ContentsPreface Part I: Introduction to economic conceptsChapter I-1: Introduction to micro-economicsI-1.1 Economic objectives
I-1.2 Introduction to constrained optimisation
I-1.3 Demand and consumers’ surplus
I-1.4 Supply and producers’ surplus
I-1.5 Achieving optimal short-run outcomes using competitive markets
I-1.6 Smart markets
I-1.7 Longer-run decisions by producers and consumers
I-1.8 Monopoly
I-1.9 Oligopoly
I-1.10 Summary of Chapter I-1
Part II: Introduction to electricity networks and electricity marketsChapter II-1: Introduction to electric power systemsII-1.1 DC circuit concepts
II-1.2 AC circuit concepts
II-1.3 Reactive power
II-1.4 The elements of an electric power system
II-1.5 Electricity generation
II-1.6 Electricity transmission and distribution networks
II-1.7 Physical limits on networks
II-1.8 Electricity consumption
II-1.9 Does it make sense to distinguish electricity producers and consumers?
II-1.10 Summary of Chapter II-1
Chapter II-2: Electricity industry market structure and competition
II-2.1 Tasks performed in an efficient electricity industry
II-2.2 Electricity industry reforms
II-2.3 Approaches to reform of the electricity industry
II-2.4 Other key roles in a market-oriented electric power system
II-2.5 An overview of liberalised electricity markets
II-2.6 An overview of the Australian National Electricity Market
II-2.7 The pros and cons of electricity market reform
II-2.8 Summary of Chapter II-2
Part III: Optimal dispatch: The efficient use of generation, consumption and network resources
Chapter III-1: Efficient short-term operation of an electricity industry with no network constraintsIII-1.1 The cost of generation
III-1.2 A simple stylized representation of a generator
III-1.3 Optimal dispatch of generation with inelastic demand
III-1.4 Optimal dispatch of both generation and load assets
III-1.5 Symmetry in the treatment of generation and load
III-1.6 The benefit function
III-1.7 Non-convexities in production – minimum operating levels
III-1.8 Efficient dispatch of energy-limited resources
III-1.9 Efficient dispatch in the present of ramp-rate constraints
III-1.10 Start-up costs and the unit-commitment decision
III-1.11 Summary of Chapter III-1
Chapter III-2: Achieving efficient use of generation and load resources using a market mechanism in an industry with no network constraints
III-2.1 Decentralisation, competition, and market mechanisms
III-2.2 Achieving optimal dispatch through competitive bidding
III-2.3 Variation in wholesale market design
III-2.4 Day-ahead versus real-time markets
III-2.5 Price controls and rationing
III-2.6 Time-varying demand, the load-duration curve and the price-duration curve
III-2.7 Summary of Chapter III-2
Chapter III-3: Representing network constraintsIII-3.1 Representing networks mathematically
III-3.2 Net injections, power flows and the DC load flow model
III-3.3 The matrix of power transfer distribution factors
III-3.4 Distribution factors for radial networks
III-3.5 Constraint equations and the set of feasible injections
III-3.6 Summary of Chapter III-3
Chapter III-4: Efficient dispatch of generation and consumption resources in the presence of network congestion
III-4.1 Optimal dispatch with network constraints
III-4.2 Optimal dispatch in a radial network
III-4.3 Optimal dispatch in a two-node network
III-4.4 Optimal dispatch in a three-node meshed network
III-4.5 Optimal dispatch in a four-node network
III-4.6 Properties of Nodal Prices with a Single Binding Constraint
III-4.7 How many independent nodal prices exist?
III-4.8 The Merchandising Surplus, Settlement Residues and the Congestion Rents
III-4.9 Network losses
III-4.10 Summary of Chapter III-4
Chapter III-5: Efficient network operationIII-5.1 Efficient operation of DC interconnectors
III-5.2 Optimal network switching
III-5.3 Summary of Chapter III-5
Part IV: Efficient investment in generation and consumption assets
Chapter IV-1: Efficient investment in generation and consumption assets
IV-1.1 The optimal generation investment problem
IV-1.2 The optimal level of generation capacity with downward sloping demand
IV-1.3 The optimal mix of generation capacity with downward sloping demand
IV-1.4 The optimal mix of generation with inelastic demand
IV-1.5 Screening curve analysis
IV-1.6 Buyer-side investment
IV-1.7 Summary of Chapter IV-1
Chapter IV-2: Market-based investment in electricity generationIV-2.1 Decentralised generation investment decisions
IV-2.2 Can we trust competitive markets to deliver an efficient level of investment in generation?
