Explaining the Power Grid

Electricity is fascinating.

The energy used by a light bulb to light up a room is being produced in almost the exact same time at possibly hundreds of kilometers of distance, and we have no way to perfectly know from which power plant it comes from.

Most of us are lucky enough to experience and use electricity on a daily basis, in fact we may say that our lives rely heavily on the continuous availability of this source of power. This said, we generally know very little about the complexity behind its production and management.

Chapter 2: Electricity and the Power Grid

This article has the scope to introduce the second chapter of my Master’s Thesis on the Italian Electricity Market, an extremely important -yet very intricate- topic for our society.

In my thesis I have studied how the operators that actively produce electricity in Italy decide to price their offers on the public market, expecially that of Ancillary Services.

As anticipated, this setting is quite complicated and can be hard to grasp at first. For this reasons I have decided to written this chapter, that has the goal to lay the necessary foundations to fully understand how electricity works and how it is commonly produced and delivered to our houses.

By doing so I will also highlight some of the decisions that were made in our statistical analysis.

If you are (still) interested in the topic, feel free to directly read the chapter!