Electrical Engineer's Reference Book, 16th Edition

42

Electricity Economics and Trading

BJ Cory, DSc(Eng), FIEE, Fellow IEEE, CEng,     Imperial College, London

Contents

Introduction 42.1

Summary of electricity pricing principles 42.2

Economic efficiency 42.2.1

Marginal pricing and risk 42.2.2

Delivery charging 42.2.3

Electricity markets 42.3

Market models 42.4

Reactive market 42.5

42.1 Introduction

Like any commodity or good, electrical energy can be bought and sold in an established market place. Hence buying and selling infrastructures are required to enable quantities and prices to be publicised and contracts negotiated between various groups or individuals. The difference between electrical energy and other commodities is the delivery system—rather than delivering by some form ...