Electricity marketIn a broad sense, an electricity market is a system that facilitates the exchange of electricity-related goods and services. During more than a century of evolution of the electric power industry, the economics of the electricity markets had undergone enormous changes for reasons ranging from the technological advances on supply and demand sides to politics and ideology.
Peak demandPeak demand on an electrical grid is simply the highest electrical power demand that has occurred over a specified time period (Gönen 2008). Peak demand is typically characterized as annual, daily or seasonal and has the unit of power. Peak demand, peak load or on-peak are terms used in energy demand management describing a period in which electrical power is expected to be provided for a sustained period at a significantly higher than average supply level. Peak demand fluctuations may occur on daily, monthly, seasonal and yearly cycles.
Ancillary services (electric power)Ancillary services are the services necessary to support the transmission of electric power from generators to consumers given the obligations of control areas and transmission utilities within those control areas to maintain reliable operations of the interconnected transmission system. "Ancillary services are all services required by the transmission or distribution system operator to enable them to maintain the integrity and stability of the transmission or distribution system as well as the power quality".
Normal distributionIn statistics, a normal distribution or Gaussian distribution is a type of continuous probability distribution for a real-valued random variable. The general form of its probability density function is The parameter is the mean or expectation of the distribution (and also its median and mode), while the parameter is its standard deviation. The variance of the distribution is . A random variable with a Gaussian distribution is said to be normally distributed, and is called a normal deviate.
Cauchy distributionThe Cauchy distribution, named after Augustin Cauchy, is a continuous probability distribution. It is also known, especially among physicists, as the Lorentz distribution (after Hendrik Lorentz), Cauchy–Lorentz distribution, Lorentz(ian) function, or Breit–Wigner distribution. The Cauchy distribution is the distribution of the x-intercept of a ray issuing from with a uniformly distributed angle. It is also the distribution of the ratio of two independent normally distributed random variables with mean zero.
Energy demand managementEnergy demand management, also known as demand-side management (DSM) or demand-side response (DSR), is the modification of consumer demand for energy through various methods such as financial incentives and behavioral change through education. Usually, the goal of demand-side management is to encourage the consumer to use less energy during peak hours, or to move the time of energy use to off-peak times such as nighttime and weekends.
Free marketIn economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any other external authority. Proponents of the free market as a normative ideal contrast it with a regulated market, in which a government intervenes in supply and demand by means of various methods such as taxes or regulations.
Demand responseDemand response is a change in the power consumption of an electric utility customer to better match the demand for power with the supply. Until the 21st century decrease in the cost of pumped storage and batteries electric energy could not be easily stored, so utilities have traditionally matched demand and supply by throttling the production rate of their power plants, taking generating units on or off line, or importing power from other utilities.
Electricity generationElectricity generation is the process of generating electric power from sources of primary energy. For utilities in the electric power industry, it is the stage prior to its delivery (transmission, distribution, etc.) to end users or its storage (using, for example, the pumped-storage method). Usable electricity is not freely available in nature, so it must be "produced" (that is, transforming other forms of energy to electricity). Production is carried out in power stations (also called "power plants").
Distributed generationDistributed generation, also distributed energy, on-site generation (OSG), or district/decentralized energy, is electrical generation and storage performed by a variety of small, grid-connected or distribution system-connected devices referred to as distributed energy resources (DER). Conventional power stations, such as coal-fired, gas, and nuclear powered plants, as well as hydroelectric dams and large-scale solar power stations, are centralized and often require electric energy to be transmitted over long distances.
Ratio distributionA ratio distribution (also known as a quotient distribution) is a probability distribution constructed as the distribution of the ratio of random variables having two other known distributions. Given two (usually independent) random variables X and Y, the distribution of the random variable Z that is formed as the ratio Z = X/Y is a ratio distribution. An example is the Cauchy distribution (also called the normal ratio distribution), which comes about as the ratio of two normally distributed variables with zero mean.
Stable distributionIn probability theory, a distribution is said to be stable if a linear combination of two independent random variables with this distribution has the same distribution, up to location and scale parameters. A random variable is said to be stable if its distribution is stable. The stable distribution family is also sometimes referred to as the Lévy alpha-stable distribution, after Paul Lévy, the first mathematician to have studied it. Of the four parameters defining the family, most attention has been focused on the stability parameter, (see panel).
F-distributionIn probability theory and statistics, the F-distribution or F-ratio, also known as Snedecor's F distribution or the Fisher–Snedecor distribution (after Ronald Fisher and George W. Snedecor), is a continuous probability distribution that arises frequently as the null distribution of a test statistic, most notably in the analysis of variance (ANOVA) and other F-tests. The F-distribution with d1 and d2 degrees of freedom is the distribution of where and are independent random variables with chi-square distributions with respective degrees of freedom and .
Electrical gridAn electrical grid is an interconnected network for electricity delivery from producers to consumers. Electrical grids vary in size and can cover whole countries or continents. It consists of: power stations: often located near energy and away from heavily populated areas electrical substations to step voltage up or down electric power transmission to carry power long distances electric power distribution to individual customers, where voltage is stepped down again to the required service voltage(s).
Smart gridA smart grid is an electrical grid which includes a variety of operation and energy measures including: Advanced metering infrastructure (of which smart meters are a generic name for any utility side device even if it is more capable e.g. a fiber optic router) Smart distribution boards and circuit breakers integrated with home control and demand response (behind the meter from a utility perspective) Load control switches and smart appliances, often financed by efficiency gains on municipal programs (e.g.
Futures contractIn finance, a futures contract (sometimes called futures) is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The asset transacted is usually a commodity or financial instrument. The predetermined price of the contract is known as the forward price. The specified time in the future when delivery and payment occur is known as the delivery date.
Peaking power plantPeaking power plants, also known as peaker plants, and occasionally just "peakers", are power plants that generally run only when there is a high demand, known as peak demand, for electricity. Because they supply power only occasionally, the power supplied commands a much higher price per kilowatt hour than base load power. Peak load power plants are dispatched in combination with base load power plants, which supply a dependable and consistent amount of electricity, to meet the minimum demand.
Electricity retailingElectricity retailing is the final sale of electricity from generation to the end-use consumer. This is the fourth major step in the electricity delivery process, which also includes generation, transmission and distribution. Electricity retailing began at the end of the 19th century when the bodies which generated electricity for their own use made supply available to third parties. In the beginning, electricity was primarily used for street lighting and trams. The public could buy once large scale electric companies had been started.
ContractA contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more mutually agreeing parties. A contract typically involves the transfer of goods, services, money, or a promise to transfer any of those at a future date. In the event of a breach of contract, the injured party may seek judicial remedies such as damages or rescission. A binding agreement between actors in international law is known as a treaty.
Asset pricingIn financial economics, asset pricing refers to a formal treatment and development of two main pricing principles, outlined below, together with the resultant models. There have been many models developed for different situations, but correspondingly, these stem from either general equilibrium asset pricing or rational asset pricing, the latter corresponding to risk neutral pricing.
