Electricity Markets and Pricing Concepts Quiz
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Questions and Answers

What is true about locational marginal pricing (LMP)?

  • LMP depends on the price of transmission rights. (correct)
  • LMP is the same for all locations.
  • LMP varies at different nodal prices. (correct)
  • LMP does not account for congestion.

    • How do zonal prices operate compared to nodal prices?

  • Zonal prices can differ within zones but are the same across them. (correct)
  • Zonal prices remain constant across all zones.
  • Zonal prices are always lower than nodal prices.
  • Zonal prices do not account for congestion.

    • What implications arise when all locational marginal prices are equal?

  • Congestion rent is used to fund congestion revenue rights.
  • There is no congestion in the market. (correct)
  • There is significant congestion in the market.
  • All transmission rights are forfeited.

    • What does the formula for the price of transmission rights, Psink = Psource, represent?

    <p>The cost balance between different market locations.</p> Signup and view all the answers

    What does the FTR payoff represent?

    <p>The difference in locational prices multiplied by a variable.</p> Signup and view all the answers

    What is the relationship between power and energy in terms of their units?

    <p>1 Watt = 1 Joule per second</p> Signup and view all the answers

    Which of the following best describes a primary customer in the electricity distribution system?

    <p>Receives power at 13 kV</p> Signup and view all the answers

    What is a potential negative impact of deregulation in the electricity market?

    <p>Price fluctuation</p> Signup and view all the answers

    What is the function of substations in the electricity distribution system?

    <p>To regulate the voltage and distribute power</p> Signup and view all the answers

    Which statement is true about regulated prices in electricity markets?

    <p>They help prevent overcharging.</p> Signup and view all the answers

    What is the definition of peak load in terms of electricity demand?

    <p>The maximum demand at any single point in time</p> Signup and view all the answers

    Which voltage levels are typical for secondary customers in the electricity distribution framework?

    <p>120V and 240V</p> Signup and view all the answers

    What does the term 'baseload' refer to in electricity demand?

    <p>The minimum amount of electricity that must be supplied</p> Signup and view all the answers

    What is meant by 'obligation' in this context?

    <p>The need to ensure payment, regardless of circumstances.</p> Signup and view all the answers

    What initiates a response time of 3 to 5 seconds in this system?

    <p>Control signals for ancillary service.</p> Signup and view all the answers

    What describes regulation up?

    <p>The adjustment of available capacity above output level.</p> Signup and view all the answers

    What is the primary function of spinning reserves?

    <p>To maintain consistent system frequency.</p> Signup and view all the answers

    What is indicated by non-spinning reserves?

    <p>Offline resources that require longer response times.</p> Signup and view all the answers

    What is meant by the term 'ramp rate'?

    <p>The speed with which a generator can change its output.</p> Signup and view all the answers

    How long is the response time for spinning reserves?

    <p>Within 10 minutes.</p> Signup and view all the answers

    What does a service limit indicate?

    <p>The highest and lowest operating levels for ancillary services.</p> Signup and view all the answers

    Which of the following countries is NOT associated with the specified regions in the context of the USA?

    <p>Europe</p> Signup and view all the answers

    What percentage of Canada's renewable energy sector is comprised of hydro energy?

    <p>83%</p> Signup and view all the answers

    What is a significant challenge faced by smaller farms in the context of converting organic waste to methane-rich bio gas?

    <p>High initial costs</p> Signup and view all the answers

    Which of the following companies is NOT listed as a key player in the solar energy market?

    <p>Tesla Energy</p> Signup and view all the answers

    Which of the following statements about hydrogen production is accurate?

    <p>Future production efficiency is expected to be between 70% to 85%</p> Signup and view all the answers

    What is the primary function of baseload generators?

    <p>To maintain a constant supply of electricity.</p> Signup and view all the answers

    What does the capacity factor of a power plant indicate?

