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The University of Southampton

ELEC6220 Power System Economics

Module Overview

- To introduce fundamental concepts relating to the design, analysis, economics and management of modern electrical power systems. - To develop awareness of the technical problems associated with operation of such systems. - To gain analytical and numerical modelling skills for handling particular problems. - To introduce classification of grid users, load control and tariffs.

Aims and Objectives

Learning Outcomes

Knowledge and Understanding

Having successfully completed this module, you will be able to demonstrate knowledge and understanding of:

  • Advanced concepts of operation of electrical power systems
  • Elements of control of power systems
  • Economic and management aspect
Subject Specific Intellectual and Research Skills

Having successfully completed this module you will be able to:

  • Appreciation of the complexity of power systems
  • Ability to analyse the performance of power systems
Transferable and Generic Skills

Having successfully completed this module you will be able to:

  • Application of modern modelling techniques
  • Ability to tackle problems of interdisciplinary nature
Subject Specific Practical Skills

Having successfully completed this module you will be able to:

  • A range of analytical and numerical methods of analysis of power systems
  • Ability to use commercial software for simulation


Introduction - The evolution of electricity generation technologies - The evolution of environmental awareness - The size of the industry - The politics of electricity - Hierarchy of energy within the national economy The utilisation of electric power - Types of loads - Classification of grid users - Measurement of load - Load loss factor - Load control - Load forecasting - Tariffs - Smart meters - Impact of electric vehicles on the power grid Power System Economics - Basic pricing principles - Supply-side and demand-side options - Load management and spot pricing - Electricity pricing - Charging for transmission and distribution services - Cost of generating electrical energy - Methods of determining depreciation - Importance of high load factor Electricity markets - Markets and monopolies - Electricity market structure - Market clearing - Social welfare - Market coupling - Government control versus free market approach - Decentralisation of the electricity market Power factor improvement - Causes and disadvantages of low power factor - Calculation of power factor correction - The most economical power factor - Power factor improvement equipment Economics of power transmission - Economic choice of conductor size - Economic choice of transmission voltage - Most economical conductor size in a cable Energy management system - Load-flow or power-flow computation - DC load-flow - Optimal power flow - State estimator Control of transported and distributed power - Evolution of smart grids - Control of real power flows - Control of reactive power flows - Unified Power-Flow Controller - State of the art of distribution systems - Comparison of HVAC and HVDC systems in smart grids Future power systems - Renewable Energy - Decentralised or Distributed Generation - Power-Electronic Interfaces - Energy Storage - Blackouts and Chaotic Phenomena Case studies - UCTE split of 2006 - Western energy crisis of 2001 - EU market liberalisation

Learning and Teaching

Preparation for scheduled sessions6
Follow-up work6
Completion of assessment task54
Wider reading or practice50
Total study time150

Resources & Reading list

D.S. Kirschen, G. Strbac (2018). Fundamentals of Power System Economics. 

B. Murray (2009). Power Markets and Economics. 

Weedy B.M., B.J. Cory (2012). Electric Power Systems. 



MethodPercentage contribution
Continuous Assessment 50%
Final Assessment  50%


MethodPercentage contribution
Set Task 100%


MethodPercentage contribution
Set Task 100%

Repeat Information

Repeat type: Internal & External

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