Course overview
In this course, we learn about the wholesale electricity market and power system operation in terms of energy and ancillary services. The course provides a broad knowledge of the evolution of the power system industry and electricity market over time, rules and regulations, various energy and ancillary services markets and transmission system operation with a focus on Australian Electricity Market. Introduction to deregulation and electricity market: History of power industry, vertically-integrated utility, Problems with regulation, What is deregulation and why is it needed, what should be deregulated, Types of markets, Evolution of deregulation, Entities in the deregulated electricity industry, Types of market in terms of trading arrangement, Open electricity energy markets Market principles and electricity market economics: Modelling consumers, Modelling suppliers, Market equilibrium, Pareto efficiency, Global welfare, Theory of firm: short-run and long-run costs, Marginal cost fallacies, Scarcity rent, Economy of scale and scope, Profit and fixed cost recovery, Market power, Optimisation and market equilibrium problem Ancillary services (AS) market: Definition, Different types of AS for balancing issues, network issues, and system restoration, Compulsory provision of AS, AS market, demand-side AS provision, Impact of AS market on the spot prices, co-optimisation of energy and AS markets, Contingency analysis Transmission system operation: Introduction to the transmission system, Decentralised trading over a transmission network, Physical transmission rights, Issues related to physical transmission rights, Centralised trading over a transmission network, Unconstrained/Constrained transmission system with/without losses, Nodal marginal prices, Variable/fixed/non-technical losses
Course learning outcomes
- The electricity industry in the past and present, restructuring and deregulation: We will learn about the transition to a de-regulated electricity industry, necessities, evolution roadmap, types of markets appropriate for electricity as a commodity etc.
- Microeconomics: in relation to the electricity market, we learn microeconomic concepts, e.g., modelling consumers and suppliers, market equilibrium, Pareto efficiency, global welfare, short-run and long-run costs, marginal price, scarcity rent, market power etc.
- Optimisation: We learn about different optimisation formulations and implementation in GAMS and MATLAB using Gurobi solver.
- Variations of economic dispatch: Understanding variations of economic dispatch problems, definition, and implementation (simple ED, offer-based ED, ED with losses and transmission constraints) step-by-step.
- Ancillary services market: We learn about AS products (particularly the pool market-based ones) in the National Electricity Market (NEM) and the impact of co-optimisation of energy and AS markets.
- An electricity market with intermittent renewable resources: We review the changes in the electricity market to cope with the impact of renewable resources' intermittency and its impact on prices and services.