Power System Economics: Designing Markets for Electricity

The first systematic presentation of electricity market design-fromthe basics to the cutting edge. Unique in its breadth and depth.Using examples and focusing on fundamentals, it clarifies longmisunderstood issues-such as why today's markets are inherentlyunstable. The book reveals for the first time how uncoordinatedregulatory and engineering policies cause boom-bust investmentswings and provides guidance and tools for fixing broken markets.It also takes a provocative look at the operation of pools andpower exchanges.
* Part 1 introduces key economic, engineering and market designconcepts.
* Part 2 links short-run reliability policies with long-runinvestment problems.
* Part 3 examines classic designs for day-ahead and real-timemarkets.
* Part 4 covers market power, and
* Part 5 covers locational pricing, transmission right and pricinglosses.
The non-technical introductions to all chapters allow easy accessto the most difficult topics. Steering an independent coursebetween ideological extremes, it provides background material forengineers, economists, regulators and lawyers alike. With nearly250 figures, tables, side bars, and concisely-stated results andfallacies, the 44 chapters cover such essential topics as auctions, fixed-cost recovery from marginal cost, pricing fallacies, real andreactive power flows, Cournot competition, installed capacitymarkets, HHIs, the Lerner index and price caps.

About the Author
Steven Stoft has a Ph.D. in economics (U.C. Berkeley) as well as abackground in physics, math, engineering, and astronomy. He spent ayear inside FERC and now consults for PJM, California and privategenerators. Learn more at www.stoft.com.