    <p>The actual output of the plant relative to its maximum possible output.</p> Signup and view all the answers

    In electricity generation, what does 'heat rate' measure?

    <p>The efficiency of a generator in converting heat content to electricity.</p> Signup and view all the answers

    How does the Marginal Cost in an electricity system affect pricing?

    <p>It influences the market price based on the cost of supplying the next unit of electricity.</p> Signup and view all the answers

    What is the primary purpose of a Day Ahead Market in electricity trading?

    <p>To finalize contracts for next-day electricity purchases or sales.</p> Signup and view all the answers

    What results from a negative balance for a producer in the electricity market?

    <p>The producer incurs a financial loss.</p> Signup and view all the answers

    What is the role of network modeling in electricity systems?

    <p>To analyze grid behavior and optimize performance.</p> Signup and view all the answers

    Which term refers to the financial aspects of electricity transmission rights?

    <p>Financial transmission rights</p> Signup and view all the answers

    What is indicated by the term 'ancillary services' in electricity markets?

    <p>Non-essential services that improve grid stability and reliability.</p> Signup and view all the answers

    What does the 'settlement' process in real-time electricity markets involve?

    <p>Paying parties for their transactions according to market prices.</p> Signup and view all the answers

    What does the term 'truth telling' refer to in generator offers?

    <p>Generators report their marginal costs accurately.</p> Signup and view all the answers

    Which type of electricity market allows for last-minute adjustments to generation plans?

    <p>Real-Time Market</p> Signup and view all the answers

    What do bilateral contracts in electricity markets involve?

    <p>Private agreements between two parties.</p> Signup and view all the answers

    What could excessive reliance on a single type of electricity generation lead to?

    <p>Vulnerability to resource-specific disruptions.</p> Signup and view all the answers

    What is the primary purpose of the capacity margin?

    <p>To balance total supply with peak load</p> Signup and view all the answers

    Which factor contributes to market power problems in an energy market?

    <p>Price set predominantly by supply</p> Signup and view all the answers

    What does VOLL stand for in energy markets?

    <p>Value of Lost Load</p> Signup and view all the answers

    Which of the following describes a 'Peaker' in energy markets?

    <p>A generator used during high demand periods to supplement energy supply</p> Signup and view all the answers

    What is an investment barrier in combustion turbine markets related to?

    <p>High immediate cost of entry</p> Signup and view all the answers

    What does the term 'capacity market' refer to?

    <p>A market ensuring sufficient capacity is built to meet demand</p> Signup and view all the answers

    In which market does Alberta operate?

    <p>Energy only market</p> Signup and view all the answers

    What is a characteristic of 'downtime' for generators?

    <p>It can include forced outages due to unexpected issues</p> Signup and view all the answers

    Which pricing concept reflects the maximum price consumers are willing to pay when experiencing a loss of electricity?

    <p>Value of Lost Load (VOLL)</p> Signup and view all the answers

    The price cap for Alberta is set at which amount?

    <p>$1,000</p> Signup and view all the answers

    What is the role of economic withholding?

    <p>To create a high price while still appearing to produce energy</p> Signup and view all the answers

    What is typically the relationship between energy prices and capacity auctions?

    <p>The price of capacity reflects fixed cost recovery</p> Signup and view all the answers

    What is an expected outcome of adjusting operation reserves below 2000?

    <p>Immediate adjustment to VOLL pricing will occur</p> Signup and view all the answers

    What is the main goal of regulation in electricity markets?

    <p>To prevent monopolies and overcharging</p> Signup and view all the answers

    What is the main disadvantage of deregulation in electricity markets?

    <p>Potential for price fluctuations</p> Signup and view all the answers

    At what voltage levels do secondary customers typically operate?

    <p>120 V and 240 V</p> Signup and view all the answers

    What do regulated price caps in electricity markets typically fail to reflect?

    <p>True supply and demand</p> Signup and view all the answers

    In electricity terminology, what does the term 'baseload' refer to?

