Power Markets and Economics: Energy Costs, Trading, Emissions

by Barrie Murray (Electricity Market Services Limited)

• ISBN13: 9780470743010
• ISBN10: 0470743018
• Format: eBook
• Copyright: 2009-02-01
• Publisher: Wiley

Summary

It is now almost twenty years since liberalisation and the introduction of competition was proposed for electricity utilities. Some form of restructuring has been widely adopted around the world to suit local objectives. The industry now faces new challenges associated with global warming, rising prices and escalating energy demand from developing countries like China and India. The industry will have to cope with; managing emissions; managing variable energy sources like wind, dev eloping clean coal technology; accommodating distributed generation and new nuclear stations and managing the impact of these developments on the distribution and transmission networks. It is now necessary to consider how the various market structures that were adopted have performed and how they will address some of these new issues and what further changes might be necessary.This volume presents an all-inclusive analysis of the electricity market structures that have been adopted around the world and how they are performing. It provides an up-to-date analysis of the cost of competing technologies, the operation of energy and ancillary service markets and the impact of renewable sources and emission restrictions. It takes a forward look at likely future developments necessary to cope with the new emerging issues.Part One introduces industry infrastructure, analysing state utilities, the motives behind liberalisation and the resulting structures.Part Two considers generation costs, including renewable generation costs, and investigates the cost of restricting emissions as well as transmission and distribution costs.Part Three discusses market operation, describing how costs affect the organisation of power generation. It covers trading arrangements, ancillary services, international trading and investment.Part Four looks to future markets and technological developments that will shape the industry through the next twenty years. This includes the appraisal of investment opportunities for global power companies and implications for market performance.Written by an internationally renowned consultant engineer, this book is full of expert insight and balances fundamental methodology and academic theory with practical information and diverse worked examples.This is an excellent reference on the topic for power system engineers, regulators, banks, investors, and government energy agencies. With its many worked examples, it is also a brilliant tutorial accessible for postgraduates and senior undergraduates in electrical and power engineering.

Table of Contents

Foreword

Preface

Industry Infrastructure

Approach to Restructuring

Introduction

Industry Physical Structure

Introduction of Competition

Restructuring Options

Comparison of Structures

Summary

Market Mechanisms

Introduction

Market Participants

Market Mechanisms

Market Implementation

Price Analysis

Summary

The Cost Chain

Basic Generation Energy Costs

Introduction

Cost Components

Practical Operating Efficiencies

Impact of Utilisation on Costs

Comparison of Generation Costs

International Comparisons

Summary

Alternative Energy Sources

Introduction

Competing Sources

Current Production Europe

Incentive Schemes

Market Pricing

The Economics of Alternative Sources

Comparisons

Summary

Emissions

Introduction

Emission Trading Schemes (ETS)

Large Combustion Plant Directive (LCPD)

Generation CO2 Emissions

Production Costs

National Allocation Plans

Market Operation

Impact of Capacity Mix

International Approach

Summary

Transmission

Introduction

Impact of Transmission Constraints in Markets

Transmission Charging

Derivation of Use of System Charges

International Tariff Comparisons

Transmission Investment

Interconnection Investment Appraisal

International Practice

Summary

Distribution

Introduction

Market Status

Commercial Arrangements

Metering and Balancing

Cost of Distribution

Distribution Tariffs

OPEX Regulation

Capex Regulation

Business Risk

Distributed Generation

Summary

End User Charges and Prices

Introduction

Price Comparisons

End user Energy Prices

Total End User Prices

Tariff Development

Customer Switching

Summary

Market Operation

Market Trading

Introduction

European Markets

Developing Markets - China

Market Power

Trading Arrangements

Bilateral Trading

Balancing Market

Exchange Trading

Supplier Risk

Generation Risk

Market Interaction

Arbitrage Spark Spread

Summary

Market Analysis

Introduction

Modelling Overview

Dispatch Market Simulation

Load Duration Model

Hydro Generation

Interconnection Modelling

Predicting Demand Data

Generation data

Calculations

Price Duration Curve

Statistical Forecasting

Predicting New Entry

Summary

Ancillary Service Markets

Introduction

Ancillary Service Requirements

Market Volume

Procurement Process

Cost of Providing Services

Predicting Revenues

Summary

Cross-border Trading

Introduction

Governance

Cross-border Capacity

New Investment

Managing Operation

Capacity Auctions

Security

Charging for Wheeling

International Trading Development

Summary

Investment Appraisal

Introduction

Overall Analysis

Analysis of Options

Plant Costs

Predicting Revenue

Bidding/Contracting Strategy

Evaluating Risk

Summary

Part 4

Market Performance

Introduction

Performance Criteria

Market Shortcomings

Performance Assessment

Performance Improvement

Summary

Market Developments

Introduction

Generation Developments

Future Plant Mix

Transmission and Distribution Grids

Carbon Capture and Storage

Market Implications

Summary

Long-term Scenarios

Introduction

Emissions

Alternative Energy Sources

The Nuclear Option

Fuel Prices

Fuel Supply Security

System Security

Clean Coal Technology

Network Developments

International Commodity and Freight Markets

Competition

Conclusions

Glossary

References

Appendix Conversion Tables

Index

Table of Contents provided by Publisher. All Rights Reserved.