IEEE Power & Energy Magazine - March/April 2022 - 74

new practices
an update for power system markets
T
74
THIS ISSUE'S " BOOK REVIEW "
column discusses Fundamentals of
Power System Economics, second edition,
by Daniel S. Kirschen and Goran
Strbac. The reviewer writes, " The book
makes for easy reading, with straightforward
and descriptive examples. "
Fundamentals of Power
System Economics,
Second Edition
By Daniel S. Kirschen and
Goran Strbac
The second edition of Fundamentals
of Power System Economics is an
update written by two well-known power
system professors, Daniel Kirschen,
University of Washington, and Goran
Strbac, Imperial College London. As
the title suggests, the book introduces
the fundamentals of power systems
economics. The second edition reflects
developments in power systems market
practices. In particular, it covers the
impacts of uncertainty from the rapid
increase of variable renewable generation
adoption and the need for flexible
sources, such as energy storage and
demand-side responses.
Electrical power systems can be
traced to the late 19th century, propelled
by the innovation of incandescent
lamps. The electric utility industry
as we know it commenced with Edison
Electric Light supplying dc power to
several thousand lamps in New York
Digital Object Identifier 10.1109/MPE.2021.3134151
Date of current version: 21 February 2022
ieee power & energy magazine
ly integrated utilities into separately
owned and operated generating,
transmission, and distribution companies.
For example, some utilities and
states in the United States still operate
under the traditional vertically integrated
model, but the majority now participate
in wholesale electricity markets.
The book continues with basic concepts
from microeconomics, explaining
characteristics of spot markets, forward
and future contracts, and markets
by using simple yet effective examples
from real life. Throughout the book,
the authors include practical examples
to explain facets of microeconomics to
readers not well versed in the subject.
The concepts of microeconomics
City. That was the first so-called vertically
integrated utility that owned the
generation, distribution,
and retail of electricity.
This model was adopted
by ac power systems
that succeeded due to
their ability to reduce
energy losses. For the
next hundred years, the
power system industry
was in the hands of vertically
integrated utilities. Some of those
were state owned, and some were investor
owned, but in both cases, they were monopoly
utilities.
By the late 1990s, competition was
introduced by unbundling verticalThe
book
introduces the
fundamentals of
power systems
economics.
are further treated in the book, explaining
the meaning of bilateral trading
and spot markets and the interaction
of participants within electrical energy
markets. One chapter discusses in detail
the operations of generators,
consumers,
storage facilities, and
pumped-hydro plants.
Another chapter focuses
on power system security
and explains the
reasons for the ancillary
services market.
The restructuring of
power systems began with regulatory
policies granting electric power producers
uninterrupted access to transmission
networks. The book studies
(continued on p. 76)
march/april 2022
book review
IEEE Power & Energy Magazine - March/April 2022

Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - March/April 2022
