Chapter 2

How the Industry Operates

This chapter describes how the electricity industry operates. It starts by describing the physical system that produces and delivers electricity to customers. The demand for electricity depends critically on the season and time of day. The next section describes the logic and economics that leads to this structure. This is followed by descriptions of the most common generation technologies. These technologies have different important attributes and roles so they are organized into several groups to emphasize similarities. Generators have different variable costs of production. Figuring out how to operate them to produce power at least cost is another important issue. This process is covered next. Because of ...

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