{"product_id":"electricity-markets-9780470011584","title":"Electricity Markets","description":"\u003cb\u003eBook Synopsis\u003c\/b\u003e\u003cbr\u003eElectricity Markets: Pricing, Structures and Economics provides a descriptive and cross-disciplinary approach to the electricity markets, allowing traders and analysts to understand the market, its policies and how they drive prices, emissions and security - something that affects all stakeholders.\u003cbr\u003e\u003cbr\u003e\u003cb\u003eTable of Contents\u003c\/b\u003e\u003cbr\u003e\u003cp\u003ePreface xix\u003c\/p\u003e \u003cp\u003eAcknowledgements xxi\u003c\/p\u003e \u003cp\u003eIntroduction 1\u003c\/p\u003e \u003cp\u003e\u003cb\u003e1 The Basics 7\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e1.1 How electricity works 7\u003c\/p\u003e \u003cp\u003e1.2 Early development of the Electricity Supply Industry (ESI) 10\u003c\/p\u003e \u003cp\u003e1.3 The lifecycle of electric power 12\u003c\/p\u003e \u003cp\u003e1.4 Development, structure, coordination, legislation of the ESI 14\u003c\/p\u003e \u003cp\u003e1.5 New ownership structure 15\u003c\/p\u003e \u003cp\u003e1.6 Selected country examples 16\u003c\/p\u003e \u003cp\u003e1.6.1 Europe 16\u003c\/p\u003e \u003cp\u003e1.6.2 Development in the Americas 18\u003c\/p\u003e \u003cp\u003e1.6.3 Australasia 19\u003c\/p\u003e \u003cp\u003e1.6.4 Asia 20\u003c\/p\u003e \u003cp\u003e1.6.5 Africa and the Middle East 20\u003c\/p\u003e \u003cp\u003e\u003cb\u003e2 Structure, Operation and Management of the Electricity Supply Chain 21\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e2.1 Energy sources 21\u003c\/p\u003e \u003cp\u003e2.1.1 Fossil fuel 22\u003c\/p\u003e \u003cp\u003e2.1.2 Nuclear 26\u003c\/p\u003e \u003cp\u003e2.1.3 Renewable combustible matter 26\u003c\/p\u003e \u003cp\u003e2.1.4 ‘Hot’ natural energy 26\u003c\/p\u003e \u003cp\u003e2.1.5 ‘Cold’ natural energy 27\u003c\/p\u003e \u003cp\u003e2.1.6 Hydrogen 27\u003c\/p\u003e \u003cp\u003e2.1.7 Stored 27\u003c\/p\u003e \u003cp\u003e2.1.8 Consumables 28\u003c\/p\u003e \u003cp\u003e2.1.9 Integration of energy sourcing and power generation 28\u003c\/p\u003e \u003cp\u003e2.2 Power generation 29\u003c\/p\u003e \u003cp\u003e2.2.1 Turbine generation 30\u003c\/p\u003e \u003cp\u003e2.2.2 Open cycle 31\u003c\/p\u003e \u003cp\u003e2.2.3 Conventional thermal generation 31\u003c\/p\u003e \u003cp\u003e2.2.4 Combined cycle 34\u003c\/p\u003e \u003cp\u003e2.2.5 Combined heat and power (CHP) 34\u003c\/p\u003e \u003cp\u003e2.2.6 Turbines driven by water 34\u003c\/p\u003e \u003cp\u003e2.2.7 Wind 36\u003c\/p\u003e \u003cp\u003e2.2.8 Non turbine generation 36\u003c\/p\u003e \u003cp\u003e2.2.9 Distributed power generation 36\u003c\/p\u003e \u003cp\u003e2.2.10 The production of environmental and amenity impact factors 37\u003c\/p\u003e \u003cp\u003e2.2.11 Abating the production of environmental impact factors 40\u003c\/p\u003e \u003cp\u003e2.2.12 Constructing the emission abatement stacks 44\u003c\/p\u003e \u003cp\u003e2.2.13 Stock management 49\u003c\/p\u003e \u003cp\u003e2.2.14 Flexibility 50\u003c\/p\u003e \u003cp\u003e2.2.15 Reliability and availability 55\u003c\/p\u003e \u003cp\u003e2.2.16 Reactive power 55\u003c\/p\u003e \u003cp\u003e2.2.17 Three phase 55\u003c\/p\u003e \u003cp\u003e2.2.18 Efficiency 56\u003c\/p\u003e \u003cp\u003e2.2.19 Cost 58\u003c\/p\u003e \u003cp\u003e2.2.20 Generation mix 59\u003c\/p\u003e \u003cp\u003e2.2.21 Requirements for ancillary services 60\u003c\/p\u003e \u003cp\u003e2.2.22 Plant dynamics 60\u003c\/p\u003e \u003cp\u003e2.2.23 The relative value of the different forms of plant service 60\u003c\/p\u003e \u003cp\u003e2.2.24 Generator hedging 61\u003c\/p\u003e \u003cp\u003e2.3 High voltage transmission, network operation, system operation 62\u003c\/p\u003e \u003cp\u003e2.3.1 Electrical networks 