    <p>The minimum amount of demand that must be met</p> Signup and view all the answers

    What is indicated by the peak load in the electricity market?

    <p>The highest demand recorded during a specific period</p> Signup and view all the answers

    Which of the following represents the relationship between power and energy?

    <p>Power (watts) = Energy (joules) / Time (seconds)</p> Signup and view all the answers

    What is the purpose of a substation in the electricity distribution system?

    <p>To decrease voltage for local distribution</p> Signup and view all the answers

    What condition results in all locational marginal prices (LMPs) being equal?

    <p>Absence of congestion</p> Signup and view all the answers

    What distinguishes nodal prices from zonal prices in electricity markets?

    <p>Nodal prices can differ in each location, while zonal prices are consistent within zones.</p> Signup and view all the answers

    In the context of price of transmission rights, how is Psink defined?

    <p>As the difference between source and sink prices</p> Signup and view all the answers

    Which statement accurately describes the function of Congestion Revenue Rights (CRRs)?

    <p>They are used to fund congestion in the power market.</p> Signup and view all the answers

    Which pricing model is primarily utilized in Alberta's electricity market?

    <p>Zonal pricing</p> Signup and view all the answers

    Which renewable energy source represents 83% of Canada's renewable energy sector?

    <p>Hydro energy</p> Signup and view all the answers

    What is a major challenge smaller farms face when converting organic waste to methane-rich bio gas?

    <p>Limited access to large-scale infrastructure</p> Signup and view all the answers

    Which of the following companies is identified as a key player in the solar energy market?

    <p>Canadian Solar</p> Signup and view all the answers

    What percentage is projected for hydrogen production efficiency in the future?

    <p>85%</p> Signup and view all the answers

    Which region currently has 23% wind energy representation?

    <p>Alberta</p> Signup and view all the answers

    What is meant by 'regulation down' in the context of energy management?

    <p>Reducing the energy output to be below output level but above its own lowest sustainable level</p> Signup and view all the answers

    Which of the following most accurately defines spinning reserves?

    <p>Online resources that can respond within 10 minutes to frequency issues</p> Signup and view all the answers

    What does the term 'ramp rate' refer to in energy generation?

    <p>The speed at which a generator can change its output</p> Signup and view all the answers

    Which service is characterized by a fast response time of 3 to 5 seconds?

    <p>Spinning reserves</p> Signup and view all the answers

    What is the main purpose of non-spinning reserves in an energy system?

    <p>To assist in balancing the grid during extended demand surges</p> Signup and view all the answers

    What characterizes the concept of regulation up?

    <p>Increasing available energy above the current output level to meet excess demand</p> Signup and view all the answers

    Which of the following describes an obligation in energy payment terms?

    <p>Mandatory payments that ensure continued operation of the grid</p> Signup and view all the answers

    What does ancillary service limit refer to in energy regulation?

    <p>The boundaries within which ancillary services must operate</p> Signup and view all the answers

    What is the main resource used for electricity generation in New Brunswick?

    <p>Nuclear</p> Signup and view all the answers

    Which of the following best defines the 'capacity factor' of a power plant?

    <p>The ratio of actual output to maximum possible output</p> Signup and view all the answers

    What does the term 'marginal cost' refer to in the context of electricity markets?

    <p>Cost of producing one additional unit of electricity</p> Signup and view all the answers

    How is the heat rate of a generator defined?

    <p>The efficiency of a generator to convert heat content into electricity</p> Signup and view all the answers

    What is the correction mechanism applied during real-time electricity market operations?

    <p>Physical adjustments to generation plans</p> Signup and view all the answers

    What does the term 'ancillary services' refer to in electricity markets?

    <p>Services that help maintain the reliability of the grid</p> Signup and view all the answers

    Which of the following accurately describes a Day Ahead Market?

    <p>Market for purchasing electricity a day in advance</p> Signup and view all the answers

    In the context of electricity pricing, what is 'truth telling'?

