This book convincingly argues that from a theoretical point of view present day network industries offer opportunities for strategic behaviour and that these opportunities are also actually utilized in practice. The authors show that this behaviour can be harmful to the realization of the expected positive effects of institutional changes such as liberalization and privatization (e.g., innovation and lower prices). The authors make their case in a solid theoretical way illustrated with insightful case studies. This book is a must for academics, managers and policy makers in today s network industries. John Groenewegen, Delft University of Technology, The Netherlands This in-depth book explains how institutional changes such as the privatization and liberalization of network industries, for example transport, energy or telecommunications, can frequently be disappointing. The expected benefits such as lower prices, innovation and better services fail to materialize, often because the number of competitors is low. The authors demonstrate how strategic actor behaviour of one or more of the firms involved can help explain these disappointing results. This book elucidates the concept of strategic behaviour and portrays it in real-life examples to aid our understanding of this important phenomenon in terms of policy and organizational decision-making. It clearly demonstrates the adverse effects strategic behaviour can exert on the quality of infrastructure provision after liberalization. The theoretical sections are backed by empirical examples from throughout the world. The unique multidisciplinary approach will ensure a broad readership among students, researchers and policy-makers with an interest in the economics, politics and management of infrastructure and network industries.

This addition to the ISOR series introduces complementarity models in a straightforward and approachable manner and uses them to carry out an in-depth analysis of energy markets, including formulation issues and solution techniques. In a nutshell, complementarity models generalize: a. optimization problems via their Karush-Kuhn-Tucker conditions b. on-cooperative games in which each player may be solving a separate but related optimization problem with potentially overall system constraints (e.g., market-clearing conditions) c. conomic and engineering problems that aren’t specifically derived from optimization problems (e.g., spatial price equilibria) d. roblems in which both primal and dual variables (prices) appear in the original formulation (e.g., The National Energy Modeling System (NEMS) or its precursor, PIES). As such, complementarity models are a very general and flexible modeling format. A natural question is why concentrate on energy markets for this complementarity approach? s it turns out, energy or other markets that have game theoretic aspects are best modeled by complementarity problems. The reason is that the traditional perfect competition approach no longer applies due to deregulation and restructuring of these markets and thus the corresponding optimization problems may no longer hold. Also, in some instances it is important in the original model formulation to involve both primal variables (e.g., production) as well as dual variables (e.g., market prices) for public and private sector energy planning. Traditional optimization problems can not directly handle this mixing of primal and dual variables but complementarity models can and this makes them all that more effective for decision-makers.

This textbook explains the main economic mechanisms behind energy markets and assesses how governments can implement policies to improve these markets’ performance. Adopting a microeconomic perspective, it systematically analyses the various types of market failures on the electricity and gas markets as well as coal, oil, hydrogen and heat markets in order to identify government policies that can improve welfare. Critical factors in this regard include the natural monopoly and the public-goods character of energy infrastructures; market power structures resulting from inflexibility of supply and demand; international trade restrictions; negative externalities concerning the use of fossil energy; positive externalities concerning innovative new energy technologies; information asymmetries with regard to the product characteristics of energy commodities; and other public concerns, such as energy poverty. In turn, readers will learn about various measures that governments can use to address these market failures, including incentive regulations for electricity grids; international integration of wholesale energy markets; environmental regulatory measures like emissions trading schemes; subsidy schemes for new technologies; green-energy certificate schemes; and energy taxes. This second, updated and expanded edition addresses recent developments in international energy markets that have resulted in extremely high prices and concerns about the markets’ ability to provide a secure energy supply. Further, it examines several countries’ intensified measures to implement the transition to a low-carbon energy system. Given its scope, the book will appeal to upper-undergraduate and graduate students from various disciplines who want to learn more about the economics and regulation of energy systems and markets. “Given Mulder’s experience in government and academia, he provides a novel contribution to the literature by systematically analyzing different types of market failures and potential remedies offered by economic theory. Overall, Mulder’s textbook should be a valuable reference for students and energy policy analysts.” (J. Wesley Burnett, The Energy Journal, Vol. 43, Number 3)

This book successfully illustrates the modeling of electricity prices with the help of stochastic processes. The relatively new phenomenon of negative prices is also integrated into the models. The integration of feed-in from wind power plants in energy models is also very innovative. This approach helps to simulate electricity prices in order to take into account the "merit-order effect of renewable energy". Finally, the models are used for the techno-economic evaluation of energy storages.

Energy has moved to the forefront in terms of societal and economic development. Modern Energy Markets is a comprehensive, economically oriented, exploration of modern electricity networks from production and distribution to deregulation and liberalization processes. Updating previous work by the authors, different aspects are considered resulting in a complete and detailed picture of the systems and characteristics of modern electricity markets. Modern Energy Markets provides clear detail whilst encompassing a broad scope of topics and includes: •A method to model energy production systems including the main characteristics of future demand side management, •Different applications of this model in nuclear and renewable energy scenarios, •An analysis of Real-Time Pricing of electricity and its potential effects across the market, and, •A discussion of the need for regulation in an easily monopolized industry. Engineering and Economics students alike will find that Modern Energy Markets is a succinct and informative resource, as will researchers interested in environmental and energy issues. The inclusion of timely and relevant issues related to economic decision will also be of value to industry and civil officials.

Local Electricity Markets introduces the fundamental characteristics, needs, and constraints shaping the design and implementation of local electricity markets. It addresses current proposed local market models and lessons from their limited practical implementation. The work discusses relevant decision and informatics tools considered important in the implementation of local electricity markets. It also includes a review on management and trading platforms, including commercially available tools. Aspects of local electricity market infrastructure are identified and discussed, including physical and software infrastructure. It discusses the current regulatory frameworks available for local electricity market development internationally. The work concludes with a discussion of barriers and opportunities for local electricity markets in the future. - Delineates key components shaping the design and implementation of local electricity market structure - Provides a coherent view on the enabling infrastructures and technologies that underpin local market expansion - Explores the current regulatory environment for local electricity markets drawn from a global panel of contributors - Exposes future paths toward widespread implementation of local electricity markets using an empirical review of barriers and opportunities - Reviews relevant local electricity market case studies, pilots and demonstrators already deployed and under implementation