Coordinating energy and reserves in a wholesale electricity market.

This thesis addresses a number of questions related to the design of a wholesale electricity market and the decentralisation of a mixed hydro and thermal system. Initially it concentrates on the response to price of a Linear Programming model of a hydro station and existence of a step supply curve consistent with that function. This has implications for the existence of the perfect competition equilibrium in a simplified energy market. An experimental analysis is presented, which attempts to quantify the theorised discrepancy between an 'ideal' centrally coordinated solution and the market's solution. The latter half of this thesis develops a Linear Programming based representation of the joint energy and reserve capability of a generating unit or station, called the Fan Approximation. This approach is used to develop an offering and market-clearing model for energy and reserves which allows hydro, thermal, and interruptible load participants to compete equally