    <p>Generators offering their true marginal costs</p> Signup and view all the answers

    What do bilateral contracts in electricity markets entail?

    <p>Private agreements between two parties for energy transactions</p> Signup and view all the answers

    Which factor contributes to the capacity margin in electricity generation?

    <p>Excess of actual generation over demand</p> Signup and view all the answers

    What is the primary role of network modeling in electricity systems?

    <p>Analyzing grid behavior for efficient operations</p> Signup and view all the answers

    What is indicated by a negative balance for a consumer in the electricity market?

    <p>Consumers receive compensation as they overused electricity</p> Signup and view all the answers

    What is one consequence of using a sealed bid auction in electricity markets?

    <p>Increased seller competition</p> Signup and view all the answers

    Which type of adjustments are made during the adjustment period in electricity generation?

    <p>Physical changes to generation levels</p> Signup and view all the answers

    Which of the following descriptions best fits the concept of 'real-time market'?

    <p>Market allowing immediate buy/sell operations</p> Signup and view all the answers

    What does VOLL represent in energy markets?

    <p>Value of Lost Load</p> Signup and view all the answers

    Which of the following describes a capacity market?

    <p>A market ensuring sufficient capacity is built through auctions</p> Signup and view all the answers

    What limitation does Alberta's energy market condition impose?

    <p>It is an energy-only market with price caps</p> Signup and view all the answers

    What is the likely impact of low energy price caps?

    <p>Potential underinvestment in infrastructure</p> Signup and view all the answers

    How does VOLL pricing differ from peak pricing?

    <p>VOLL reflects the maximum consumer willingness to pay, unlike peak pricing</p> Signup and view all the answers

    Which aspect characterizes economic withholding in a market?

    <p>Offering resources at inflated prices to drive market prices up</p> Signup and view all the answers

    What is a characteristic of capacity margins in energy systems?

    <p>They measure surplus supply for reliability.</p> Signup and view all the answers

    What is a primary reason for price caps in the energy market?

    <p>To prevent price manipulation and protect consumers</p> Signup and view all the answers

    What does 'peaking pricing' imply for marginal cost adjustments?

    <p>It allows for pricing that includes marginal costs during shortages.</p> Signup and view all the answers

    What could be a potential side effect of insufficient capacity in the market?

    <p>Increased market power among fewer suppliers</p> Signup and view all the answers

    What is the relationship between operational reserves and market power in energy markets?

    <p>Operational reserves can reduce opportunities for market manipulation.</p> Signup and view all the answers

    How are payments uplifted shared in energy markets according to the RUC?

    <p>Equally among all consumers</p> Signup and view all the answers

    What defines locational marginal pricing (LMP) in relation to congestion?

    <p>LMP varies at different locations, particularly under congestion.</p> Signup and view all the answers

    Under which conditions would all LMPs be equal?

    <p>When there is no congestion.</p> Signup and view all the answers

    What is a characteristic of zonal pricing compared to nodal pricing?

    <p>Zonal pricing can differ within zones but remains constant in specific areas.</p> Signup and view all the answers

    What is a direct consequence of having transmission rights for a consumer?

    <p>Consumers receive compensation equal to the difference between sink and source prices.</p> Signup and view all the answers

    What does a congestion revenue right (CRR) primarily fund?

    <p>Transmission infrastructure improvements.</p> Signup and view all the answers

    What does the regulation down process focus on in a power generation system?

    <p>Reducing the amount available below its output level</p> Signup and view all the answers

    What is the primary role of spinning reserves in an electricity system?

    <p>Restore system frequency using online resources</p> Signup and view all the answers

    What is the significance of the ramp rate for a generator?

    <p>It indicates how fast a generator can change its output</p> Signup and view all the answers

    In the context of reserves, what differentiates non-spinning reserves from spinning reserves?

    <p>Non-spinning reserves rely on offline resources</p> Signup and view all the answers

    What does the term 'service limit' refer to in the context of generator operations?

