SUBJECT

Electricity is probably the most important infrastructural element of the economy of each nation and is central to the welfare of modern societies. 

In the last decade the Electricity Industry all over the world moved from a central operated structure, characterized by a regulated Monopoly and a Vertical Integrated Utility, to a distributed decision making structure with the introduction of competitive markets with competition among the suppliers and the demanders of electricity.  

Electricity markets, unlike other commodity and  good markets, need to be operated under  very strict and rather  difficult-to-control physical, technical and operational constraints (instantaneous power balance without storage possibilities, grid-structure depended power flows, voltage and reactive power control, stability and security requirements).  

The new competitive dimension of the electric industry poses new challenges to the technical design and the operation of power systems, from one side, and, from the other, the physical constraints may pose boundaries to the efficient economic operation of the market. This interaction between the “physical” and the “economic” layer is absolutely specific of this context and needs to be properly addressed considering both the economic and engineering aspects along with their interrelationships.