Electricity Markets Syndicate Report

Electricity Markets & Operation Security

Report of syndicate project

About This Document

This report summarises the results of the syndicate project group exercise number 6 of the course “ELEC7310 Electricity Markets and Operation Security”. The exercise consist of a electricity market simulation game with a duration of nine weeks in which the group of seven students operates an imaginary power plant. They aim to generate maximum profit from weekly decisions about the power plant operation and electricity trades in a strategic way. That way, the syndicate group gains profound knowledge about electricity markets and a deeper understanding of the challenges in efficient operation of power grids.  

In the first chapter, electricity markets are explained in general for a better understanding and as preliminary knowledge first. In part 1.b) the simulation exercise and its conditions are explained in detail. The following part 1.c) then deals with ways how to analyse the energy market and predict its behaviour and part 1.d) discusses possible operation and trading strategies. Both parts are base for taking sound decisions in the simulation exercise.  

In Chapter 2, changes of conditions in market or power station and the subsequent trades or actions are presented, analysed and discussed in weekly sections.  

In Chapter 3, the results of the simulation are reviewed and concluded in respect to financial profit, strategic decisions and lessons learned.

Table of Content

1. Introduction

1.1. AUS Electricity Markets

        1.1.1 The National Electricity Market

        1.1.2 The Australian Energy Market Operator

        1.1.3 The Energy Market

        1.1.4 Electricity Futures and Options

                1.1.4.1 Futures contract

1.1.4.2 Base Load CAP Contract

1.2. Simulation explanation

1.3. How to analysis markets (forecast, data analysis, problems

1.4. Trading strategies: Cap Contract trading strategy

2. Simulation Trading History

2.1 Week 1

2.2 Week 2

2.3 Week 3

2.4 Week 4

2.5 Week 5

2.6 Week 6

2.7 Week 7

2.8 Week 8

2.9 Week 9

3. Conclusion

4. Reference

5. Appendix

1.1 The Australian Electricity market

1.1.1 The National Electricity Market

The National Electricity Market (NEM) is the wholesale electricity market for the electrically connected states and territories of eastern and southern Australia – Queensland, New South Wales, the Australian Capital Territory, Victoria, South Australia and Tasmania. Western Australia and the Northern Territory are not connected to the NEM.