- Academic Registry
Programme & Unit Catalogues

EE30197: Power markets and economics

[Page last updated: 02 August 2022]

Academic Year: 2022/23
Owning Department/School: Department of Electronic & Electrical Engineering
Credits: 6 [equivalent to 12 CATS credits]
Notional Study Hours: 120
Level: Honours (FHEQ level 6)
Semester 1
Assessment Summary: EX 100%
Assessment Detail:
  • Examination (EX 100%)
Supplementary Assessment:
Like-for-like reassessment (where allowed by programme regulations)
Learning Outcomes: After successfully completing this unit, students should be able to:
describe the infrastructure of the industry and the various structures that have been adopted to effect market operation and how they interact; undertake simple calculations involving the cost chain that contributes to end user prices, including the costs of conventional and renewable generation and the impact of emission restrictions; describe the basis for transmission and distribution costs and illustrate how these contribute to the charging structures and make up end-user prices; describe the basic operation of markets, including trading arrangements, price forecasting and cross- border trading plus the auctioning of inter-connector capacity; carry out investment appraisal and risk assessment; describe some of the techniques used to monitor performance and introduce improvement, including some measures to address technological developments that might impact on market operation and development.

Aims: This module is designed to provide insight into the economics of power systems and how this influences the operation of electricity markets; it is grouped under the four areas of interest: 1. Industry infrastructure; 2. The cost chain; 3. Market operation; 4. Market development.

Skills: Application of the information, techniques and methods detailed in the unit material, to the proposal of, and the carrying through of, appropriate solutions to engineering problems concerned with power markets and economics. Taught, facilitated and tested.

Content: Industry physical structure; introduction of competition; restructuring options; comparison of structures; market participants, mechanisms and operation; Basic generation energy costs - cost components; practical operating efficiencies; impact of utilisation on costs; comparison of generation costs; Alternative energy sources - competing sources; incentive schemes; the economics of renewable sources; Emissions - emission trading schemes (ETS); generation CO2 emissions; national allocation plans; Transmission - impact of transmission in markets; transmission charging; derivation of use of system charges; interconnection pricing; international practice; Distribution - cost of distribution; distribution tariffs; OPEX regulation; Capex regulation;
End User Charges and Prices - end user energy prices; total end user prices; tariff development; Market Trading - trading arrangements; bilateral trading; balancing market; exchange trading; managing price risk; Market Analysis - modelling overview; predicting demand data; generation data; Ancillary Service Markets - ancillary service requirements reserve; market volume; procurement process; cost of providing services; Cross-Border Trading - governance; cross-border capacity; security; charging for wheeling; international trading; Investment Appraisal - analysis of options; plant costs; predicting revenue; evaluating risk; Market Performance - performance criteria; market shortcomings; performance assessment and improvement; Economics of Market Developments - generation developments; transmission and distribution grids; carbon capture and storage; market implications.

Programme availability:

EE30197 is Optional on the following programmes:

Department of Electronic & Electrical Engineering
  • UEEE-AFB01 : BEng(Hons) Electrical and Electronic Engineering (Year 3)
  • UEEE-AKB01 : BEng(Hons) Electrical and Electronic Engineering with Year long work placement (Year 4)
  • UEEE-AFB12 : BEng(Hons) Electrical Power Engineering (Year 3)
  • UEEE-AKB12 : BEng(Hons) Electrical Power Engineering with Year long work placement (Year 4)
  • UEEE-AFM01 : MEng(Hons) Electrical and Electronic Engineering (Year 3)
  • UEEE-AKM01 : MEng(Hons) Electrical and Electronic Engineering with Year long work placement (Year 4)
  • UEEE-AFM12 : MEng(Hons) Electrical Power Engineering (Year 3)
  • UEEE-AKM12 : MEng(Hons) Electrical Power Engineering with Year long work placement (Year 4)


  • This unit catalogue is applicable for the 2022/23 academic year only. Students continuing their studies into 2023/24 and beyond should not assume that this unit will be available in future years in the format displayed here for 2022/23.
  • Programmes and units are subject to change in accordance with normal University procedures.
  • Availability of units will be subject to constraints such as staff availability, minimum and maximum group sizes, and timetabling factors as well as a student's ability to meet any pre-requisite rules.
  • Find out more about these and other important University terms and conditions here.