Fundamentals Of Power System Economics

Fundamentals of Power System Economics

Fundamentals of Power System Economics Daniel Kirschen and Goran Strbac  2004 John Wiley & Sons, Ltd ISBN: 0-470-84572-4

Fundamentals of Power System Economics
Daniel Kirschen Goran Strbac
University of Manchester Institute of Science & Technology (UMIST), UK

Copyright  2004

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For Penny and Philippe For Dragana, Jelena and Anna

Contents
PREFACE

xi1 INTRODUCTION
1.1 Why Competition? 1.2 Dramatis Personae 1.3 Models of Competition
1.3.1 Model 1: Monopoly 1.3.2 Model 2: Purchasing agency 1.3.3 Model 3: Wholesale competition 1.3.4 Model 4: Retail competition 1.3.5 Competition and privatization Open Questions Further Reading Problems

1
1 2 4 4 4 5 6 7 7 8 9

1.4 1.5 1.6

2 BASIC CONCEPTS FROM ECONOMICS
2.1 Introduction 2.2Fundamentals of Markets
2.2.1 Modeling the consumers 2.2.2 Modeling the producers 2.2.3 Market equilibrium 2.2.4 Pareto efficiency 2.2.5 Global welfare and deadweight loss Concepts from the Theory of the Firm 2.3.1 Inputs and outputs 2.3.2 Long run and short run 2.3.3 Costs Types of Markets 2.4.1 Spot market 2.4.2 Forward contracts and forward markets

11
11 11 11 17 21 22 24 25 25 26 29 33 33 342.3

2.4

viii
2.4.3 Future contracts and futures markets 2.4.4 Options 2.4.5 Contracts for difference 2.4.6 Managing the price risks 2.4.7 Market efficiency Markets with Imperfect Competition 2.5.1 Market power 2.5.2 Models of imperfect markets 2.5.3 Monopoly Further Reading Problems

CONTENTS

2.5

2.6 2.7

36 37 38 39 39 39 39 40 43 44 45

3 MARKETS FOR ELECTRICAL ENERGY
3.1...