62\u003c\/p\u003e \u003cp\u003e2.3.2 Functions associated with network operation 72\u003c\/p\u003e \u003cp\u003e2.3.3 Coordinated planning of generation and transmission build 74\u003c\/p\u003e \u003cp\u003e2.3.4 Signals to build 76\u003c\/p\u003e \u003cp\u003e2.3.5 Interconnection 78\u003c\/p\u003e \u003cp\u003e2.3.6 Charging mechanisms available to the grid and system operators 79\u003c\/p\u003e \u003cp\u003e2.4 Distribution 81\u003c\/p\u003e \u003cp\u003e2.4.1 The roles of the distribution network operator 82\u003c\/p\u003e \u003cp\u003e2.4.2 Entry connection cost 83\u003c\/p\u003e \u003cp\u003e2.5 Metering 84\u003c\/p\u003e \u003cp\u003e2.5.1 Metering and the consumer experience 85\u003c\/p\u003e \u003cp\u003e2.5.2 The metering lifecycle 85\u003c\/p\u003e \u003cp\u003e2.5.3 Meter types 86\u003c\/p\u003e \u003cp\u003e2.6 Supply 87\u003c\/p\u003e \u003cp\u003e2.6.1 Billing 88\u003c\/p\u003e \u003cp\u003e2.6.2 Consumer segmentation 89\u003c\/p\u003e \u003cp\u003e2.6.3 Regulatory requirements 89\u003c\/p\u003e \u003cp\u003e2.6.4 Consumer agreements 90\u003c\/p\u003e \u003cp\u003e2.6.5 Supplier profit and loss profile in relation to wholesale price 93\u003c\/p\u003e \u003cp\u003e2.6.6 Retail pricing 93\u003c\/p\u003e \u003cp\u003e2.6.7 Hedging 95\u003c\/p\u003e \u003cp\u003e2.6.8 Supplier risk and supplier charges 101\u003c\/p\u003e \u003cp\u003e2.6.9 Swing in industrial and commercial contracts 102\u003c\/p\u003e \u003cp\u003e2.6.10 Demand side management 102\u003c\/p\u003e \u003cp\u003e\u003cb\u003e3 Policy – Issues, Priorities, Stakeholders, Influencers 105\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e3.1 Agendas and policy formation 106\u003c\/p\u003e \u003cp\u003e3.2 Policy issues and drivers 107\u003c\/p\u003e \u003cp\u003e3.3 Policy outcomes and instruments 110\u003c\/p\u003e \u003cp\u003e3.4 Energy policies 112\u003c\/p\u003e \u003cp\u003e3.4.1 Policy trends 112\u003c\/p\u003e \u003cp\u003e3.4.2 Formation of policy 115\u003c\/p\u003e \u003cp\u003e3.5 Framework 116\u003c\/p\u003e \u003cp\u003e3.6 Domestic institutional players 117\u003c\/p\u003e \u003cp\u003e3.7 The role and influence of international players 118\u003c\/p\u003e \u003cp\u003e\u003cb\u003e4 Liberalisation, Deregulation and Regulation 121\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e4.1 The liberalisation paradigm 122\u003c\/p\u003e \u003cp\u003e4.2 Steps 122\u003c\/p\u003e \u003cp\u003e4.2.1 Unbundling (and de-integration) 123\u003c\/p\u003e \u003cp\u003e4.2.2 Corporatisation 125\u003c\/p\u003e \u003cp\u003e4.2.3 Ring fence some activities under state control 126\u003c\/p\u003e \u003cp\u003e4.2.4 Forced divestment and fragmentation of the incumbents 127\u003c\/p\u003e \u003cp\u003e4.2.5 Privatisation 127\u003c\/p\u003e \u003cp\u003e4.2.6 Deregulation 127\u003c\/p\u003e \u003cp\u003e4.2.7 Reregulation 128\u003c\/p\u003e \u003cp\u003e4.2.8 Further fragmentation 128\u003c\/p\u003e \u003cp\u003e4.2.9 Cross industry horizontal integration 128\u003c\/p\u003e \u003cp\u003e4.2.10 Re-consolidation 128\u003c\/p\u003e \u003cp\u003e4.2.11 Entry of financial institutions 128\u003c\/p\u003e \u003cp\u003e4.2.12 Pressure on retail deregulation 128\u003c\/p\u003e \u003cp\u003e4.2.13 Further deregulation of networks and metering 129\u003c\/p\u003e \u003cp\u003e4.2.14 Revise model 129\u003c\/p\u003e \u003cp\u003e4.3 Conditions for reform 129\u003c\/p\u003e \u003cp\u003e4.4 The role of the state 130\u003c\/p\u003e \u003cp\u003e4.4.1 The national macroeconomy 131\u003c\/p\u003e \u003cp\u003e4.4.2 Mechanisms of government influence 131\u003c\/p\u003e \u003cp\u003e4.5 Measures of liberalisation and deregulation 132\u003c\/p\u003e \u003cp\u003e4.6 Regulation 134\u003c\/p\u003e \u003cp\u003e4.6.1 \u003ci\u003eQuid pro quo\u003c\/i\u003e model for regulatory change 135\u003c\/p\u003e \u003cp\u003e4.6.2 