Electricity System Markets and Developments
Elsystemets marknader och utveckling

FMIN60, 7.5 credits, A (Second Cycle)

Valid for: 2025/26
Faculty: Faculty of Engineering LTH
Decided by: PLED W
Date of Decision: 2025-04-09
Effective: 2025-05-05

General Information

Main field: Technology Depth of study relative to the degree requirements: Second cycle, in-depth level of the course cannot be classified
Elective for: I4-hem, W4
Language of instruction: The course will be given in Swedish

Aim

The electricity system plays a central role in society's electrification and green transition, which creates a great demand for expertise in the area. The aim of this course is to provide the student with in-depth knowledge and skills regarding relevant market aspects in order to contribute to the development of the electricity system.

Learning outcomes

Knowledge and understanding
For a passing grade the student must

• Describe the history and development of the electricity system with a focus on institutional development and market regimes
• Describe the technical composition and functions of the electricity system and its impact on price formation in the electricity market and the need for support services
• Have in-depth knowledge of how the interconnected electricity system markets (e.g. spot, investment, balancing, support markets) in the Nordic countries and the EU work and what alternatives are available
• Have in-depth knowledge of theories about different market regimes, their institutions and regulation
• Describe and discuss the influence of politics on the development of the electricity system and on which electricity market regimes are needed and which can be chosen (e.g. energy only 2.0, market capacity, reserve capacity, etc.)
• Describe the electricity network operations (natural monopolies) with regard to legislation, pricing and revenue regulation as well as planning and investment logic
• Describe the conditions for future user flexibility among small and large electricity customers

Competences and skills
For a passing grade the student must

• Critically evaluate and analyse different possible compositions of parts of the electricity system, e.g. energy storage, different types of power, user flexibility
• Analyse and evaluate proposals for regulations and political governance with relevance to the electricity system•
• Evaluate and critically discuss different business strategies in relation to electricity markets

Judgement and approach
For a passing grade the student must

• Demonstrate a critical review approach to different markets and the functioning of the regulations and proposals for changes to these

Contents

The course covers the following areas

The history and development of the electricity system.

The composition and function of the electricity system (different power productions, merit order, etc.) and its impact on price formation on the electricity market and the need for system services.

The interconnected electricity system markets in the Nordic countries and the functioning of various system services.

Theories of different market regimes, their institutions and regulation

Principles for how an electricity market can be organized from microeconomics; market mechanisms/price formation, merit orders; energy-only/capacity market; balance responsibility)

Significant European and Swedish regulations governing the development of electricity grids and electricity markets (TEN-E, the Electricity Act, impact of electricity certificates/emissions trading, etc.

Electricity network operations (TSO, DSO) - regulation, responsibility and tools (theory natural monopolies, balance responsibility, system responsibility, revenue limit; power tariffs, conditional agreements, etc.)

Market power, competition; risk management (financial instruments); power purchase agreements

User flexibility for large and small future electricity consumers.

Future scenarios with a focus on institutional and technical co-development of the electricity system

International outlook to a number of other electricity market regimes.

Examination details

Grading scale: TH - (U, 3, 4, 5) - (Fail, Three, Four, Five)
Assessment:

The course's examination consists of a written examination with grading according to the graded LTH scale (U, 3, 4 and 5) where the knowledge and understanding requirements are examined and two approved assignments/exercises in seminar form with mandatory attendance where skills and abilities and judgement and approach are examined.

The examiner, in consultation with Disability Support Services, may deviate from the regular form of examination in order to provide a permanently disabled student with a form of examination equivalent to that of a student without a disability.

Modules
Code: 0125. Name: Electricity System Markets and Developments - Written Exam.
Credits: 4.5. Grading scale: TH - (U, 3, 4, 5). Assessment: Approved Written Exam
Code: 0225. Name: Assignments, Exercises with Compulsory Attendance.
Credits: 3.0. Grading scale: UG - (U, G). Assessment: 2 group exercises/assignments

Admission

Admission requirements:

• MVKN36 Energy Markets

Reading list

• Reports and articles that we make available on Canvas.

Contact

Course coordinator: Max Åhman, max.ahman@miljo.lth.se
Course administrator: Petra Malmquist, petra.malmquist@miljo.lth.se
Course homepage: https://www.tos.lth.se/utbildning/grundutbildning/