The course is aimed at providing the basic background needed for understanding the national and international energy equilibria, with reference to economics and a focus on electricity. The course discusses the main economic issues of electricity as an energy commodity, considering the related markets. The course introduces the basic concepts about the operation of competitive electricity markets and the financial analysis of the investment project in the electro-energetic field. The key-aspects in the management of the power systems in the framework of the “energy transition” from fossil fuels to Renewable Energy Sources (RES) are introduced.

The student, at the end of the course, will be able to understand, within national and international energy scenarios, the interplay between energy and economic issues. He or she will be aware of the basic concepts of the economic and financial analysis and of the structure and operation of competitive electricity markets, being able to understand and interpreting the main related issues. The student will acquire a basic understanding of the key-issues, from an economic perspective but not limited to that, of the undergoing energy transition.

Basic background in power systems analysis (power flow equations, line modelling, power-frequency regulation, voltage regulation).

1. ELECTRICITY AS A FORM OF ENERGY: Power and energy; Historical background; Economic overview; Demand side in electricity; Supply side in electricity; Price structure for the electricity. 2. ENERGY TRANSITION: Drivers for energy transition: GHG, pollutants , fossil fuel depletion; Scenarios for energy transition and the role of electricity; The electricity triangle; The paradigm for the electrification of energy: supergrid vs. micrpgrid. 3. MICROECONOMICS AND INDUSTRIAL ORGANIZATION: What is economics?; Basic economic laws; Basic definitions (cost, revenue, profit…); Objectives of a firm; Demand Elasticity; Equilibrium point and associate economic metrics; Market models. 4. SUPPLY SIDE OF ELECTRICITY: POWER PLANTS TECHNOLOGIES, PRODUCTION COSTS AND BIDS: Generation Technologies; Generation Cost Components; Cost Comparison of Various Generation Technologies; Generation Cost Modelling; Optimal offer of Thermal Plants in Power Market; Unit commitment. 5. MARKET IMPLEMENTATION IN THE ELECTRICITY INDUSTRY: Basic features of electricity as a commodity; Economy, electricity and development; Competition vs. regulation in electricity markets; Levels of liberalization; Players, markets and goods (commodities); Ancillary services; Reference structures for competitive markets; Price fixing mechanism; Liberalization in the EU and Italy; Italian electricity market – IPEX. 6. NETWORK RELATED COSTS IN COMPETITIVE ELECTRICITY MARKETS: Network costs definition; Embedded (capacity) costs; Loss costs; Congestion costs; Transmission pricing. 7. OPTIMIZATION PROBLEMS AND CONGESTION MANAGEMENT: Optimization Problems (OP); Formulation for OP; Karush Kun Tucker conditions (KKT); Sensitivity interpretation of Lagrange multipliers; Market clearing as an optimization problem; Market clearing without considering the network constraints; Market clearing considering the network constraints; Transmission rights. 8. PURCHASING ELECTRICITY ON THE MARKET 9. FINANCIAL ANALYSIS OF THE INVESTIMENTS: What is an investment?; Investment analysis; Capital and interest rates; Basic financial mathematics; compounding, discounting, annuity; Cash flow analysis; Assessment of the convenience of the investment; Indexes for financial evaluation. 10. OPERATION AND MANAGEMENT OF POWER SYSTEM UNDER HIGH PENETRATION OF RES: Power system operation with low inertia, Electricity markets with high penetration of RES.

The course is organized in lectures and practical works. Lectures introduce to the students the key-concepts, also with an interactive approach. Practical work, in the classroom and ICT lab, will provide some insight, with the direct involvement of the students, on the topics presented in the lectures, also through general computational SW (Matlab) and dedicated power systems SW (Powerword). Practical work topics: 1.Technical-economic aspect of electrical energy, 2.Microeconomics and economic metrics, 3. Market clearing without network constraints, 4. Market clearing with network constraints and optimization problems, 5. Financial analysis of energy investments.

Course slides will be provided to the students through the portal 1. S. Stoft - Power System Economics: Designing Markets for Electricity – John Wiley& Sons, I edizione, Maggio 2002. ISBN: 0-471-15040-1 2. D.Kirschen, G.Strbac – Fundamentals of Power System Economics – Wiley, 2004. G.Rothwell, T. Gomez – Electricity Economics – IEEE Press, Wiley Interscience, 2003. ISBN:0-470-84572-4 3. G.Rothwell, T. Gomez – Electricity Economics – IEEE Press, Wiley Interscience, 2003. ISBN:0-471-23437-0 4. P. A. Samuelson, W. D. Nordhaus - Microeconomics –McGraw-Hill/Irwin, XVII edizione, Maggio 2001. 5. Hisham Khatib – IEE Power Series : Economic Evaluation of Projects in the Electricity Surpply Industry – The Institution of Electrical Engineers, London, Luglio 2003. ISBN:0-86341

Modalità di esame: Prova scritta (in aula); Prova orale obbligatoria;

Exam: Written test; Compulsory oral exam;

... Written or oral examination. The first exam immediately after the end of the course (“primo appello”), is a written test composed by two exercises and 3 multiple choice questions; the duration is 2 hours. During the written examination no support material (books, notes,…) will be allowed. The following ones, are oral examination with at least three questions on the topics of the course.

Gli studenti e le studentesse con disabilità o con Disturbi Specifici di Apprendimento (DSA), oltre alla segnalazione tramite procedura informatizzata, sono invitati a comunicare anche direttamente al/la docente titolare dell'insegnamento, con un preavviso non inferiore ad una settimana dall'avvio della sessione d'esame, gli strumenti compensativi concordati con l'Unità Special Needs, al fine di permettere al/la docente la declinazione più idonea in riferimento alla specifica tipologia di esame.