Power System Economics Course Overview

Study Notes

Course assessment is split between various assignments including a team project, labs, journal club, and final exam
The team project is worth 30% and is assessed through a formal report and presentation
Lab reports make up 30% of the course grade
The journal club is worth 5% of the course grade with a potential bonus of 5%
The final exam is worth 25% of the course grade

Readings for the course are from two books, both of which are recommended
The first book is Fundamentals of Power System Economics by Kirschen and Strbac, published by Wiley in 2018
The second book is Power System Economics: Designing Markets for Electricity by Steven Stoft, published in 2002

The desert island economy example focuses on two people, Robinson and Friday, who can produce both fish and coconuts
These people can choose to specialize in the production of one good over the other.
Robinson is better at harvesting coconuts; Friday is better at catching fish
Even though both parties have a comparative advantage in one good over the other, they can both be made better off by trading with each other and specializing in the production of one good.
This example shows that specialization and trade can be beneficial for both parties

There are two practice exercises given in the text
Both exercises involve two people, Ann and Bob, who are stranded on a desert island
The exercises ask students to analyze the production functions of Ann and Bob to understand how trade can make both people better off
Each person has a different production function and chooses different amounts of fish and coconuts when they are not trading.
The exercises encourage students to find an arrangement that could make both people better off by applying concepts like specialization and trade.