MSc Advanced Electrical Power Systems Engineering

BRIEF DESCRIPTION OF THE UNIT

1. Introduction to optimisation and optimal economic system operation

i)   Introduction to power system economics: electricity as a commodity and trade-off between economical and secure supply (2 lectures)

ii)  Introduction to nonlinear optimization concepts and Karush-Kuhn-Tucker (KKT) conditions (2 lectures)

iii) Introduction to economic dispatch, KKT solution, and interpretation of Lagrange multipliers (2 lectures)

iv) Introduction to unit commitment (2 lectures)

2. Electricity markets and power system economics

i)   Foundations of microeconomics: Supply and demand; price elasticity; surplus; social welfare; market equilibrium; theory of the firm; fixed cost, marginal cost, average cost (2 lectures)

ii)  Introduction to risk: Definition; price risk management and contracts; principles of portfolio design (2 lectures)

iii) Industry restructuring: Objectives; unbundling; market players; basic structures: pool, bilateral and mixed (2 lecture)

iv) Deregulated business (wires business) (2 lectures)

v) Electricity marketplaces: Forward and spot (balancing) markets; power exchanges; generation scheduling; two-settlement system (2 lectures)

vi)  Participation in electricity markets: producers, retailers, customers, hybrid participants (2 lectures)

vii) Network effects: Locational marginal pricing; transmission losses and constraints; transmission rights (3 lectures)

3. Concepts of power system security

i)   Supply and demand balance over different timeframes: ancillary services in a market environment and concept of (N-x) security (2 lectures)

ii)  Optimal power flow and DC approximation (3 lectures)

4. Power system investment

i)   Generation investment: Drivers for capacity expansion and retirement; risks; planning in deregulated environment  (2 lectures)

ii) Generation development in vertically integrated power systems (2 lectures)

iii)  Transmission investment: Costing and pricing of transmission networks; value of transmission; need for regulation; approaches to transmission pricing (4 lectures)

The unit aims to: The unit aims to introduce the student to the operation and economics of power systems. The emphasis is placed on the need to balance the desire to operate (as well as plan) as economically as possible with the need to maintain the security of the system. In order to do so in a market context, the unit also gives an understanding of the economic principles underlying the introduction of competition in the supply and retail of electricity as well as the opening of the transmission and distribution systems to third party access.

ILO 1 - Use a software package to solve optimization of the test generation – transmission system and analyse and explain the simulation results.

ILO 2 - Explain different electricity wholesale markets and associated contracts, and solve problems that take into account all trading arrangements in the wholesale market.

ILO 3 - Analyse generation and transmission expansion planning and solve problems for vertically integrated and deregulated power systems

ILO 4 - Explain fundamentals of locational marginal pricing used for transmission congestion management and solve problems of small dimensions.

ILO 5 - Explain market structures, differences between competition, oligopoly and monopoly, and define Nash equilibrium.

ILO 6 - Explain fundamental concepts of microeconomics, theory of the firm and markets, and calculate relevant examples.

ILO 7 - Explain application of the generalized non-linear optimization to economic operation of power systems and calculate examples of small dimensions.

ILO 8 - Explain and calculate technical aspects of the power system security and balancing, and explain ancillary services with examples from the GB industry.

ILO 9 - Describe fundamental principles of the regulated business applied for the regulation of “monopolistic” utilities, and define essential economic price control principles.

ILO 10 - Describe technical, financial, price and external risks related to power system operation and planning, and produce relevant examples.

Written Examination

Four compulsory questions, answer all questions

Duration: 3 hours

Calculators are permitted

This examination forms 80% of the unit assessment

Coursework/Laboratories

The number of laboratories attended: 2

Laboratory 1

The length of each laboratory: 3 hours

A report of a maximum of 10 pages on on Optimal Power Flow and Power System Operation

This course work forms 20% of the unit assessment

Laboratory 2

Power system design exercise running through the entire semester for full time students only

Satisfactory engagement with the exercise and participation in the group presentation

This course work is a pass / fail

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• Power generation, operation, and control by Wood, Allen J. John Wiley and Sons, 2013. ISBN: 111873386
• Fundamentals of power system economics by Kirschen, Daniel S. Wiley, 2004. ISBN: 0470845724
• Fundamentals of power system economics by Kirschen, Daniel Sadi. John Wiley & Sons, 2004. ISBN: 9780470845721
• Power generation, operation, and control by Wood, Allen J. John Wiley and Sons, 2014. ISBN: 9781118733844