Syllabus for EE/Econ 458 (Tesfatsion)

Economic Systems for
Electric Power Planning

Last Updated: 28 March 2015

Latest Course Offering: Fall 2011
Meeting Time: MWF 11-11:50
Meeting Place: Marston 205

EE/Econ 458 Homepage (Tesfatsion)
Syllabus for Dr. McCalley's Class Days
Required Text & Useful On-Line Materials
Topic Outline and Exam Schedule
Topics, Readings, Exercises, and Tentative Schedule

Required Text & Useful On-Line Materials

Required Textbook (Bookstore):

On-Line Resource Materials:

Fun Stuff:

Topic Outline and Exam Schedule

  1. Historical Background and Course Overview (JM/LT)
  2. Microeconomic Basics for Power Systems
    1. Modeling of Generator Costs (JM)
    2. Market Demand/Supply Basics (LT)
    3. Theory of the Competitive Firm (LT)
    4. Introduction to Constrained Optimization (LT)
  3. Linear Programming and Application to Optimal Power Flow (JM)
  4. Integer Programming and Application to Security Constrained Unit Commitment (JM)
  5. Operation of Electric Power Markets (LT)
    1. Game Aspects of Power Systems
    2. Organization of Power Markets
    3. Power Market Trading Subject to Transmission Constraints
    4. Policy Concerns
  6. Financial Risk Management for Power Systems (LT)
    1. Markets, Risks, and Risk-Hedging Contracts
    2. Financial Risk Management: Basic Concepts

    MIDTERM EXAM 1: Monday, September 19th
    (regular classroom and time)

    MIDTERM EXAM 2: Wednesday, November 2nd
    (regular classroom and time)

    FINAL EXAM: Tuesday, December 13, 9:45-11:45am (regular classroom)

Topics, Readings, Exercises, and Tentative Class Schedule

Required readings are marked below with two asterisks (**), and recommended materials are marked below with a single asterisk (*). Exercises will be posted below as they are assigned.

The lecture notes posted below will possibly be revised prior to their scheduled day of presentation, and some new required materials might be added. Any revised or new materials added below will be highlighted using "updated" or "new" icons for at least one week after the modification is made.

I. Historical Background and Course Overview (LT/JM, 8/22)

Required Readings:

II. Microeconomic Basics for Power Markets


II.A Modeling of Generator Costs (JM, 8/24, 8/26)

Required Readings:

** Lecture Materials by JM . ON-LINE/CLASS PRESENTATION


II.B Market Demand/Supply Basics (LT, 8/29, 8/31, 9/2, 9/7, 9/9)

** HOMEWORK 2: Construction of Market Demand and Supply Schedules (pdf,32KB). Due: Wednesday, September 7, 11:00am (beginning of class)

** HOMEWORK 3: Cost Functions for Power Systems (pdf,92KB). Due: Friday, September 16, 11:00am (beginning of class)

Important Note: As stated near the top of each homework assignment, homework answers are due in at the beginning of class on the due date (i.e., before discussion of answers commences). Late assignments will not be accepted -- no exceptions.

Required Readings:


II.C Theory of the Competitive Firm (LT, 9/12)

Required Readings:


II.D Introduction to Constrained Optimization (LT, 9/14, 9/16)

Required and Recommended Readings:

FIRST MIDTERM EXAM (Monday, September 19)

III. Linear Programming and Application to
Optimal Power Flow (JM, 9/21, 9/23)

Required Readings:

IV. Integer Programming and Application to
Security Constrained Unit Commitment (JM, 9/26-10/31)

Required Readings:

SECOND MIDTERM EXAM (Wednesday, November 2)

V. Operation of Electric Power Markets (LT, 11/4-11/18, 11/28-11/30)

V.A Game Aspects of Power Systems (LT, 11/4)

Required Readings:


V.B Organization of Power Markets (LT, 11/7, 11/9, 11/11, 11/14, 11/16, 11/18, 11/28, 11/30)

Homework Assignment:

** HOMEWORK 8: Settlement of Contracts in Wholesale Electric Power Markets (pdf,23KB). Due: Monday, November 14, 2011, 11:00am (beginning of class)

** HOMEWORK 9: Real-World Case Study of a North American Restructured Energy Region (pdf,24KB). Due: Wednesday, November 30, 2011, 11:00am (beginning of class)

Required Readings:


V.C Power Market Trading Subject to Transmission Constraints (LT, 12/2)

Required Readings:


V.D Policy Concerns (LT)

Recommended Readings:

VI. Financial Risk Management for Power Systems (LT, 12/5, 12/7, 12/9)

** Homework 10 (Individual): Financial Risk Management in Electric Power Markets (pdf,29KB). Due: Wednesday, December 7, 2011, 11:00am. ON-LINE


VI.A Markets, Risks, and Risk-Hedging Contracts

Required Readings:


VI.B Financial Risk Management: Basic Concepts

Required Readings:

COMPREHENSIVE FINAL EXAM (Tuesday, Dec 13, 9:45-11:45)