    <p>The maximum output a generator can maintain consistently</p> Signup and view all the answers

    What triggers the Energy Emergency Alert (EA) in an electricity system?

    <p>A significant drop in generation capacity</p> Signup and view all the answers

    What aspect of regulation addresses the amount of available energy above the output level?

    <p>Regulation up</p> Signup and view all the answers

    Which company is NOT recognized as a key player in the solar energy market?

    <p>First Solar</p> Signup and view all the answers

    What is the typical response time for ancillary services to control signals?

    <p>3 to 5 seconds</p> Signup and view all the answers

    What is one of the significant challenges faced by smaller farms in converting organic waste to methane-rich bio gas?

    <p>Accessibility to technology</p> Signup and view all the answers

    Which energy source currently provides the least percentage of Alberta's renewable energy sector?

    <p>Wind</p> Signup and view all the answers

    What is the current efficiency range of electrolyzers in hydrogen production?

    <p>60-75%</p> Signup and view all the answers

    What does the heat rate indicate in power generation?

    <p>The efficiency of a generator in utilizing heat content</p> Signup and view all the answers

    What is the purpose of regulation in the electricity market?

    <p>To avoid monopolies and prevent overcharging</p> Signup and view all the answers

    Which of the following is a characteristic of the Day Ahead Market?

    <p>It operates one day ahead of real-time</p> Signup and view all the answers

    What does the capacity factor of a power plant represent?

    <p>The ratio of actual output to maximum possible output</p> Signup and view all the answers

    Which of the following voltage levels is typical for primary customers in the distribution system?

    <p>13 KV and 4 KV</p> Signup and view all the answers

    What does deregulation in the electricity market primarily aim to achieve?

    <p>Minimize costs via market incentives</p> Signup and view all the answers

    What is the purpose of the CRR auction?

    <p>To receive payments during periods of congestion</p> Signup and view all the answers

    Which of the following represents a con of deregulation?

    <p>Price fluctuation</p> Signup and view all the answers

    How are bilateral contracts characterized in electricity markets?

    <p>Agreements signed privately between two parties</p> Signup and view all the answers

    What is indicated by the negative balance for a producer in the electricity market?

    <p>Loss for the producer</p> Signup and view all the answers

    What do the terms 'peak load' and 'baseload' refer to in electricity demand?

    <p>Peak load is the highest demand, baseload is the minimum</p> Signup and view all the answers

    Which aspect is primarily evaluated in reliability within electricity systems?

    <p>Capacity to meet energy demand</p> Signup and view all the answers

    In the context of electricity generation, what would a regulated price cap typically not reflect?

    <p>The true supply situation</p> Signup and view all the answers

    Which power measurement indicates energy usage over time?

    <p>Joule/Second</p> Signup and view all the answers

    What does 'ancillary services' refer to in electricity markets?

    <p>Support services that maintain the reliability of the grid</p> Signup and view all the answers

    What type of auction is mentioned in relation to design and market competition?

    <p>Sealed bid auction</p> Signup and view all the answers

    How does one megawatt relate to watts?

    <p>1,000,000 watts</p> Signup and view all the answers

    What is the function of network modeling in electricity systems?

    <p>To analyze grid behavior and efficiency</p> Signup and view all the answers

    How does the marginal cost in an electricity system influence pricing?

    <p>It affects the operating costs for each generator</p> Signup and view all the answers

    Which term refers to the adjustment made after electricity generation to meet varying demand?

    <p>Adjustment Period</p> Signup and view all the answers

    What role does the adjustment period play in real-time markets?

    <p>Facilitates adaptations to generation plans</p> Signup and view all the answers

    What is a characteristic of an energy-only market?

    <p>Prices are determined solely by supply and demand dynamics</p> Signup and view all the answers

    What is the main barrier to entry for combustion turbine investments?

    <p>High immediate costs</p> Signup and view all the answers

    What does the term 'operating reserve' refer to?