IV-2.3 Price caps, reserve margins and capacity payments
IV-2.4 Time-averaging of network charges and generation investment
IV-2.5 Summary of Chapter IV-2
Part V: Handling contingencies: Efficient dispatch in the very short run
Chapter V-1: Efficient operation of the power system in the very short-runV-1.1 Introduction to contingencies
V-1.2 Efficient handling of contingencies
V-1.3 Preventive and corrective actions
V-1.4 Satisfactory and secure operating states
V-1.5 Optimal dispatch in the very short-run
V-1.6 Operating the power system ex ante as though certain contingencies have already happened
V-1.7 Examples of optimal short-run dispatch
V-1.8 Optimal short-run dispatch using a competitive market
V-1.9 Summary of Chapter V-1
Chapter V-2: Frequency-based dispatch of balancing services
V-2.1 The intra-dispatch interval dispatch mechanism
V-2.2 Frequency-based dispatch of balancing services
V-2.3 Implications of ignoring network constraints when handling contingencies
V-2.4 Procurement of frequency-based balancing services
V-2.5 Summary of Chapter V-2
Part VI: Managing Risk
Chapter VI-1: Managing inter-temporal price risks
VI-1.1 Introduction to forward markets and standard hedge contracts
VI-1.2 The construction of a perfect hedge – the theory
VI-1.3 The construction of a perfect hedge – specific cases
VI-1.4 Hedging by customers
VI-1.5 The role of the trader
VI-1.6 Inter-temporal hedging and generation investment
VI-1.7 Summary of Chapter VI-1
Chapter VI-2: Managing inter-locational price risk
VI-2.1 The role of the merchandising surplus in facilitating inter-locational hedging
VI-2.2 Inter-locational transmission rights: CapFTRs
VI-2.3 Inter-locational transmission rights: Fixed-Volume FTRs
VI-2.4 Inter-locational hedging and transmission investment
VI-2.5 Summary of Chapter VI-2
Part VII: Market Power
Chapter VII-1: Market power in electricity markets
VII-1.1 An introduction to market power in electricity markets
VII-1.2 How do generators exercise market power? Theory
VII-1.3 How do generators exercise market power? Practice
VII-1.4 The incentive to exercise market power: The importance of the residual demand curve
VII-1.5 The incentive to exercise market power: The impact of the hedge position of a generator
VII-1.6 The exercise of market power by loads and vertical integration
VII-1.7 Is the exercise of market power necessary to stimulate generation investment?
VII-1.8 The consequences of the exercise of market power
VII-1.9 Summary of Chapter VII-1
Chapter VII-2: Market Power and Network CongestionVII-2.1 The exercise of market power by a single generator in a radial network
VII-2.2 The exercise of market power by a single generator in a meshed network
VII-2.3 The exercise of market power by a portfolio of generators
VII-2.4 The effect of transmission rights on market power
VII-2.5 Summary of Chapter VII-2
Chapter VII-3: Detecting, Modelling and Mitigating Market PowerVII-3.1 Approaches to assessing market power
VII-3.2 Detecting the exercise of market power through the examination of market outcomes in the past
VII-3.3 Simple indicators of market power
VII-3.4 Modelling of market power
VII-3.5 Policies to reduce market power
VII-3.6 Summary of Chapter VII-3
Part VIII: Network Regulation and Investment
Chapter VIII-1: Efficient investment in network assetsVIII-1.1 Efficient AC network investment
VIII-1.2 Financial implications of network investment
VIII-1.3 Efficient investment in a radial network
VIII-1.4 Efficient investment in a two-node network
VIII-1.5 Coordination of generation and network investment in practice
VIII-1.6 Summary of Chapter VIII-1
Part IX: Contemporary issues
Chapter IX-1: Regional pricing and its problemsIX-1.1 An introduction to regional pricing
IX-1.2 Regional pricing without constrained-on and constrained-off payments
IX-1.3 Regional pricing with constrained-on and constrained-off payments
IX-1.4 Nodal pricing for generators / regional pricing for consumers
IX-1.5 Summary of Chapter IX-1
Chapter IX-2: The Smart Grid and Efficient Pricing of Distribution NetworksIX-2.1 Efficient pricing of distribution networks
IX-2.2 Decentralisation of the dispatch task
IX-2.3 Retail tariff structures and the incentive to mis-represent local production and consumption
IX-2.4 Incentives for investment in controllable embedded generation
IX-2.5 Retail tariff structures
IX-2.6 Declining demand for network services and increasing returns to scale
IX-2.7 Summary of Chapter IX-2
Part X: Appendix
Chapter X-1: NomenclatureChapter X-2: References