Network based Energy Systems

In the first part we put the gas and power industries into the broader picture of energy markets. We describe some important basics of the international energy industry: major energy sources and markets, their interconnections, historical perspective on prices and production to reserve ratios, resource & environmental problems, etc.

In the second part we focus on electric power. We look at the sector from three angles: power generation, transmission, and ‘reliability management’; with two issues in mind: the use of existing asset and the investment into new assets. Firstly, we address each of these issues from an operations research view, explaining the various problems which have to be solved in order to achieve an efficient power supply. Secondly, we suggest how the efficient solutions can be implemented using decentralized markets, if these were perfectly competitive. Thirdly, we look at some problems which result from market power using non-cooperative game theory. With market power, the market participants will act strategically and try to ‘game’ the rules to their advantage.

In the third part, we will look at the international pipeline system for natural gas, and discuss how investment and regulation can shape the power structure. In this part we will be using notions from cooperative game theory.

Organization: 4 hours lectures and tutorial per week (4sws). Home assignments will be discussed in tutorials.

Prerequisites: Basic knowledge of microeconomics (optimization theory), game theory and industrial organization.

Examination: there is a written examination (90 min) counting for 6 ETCS at the end.

Material: The material is available on Moodle (course name: "Network Based Energy Systems", key: "NBES").