The module addresses students of the master’s course power engineering. Students are expected to have background knowledge in economics, be familiar with algebra as well as understand basically microeconomics.
After attending the module "Power System Economics I," the student will have a basic understanding of markets for electricity. Especially they should be able
- to analyse and discuss the economic fundamentals driving the profitability of electricity generation,
- to understand the basic peculiarities of electricity and electricity power stations and
- to understand the key issues in functioning of electricity markets and their influence on the market outcomes for consumers and producers.
1. Microeconomic fundamentals
2. Special features of electricity markets, overview
3. Pricing power, energy and capacity
4. Technical and economical characterisations of different types of Generation
5. Power supply and demand, merit order, short-run Equilibrium
6. Investment policy, reliability, long-run Equilibrium
7. External effects, environmental policy, renewable energies
8. Market design of electricity markets in Europe
The lecture is based on presentations which can be used for lecture notes. For the tutorial there will be practice sheets. The module examination will be in form of a written examination at the end of the lecture period.
Shively, Bob; Ferrare, John (2010): Understanding today's electricity business. Ed. 5.0. Laporte, CO: Enerdynamics.
Stoft, Steven (2010): Power system economics. Designing markets for electricity. Piscataway, NJ, New York: IEEE Press; Wiley-Interscience.