    <p>Power that is unused but immediately available</p> Signup and view all the answers

    What distinguishes peaker pricing from VOLL pricing?

    <p>Peaker pricing incorporates marginal cost considerations</p> Signup and view all the answers

    How is capacity margin calculated?

    <p>Total supply - peak load</p> Signup and view all the answers

    Which of the following price caps is the highest according to the discussed data?

    <p>Netherland - Euro $100,000</p> Signup and view all the answers

    What is the main purpose of a capacity market?

    <p>To recover fixed costs through auctions</p> Signup and view all the answers

    What strategy involves withholding resources from the market to affect price levels?

    <p>Physical withholding</p> Signup and view all the answers

    What do downward sloping demand curves generally indicate?

    <p>Optimal pricing structure leads to scarcity</p> Signup and view all the answers

    Which scenario describes 'deration'?

    <p>Intentional reduction of power output</p> Signup and view all the answers

    Which of the following markets has the lowest price cap?

    <p>Alberta</p> Signup and view all the answers

    How is the 'value of lost load' estimated?

    <p>Derived from customer willingness to pay</p> Signup and view all the answers

    What does a higher VOLL imply for consumers?

    <p>Greater value placed on stable electricity supply</p> Signup and view all the answers

    Study Notes

    Electricity Final

    • Electricity Flow: Upper stream (generation), Middle stream (transmission), Downstream (distribution). Power plants transmit to substations, then to distribution, finally to customers (primary and secondary). Different voltage levels are used at different stages (e.g., 120V/240V for homes, 13kV and 69kV for transmission).

    • Regulation: Aims to prevent monopolies and overcharging. However, regulated price caps may not accurately reflect supply and demand, potentially leading to underregulation where all prices are at regulated rates.

    • AESO and IESO: Alberta Electricity System Operator (AESO) and Independent Electricity System Operator (IESO) in Ontario are examples of governing bodies.

    • Deregulation Pros and Cons: Pros include cost minimization incentives, marginal cost pricing, and market pricing. Cons include price fluctuations and congestion.

    • Power Calculation: Power (watts) = Energy (joules) ÷ Time (seconds).

    Unit Conversions

    • Units: 1 kilowatt (kW) = 1000 watts (W), 1 megawatt (MW) = 1000 kW, 1 gigawatt (GW) = 1000 MW, 1 terawatt (TW) = 1000 GW.

    Electricity Demand

    • Peak Load: High demand.
    • Base Load: Minimum demand to meet.

    Electricity Generation

    • Electricity Generation Sources: Hydro, nuclear, coal, and natural gas.

    Power Frequency

    • Frequency: Rate of current alternation. North American frequency is 60 Hz.

    Voltage

    • Voltage: Electrical pressure pushing the current.

    Marginal Costs in Electricity Market

    • Operating Costs: Heat rate (efficiency of a generator using heat content in BTU), Capacity factor (actual output to max possible output), Total cost (heat rate x gas price x 0.8m cost).
    • System Costs: Design for competitive prices (auction), Sealed bid auction to increase competition, Truthful generator offers marginal costs, Submarkets for better functioning and reliable real time market.

    Electricity Market Operations

    • Registration: Suppliers register to take part.
    • Network Modelling: Analysis of grid behavior.
    • CRR auction: Auction to receive payments when congestion occurs.
    • Day Ahead: Submit offers for electricity.
    • Reliability: Enough generation capacity to meet demand.
    • Adjustment period: Adjustments to generation/consumption plans.
    • Real time: Active energy supply to customers.
    • Settlement: Parties' payment/charges based on transactions.
    • Real Time: Physical reliability and penalties (contracts), Day ahead (financial, one day ahead of real time, voluntary), Ancillary (stability, demand = supply, reliability in day ahead, physical) and Transmission rights (financial, arbitrage, hedging annually, monthly, or weekly). Capacity (physical, financial, annual, monthly).

