Lecture Notes

L1 How do electric power systems manage to provide electricity continuously with an adequate quality of service, at an affordable price and with an acceptable environmental impact? Course introduction. (PDF - 2.3MB)
L2 A historical approach to the electric power sector. Electric power systems (EPS) from physical and operation perspectives. Demand of electricity; production, technologies, equipment, fuels, networks, metering and communication, control centers. (PDF - 1.3MB)
L3 Global view of an EPS from an economic and managerial perspective. Organization of the power sector. The hierarchy of decision-making processes in the traditionally regulated power sector. Equivalent functions under a competitive regime. (PDF - 1.6MB)
L4 The regulatory function. What should and should not be regulated. Traditional regulation of the electric power sector. Cost-of-service remuneration. Weak and strong points of the traditional approach. (PDF - 5.0MB)
L5 How to regulate a network monopolistic activity, such as distribution of electricity? Under which conditions would an electric utility provide distribution network services efficiently and with an adequate quality of service? (PDF - 1.7MB)
L6 Regulation of natural monopolies. Beyond the cost-of-service approach. Incentive based regulation. Critical revision of major regulatory approaches. A price control process. Description and evaluation of the RPI-X approach. Costs, revenues and efficiency gains. Distribution of electricity. Economic, technical and regulatory characterization. Incentive schemes to move towards optimal levels of network losses and quality of service. (PDF - 5.5MB)
L7 How to design, implement and monitor an efficient, reliable and environmentally adequate system of electricity production? Competitive markets or traditional regulation? How does a wholesale market function? How to deal with any abuses of market power? (PDF - 8.2MB)
L8 Economic generations dispatch. The search for efficiency via optimization. Links to longer term functions in a traditionally based reulatory approach.  
L9 Principles of microeconomics. Relationships between the traditional and competitive regulatory frameworks. (PDF - 2.7MB)
L10 Equivalences among remuneration schemes. Factors affecting the expectation of cost recovery.  
L11 Wholesale electricity markets. Formats of commercial trade among agents and hedging of risk. (PDF - 3.9MB)
L12 Organized power exchanges. Spot markets. Longer term organized contracting. Bilateral contracts. Energy derivatives. (PDF - 2.3MB)
L13 Market power. Oligopolistic strategies. Monitoring and measures of mitigation of market power. Simulation models. Case example on market power mitigation measures. (PDF)
L14 Characterization of the transmission activity. Nodal prices of electricity. Properties of recovery of total transmission network costs.

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L15 Investment in transmission network assets. Critical review of international experiences. Transmission access. Conditions for connection to the grid. Management of network congestions. Formats of electricity transmission contracts. (PDF - 1.1MB)
L16 Transmission access. Transmission pricing. Justification and design of locational signals for generation and demand. (PDF - 1.9MB)
L17 Tariff design. Basic principles: sustainability, efficiency, additivity, non-discrimination, transparency, simplicity. Specific treatment of each activity. (PDF - 2.6MB)
L18 Retail markets. The debate on the extension to all consumers. Convenience and design of default tariffs. Demand response. Advanced metering and its implications. (PDF - 1.0MB)
L19 The origin of the problem. Is there a market failure? Description and critical evaluation of relevant approaches both proposed and actually implemented. (PDF)
L20 Visit to the ISO-New England control center. Secure operation, daily market, ancillary services, renewaables, capacity expansion, etc.  
L21 Justification of ad hoc regulatory regimes for generation of electricity from renewable energy sources. Critical evaluation of existing and proposed regimes for promotion of renewables. New regulatory issues in a regional / multinational context.  
L22 Case study: The struggle to find a seamless method to integrate the national electricity markets in the European Union (EU) into a Single Electricity Market. Lessons to be learned. (PDF - 3.6MB)
L23 Examination of the present energy model under a sustainability perspective. Identification of the major shortcomings. Review of the major measures that can be applied concerning the electric power sector and the corresponding regulatory instruments. Markets versus governments. The potential role of indicative planning and its compatibility with electricity markets. (PDF - 1.6MB)
L24 What is meant by efficiency? Is energy efficiency about supply or demand? How big is it and how much does it cost? What is the history of the electric utility role in efficiency and what should be? What is “responsive energy” and what does it have to do with “smart grids”? What is the role of the electric utility in the smart/responsive energy world ahead? What are the opportunities in the field?  
L25 Review of international experiences of electricity reform and their impact on universal electricity access. Elements of successful programs of rural electrification. Extension of the major grid and supply to dispersed population. Regulatory challenges and how to address them. (PDF)
L26 Regulatory instruments to mitigate climate change. Design and implementation of carbon markets and prices. Targets, allocation of allowances, banking and risk hedging schemes. Impacts on electricity markets. The debate on windfall profits.


(Courtesy of Denny Ellerman. Used with permission.)

L27 Presentation of the term papers. An extended schedule will be used on that day, so that all papers will have sufficient time for presentation and discussion.