Prescriptive model for regulation 135\u003c\/p\u003e \u003cp\u003e4.6.3 Regulatory engagement 137\u003c\/p\u003e \u003cp\u003e4.6.4 Economic regulation 137\u003c\/p\u003e \u003cp\u003e4.7 Regulators 137\u003c\/p\u003e \u003cp\u003e4.7.1 Regulatory indicators 139\u003c\/p\u003e \u003cp\u003e4.7.2 Market monitoring by the regulator 139\u003c\/p\u003e \u003cp\u003e4.7.3 Price regulation 139\u003c\/p\u003e \u003cp\u003e4.7.4 Rate of return regulation 140\u003c\/p\u003e \u003cp\u003e4.8 Industry key performance indicators 140\u003c\/p\u003e \u003cp\u003e\u003cb\u003e5 Market Structures for Electricity 141\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e5.1 The basics of plant dispatch 143\u003c\/p\u003e \u003cp\u003e5.1.1 Acquiring the information on demand 143\u003c\/p\u003e \u003cp\u003e5.1.2 Management of variation in demand in the centrally managed system 145\u003c\/p\u003e \u003cp\u003e5.1.3 Acquiring the basic information on generation capability 146\u003c\/p\u003e \u003cp\u003e5.1.4 Construction of the first trial schedule 149\u003c\/p\u003e \u003cp\u003e5.1.5 Schedule feasibility and adjustment 150\u003c\/p\u003e \u003cp\u003e5.1.6 Ancillary services 158\u003c\/p\u003e \u003cp\u003e5.1.7 Profiles within commitment periods 158\u003c\/p\u003e \u003cp\u003e5.1.8 Generator failure 159\u003c\/p\u003e \u003cp\u003e5.2 The centrally managed model 160\u003c\/p\u003e \u003cp\u003e5.2.1 Information and behaviour in centrally managed systems 160\u003c\/p\u003e \u003cp\u003e5.2.2 Introduction of Independent Power Producers (IPP’s) 163\u003c\/p\u003e \u003cp\u003e5.2.3 Consumers in the centrally managed system 164\u003c\/p\u003e \u003cp\u003e5.3 The single buyer 164\u003c\/p\u003e \u003cp\u003e5.4 The pool model 165\u003c\/p\u003e \u003cp\u003e5.4.1 The trial schedule in the pool 166\u003c\/p\u003e \u003cp\u003e5.4.2 Subsequent trial schedules and final initial schedule 167\u003c\/p\u003e \u003cp\u003e5.4.3 Demand 168\u003c\/p\u003e \u003cp\u003e5.4.4 Power capacity 168\u003c\/p\u003e \u003cp\u003e5.4.5 Penalty for failure 169\u003c\/p\u003e \u003cp\u003e5.4.6 Pool index 169\u003c\/p\u003e \u003cp\u003e5.4.7 Contracts for difference 169\u003c\/p\u003e \u003cp\u003e5.4.8 Supplier price 170\u003c\/p\u003e \u003cp\u003e5.4.9 Fixed cost recovery in the pool 171\u003c\/p\u003e \u003cp\u003e5.4.10 Price caps in static schedule 171\u003c\/p\u003e \u003cp\u003e5.4.11 Market power in the pool 171\u003c\/p\u003e \u003cp\u003e5.4.12 Information and communication in the pool 172\u003c\/p\u003e \u003cp\u003e5.4.13 Renewable and other generation with special treatment 172\u003c\/p\u003e \u003cp\u003e5.4.14 Offering and contracting strategy for generation plant in the pool 172\u003c\/p\u003e \u003cp\u003e5.4.15 Interpool relationships 175\u003c\/p\u003e \u003cp\u003e5.5 The bilateral model 176\u003c\/p\u003e \u003cp\u003e5.5.1 Contracting in the bilateral system 176\u003c\/p\u003e \u003cp\u003e5.5.2 Physical notification in the bilateral system 176\u003c\/p\u003e \u003cp\u003e5.5.3 The market operator in the bilateral market 177\u003c\/p\u003e \u003cp\u003e5.5.4 Operational strategy for contracted plant in the bilateral market 177\u003c\/p\u003e \u003cp\u003e5.5.5 Hybrid pool\/bilateral markets 178\u003c\/p\u003e \u003cp\u003e5.6 Imbalance and balancing 178\u003c\/p\u003e \u003cp\u003e5.6.1 Market structure for balancing and imbalance 178\u003c\/p\u003e \u003cp\u003e5.6.2 Imbalance charging 179\u003c\/p\u003e \u003cp\u003e5.6.3 Provision of balancing 179\u003c\/p\u003e \u003cp\u003e5.6.4 Transmission effects in balancing 180\u003c\/p\u003e \u003cp\u003e5.6.5 Profile effects within the balancing period 180\u003c\/p\u003e \u003cp\u003e5.6.6 Transaction strategy 181\u003c\/p\u003e \u003cp\u003e5.6.7 Transaction cost minimisation 181\u003c\/p\u003e \u003cp\u003e5.6.8 Imbalance revenue