-Maryland ISO (PJM), California's Electricity Oversight Board, the U.S. Department of Energy, and an independent power producer.
Reviews for Power System Economics: Designing Markets for Electricity
"""This book is for anyone seeking to understand how cost/price relationships involved in electrical energy production and distribution may ideally be determined."" (Electrical Apparatus, August 2002) ""...the quality of its content deserves a wide readership...""(Power System Economics The Journal of Energy Literature, Vol.V111, No.2, 2002)"
