Preface ........................................................ xi
Acknowledgments ................................................ xv
Figure Citations ............................................. xvii
About the Author .............................................. xix
1. Overview .................................................... 1
1.1 The Power Delivery Chain in a Vertically Integrated
Utility ................................................. 1
1.2 The Power Delivery Chain in a Market Environment ........ 3
2. Energy, Load, and Generation Technologies ................... 7
2.1 lincrgy, Power, and their Measurements .................. 7
2.2 Load ................................................... 14
2.3 Generation Technologies ................................ 21
3. The Grid ................................................... 49
3.1 Fundamentals: Load, Generation, and Alternating
Current ................................................ 49
3.2 Grid Equipment ......................................... 56
3.3 Grid Reliability and Contingency Requirements .......... 64
3.4 Grid Con figuration .................................... 67
3.5 Grid Operations ........................................ 72
3.6 Blackout August 14, 2003 ............................... 76
4. Short-Term Utility Planning ................................ 81
4.1 Planning and Execution of Dispatch: Day-Ahead
Planning Through Real-Time Delivery .................... 81
4.2 Day-Ahead Demand Forecasting: Load and Ancillary
Service Requirements ................................... 84
4.3 Least-Cost Dispatch in a Single Control Area:
A Simple Model ......................................... 89
4.4 A Solution Using Profit Maximization ................... 95
4.5 Least-Cost Dispatch in a Single Control Area with
Operating Constraints .................................. 99
4.6 Least-Cost Dispatch in a Single Node with Spinning
Reserve and Regulation ................................ 111
4.7 Least-Cost Dispatch in a Network ...................... 113
4.8 Real Time ............................................. 120
5. Long-Term Utility Planning ................................ 122
5.1 Project Development ................................... 122
5.2 The Planning Process .................................. 127
5.3 Long-Term Load Forecasting ............................ 129
5.4 A Simplified Look at Generation Capacity Additions .... 131
5.5 Generation Additions and Retirements Within a Single
Control Area .......................................... 143
5.6 Generation Additions and Retirements wilh
Transmission to a Single Control Area ................. 147
5.7 Generation Additions and Retirements and
Transmission Additions Within a Network ............... 148
5.8 Reserve Reuqirements .................................. 151
6. Midterm Utility Planning .................................. 152
6.1 Informational Requirements ............................ 152
6.2 Formulation of the Optimization Problem ............... 156
7. A Market Environment ...................................... 161
7.1 Principles and Architecture ........................... 161
7.2 Short-Term Market Design: Day-Ahead Scheduling
Through Real-Time Delivery ............................. 164
7.3 Long-Term Market Design: No Clear Solutions ........... 170
7.4 Midterm Market Design ................................. 173
8. Asset Management in Short-Term Markets .................... 180
8.1 Retailers ............................................. 180
8.2 Power Producers ....................................... 183
8.3 Integrated Energy Companies ........................... 189
9. Investment Analysis: Long-Term Planning in a Market
Environment ............................................... 192
9.1 Investment Setting in Utility and Market
Environments .......................................... 192
9.2 Project Analysis for a Merchant Plant ................. 193
9.3 Power Purchase Agreements (Long-Term Contracts) ....... 202
10. Risk Management in the Midterm Markets .................... 211
10.1 Retailer Risk ........................................ 211
10.2 Power Producer Risk .................................. 214
10.3 A Quick Risk Primer in Statistics lor Risk
Management ........................................... 215
10.4 Risk Management in Midterm Markets: Retailers ........ 229
10.5 Risk Management in Midterm Markets: Power
Producers ............................................ 252
10.6 Risk Management in Midterm Markets: Integrated
Electricity Suppliers ................................ 274
11. The California Experience ................................. 278
11.1 Market Fundamentals .................................. 279
11.2 Short-Term Market Structure: The CALPX, CAISO, and
Other Market Participants ............................ 281
11.3 Fatboy, Gel Shorty, Ricochet, and Death Star ......... 286
11.4 Market Contrast: PJM and California .................. 288
Bibliography .................................................. 291
Index ......................................................... 294
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