Economy of Electrical Power Engineering
FEKT-MPA-EELAcad. year: 2020/2021
The main goal of the course is to build on the information and knowledge acquired by students during their bachelor studies in economics and ecology of power engineering, and follow up with the issues of economic efficiency in power systems, operation optimization of power systems and business aspect of electricity. The subject Economics of Power Engineering is compulsory, as the knowledge and understanding of the connections between power engineering and the economy are fundamental parts of the knowledge portfolio of engineers and graduates of the Institute of Power Engineering.
In this course, emphasis is placed both on a comprehensive understanding of the theoretical basis of power engineering economics and the solution of practical examples and exercises demonstrating dependency and case studies that contribute to a better understanding of the topic. In addition to numerical exercises, the course also includes computer exercises where students learn options to solve many tasks using advanced mathematical and scientific software tools.
Learning outcomes of the course unit
The study outcome is not intended to create an independent economist or project manager in the field of power engineering. After completing the course, student will probably not be able to carry out extensive and comprehensive economic analyses of the electricity market and energy operations. However, the student should be able to work out, along with a technical project in power or electrical engineering respectively, an elementary economic analysis containing a basic evaluation of economic efficiency and return on investment of the project and will be able to explain and answer the following questions:
- What characterizes the cost of the power loss and electricity loss?
- What are the costs of power and energy?
- What is the problem of choosing the appropriate line section?
- What is an economical line section?
- What is the importance of the costs of transformers?
- What is the economic burden of transformers?
- What methods are used to optimize the operation of the electricity system?
- What comprises the price of electricity?
- What methods are used for pricing electricity, and which method is applied in the Czech Republic?
- What are the methods of promoting renewable energy (OZE), what is their principle, advantages and disadvantages?
- How is the electricity market implemented?
Knowledge at the Bachelor's degree level and knowledge of BEEE subject are required.
Recommended optional programme components
Recommended or required reading
HUMPHREYS, K. K.: Jelen's Cost and Optimatization Engineering,McGraw Hill, 1990 (EN)
STOFT, Stewen. Power System Economics : Designing Markets for Electricity. Stamatios V. Kartalopoulos. 1st edition. New Jersey, USA : IEEE Press, 2002. 468 s. ISBN 0-471-15040-1. (EN)
MUNASINGHE, Mohan. The Economics of Power System Reliability and Planning : Theory and Case Study. 1st edition. Washington D.C., USA : [s.n.], 1979. 623 s. ISBN 0-8018-2276-9. (EN)
ROBINSON, D.J.: The Energy Economy: Practical Insight to Public Policy and Current Affairs, ISBN 9781137469274, 2015, Palgrave Macmillan S (EN)
BP: Energy Outlook, BP, online, 2018, URL:
THUMANN ALBERT, NIEHUS TERRY a YOUNGER WILLIAM J. Energy Economics. Handbook of Energy Audits. 9th Edition. Fairmont Press, 2013, s. 1-1. ISBN 9780881736854. (EN)
Planned learning activities and teaching methods
Teaching methodology is determined by different teaching techniques as they are described in Article 7 of the Study and Examination Regulations of the University.
Lectures are organized in the form of interpretation and discussion of the issue according to the syllabus.
To diversify and improve the quality of teaching, some lectures are presented by invited experts. Students are informed of these lectures in advance and their attendance is recorded and can be included in overall evaluation of the course and might influence the total point score.
Seminars are used for practical exercises particularly in mathematical skills and topics taught at lectures. The topics are further discussed and debated during seminar classes.
Assesment methods and criteria linked to learning outcomes
Assessment of subject is based on these components:
- Assessment of exercises in the form of credited tests or a semester project.
- Assessment of computer exercises where the student works out the specified task.
- Assessment of the final exam.
- Assessment of student activities. These points are extra credit for voluntary, independent and active solving of tasks and examples, etc. The bonus points are given by the subject teacher and are entirely based on his/her subjective assessment and are his/her responsibility.
The points ratio from particular parts of subject and the conditions for obtaining credit and tests are specified by the teacher at the beginning of the semester.
Language of instruction
Syllabus of lectures:
1. Introduction and course organization, revision of financial mathematics issues, entrance test!
2. The costs in power engineering, costs of losses, power and energy.
3. Costs of transmission - Selection of suitable line cross sections, economical line section.
4. The costs of transformers - economical transformer load, group transformer operation.
5. Economical distribution of production and electrical networks load.
6. Calculation and pricing of gain of losses and electricity consumption.
7. Operation of power systems optimizing.
8. Introduction to Finance and Accounting in power engineering (invited lecture).
9. Basic methods and procedures in the power engineering economy (invited lecture)
10. Economic efficiency in power systems, the impact of environmental requirements on the economic efficiency of projects in the power engineering.
11. Electricity market and trade.
12. Trading in electricity and emission permits (invited lecture).
13. Electricity trading, regulation (invited lecture)
Syllabus of training in profesional basics:
1. Revision of Financial Mathematics
2. The costs in power engineering.
3. Specific costs of losses, power and energy.
4. Distribution costs.
5. The costs of transformers.
6. Credit test 1.
7. Economic efficiency in power systems.
8. Economical distribution of production and electrical network load.
9. Calculation and pricing of gain of losses and electricity consumption.
10. Electricity market, pricing, regulation.
11. Credit test 2.
Syllabus of computer exercises:
12. The use of software tools to solve tasks of the economy in the power engineering .
13. The use of software tools for optimization of power systems operation.
The aim of the course is to familiarize students with basic and direct connections and dependencies between issues and topics of a purely technical nature of power engineering and the economic aspects of any solution. The goal is to show students and encourage them to understand that power engineering and the economy are intertwined, and that understanding of this relation is a necessary part of knowledge for every engineer and power engineering graduate.
Specification of controlled education, way of implementation and compensation for absences
Lectures on the subject are optional but students’ attendance is recommended. The lectures are intended to provide a complete understanding of the topic and a number of key conflict issues and problems are covered. Attendance at lectures presented by invited experts will be recorded, and will be included in the overall evaluation of the course and might influence the total point score.
Computer exercises and training in profesional basics are optional. Drawing up an individual task or project is mandatory.