Fall 2017 - 60850 - PA 388K – Advanced Topics in Public Policy

Markets for Electricity
This course will examine policy issues related to the electric utility industry from an economic perspective.  Topics will include: A quick overview of concepts in electrical engineering (measurements, physical constraints, networks) An historical perspective System dispatch concepts (security-constrained economic dispatch, economic merit order, identification and modeling of physical constraints) The generation of electricity from nuclear power plants, coal and natural gas power plants, and renewable energy sources The design of wholesale electricity markets (real-time markets for energy, day-ahead markets for energy and ancillary services, bidding behavior) Competition in the provision of electricity at the retail level Electricity market restructuring activities around the world Energy transformation toward renewables (e.g., solar and wind) Ensuring adequacy of supply in a competitive market for electricity and the challenges face by power plant owners in the recovery of large fixed costs when markets price electricity based on short-run marginal cost Placing a value on service reliability Modeling energy demand (functional forms, price elasticity of demand estimates) Forecasting the demand for energy at various scales (time-series models, econometric modeling, end-use models) Market monitoring and surveillance Economic regulation of electricity system functions with natural monopoly characteristics (non-discriminatory open access to transmission, price regulation of transmission and distribution providers, regulatory principles) Energy efficiency (opportunities for end-use efficiency, cost-effectiveness tests from various perspectives, the selection of discount rates) Approaches to achieving environmental goals (e.g., cap and trade, pollution emissions taxes, best available control technology, environmental dispatch) Energy poverty and opportunities for electrification in developing countries Electricity pricing strategies (goals, time-of-use, real-time pricing, inclining blocks, demand charges) Energy storage (e.g., batteries): the game changer The “smart grid” Demand response programs There is a term paper requirement, a midterm exam and homework assignments.