The Engineering Economics of Electricity Markets

Catalog description

This course presents the power system engineering and economic concepts necessary to understand the costs and benefits of transitioning to a low carbon electricity supply industry. The technical characteristics of generation units and transmission and distribution networks as well as the mechanisms used to operate the electricity supply industries will be studied. The fundamental economics of wholesale markets and how intermittent renewables impact the price and quantity of physical and financial products traded in these markets (e.g., energy, capacity, ancillary services, and financial contracts) will be analyzed. Long-term resource adequacy mechanisms will be introduced and their properties analyzed. The role of both short-duration and seasonal energy storage will be analyzed. Mechanisms for determining the engineering and economic need for transmission network expansions in a wholesale market will be discussed. The impact of distributed versus grid-scale generation on the performance of electricity supply industries will be studied. A detailed treatment of electricity retailing will focus on the importance of active demand-side participation in a low carbon energy sector. This course uses knowledge of probability at the level of Stats 116, optimization at the level of MS&E 111, statistical analysis at the level of Economics 102B, microeconomics at the level of Economics 51 and computer programming in R.