This chapter covers basic concepts in power system operations and electricity markets. Basic concepts of power generation include variable cost, marginal cost, fixed cost, investment cost, the weighted average cost of capital, and the definition of a natural monopoly. Basic concepts of transmission and distribution include a discussion of Ohm’s law, Kirchhoff’s laws, the power flow equations, and the direct current power flow. Basic concepts of consumption include the notion of valuation/marginal benefit, demand functions, demand elasticity, and the value of lost load. The actors of electricity markets are introduced, including transmission/independent system operators, distribution system operators, utilities, load serving entities, retailers, power exchanges, and transmission companies. Reserves and ancillary services are then introduced, and details about the forward-looking and rolling nature of power system operations are discussed. Exchanges and pools are informally defined, and the debate between uniform and pay-as-bid pricing is detailed. A blueprint of a typical electricity markets, with the participating actors and traded products and services, is introduced. The California and Central Western European markets are compared in order to introduce the debate between zonal and nodal pricing, as well as different approaches in pricing.

This chapter introduces the unit commitment model. The fixed (startup and min load) and variable cost of a unit are discussed. Initial conditions, transitions, min up/down times, temperature-dependent startups, startup/shutdown profiles, ramp rates, heat rate curves, and reserves are discussed and represented in a mixed integer linear programming model of unit commitment. The extension of the basic model to uncertainty in the stochastic unit commitment model is discussed. The two-settlement system of day-ahead markets is described. Portfolios followed by nominations are compared to unit-based market models. Exchanges are compared to power pools. The possibility of inexistence of a market clearing price in non-convex market clearing models is discussed. Paradoxically rejected orders in European market models are described. Lost opportunity cost as a metric of deviation from equilibrium is introduced, and related notions such as make-whole payments, uplifts, and potential congestion revenue shortfall are introduced. Convex hull pricing is defined and compared to pricing based on linear relaxations and fixing integer variables. The products of the European electricity market (continuous and block orders) are described. The treatment of European pricing rules in the EUPHEMIA algorithm through a branch-and-cut scheme is discussed.

This chapter examines the dynamics of meandering rivers, including the initiation of meandering in straight channels; the development of bar units; and the relation of these units to pools, riffles, and point bars. It reviews theories of pool-riffle development and maintenance; flow through meander bends, including the influence of channel curvature and the point bar on flow structure; and the relation of the spatial pattern of shear stress in curved channels to patterns of erosion and deposition, to the development of bar unit topography, and to patterns of bank erosion. Mechanisms of bank erosion are introduced, emphasizing that bank erosion occurs in different types of rivers. Modes of planform deformation on meandering rivers are explored, as well as the factors that influence planform migration dynamics in meandering rivers. The discussion includes a basic introduction to numerical models of meandering rivers and attempts to integrate models of flow and sediment transport in curved channels with models capable of simulating bank erosion and lateral migration of meandering rivers. The chapter also briefly discusses meandering of mixed bedrock-alluvial rivers.

Insurance has two basic theoretical motivations. First, for those parties holding a risky asset to purchase a commodity that reduces the overall expected risk of the two assets, being the original asset and the asset of the insurance policy. Insurance policies are available in various forms on the market, but two of the main types of policies for environmental accidents are first-party (damage to self and own assets) and third-party (damage to other parties and their assets) liability insurance. Moral hazard contains the idea that if you assume the risk for someone else, then they no longer face the costs of those risks and thus are more likely to undertake those risks. Market capacity to supply the necessary volume of insurance policies and to be able to pay them out when needed can be reinforced with several tools, including forms of co-insurance, reinsurance, and pooling. Again, it bears repeating that while some injuries, like a wrecked car, might be remedied by cash payouts, this is not often the case for material environmental injuries. Thus, the creation of moral hazard for environmental insurance policies, both first-party and third-party, is a serious concern.