Sustainable energy services to customers - a balanced choice and coordination of energy generated by traditional and alternative sources - are the subject of this new innovative book. The myriad factors involved in modeling an effective sustainable power system are overwhelming. The Green Islands project represents a decade of work by over a dozen researchers who have developed a model designed to utilize the potential of distributed clean resources. The key is the proper use of Information Technology (IT).Sited on two islands in the Azores, the project developed the model of careful forecasting of demand and supply, down to the minute, coordinating the output of conventional power plants, wind energy, fly wheels, hydroelectricity, demand reduction, and even plug-in electric vehicles to take full advantage of the clean resources available. The energy contingencies of the remote islands are not unique. The issues of integrating promising clean technologies, such as wind, into a complex power grid are challenging in geographically far-flung, island-scale, power systems.
Model-based sensing, communications, and decision-making algorithms to coordinate adaptive load management (ALM) could enable customers to utilize just-in-time (JIT), just-in-place (JIP), and just-in-context (JIC) energy resources. The distribution of flexible and efficient energy to customers is the goal. The model the authors have developed could change the way power portfolios are built. A new perspective for optimization of green energy is presented in this book. Additional data provided online via Springer represents a repository of real-world electric energy systems and its IT-enabled smarts."

The writing of this book was largely motivated by the ongoing unprecedented world-wide restructuring of the power industry. This move away from the traditional monopolies and toward greater competition, in the form of increased numbers of independent power producers and an unbundling of the main services that were until now provided by the utilities, has been building up for over a decade. This change was driven by the large disparities in electricity tariffs across regions, by technological developments that make it possible for small producers to compete with large ones, and by a widely held belief that competition will be beneficial in a broad sense. All of this together with the political will to push through the necessary legislative reforms has created a climate conducive to restructuring in the electric power industry. Consequently, since the beginning of this decade dramatic changes have taken place in an ever-increasing list of nations, from the pioneering moves in the United Kingdom, Chile and Scandinavia, to today's highly fluid power industry throughout North and South America, as well as in the European Community. The drive to restructure and take advantage of the potential economic benefits has, in our view, forced the industry to take actions and make choices at a hurried pace, without the usual deliberation and thorough analysis of possible implications. We must admit that to speak of "the industry" at this juncture is perhaps disingenuous, even misleading.

The challenges facing participants in competitive electricity markets are staggering: high price volatility introduces significant financial risk into an industry accustomed to guaranteed rates of return, while illiquid forward markets prevent effective hedging strategies from being implemented. Valuation, Hedging and Speculation in Competitive Electricity Markets: A Fundamental Approach, examines the unique properties which separate electricity from other traded commodities, including the lack of economical storage, and the impact of a scarce transmission network. The authors trace the sources of uncertainties in the price of electricity to underlying physical and economic processes, and incorporate these into a bid-based model for electricity spot and forward prices. They also illustrate how insufficient market data can be circumvented by using a combination of price and load data in the marking- to-market process. The model is applied to three classes of problems central to the operation of any electric utility or power marketer; valuing generation assets, formulating dynamic hedging strategies for load serving obligations, and pricing transmission contracts and locational spread options. Emphasis is placed on the difference between trades which can be 'booked out' in the forward markets, and those which must be carried through to delivery. Lately, significant attention has been given to the role of regulators in mitigating excessive price levels in electricity markets. The authors conduct a quantitative analysis of the long-term effects of regulatory intervention through the use of price caps. By modeling the dynamic interplay between the observed price levels and the decision toinvest in new generation assets, it is shown how such short term fixes can lead to long term deficits in the available generation capacity, and ultimately to market failures and blackouts.

Deregulation is causing dramatic change in the power industry but little is known about how power systems will function under competition. What are suitable performance objectives? What control designs are required and what economic techniques should be used? This detailed analysis attempts to answer these questions. The authors provide a modelling, analysis and systems control framework that makes it possible to relate distinctive features of the electric power industry to more conventional supply/demand processes in other industries. Some parts of the system can be distributed while other parts must remain co-ordinated. This authoritative and detailed study is highly topical and will be of interest to those working in the systems control area, especially in electrical power. It is also most relevant for industrial economists as well as academics in electrical power engineering.

The challenges facing participants in competitive electricity markets are staggering: high price volatility introduces significant financial risk into an industry accustomed to guaranteed rates of return, while illiquid forward markets prevent effective hedging strategies from being implemented. Valuation, Hedging and Speculation in Competitive Electricity Markets: A Fundamental Approach, examines the unique properties which separate electricity from other traded commodities, including the lack of economical storage, and the impact of a scarce transmission network. The authors trace the sources of uncertainties in the price of electricity to underlying physical and economic processes, and incorporate these into a bid-based model for electricity spot and forward prices. They also illustrate how insufficient market data can be circumvented by using a combination of price and load data in the marking- to-market process.The model is applied to three classes of problems central to the operation of any electric utility or power marketer; valuing generation assets, formulating dynamic hedging strategies for load serving obligations, and pricing transmission contracts and locational spread options. Emphasis is placed on the difference between trades which can be 'booked out' in the forward markets, and those which must be carried through to delivery. Lately, significant attention has been given to the role of regulators in mitigating excessive price levels in electricity markets. The authors conduct a quantitative analysis of the long-term effects of regulatory intervention through the use of price caps. By modeling the dynamic interplay between the observed price levels and the decision to invest in new generation assets, it is shown how such short term fixes can lead to long term deficits in the available generation capacity, and ultimately to market failures and blackouts.

Offering a re-evaluation of the power industry, this book discusses decision-making for problems where a particular decision affects the options available at the next decision time. It covers a wide range of topics, from dynamic programming to future market decisions.

The writing of this book was largely motivated by the ongoing unprecedented world-wide restructuring of the power industry. This move away from the traditional monopolies and toward greater competition, in the form of increased numbers of independent power producers and an unbundling of the main services that were until now provided by the utilities, has been building up for over a decade. This change was driven by the large disparities in electricity tariffs across regions, by technological developments that make it possible for small producers to compete with large ones, and by a widely held belief that competition will be beneficial in a broad sense. All of this together with the political will to push through the necessary legislative reforms has created a climate conducive to restructuring in the electric power industry. Consequently, since the beginning of this decade dramatic changes have taken place in an ever-increasing list of nations, from the pioneering moves in the United Kingdom, Chile and Scandinavia, to today's highly fluid power industry throughout North and South America, as well as in the European Community. The drive to restructure and take advantage of the potential economic benefits has, in our view, forced the industry to take actions and make choices at a hurried pace, without the usual deliberation and thorough analysis of possible implications. We must admit that to speak of "the industry" at this juncture is perhaps disingenuous, even misleading.