distribution 181\u003c\/p\u003e \u003cp\u003e5.6.9 Auction choices 181\u003c\/p\u003e \u003cp\u003e5.6.10 Issues with balancing mechanisms 182\u003c\/p\u003e \u003cp\u003e5.7 Reserve contracts 182\u003c\/p\u003e \u003cp\u003e5.8 Wholesale markets 183\u003c\/p\u003e \u003cp\u003e5.9 Power exchanges 184\u003c\/p\u003e \u003cp\u003e5.9.1 The journey to power exchanges 184\u003c\/p\u003e \u003cp\u003e5.9.2 Specifics of power exchanges 187\u003c\/p\u003e \u003cp\u003e5.10 Advanced pool markets 189\u003c\/p\u003e \u003cp\u003e\u003cb\u003e6 Power Capacity 191\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e6.1 The definition of capacity 191\u003c\/p\u003e \u003cp\u003e6.2 Requirements for Capacity 193\u003c\/p\u003e \u003cp\u003e6.2.1 Generator failure 193\u003c\/p\u003e \u003cp\u003e6.2.2 Demand variation 196\u003c\/p\u003e \u003cp\u003e6.2.3 Network failure 196\u003c\/p\u003e \u003cp\u003e6.3 The basic economics of provision of capacity and reserve by generators 197\u003c\/p\u003e \u003cp\u003e6.3.1 Representation of generation capacity on the power stack 197\u003c\/p\u003e \u003cp\u003e6.3.2 Provision of capacity by a unit 197\u003c\/p\u003e \u003cp\u003e6.4 Modelling the capability of generation capacity 200\u003c\/p\u003e \u003cp\u003e6.4.1 Capacity effect of take or pay fuel supply contracts 200\u003c\/p\u003e \u003cp\u003e6.4.2 Capacity effect of annual emission limits 202\u003c\/p\u003e \u003cp\u003e6.4.3 Capacity effect of port and other infrastructure contracts 203\u003c\/p\u003e \u003cp\u003e6.4.4 Capacity effect of coal stocking 203\u003c\/p\u003e \u003cp\u003e6.4.5 Capacity effect of plant life usage optimisation 204\u003c\/p\u003e \u003cp\u003e6.4.6 The role of outage management in capacity 205\u003c\/p\u003e \u003cp\u003e6.4.7 Generation above normal maximum capacity 205\u003c\/p\u003e \u003cp\u003e6.4.8 Long term capacity 206\u003c\/p\u003e \u003cp\u003e6.4.9 Hydro 207\u003c\/p\u003e \u003cp\u003e6.4.10 Pumped storage 207\u003c\/p\u003e \u003cp\u003e6.5 Modelling capacity capability from the consumer side 208\u003c\/p\u003e \u003cp\u003e6.5.1 Modelling value of lost load as a capacity capability 209\u003c\/p\u003e \u003cp\u003e6.6 Commercial mechanisms – the generator perspective 209\u003c\/p\u003e \u003cp\u003e6.6.1 Day ahead capacity payments in pool markets 210\u003c\/p\u003e \u003cp\u003e6.6.2 Fixed cost subsidy, marginal cost energy provision 214\u003c\/p\u003e \u003cp\u003e6.6.3 Traded options and capacity contracts 214\u003c\/p\u003e \u003cp\u003e6.6.4 Self insurance for generator shortfall 217\u003c\/p\u003e \u003cp\u003e6.6.5 Mutual insurance 218\u003c\/p\u003e \u003cp\u003e6.6.6 Value from rare but highly priced energy contracts 219\u003c\/p\u003e \u003cp\u003e6.6.7 Reserve contracts 220\u003c\/p\u003e \u003cp\u003e6.7 Capacity provision – the supplier’s perspective 220\u003c\/p\u003e \u003cp\u003e6.7.1 Requirements to secure capacity by load serving entities 220\u003c\/p\u003e \u003cp\u003e6.8 Capacity provision – the network operator’s perspective 223\u003c\/p\u003e \u003cp\u003e6.9 The system operator’s perspective 224\u003c\/p\u003e \u003cp\u003e6.9.1 Cost to consumers 224\u003c\/p\u003e \u003cp\u003e6.9.2 Placing capacity obligation with the system operator 226\u003c\/p\u003e \u003cp\u003e6.9.3 Placing the capacity obligation with the regulator or ministry 226\u003c\/p\u003e \u003cp\u003e6.10 Capacity facilitation – contractual instruments 226\u003c\/p\u003e \u003cp\u003e6.10.1 Generator cover 227\u003c\/p\u003e \u003cp\u003e6.10.2 Insurance and reinsurance 227\u003c\/p\u003e \u003cp\u003e6.10.3 Traded options 235\u003c\/p\u003e \u003cp\u003e6.11 Use of options to convey probability information 235\u003c\/p\u003e \u003cp\u003e6.12 Effect of price caps on capacity and prices 237\u003c\/p\u003e \u003cp\u003e\u003cb\u003e7 Location 