Semester Offering: August

Development and expansion of electricity system is an inevitable part of the current development discourse. This is particularly import for Asia, as it is growing and providing electricity at reasonable cost is essential for human living as well as economic growth. In this context, this course is designed to develop an in-depth understanding of key economic and other concepts related to electric utility planning and to expose the students to modern approaches of electricity planning, electricity pricing and environmental implications of alternative power development plans.


The students will be able to:
·         Demonstrate the advanced knowledge of the electricity planning and economics concepts especially around costs, pricing, economic operation, demand patterns, demand side management and regulation
·        Choose and decide amongst the different models and approaches for electricity demand forecasting
·        Make critical judgement on how to handle electricity system reliability from economic viewpoints
·        Show expertize in deciding amongst alterative power system planning models and pricing mechanisms
·        Demonstrate the ability to use quantitative assessment tools




I.       Nature of Planning in Electricity Sector and the Hierarchy of Electricity Planning Models
II.      Electricity Demand Forecasting
1.        Different Approaches for Forecasting
2.        Short Term Demand Forecasting Models
3.        Long Term Demand Forecasting Models

III.     Power Generation Technologies- An overview

IV.     Economics of power generation options
1.        Cost structure of power generation (general and technology specific)
2.        Role of financing mechanism and discount rate
3.        Role of power demand pattern
4.        Effects of environmental regulation
5.        Role of electricity pricing structure
6.        Economics of grid supply vs. decentralized generation

V.      Economic Operation of Power System
1.        Economic Dispatch
2.        Unit Commitment
3.        Hydro-Thermal Scheduling
4.        Conventional vs. decentralized power system operation 

VI.     Economics of Power System Reliability
1.        Key Indices of Power System Reliability and their Calculations
2.        Linkage between Reliability and Capacity Planning
3.        Linkage between reliability and cost

VII.    Power System Planning Models
1.        The Screening Curve Analysis vs. Production Cost Simulation Models
2.        Traditional Generation Expansion Planning Models
3.        Integrated Resource Planning Models
4.        Dealing with Uncertainties in Capacity Expansion Planning
5.        System planning under public monopoly vs. competitive market

VIII.   Electricity Pricing Theory and Approaches
1.        Short-run vs Long-run Marginal Cost Pricing
2.        Theory of Peak Load Pricing
3.        Theory of Spot Pricing
4.        Locational Pricing: Concepts and Approaches
5.        Buyback rates of Electricity Produced by Independent Producers
6.        Electricity Rate-Making in Practice
7.        Environmental Regulation and Electricity Pricing

IX.     Demand Side Management as a Strategic Option in Utility Planning

X.      Deregulation of Electric Utilities: Issues and Approaches


1.         Determination of optimal unit commitment plan and optimal hydro-thermal schedule.
2.         Generation system reliability and production cost simulation.
3.         Demonstration of a generation planning and integrated resource planning software, formulation of a problem and analysis of model outputs around capacity expansion planning and demand-side management plans.


No designated text book, but class notes and selected handouts will be provided.


1.         M. Ilic, F. Galiana, and L. Fink, 1998, Power Systems Restructuring: Engineering and Economics,  Kluwer Academic Press, Boston.
2.         Daniel  Kirschen and Goran Strbac, 2004, Fundamental of Power System Economics, John Wiley & Sons, UK.
3.         Gilbert Masters, 2004, Renewable and Efficient Electric Power Systems, Wiley-Interscience, John Wiley & Sons, New Jersey, USA.
4.         Geoffrey Rothwell and Thomas Gomez, 2003, Electricity Economics: Regulation and Deregulation, Wiley-Interscience, John Wiley & Sons.
5.         Fereidoon P. Sioshansi and Wolfgang Pfaffenberger (eds.), 2006, Electricity Market Reform: An International Perspective, Elsevier, Oxford, UK.
6.         F.C. Shewppe, M.C. Caramanis, R.D. Tabors and R.E. Bohn, 1988, Spot Pricing of Electricity,       Kluwer Academic Press, Boston.
7.         Steven Stoft, 2002, Power System Economics: Designing Markets for Electricity, Wiley- Interscience, New York.
8.         H.G. Stoll, 1989, Least-Cost Electric Utility Planning, John-Wiley, New York.
9.         J.N. Swisher, M. Jannuzzi and R.Y. Redlinger, 1997, Integrated Resource Planning, UNEP CollaboratingCentre on Energy and Environment, Risoe, Denmark.


1.         IEEE Transactions on Power Systems, IEEE
2.         The Energy Journal, International Association of Energy Economics
3.         Energy Policy, Elsevier
4.         Utilities Policy, Elsevier
5.         The Electricity Journal, Elsevier


The course is composed of 30 hours of lecture and 45 hours of lab hours. Student are expected to spend about two hours of self-study for each lecture hours, mainly, reference books and provided reading/lecture materials. Three assignments are planned, of which, 5-10 hours for each would be necessary first two assignments (linked to the lab); the third assignment will involve group work and presentations and need more time.  


The methods include lectures in class, assignments (individual and in group), class discussions, and problem solving in lab sessions. The lab hours will be used for exercises and student assignment presentations. Students will be asked to go through selected reading materials before coming to the class. Interactive teaching methods will be adopted in the class.


The final grade will be computed from cumulative scores of the following constituent parts: mid-term exam (30%), final exam (30%), assignments (30%), interactive participation in the class and attendance (10%). Closed book examination will be used for the exams.

Grade “A” is awarded if a student demonstrates advanced knowledge as anticipated in the course learning outcomes above; Grade “B” is awarded for overall understanding of topics; Grade “C” is for below-expected understanding; and “D” for not meeting the most-basic expectations.