Energy Markets and Risk
Lecture 7: Modelling of supply and perfect
competition
Dr. Chris Dent
1. Demand function
Typically the demand
q
for a commodity decreases with the price
. This is
expressed through the demand function:
q=D( )
(1)
and (the other wa

Energy Markets and Risk
Lectures 10-11: Electricity Markets
Dr. Chris Dent
1 Differences between electricity and other commodities
The previous four lectures have discussed issues of markets in general; lectures 1013 will present issues specific to the de

Energy Markets and Risk
Lecture 7: Modelling of supply and perfect
competition
Dr. Chris Dent
1. Social welfare
1.1 Definitions
Producer profit (or surplus): the difference between the amount the producers
receive in income and their costs. In a price-qua

Energy Markets and Risk
Lecture 7: Modelling of supply and perfect
competition
Dr. Chris Dent
1 Cournot competition - model
1.2 Model specification
As discussed in the previous lecture, it is easy to understand the behaviour of a profit
maximising monopol

Energy Markets and Risk
Lecture 4: Capacity value of additional
generation
Dr. Chris Dent
1. Capacity value metrics
1.1 Introduction
In the previous lecture we saw that if the distribution of
X
may be approximated
by an exponential function in the relevan

Energy Markets and Risk
Lecture 3: Conventional generating units
Dr. Chris Dent
1. Risk indices
As discussed in Lecture 2, the margin of generating capacity over demand at any
point in time is
Z t =X t +Y t Dt
Xt
where
and
Dt
(1)
Yt
is available conventio

Energy Markets and Risk
Lecture 1: Introduction to the course
Dr. Chris Dent
Contact details:
Room E324 (Left corridor of pigeon lofts, Christopherson Building)
Office Hours: Friday 1100-1200 (except week 2), plus Tuesday 1100-1200
(weeks 5, 6 and 8)
T

Energy Markets and Risk
Lecture 6: Modelling of supply
Dr. Chris Dent
1. Modelling of markets
1.1 Content of this section of the course
The next lectures will introduce general concepts of modelling of markets this will
be set in the context of applicatio

Energy Markets and Risk
Lecture 4: Wind generation in adequacy
assessment
Dr. Chris Dent
1. Key properties of wind generation for adequacy assessment
Unlike conventional generation, the available capacity from wind generation at a
point in time is primari

Energy Markets and Risk
Lecture 2: Review of required mathematics
Dr. Chris Dent
1. Random variables
Quantities governed by randomness. [are] called random variables. The value
taken by a random variable is subject to chance. (From Grimmett and Stirzaker,

Energy Markets and Risk
Lecture 3: Conventional generating units
Bonus material (not in lectures)
Dr. Chris Dent
Method for constructing the exact distribution of available conventional
capacity
Exact is in inverted commas as it means the exact result ass

Energy Markets and Risk
Lecture 2: Introduction to adequacy
assessment
Dr. Chris Dent
1. Why carry out probabilistic risk or reliability assessments?
The fundamental reason for using probabilistic assessments is that availability of
components is uncertai