239\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e7.1 Infrastructure costs to be recovered 240\u003c\/p\u003e \u003cp\u003e7.1.1 Build and maintain 240\u003c\/p\u003e \u003cp\u003e7.1.2 Losses 241\u003c\/p\u003e \u003cp\u003e7.1.3 Reactive power 241\u003c\/p\u003e \u003cp\u003e7.1.4 Redundancy and security 241\u003c\/p\u003e \u003cp\u003e7.1.5 Cost of constraint 242\u003c\/p\u003e \u003cp\u003e7.1.6 Commercial losses 242\u003c\/p\u003e \u003cp\u003e7.1.7 Wheeling and interconnection 242\u003c\/p\u003e \u003cp\u003e7.2 Counterparties for payment and receipt 242\u003c\/p\u003e \u003cp\u003e7.3 Basic charging elements for location related charging 243\u003c\/p\u003e \u003cp\u003e7.3.1 Connection charges 243\u003c\/p\u003e \u003cp\u003e7.3.2 Use of system charges 243\u003c\/p\u003e \u003cp\u003e7.3.3 Calculation of capacity cost in relation to system capacity need 245\u003c\/p\u003e \u003cp\u003e7.3.4 Losses 245\u003c\/p\u003e \u003cp\u003e7.3.5 Locational element of balancing 247\u003c\/p\u003e \u003cp\u003e7.3.6 Locational element of reserve and security 247\u003c\/p\u003e \u003cp\u003e7.3.7 Regional structure for cross subsidy 247\u003c\/p\u003e \u003cp\u003e7.3.8 Constraints 248\u003c\/p\u003e \u003cp\u003e7.3.9 Reactive power 248\u003c\/p\u003e \u003cp\u003e7.4 Models for designation of electrical location 249\u003c\/p\u003e \u003cp\u003e7.4.1 Postage stamp 249\u003c\/p\u003e \u003cp\u003e7.4.2 Zonal 250\u003c\/p\u003e \u003cp\u003e7.4.3 Postage stamp with market splitting 250\u003c\/p\u003e \u003cp\u003e7.4.4 Nodal 251\u003c\/p\u003e \u003cp\u003e7.4.5 Implicit locational differentials 253\u003c\/p\u003e \u003cp\u003e7.4.6 Control area 253\u003c\/p\u003e \u003cp\u003e7.4.7 Position in voltage hierarchy 253\u003c\/p\u003e \u003cp\u003e7.5 Nodal energy prices, virtual transmission and nodal market contracts 254\u003c\/p\u003e \u003cp\u003e7.5.1 Market models 254\u003c\/p\u003e \u003cp\u003e7.5.2 Transmission allocation at system borders 258\u003c\/p\u003e \u003cp\u003e7.5.3 Connection allocation 260\u003c\/p\u003e \u003cp\u003e7.5.4 Integration of location based charging elements 260\u003c\/p\u003e \u003cp\u003e7.6 The energy complex 260\u003c\/p\u003e \u003cp\u003e7.6.1 Case examples 260\u003c\/p\u003e \u003cp\u003e7.6.2 Global opinion 262\u003c\/p\u003e \u003cp\u003e7.7 Environmental borders 263\u003c\/p\u003e \u003cp\u003e\u003cb\u003e8 Environment, Amenity, Corporate Responsibility 265\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e8.1 Environmental pressure 265\u003c\/p\u003e \u003cp\u003e8.2 Definitions 266\u003c\/p\u003e \u003cp\u003e8.2.1 Definition of production of potential impact factors 268\u003c\/p\u003e \u003cp\u003e8.2.2 Definition of impact 269\u003c\/p\u003e \u003cp\u003e8.2.3 Definition of sensitivity of impact factors once produced 272\u003c\/p\u003e \u003cp\u003e8.3 The policy debate 273\u003c\/p\u003e \u003cp\u003e8.4 Regulation and incentive for restricting emissions and other impacts 274\u003c\/p\u003e \u003cp\u003e8.4.1 Continuous limits 274\u003c\/p\u003e \u003cp\u003e8.4.2 Non instantaneous limits 275\u003c\/p\u003e \u003cp\u003e8.4.3 Environmental tolerance limits and translators 276\u003c\/p\u003e \u003cp\u003e8.4.4 Technology prescription or limits 276\u003c\/p\u003e \u003cp\u003e8.4.5 Self regulation 277\u003c\/p\u003e \u003cp\u003e8.4.6 Annual limits (caps) 277\u003c\/p\u003e \u003cp\u003e8.4.7 Cap and trade 279\u003c\/p\u003e \u003cp\u003e8.4.8 Emission allowance auctions 283\u003c\/p\u003e \u003cp\u003e8.4.9 Trade no Cap 283\u003c\/p\u003e \u003cp\u003e8.4.10 Taxes 283\u003c\/p\u003e \u003cp\u003e8.4.11 Cap and tax 284\u003c\/p\u003e \u003cp\u003e8.5 Other policy tools for environmental enhancement 285\u003c\/p\u003e \u003cp\u003e8.5.1 Feed in renewable generation 285\u003c\/p\u003e \u003cp\u003e8.5.2 Renewable