Lesson 12 Overview

In this lesson, we will look at the economics of the electricity industry, which is one of the largest and most pervasive energy markets in the world today. We will describe the supply and demand fundamentals, how prices are established, and what drives changes in prices. We will then look at some topics that will affect this industry in the near future:

1. The boom in the production of natural gas in the US, and what this means for the power sector.
2. The drive to enlarge the share of electricity generated by renewable sources of energy.
3. The future of the nuclear power industry in the wake of the recent Japanese earthquake and tsunami and ensuing nuclear accident.

What will we learn?

By the end of this lesson, you should be able to:

• describe the electricity "value chain";
• draw, label and explain the key components of a supply and demand diagram for electricity;
• explain what a generation stack is;
• describe what is meant by the term "load shape";
• list and describe various environmental regulations affecting the coal-fired electricity generation sector;
• describe the effects of these regulations on electricity prices;
• explain what "renewable portfolio standards" are.

What is due for Lesson 12?

This lesson will take us one week to complete. Please refer to Canvas for specific time frames and due dates. There are a number of required activities in this lesson. The chart below provides an overview of those activities that must be submitted for this lesson. For assignment details, refer to the lesson page noted.