Electricity Sector Planning and Restructuring Assignment - UTS

This assignment solution addresses the restructuring of the Australian electricity industry. It begins with a snapshot of the industry's structure before and after restructuring, highlighting changes in generation sources, transmission, distribution, and retail. The solution then outlines the stated rationale for the restructuring, focusing on industry decision-making, social reliance, and market compatibility. A key part of the assignment involves analyzing market operator bids to construct a supply curve and calculate market prices, quantities produced, and revenues for different forecasted loads (400 MW, 600 MW, and 875 MW). The solution provides detailed calculations and analysis of the bidding chart data, demonstrating the application of spot pricing and energy pricing principles. References to relevant literature on electricity sector planning are also included.

Electricity Sector Planning and Restructuring 1
UNIVERSITY OF TECHNOLOGY SYDNEY ENERGY PLANNING AND POLICY
PROGRAM
49026 Electricity Sector Planning and Restructuring
By
(Name)
(Course)
(Professor’s Name)
(Institution)
(State)
(Date)

Electricity Sector Planning and Restructuring 2
Question. 1
For the Australian electricity industry1:
a) develop a snapshot (in pictorial or tabular format) of its structure:
i. prior to restructuring
ii. subsequent to restructuring
iii.
Generation, transmission, distribution, and retail
Generation
dominated by
coal (81%), gas
(10%), hydro
(6%), wind (2),
solar (0%)
Transmission
Due to lack of
finances from
the unwilling
banks, there
was limited
transmission
grids.
Distribution
The
distribution is
normally done
by The National
Electrical
Market (NEM)
Retailer
The demand
was higher
than the
supply.
Generation
The state adopted
more renewable
energy; coal (76%),
gas (7%), hydro
(10%), wind (6.1),
solar (3%)
Transmission
Due to the large
population,
multiple grids
were created to
satisfy the
market
Distribution
The NEM
operate the
world longest
interconnected
power systems
Retailer
From a report by
the Australian
energy market
operator project
that the supply will
meet the demand
in 2018 and 2019

Electricity Sector Planning and Restructuring 3
b) What was the ‘stated’ rationale for electricity industry restructuring? (no more than four dot
points with each dot point no more ten words)
 Inform and coordinate industry decision-makers over a range of time horizons
 Due to growing social reliance
 Spot pricing and the need for strong compatibility between the market model of an
electricity industry and its underlying physical operation.
 Practical comprises required in representing network services in an electricity spot
derivative market of the Australian National Electricity Market.
c) What is the most insightful comment you can make about the stated rationale for
restructuring (as in part b) above)? (no more than two lines with each dot point no more than
two lines).
 These objective engineering necessities are applied more intensely in the large production
and transmission sectors of the industry.
 Modernization in the disseminated energy resource technology and developing concern
about ecological impacts.
 The effects of the preceding pricing technique endorsed the use of spot and derivative
pricing to upkeep investment as a replacement for traditional payment method.
 It considered the full energy conversion chain from primary to end use energy forms.

Electricity Sector Planning and Restructuring 4
Question. 2
The Market Operator has received bids (as shown in Table 1) for the supply of electrical energy
during one hour.
a) Build the supply curve.
b) Assume that this market operates unilaterally, that is, there is no demand-side bidding; the
demand is instead based on forecast developed by the Market Operator. Calculate the market
price, quantity produced by each generator, and the revenue earned by each generator, for each
of the following forecasted loads: 400 MW, 600 MW, and 875 MW.
From the bidding chart, we can calculate an average price for each generator. i.e. mean of the
prices.
average price=∑ OF BIDDING PRICE INTANCES
∑ OF INSTANCES

Electricity Sector Planning and Restructuring 5
LOAD 400
A: (17.5)/1=17.5
B :( 17.83)/1=17.83
C :( 14.5)/=14.5
LOAD 600
A: (17.5 +17.5)/2=17.5
B :( 17.83+17.83)/2=17.83
C :( 13.5)/1=13.5
LOAD 875
A: (17.5+117.5+17.5)/1=17.5
B :( 17.83+17.83+17.83)/1=17.83
C :( 14.5+14.5+14.5)/=14.5
Load (MW) Generator Market price
($/MWh)
Quantity (MWh) Revenue ($)
400 A 17.5 400 7,000
B 17.83 400 7,132
C 14.5 400 5,800
A 17.5 600 10,500
600 B 17.83 600 10,698
C 14.5 600 8,700
A 17.5 875 15,312.50
875 B 17.83 875 15,601.25
C 14.5 875 12,687.50
From the bidding chart, we can calculate an average price for each generator. i.e. mean of the
prices. The consumed energy is calculated per hour and the expressed in watts per hour. This is
the International standard unit for the pricing of energy.

Electricity Sector Planning and Restructuring 6
Reference
Alabbas, N. H., & Kurdgelashvili, L. (2017). Identifying pathways toward sustainable electricity
supply and demand using an integrated resource strategic planning model for Saudi Arabia.
Diluccia, J. G., & Hunger, D. E. (2013). Diversity of Fuel Sources for Electricity Generation
inan Evolving U.S. Power Sector. Available from: http://hdl.handle.net/10822/558622.
Date of Access: 14th May 2018.