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Class 1 Economic Systems For Electric Power Planning: Professors Jim Mccalley and Leigh Tesfatsion

This document provides an overview and schedule for a course on economic systems for electric power planning. It lists the course instructors and their websites, and notes some differences in their orientations that reflect economic and engineering requirements. The document outlines assignments for the first week, including reading materials and homework. It then provides brief descriptions of what the course will cover, including characteristics of electric power systems before and after deregulation, privatization, and the introduction of competitive markets. Key dates for deregulation in different regions are also listed. The document concludes with an overview of course objectives related to electric industry structure, market systems, optimization tools, and transmission planning.

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90 views16 pages

Class 1 Economic Systems For Electric Power Planning: Professors Jim Mccalley and Leigh Tesfatsion

This document provides an overview and schedule for a course on economic systems for electric power planning. It lists the course instructors and their websites, and notes some differences in their orientations that reflect economic and engineering requirements. The document outlines assignments for the first week, including reading materials and homework. It then provides brief descriptions of what the course will cover, including characteristics of electric power systems before and after deregulation, privatization, and the introduction of competitive markets. Key dates for deregulation in different regions are also listed. The document concludes with an overview of course objectives related to electric industry structure, market systems, optimization tools, and transmission planning.

Uploaded by

sayedmh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Class 1 Economic systems for electric power planning

Professors Jim McCalley and Leigh Tesfatsion

WEBSITES
Dr. McCalleys: http://home.eng.iastate.edu/~JDM/ee458_2011/ee458schedule.htm Dr. Tesfatsions: http://www2.econ.iastate.edu/classes/econ458/tesfatsion/Home458Team.htm

General rule: Use the site of the instructor giving the lectures. Comments: Links on each will take you to the other. Generally consistent although differences exist and reflect the different orientations of the instructors. Different orientations of instructors reflect economic /engineering requirements of electricity markets

Assignments for this week


1. Read Paper on JDM website linked by the name of California Crisis Explained. Complete HW1 (also on JDM website) to turn in on Friday 8/26. 2. Read notes on JDM website linked by Market Summary , called Overview of Electricity Markets. 3. Read chapter 1 in Textbook. 4. Read Notes on cost curves from JDM website.

What this course is about


The electric industry and . Its characteristics before, but mainly its characteristics after Before, and after what?

What happened?
Deregulation Privatization Vertical disaggregation Functional unbundling Introduced markets Brought competition

When did this happen?


Apr 1990: UK Pool opens

Overseas

Oct 1996: New Zealand NZEM Jan. 1996: Sweden in Nordpool

Dec 1998: Australia NEM opens

Mar 2001: NETA replaces UK Pool Jan. 2000: Denmark in Nordpool

Jan. 1991: Norway launches Nordpool

Jan. 1998: Finland in Nordpool

1990

1992 North America

1994

1996
Feb 1996 MISO formed.

1998
Jan 1998: PJM ISO created Mar 1998: Cal ISO opens May 1999: ISO-NE opens Nov 1999: NY ISO launches

2000
July 2001: ERCOT becomes one control area Jan. 2001: Alberta Pool opens

2002
Jan 2002 ERCOT opens retail zonal mrket May 2002: Ontario IMO launches Dec 2001 MISO becomes first RTO

2004

2006
April 2005 MISO Markets Launch

2008
Feb 2007 SPP Markets Launch Dec 2008 ERCOT Nodal Market Launched

1996: ERCOT becomes ISO.

Well, sort of, actually, it all started much earlier

What was it before?


A monopolistic, and regulated, industry In any given region, there is only one organization from which to buy. Other organizations are blocked. Reasons for giving monopoly status can vary, but in the electric industry, the main reason was
Economies of scale when average cost of production, $/MWhr, decreases as generation plant gets larger.

Economies of scale

And this drove all thinking in the electric industry from 1900 until the early 1960s. And then what happened?

Three things
1. Smaller plants began to look more economic .
a)

Why?

Large plants takes years to build, often must be located far away, and create havoc when they outage. Smaller plants
are built more quickly and their construction costs are consequently subject to less economic uncertainty; can be located more closely to load centers, an attribute that avoids transmission, decreases system losses, & is advantageous for system security; are generally more reliable, and less consequential when they do outage.

b)

c)

d)

Combined cycle units, attractive because of high efficiency, have to account for design complexities due to coupling between CTs & HRSGs driven by waste heat from the CTs, and so tend to be lower in rating. Cogeneration facilities, attractive because of high efficiency, typically have lower ratings as a result of their interdependency with the industrial steam processes supported by them. Plants fueled by renewable energy sources (biomass, wind, solar, and independent hydro), attractive because of their low operating expenses and environmental appeal, also tend to have lower ratings.

Three things
2. Reaganomics and public approval of less tax, less government, less regulation and being competitive. 3. Fred Schweppe:
F. Schweppe, Power Systems 2000, IEEE Spectrum, Vol. 15, No. 7, July 1978. F. Schweppe, R. Tabors, J. Kirtley, H. Outhred, F. Pickel, and A. Cox, Homeostatic Utility Control, IEEE Trans. Pwr. App. And Sys., Vol. PAS-99, No. 3, May/June 1980. M. Caramanis, R. Bohn, and F. Schweppe, Optimal spot pricing: practice & theory, IEEE Transactions on Power Apparatus and Systems, Vol. PAS-101, No. 9 September 1982. F. Schweppe, M. Caramanis, R. Tabors, R. Bohn, Spot Pricing of Electricity, Kluwer, 1988.

And this is what it looks like today

But what do these mean?

Vertical disaggregation Functional unbundling

Transmission and System Operator G G G


G G

Vertically Integrated Utility

1900-199?

Transmission and System Operator G G G


G G

Transmission Operator

G
Transmission Operator

G
Independent System Operator

G G

Transmission Operator

Vertically Integrated Utility

1900-199?

Today

And the ISO/RTO runs the markets

Which leads to the course objectives


characterize existing electric industry structure and market systems; solve linear programming and integer programming problems using commercial optimization software packages; use the two basic electric energy market computational tools: security constrained optimal power flow and security constrained unit commitment; determine electricity and transmission prices, how they affect the transmission expansion of electric power systems; be conversant with transmission and resource planning tools and procedures used by todays industry.

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