obligation 285\u003c\/p\u003e \u003cp\u003e8.6 Fuel labelling and power content labelling 286\u003c\/p\u003e \u003cp\u003e8.6.1 Physical power labeling 292\u003c\/p\u003e \u003cp\u003e8.7 The cost of environmental enhancement 292\u003c\/p\u003e \u003cp\u003e8.8 Valuation of environmental factors 292\u003c\/p\u003e \u003cp\u003e8.9 Corporate responsibility 293\u003c\/p\u003e \u003cp\u003e8.10 The environmental impact of consumption 294\u003c\/p\u003e \u003cp\u003e\u003cb\u003e9 Price and Derivatives Modelling 295\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e9.1 Price processes and distributions 296\u003c\/p\u003e \u003cp\u003e9.1.1 Price processes 296\u003c\/p\u003e \u003cp\u003e9.1.2 Random walk 296\u003c\/p\u003e \u003cp\u003e9.1.3 Terminal distributions and price returns 298\u003c\/p\u003e \u003cp\u003e9.1.4 Transformation of process and Ito’s Lemma 298\u003c\/p\u003e \u003cp\u003e9.1.5 Normal and lognormal distributions 299\u003c\/p\u003e \u003cp\u003e9.1.6 Skewness 301\u003c\/p\u003e \u003cp\u003e9.1.7 The Poisson process 301\u003c\/p\u003e \u003cp\u003e9.1.8 Jump diffusion 302\u003c\/p\u003e \u003cp\u003e9.1.9 Central limit theory 303\u003c\/p\u003e \u003cp\u003e9.1.10 Extreme value theory 303\u003c\/p\u003e \u003cp\u003e9.1.11 Mean reversion 304\u003c\/p\u003e \u003cp\u003e9.1.12 Mean reversion with jump diffusion 306\u003c\/p\u003e \u003cp\u003e9.1.13 Regime switching 307\u003c\/p\u003e \u003cp\u003e9.1.14 Markov processes 309\u003c\/p\u003e \u003cp\u003e9.1.15 Spot and Forward price processes 310\u003c\/p\u003e \u003cp\u003e9.1.16 The choice between spot and forward price processes 317\u003c\/p\u003e \u003cp\u003e9.1.17 n factor processes 318\u003c\/p\u003e \u003cp\u003e9.1.18 Correlation 318\u003c\/p\u003e \u003cp\u003e9.1.19 Co-integration 321\u003c\/p\u003e \u003cp\u003e9.1.20 Conditional expectations 321\u003c\/p\u003e \u003cp\u003e9.1.21 The denominator 325\u003c\/p\u003e \u003cp\u003e9.1.22 Cost of risk 325\u003c\/p\u003e \u003cp\u003e9.1.23 Transaction cost 327\u003c\/p\u003e \u003cp\u003e9.2 Volatility modelling 328\u003c\/p\u003e \u003cp\u003e9.2.1 Term structure of volatility – TSOV 328\u003c\/p\u003e \u003cp\u003e9.2.2 Smile and skew 335\u003c\/p\u003e \u003cp\u003e9.3 Correlation modelling 337\u003c\/p\u003e \u003cp\u003e9.3.1 Cross commodity correlation modelling 337\u003c\/p\u003e \u003cp\u003e9.3.2 Commodity spread modelling 338\u003c\/p\u003e \u003cp\u003e9.3.3 Correlation between long and short duration contracts 339\u003c\/p\u003e \u003cp\u003e9.3.4 Correlation measurement using historic data 340\u003c\/p\u003e \u003cp\u003e9.3.5 Correlation models 341\u003c\/p\u003e \u003cp\u003e9.3.6 Principal components 344\u003c\/p\u003e \u003cp\u003e9.4 Pricing electricity derivatives 346\u003c\/p\u003e \u003cp\u003e9.4.1 Average rate contracts 347\u003c\/p\u003e \u003cp\u003e9.4.2 European options 347\u003c\/p\u003e \u003cp\u003e9.4.3 American options 348\u003c\/p\u003e \u003cp\u003e9.4.4 Swing options 349\u003c\/p\u003e \u003cp\u003e9.4.5 Monte Carlo Simulation 349\u003c\/p\u003e \u003cp\u003e9.4.6 Modelling with trees 350\u003c\/p\u003e \u003cp\u003e9.4.7 Modelling swing contracts using semi-analytic methods 357\u003c\/p\u003e \u003cp\u003e9.4.8 Volume options 357\u003c\/p\u003e \u003cp\u003e9.4.9 Imbalance pricing 358\u003c\/p\u003e \u003cp\u003e9.5 Establishing fundamental relationships 359\u003c\/p\u003e \u003cp\u003e9.5.1 The exogenous and endogenous worlds 361\u003c\/p\u003e \u003cp\u003e9.5.2 Price Growth 364\u003c\/p\u003e \u003cp\u003e9.5.3 Weather, climate, daylight 365\u003c\/p\u003e \u003cp\u003e9.5.4 Consumer contracts 370\u003c\/p\u003e \u003cp\u003e9.5.5 Valuation of physical assets and risks 372\u003c\/p\u003e \u003cp\u003e9.5.6 Pricing using world views 375\u003c\/p\u003e \u003cp\u003e9.6 Market completeness 