Course syllabus - Electricity Market Design and Analysis for a Sustainable Transition

Objectives

The purpose of this course is to increase the understanding of the electricity market and its role in achieving efficient electricity supply. The course emphasizes economic incentives in shaping market outcomes, and the scope of electricity market design and regulation for a sustainable energy transition.

Learning outcomes

1. Describe the interaction between the electricity system and the electricity market.
2. Explain how the electricity market can increase the efficiency of electricity supply, e.g. with respect to market integration.
3. Show how market power reduces the efficiency of the electricity market.
4. Categorize fundamental market imperfections and describe their solutions.
5. Explain economic and political challenges associated with the green transition.
6. Apply economic tools to analyze the electricity market; examine how changes to the electricity system and regulation affect market outcomes.

Course content

1. Introduction to the electricity market. Interaction between the electricity system and market.
2. The spot market for electricity. Price-formation on the power exchange. Why are electricity prices so volatile? The marginal pricing controversy. The purpose of bidding zones. International trade in electricity.
3. Electricity markets in the long and short run. Financial markets for diversifying risk. Markets for ancillary services.
4. Incentives in the electricity market, market power. Economic regulation of electricity networks
5. Shortcomings of electricity markets. Pollution and other externalities. Reliability and other public goods. The missing money problem.
6. Challenges of the energy transition: Carbon leakage, rising energy nationalism, rebirth of the centrally planned economy

Specific requirements

At least 75 credits in technology or natural sciences, or 60 credits in economics, or 40 credits in technology and at least 2 years of full-time professional experience from a relevant area within industry. In addition, English A/English 6 is required.

Examination

Written assignment (INL1). 3 credits. Grade: Pass (G) or Fail (U). Learning outcome: 1-6.

A student who has a certificate from MDU regarding a disability has the opportunity to submit a request for supportive measures during written examinations or other forms of examination, in accordance with the Rules and Regulations for Examinations at First-cycle and Second-cycle Level at Mälardalen University (2020/1655). It is the examiner who takes decisions on any supportive measures, based on what kind of certificate is issued, and in that case which measures are to be applied.

Suspicions of attempting to deceive in examinations (cheating) are reported to the Vice-Chancellor, in accordance with the Higher Education Ordinance, and are examined by the University’s Disciplinary Board. If the Disciplinary Board considers the student to be guilty of a disciplinary offence, the Board will take a decision on disciplinary action, which will be a warning or suspension.

Grade

Two-grade scale