    Bilateral Contracts and Settlement System

    • Bilateral Contracts: Contracts signed between parties privately.
    • Two Settlement System: Forward market converges with real time, reducing gaming issues and price convergence in the market. Balance for producers and losses are considered.
    • Revenue Calculation: Revenue = (Q x P₁) + ((Q₂−Q₁) x P₂) (showing a two-part pricing structure).
    • Locational Marginal Pricing (LMP): Pricing based on nodal locations, can vary across locations, but prices can be the same within zonal areas (specified).

    Transmission Rights

    • FTR payoffs: Based on difference between transmission locations, providing payment/receipts to consumers.
    • Obligation: Payments/receipts independent of whether paid/received.
    • Options: Not needing to get paid/pay out.
    • Acquiring Transmission rights: Auctions, special allocations, bilateral trades, frequency, annually, monthly or day ahead.
    • Ancillary services: responding to controls in 3-5 seconds. Regulation in amount up/down (above/below highest or lowest sustainable level).

    Spinning and Non-Spinning Reserves

    • Spinning Reserves: Resources that help restore system frequency (provided by online resources) in 10 minutes.
    • Non-Spinning Reserves: Longer response time but can do it in 30+ minutes (offline).
    • High/Low Sustained Limit (HSL/LSL): High/low sustained limit.
    • High/Low Ancillary service limit (HASL/LASL): High/low values.
    • Ramp rate: How quickly a generator changes output.
    • High/Low Dispatch Limit (HDLE/HASL): High/low dispatch limit.
    • Operating Point: Mathematical calculation for a specific moment.

    Reliability Unit Commitment

    • Ensuring Capacity: Enough capacity to meet predicted demand.
    • RUC Payments: Cost shared by all consumers.
    • Alberta's Energy Market type: Energy only market.
    • Price Caps: Varies per location (ERCOT in USA, Australia, Netherlands, and Alberta). Includes the concept of weakness in the markets.
    • Market concerns: No price elasticity of demand, price set by supply and market power problems are noted as concerns.

    Capacity and System Issues

    • Capacity Issues: planned and unplanned outages (maintenance and unforeseen problems), generation deration (intentional or unintentional power output reduction based on issues/demands).
    • Reserve Margin: Difference between total supply and predicted peak demand per time load.
    • VOLL (Value of Lost Load): The amount a customer is willing to pay for electricity when supply is lost. VOLL pricing is a regulatory constraint in the market.

    Price Caps and Market Pricing

    • Price Caps: Caps on pricing based on location variations.
    • Market Pricing: Based on supply/demand balance, includes transient local shortages and peakers allowed to use marginal costs (starting up costs). Downward sloping of pricing for scarcity and non regulatory operation reserve pricing are described in market circumstances.
    • Real Time Pricing: Helps with load-shedding problems (when reserve drops below a certain threshold, immediate adjustments happen), and reserve pricing are explained.

    Market Power

    • Market Power Issues: ability to alter prices outside competitive levels.
    • Strategies: Physical withholding, economic withholding, and the impact on market prices.

    Energy Source Groups

    • Geothermal: consolidated in some areas.
    • Agriculture: converting organic waste to methane/biogas for waste and environmental control for smaller farms.
    • Solar: Canadian based solar players make up a significant portion of Canada's renewable energy.
    • Hydro: Important source of renewable energy (83% of Canada's renewables).
    • Wind: 23% of Alberta's wind sources are noted in the text and problems with access.
    • Hydrogen: Electrolysis-based production, current generation, and projections for future growth are summarized. Germany is cited as making a financial commitment.

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    Electricity Final Exam Notes PDF

    Description

    Test your knowledge on locational marginal pricing, zonal and nodal prices, and the implications of equal locational marginal prices in electricity markets. Explore key concepts such as transmission rights, customer classifications, and the roles of substations. Delve into the effects of deregulation and understand the definitions of peak load and baseload.

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