Handbook on Electricity Markets.

• Author: Shaffer, Blake

Handbook on Electricity Markets edited by Jean-Michel Glachant, Paul Joskow, and Michael G. Pollitt. (Edward Elgar Publishing, 2021), 672 pages, Print ISBN 978-1-78897-994-8, Online ISBN 978-1-78897-995-5

In the Handbook on Electricity Markets, editors Jean-Michel Glachant, Paul Joskow, and Michael G Pollitt have a assembled a who's who cast of characters to cover a wide range of topics related to electricity markets. From traditional vertically-integrated market systems, to the wave of restructuring that has taken place over the past 30 years, to where electricity markets are headed and the challenges (and opportunities) that present themselves, this book has it covered.

The Handbook will be a valuable text, rightly taking its place on the bookshelves and desks of experts in the field, while also useful to those outside the field looking to better understand electricity markets and their pressing issues going forward. While it is a collection of individual papers, the editors do an excellent job at weaving them together into a cohesive narrative, resulting in a well-organized book. At 672 pages, this organization proves essential to make the book easily digestible.

The Handbook is divided into two parts, with the dividing line being roughly the present. The first part starts with the evolution from traditional monopolies to partial competition in electricity markets ("restructuring"), principles of these restructured electricity markets, and case studies of individual regions. This last contribution will prove a valuable resource for those simply wanting to understand the nuances of the UK electricity market, as compared to Australia's, or Texas's, for example.

In the second part, the Handbook takes us to where electricity markets are headed in terms of the issues electricity markets are grappling with as we move forward. They face decarbonization and energy transition more broadly--from the changing way in which electricity will be produced and used, to the interaction between climate policy and electricity markets. They consider whether current electricity markets are ready for the task ahead with increasing shares of intermittent renewable generation. This second part of the book also covers important issues related to electricity in the developing world, critically important due to their scope and magnitude.

In what follows, I offer a brief synopsis of the Handbook's contents, followed by a discussion of its strengths and weaknesses.

Summary

The book starts with a summary by the editors. This useful chapter gives the reader a strong sense of its contents, allowing them to pick and choose their topics from the 672 page tome. Chapter 2 may as well have been the introduction. Richard Schmalensee provides a thorough and clear overview of the process of restructuring electricity markets from traditional vertically-integrated monopolies into the mix of competitive and regulated sectors we have today in many parts of the world. This chapter also nicely foreshadows the second part of the Handbook, namely in raising some of the challenges restructured markets are facing as electricity systems shift from largely dispatchable thermal supply to increasing intermittent generation with storage.

Chapters...