376\u003c\/p\u003e \u003cp\u003e9.6.1 The completeness of markets with options 377\u003c\/p\u003e \u003cp\u003e9.7 Emission permit prices 378\u003c\/p\u003e \u003cp\u003e9.7.1 Forward price profile 378\u003c\/p\u003e \u003cp\u003e9.7.2 Banking and borrowing 378\u003c\/p\u003e \u003cp\u003e9.7.3 Volatility of permit prices 379\u003c\/p\u003e \u003cp\u003e9.8 Network price volatility 379\u003c\/p\u003e \u003cp\u003e\u003cb\u003e10 Economic Principles in Relation to the ESI 381\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e10.1 Basic economic principles in an ESI context 381\u003c\/p\u003e \u003cp\u003e10.1.1 Microeconomics and macroeconomics 381\u003c\/p\u003e \u003cp\u003e10.1.2 Classical economics 382\u003c\/p\u003e \u003cp\u003e10.1.3 Neoclassical economics 383\u003c\/p\u003e \u003cp\u003e10.1.4 The economics of the margin 385\u003c\/p\u003e \u003cp\u003e10.1.5 The demand function 387\u003c\/p\u003e \u003cp\u003e10.1.6 The production function 391\u003c\/p\u003e \u003cp\u003e10.1.7 Surplus 392\u003c\/p\u003e \u003cp\u003e10.1.8 Pareto optimisation 393\u003c\/p\u003e \u003cp\u003e10.1.9 Utility 396\u003c\/p\u003e \u003cp\u003e10.1.10 Welfare 401\u003c\/p\u003e \u003cp\u003e10.1.11 Preference 402\u003c\/p\u003e \u003cp\u003e10.1.12 Contingent valuation 406\u003c\/p\u003e \u003cp\u003e10.1.13 Valuation approaches to mortality and morbidity 407\u003c\/p\u003e \u003cp\u003e10.1.14 Policy 407\u003c\/p\u003e \u003cp\u003e10.1.15 Discriminatory pricing 408\u003c\/p\u003e \u003cp\u003e10.1.16 Problems with cross subsidy and redistribution of wealth 411\u003c\/p\u003e \u003cp\u003e10.1.17 Public goods and private goods 413\u003c\/p\u003e \u003cp\u003e10.1.18 Existence value 414\u003c\/p\u003e \u003cp\u003e10.1.19 Goods and bads 414\u003c\/p\u003e \u003cp\u003e10.1.20 Externalities 414\u003c\/p\u003e \u003cp\u003e10.1.21 Equilibrium 415\u003c\/p\u003e \u003cp\u003e10.1.22 Trade 416\u003c\/p\u003e \u003cp\u003e10.1.23 Fixed and marginal costs 419\u003c\/p\u003e \u003cp\u003e10.1.24 Cost of capital 420\u003c\/p\u003e \u003cp\u003e10.1.25 Fundamental measures 422\u003c\/p\u003e \u003cp\u003e10.1.26 Hedonic and shadow prices 423\u003c\/p\u003e \u003cp\u003e10.1.27 Price growth 423\u003c\/p\u003e \u003cp\u003e10.2 Optimal pricing by asset owners 424\u003c\/p\u003e \u003cp\u003e10.2.1 The privately owned monopoly operator 424\u003c\/p\u003e \u003cp\u003e10.2.2 Forward hedging – timing effects 425\u003c\/p\u003e \u003cp\u003e10.2.3 Fixed cost recovery 425\u003c\/p\u003e \u003cp\u003e10.3 Regulated prices 433\u003c\/p\u003e \u003cp\u003e10.4 Taxes and subsidies 434\u003c\/p\u003e \u003cp\u003e10.4.1 Deadweight loss of taxes 435\u003c\/p\u003e \u003cp\u003e10.4.2 The role of the ESI in the fiscal structure of the macroeconomy 435\u003c\/p\u003e \u003cp\u003e10.5 Games, interaction and behaviour 436\u003c\/p\u003e \u003cp\u003e10.5.1 Use of information without interaction 437\u003c\/p\u003e \u003cp\u003e10.5.2 Local consolidation 438\u003c\/p\u003e \u003cp\u003e10.5.3 Collaboration 438\u003c\/p\u003e \u003cp\u003e10.5.4 Repeated games 439\u003c\/p\u003e \u003cp\u003e10.5.5 Interactive behaviour of mid merit plant 439\u003c\/p\u003e \u003cp\u003e10.5.6 Interactive behaviour of low merit plant 440\u003c\/p\u003e \u003cp\u003e10.5.7 Reaction curves 440\u003c\/p\u003e \u003cp\u003e10.5.8 Sequential quantity response – Stackelberg game 441\u003c\/p\u003e \u003cp\u003e10.5.9 Simultaneous volume response – Cournot game 442\u003c\/p\u003e \u003cp\u003e10.5.10 Comparison of Stackelberg and Cournot outcomes 443\u003c\/p\u003e \u003cp\u003e10.5.11 Price leadership – Bertrand game 443\u003c\/p\u003e \u003cp\u003e10.5.12 Gaming and payoff matrices 444\u003c\/p\u003e \u003cp\u003e10.5.13 Nash equilibria 445\u003c\/p\u003e \u003cp\u003e10.5.14 Repeated games and cooperative games 448\u003c\/p\u003e \u003cp\u003e10.5.15 New entrance – pre-emption and optionality 449\u003c\/p\u003e \u003cp\u003e10.5.16 Gaming by institutions 450\u003c\/p\u003e \u003cp\u003e10.5.17 Auctions 451\u003c\/p\u003e \u003cp\u003e10.5.18 Focal points 452\u003c\/p\u003e \u003cp\u003e10.5.19 Supply function equilibria 452\u003c\/p\u003e \u003cp\u003e10.6 Environmental economics 455\u003c\/p\u003e \u003cp\u003e10.6.1 Valuation 455\u003c\/p\u003e \u003cp\u003e10.6.2 Environmental taxes 456\u003c\/p\u003e \u003cp\u003e10.6.3 Property rights 459\u003c\/p\u003e \u003cp\u003e10.7 Market failure 461\u003c\/p\u003e \u003cp\u003e10.8 Shocks 462\u003c\/p\u003e \u003cp\u003e10.9 The political economics of liberalisation 464\u003c\/p\u003e \u003cp\u003e\u003cb\u003e11 Financial Modelling of Power Plant 467\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e11.1 Power plant financial model 467\u003c\/p\u003e \u003cp\u003e11.2 The baseload contract 469\u003c\/p\u003e \u003cp\u003e11.2.1 Contracts on failure 470\u003c\/p\u003e \u003cp\u003e11.3 The planned flexibility contract 470\u003c\/p\u003e \u003cp\u003e11.4 The vanilla option contract 470\u003c\/p\u003e \u003cp\u003e11.4.1 Cost of the reliability contract on the option contract 471\u003c\/p\u003e \u003cp\u003e11.5 Extra flexibility 471\u003c\/p\u003e \u003cp\u003e11.6 Finance and hedging 472\u003c\/p\u003e \u003cp\u003e11.6.1 Plant failure as a limiting factor in growth and return 472\u003c\/p\u003e \u003cp\u003e11.6.2 Cost of risk 474\u003c\/p\u003e \u003cp\u003e11.6.3 Value at Risk – VAR 475\u003c\/p\u003e \u003cp\u003e11.6.4 Corporate financial measures 475\u003c\/p\u003e \u003cp\u003e11.7 Accounting 476\u003c\/p\u003e \u003cp\u003e\u003cb\u003e12 Security of Supply 477\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e12.1 Supply chain 477\u003c\/p\u003e \u003cp\u003e12.1.1 Sources 478\u003c\/p\u003e \u003cp\u003e12.1.2 Power generation capacity 479\u003c\/p\u003e \u003cp\u003e12.1.3 Transmission 480\u003c\/p\u003e \u003cp\u003e12.1.4 Distribution 480\u003c\/p\u003e \u003cp\u003e12.1.5 Suppliers 480\u003c\/p\u003e \u003cp\u003e12.1.6 Consumers 481\u003c\/p\u003e \u003cp\u003e12.2 Reserve margin 481\u003c\/p\u003e \u003cp\u003e12.2.1 Scenario approach concept of reserve margin 481\u003c\/p\u003e \u003cp\u003e12.2.2 Probability approach to reserve margin 482\u003c\/p\u003e \u003cp\u003e12.2.3 The effect of import, export and transit 483\u003c\/p\u003e \u003cp\u003e12.3 The responsibility for security of supply 484\u003c\/p\u003e \u003cp\u003e\u003cb\u003eAppendix 485\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eA.1 Plant life usage 485\u003c\/p\u003e \u003cp\u003eA.2 Power plant failure and physical risk 487\u003c\/p\u003e \u003cp\u003eA.2.1 Causes of failure 487\u003c\/p\u003e \u003cp\u003eA.2.2 Combinatorial analysis 487\u003c\/p\u003e \u003cp\u003eA.2.3 Monte Carlo modelling 488\u003c\/p\u003e \u003cp\u003eA.2.4 Cost of failure 488\u003c\/p\u003e \u003cp\u003eA.2.5 Hedging return to service 488\u003c\/p\u003e \u003cp\u003eA.2.6 State space modelling of power plant 489\u003c\/p\u003e \u003cp\u003eA.3 Reactive power 491\u003c\/p\u003e \u003cp\u003eA.4 Direct current load flow modelling 493\u003c\/p\u003e \u003cp\u003eA.4.1 Calculating transmission charges from DC load flow 495\u003c\/p\u003e \u003cp\u003eA.4.2 Calculation of losses 495\u003c\/p\u003e \u003cp\u003eReferences 497\u003c\/p\u003e \u003cp\u003eIndex 507\u003c\/p\u003e","brand":"John Wiley \u0026 Sons Inc","offers":[{"title":"Default Title","offer_id":48864620806487,"sku":"9780470011584","price":89.3,"currency_code":"GBP","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0817\/1739\/5799\/files\/9780470011584.jpg?v=1722272762","url":"https:\/\/bookcurl.com\/products\/electricity-markets-9780470011584","provider":"Book Curl","version":"1.0","type":"link"}