MIT ESD 934 - Homework 7 (2 pages)

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Homework 7



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Homework 7

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Pages:
2
School:
Massachusetts Institute of Technology
Course:
Esd 934 - Engineering, Economics and Regulation of the Electric Power Sector

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ESD 934 6 974 Engineering Economics and Regulation of the Electric Power Sector Ignacio J P rez Arriaga Homework HW7 Question 1 Retail markets and tariffs A Briefly 1 page is enough write more if you prefer and you have enough information describe the basic characteristics of the retail market in the power system of your choice Are there default tariffs And any last resource tariff scheme As a bonus in this question I know it is difficult sometimes impossible to find this information Could you explain how the default tariff or any applicable tariff in your system is computed Consider a power system with a flat default tariff that is recalculated every year and where the consumers have the possibility of switching back and forth from default tariff to the offer of any retail supplier or buying directly from the market at spot price at any time with no charges for switching just giving one week advance notice As a consumer can you figure out a scheme to fool the system in your benefit As a regulator can you figure out a mechanism to avoid that the system could be fooled Are tariffs that differentiate by utilization factors discriminatory How about those tariffs that apply Ramsey pricing to allocate the costs of promotion of energy efficiency or support to renewable energies or any other regulated charges Question 2 Capacity mechanisms Describe the method if any that has been adopted in the power system of your choice to promote investment in new generation capacity No method is also a method Provide your evaluation of this method and suggest the approach that you consider is most adequate to achieve an adequate level of generation capacity in your system Justify your answer Assume now that the regulator of a hypothetical country C not the country of your choice has decided to adopt the method of reliability options or something similar like the forward capacity mechanism in ISO New England The regulator asks for your advice to design the specific rules in the



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