ENE424 Electricity Markets (E)

• Topics

  Electricity markets worldwide have been restructured and deregulated since the early 1990s. Different countries have adopted different market designs to increase efficiency. The more recent transition to a decarbonized energy system has presented the electricity sector with both challenges and opportunities. On the one hand, the sector needs to reduce its carbon footprint, and on the other hand, electrification in itself contributes to decarbonization of other key emitting sectors, such as transport, buildings, and industry. Consequently, the existing structures are now being challenged by new renewable resources, new technologies and new business models.

  A key issue is nevertheless the competitive exchange of electricity, along with a regulatory approach to the electricity grid and businesses. An important aspect of market design is to assess the interactions between the operational and commercial aspects of the electricity markets. The objective of the course is to study electricity market design, identifying key elements of market structure, market mechanisms and regulation, and introduce the students to the fundamental aspects of renewable energy sources, from the point of view of both market operators and market participants.

  Some of the main topics are:

  • Electricity market reforms and challenges (main premises, different approaches, restructuring, decarbonization, digitalization, decentralization).
  • Market mechanisms (electricity spot market, ancillary services, congestion management, financial electricity markets, retail markets).
  • Regulatory issues of electricity markets (competition policy, regulation of natural monopolies, environmental measures).
  • Increasing penetration of intermittent renewable energy sources in power systems and subsequent impacts on market dynamics.

• Learning outcome

  Knowledge

  After completing this course, students

  • have an overview of the main building blocks for deregulating and restructuring of electricity markets
  • understand how the efficiency of the market depends upon the design and interaction of mechanisms for energy trade, ancillary services, congestion management, risk management, environmental measures, and regulatory policies
  • understand the impact of intermittent renewables on electricity markets and means to increase their share in the power systems

  Skills

  After completing this course, students will be able to

  • compare and discuss differences in chosen structure and electricity market design in different countries
  • identify and understand the specific market mechanisms necessary in an electricity market, i.e. mechanisms for energy trade, ancillary services, congestion management, risk management, environmental measures, and regulatory policies

  General competencies

  After completing this course, students will

  • have acquired knowledge of electricity market structures that is necessary to understand and to assess different proposed policies and measures aiming at e.g. further efficiency, the integration of new technologies, and environmental protection
  • be able to professionally communicate results and opinions both scientifically and professionally

• Teaching

  Lectures and seminars, group work, student presentations.

  Guests from the industry will participate in some of the lectures.

• Required prerequisites

  None.

• Credit reduction due to overlap

  None.

• Compulsory Activity

  Students must attend all classes unless there is a valid reason for absence (e.g. illness).

  Compulsory activities from previous semesters are not valid.

• Assessment

  The grade for the course is given based on a portfolio consisting of:

  • Presentation of a chosen journal article.
  • Term paper on a chosen topic that is connected to the lectures. The term paper topic can be connected to the chosen article.
  • Oral presentation of the term paper.

  The assessment elements are group-based (2-3 students). The final grade is individual and is based on an overall assessment of the three elements, including the student's development during the semester. All elements have to be taken in the same semester.

  Since some elements cannot be reassessed, the grade cannot be appealed.

• Grading Scale

  A - F

• Computer tools

  None.

• Literature

  • Cretì, Anna, and Fulvio Fontini (2019): Economics of Electricity: Markets, Competition and Rules. Cambridge University Press, UK
  • Wangensteen, Ivar (2012): Power system economics: the Nordic electricity market. Tapir Academic Press
  • Selected articles and book chapters.