The Economics of Electricity Markets

The Economics of Electricity Markets provides a cutting-edge analysis of the critical issues involved in the design and operation of electricity markets, as well as an assessment of alternative institutional arrangements that have either been implemented or are under discussion in Europe and the US. The book illustrates how a sound market design can render electricity trading and retailing very much like that of other commodities. Social and political concerns, rather than engineering or economics, are what make electricity markets 'special'. The expert contributors address a wide set of issues that arise when competition is introduced to the electricity industry, ranging from the design of spot and real-time power markets to alternative approaches to congestion management, from competition policy in wholesale electricity markets to the benefits and costs of retail competition, and from regulatory measures to ensure generation capacity adequacy to the politicization of generation investment decisions as a way of pursuing sustainability targets. This highly informative book will appeal to academics, students and researchers in the field of advanced energy economics, and will prove essential reading for energy regulators, professionals and executives wishing to explore the theoretical foundations underpinning their day-to-day activities.