chapter 3 - Bentham Science

Professional Development in Electricity Applications of Spreadsheets in Education The Amazing Power of a Simple Tool 263
Throughout industry the role of Professional Development varies widely. Some PD workshops
are focused to provide training on very particular technical aspects in great depth, for example,
training on proprietary modeling software. Nevertheless, the industry audience demands concentrated
information delivery with a focus on adding value to business and with a delivery mechanism
which provides users with resources to help them when they return to their place of work [2].
Compared with tertiary education, there is only limited time and desire for delving into theory,
equations, and developing software models. However, a workshop running pre-canned models, or
even worse, slide shows of model outputs disengages the audience quickly. We successfully integrated
spreadsheet models with a mixture of pre-built modeling (to assist with rapid delivery),
in-situ formula development (to demonstrate model construction), and running computational experiments
(to convey the mechanics of the market and to illustrate behavioral impacts).
Other authors in the academic arena have performed modeling of deregulated physical electricity
markets with spreadsheets and other modeling software. Cau et al. [4] have instituted a teaching
tool to highlight the gaming behavior of participants in the spot market. Their software implemented
a physical market clearing model to establish spot prices and dispatch instructions. The scope of
their curriculum concentrates on audience participation in extended experimental games to establish
the behavioral characteristics of the spot market. Farr et al. [5] successfully used spreadsheet
teaching models for an auction process associated with an alternative formulation of a deregulated
electricity market.
12.3 Mechanics of the National Electricity Market
Australia’s National Electricity Market (NEM) is a real-time market for balancing the supply and
demand of energy in Eastern Australia. It is a highly complex environment with many power stations
contributing to an interconnected grid, a fine resolution time-scale, a multitude of engineering
constraints and with many regulatory structures [6].
The market is managed by a single market operator (AEMO) who is charged with implementing
the very strict regulatory environment of the National Electricity Law. The market structure is quite
different to typical equity or commodity markets owing to the peculiar nature electrical energy as
the commodity being traded.
At any point in time, the demand and supply must perfectly match for otherwise load shedding
occurs which is deemed as a market failure under the market operator’s charter. Electricity cannot
be effectively stored by either consumers or producers, and consequently the market is structured to
accommodate a commodity which is undergoing continuous delivery and consumption. The NEM
is structured as an interval market, where a new price is set, and new instructions to generators are
produced at regular epochs (every five minutes). It is the role of the market operator to establish
the clearing price (the spot price) and to issue instructions to the pool of generators (around 300
generating units) for their individual levels of production.
The market is structured as a gross pool market, meaning that generators are regulated to sell
production solely to the central clearing house and all retailers buy from the same exchange. A
single clearing price emerges (the spot price or pool price) and all participants are exposed to the
same market price. A separate derivative market has emerged for participants to manage their pool
price exposure.