Essentials of Power Generation Markets

A business-person’s introduction to key definitions, concepts and issues within the electricity generation industry

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► Do you need a basic introduction to the changing electricity supply business (in language aimed at non-technical business people)?

► Do you want to explore the multiple factors guiding choices of current and future power generation?

Do you want an explanation of some of the key terminology and concepts that are used in the power generation business?


Then this course is for you: providing a thorough grounding in the fundamental economic and competitive drivers of “power” (electricity) markets.

It does so:

  • By explaining key concepts and technological terminologies that every business person should know,
  • In language that is relevant to you,
  • Using a broad, integrated view that combines coverage of topics from supply to demand, land use to economics.

The topics have been chosen based on years of experience of teaching groups of business people in this industry through “live” classes. So the content here represent essential “must-knows” along with clarification of common areas of uncertainty, confusion or misunderstanding.

How is it delivered?

  • 8 Sections, incorporating 20 lessons
  • 16 video presentations (over 4 hours of video in total)
  • 4 illustrative online calculators with self-test Q&A
  • Additional illustrative articles, supporting text and explanatory notes
  • Links to recommended further reading and references
  • There are no restrictions on when you take which lessons; however a recommended order is provided (since knowledge gained in the earlier ones is utilised later on)
  • You can return to and revise any lesson at any point

Estimated time required: 8-10 hours.

What are the Outcomes?

  • A thorough introduction to the key factors driving the current and future economics of power generation markets, including how multiple variables impact each other and how they combine to determine future electricity mix outcomes (and hence market opportunities and risks).
  • A solid knowledge base for confidence when talking to colleagues or assessing presentations, proposals or reports.
  • The ability to “speak the language” of this complex industry, including
    • The relationship between power, energy & time (and the link to power project cost and revenue),
    • Capacity factor and its economic impact,
    • The key competitive pros and cons of different electricity generation options,
    • The nature of power demand variability,
    • The pros and cons of different supply mix solutions (and considerations in choosing the “best”),
    • The relevance of baseload and future mixtures of flexible and inflexible supply,
    • Peak demand challenges, including capacity margin and system reliability,
    • The impact of peak load duration on capacity requirements,
    • Power generation efficiency and primary energy,
    • End-use demand management, such as peak shifting or shaving, as an alternative to new generating capacity,
    • Evaluating energy density and its impacts on power projects and their land use,
    • The key variables in power project economics: revenues vs. costs,
    • Levelized cost of energy (LCOE): its definition and limitations,
    • The merit order curve and wholesale pricing of electricity,

Who is it most valuable to?

  • Those new to the power generation business, or those wanting to revise, confirm or broaden their existing knowledge base.
  • Investors, lawyers, policymakers, marketing/sales executives and other non-engineers, or anyone seeking to understand technological terminology and principles; but within a business-focused and market economic context.

“A solid grounding in the fundamentals of the power business means improved assurance and confidence when conversing with future business partners, customers, clients or suppliers.”


  • Delivery is online-only: you’ll need Internet access (with any modern browser – Chrome, Explorer/Edge, Safari etc.) for viewing video and written content.
  • For ease of use, the online calculators are best viewed on larger screens (PC, laptop or tablet)
  • Note that this course is entirely self-taught and does not include trainer Q&A (hey, it’s free!)

Course Curriculum

Below are listed the course sections – click on a section title to view and go to included lessons. Icons indicate the lesson type:

text video self-test calculation

Taking This Course
Before getting started...


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Power, Energy & Capacity
Confusing Terminology & the 'power' business

A short warning, regarding terminology and units!

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How are Power, Energy & Time related?

A video presentation relating power, energy and time; including graphically, on common power vs time charts.

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Energy/Power conversion: Calculator & self-test Quiz

A simple online calculator and using it to perform some simple calculations which illustrate conversions between power, energy and time.

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Capacity Factor
How is Capacity Factor Calculated?

A video presentation introducing this important power project metric: Capacity Factor.

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What are Typical Numbers for Real Power Plants?

A short article discussing how capacity factor varies in real life between different power generating technologies and projects.

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How can Capacity Factor be used in Calculations?

A video presentation illustrating how capacity factor can be used as an input to calculate other quantities such as required capacity and generated energy, plus why it is so important from an economic point of view..

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Capacity factor illustrated: Calculator & self-test Quiz

A simple online calculator and using it to perform some calculations which illustrate the importance of capacity factor to the business of power generation.

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Supply Options: Compare & Contrast
What is the Best Electricity Supply Mix?

A short article introducing why any view of the “best” mix depends on a number of different variables and desired outcomes.

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How do Electricity Supply Options Compare?

A video presentation discussing some key differences between the different available electricity generating sources; and illustrating why no two are exactly the same.

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Are 'Baseload Generators' essential?

An article discussing the question of baseload power generation: what it means and whether it matters when planning future supply mixes.

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A graphical illustration of baseload, inflexible and flexible supply within an overall mix

A video presentation following on from the article discussing “baseload” generation and using a simple graphical model to further illustrate the issues involved.

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Demand: Variability & Balance
How much does power demand vary?

“Variability” is a term most often raised when talking about wind or solar power supplies. However this video presentation highlights that large variability is inherent in power systems, even in the absence of these new renewable sources.

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How do Power Supply Options Stack up to Meet Varying Demand? (Example)

In a power system, supply must meet varying demand at any moment. Here’s an example of how different sources of supply stack up to do this.

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Can we Generate Too Much Power?

Commentators often focus on the problems of undersupply, for example when the wind doesn’t blow or the sun doesn’t shine. Here instead is a short introduction to the important issue of oversupply.

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A Graphical Illustration of the Issue of Curtailment

This video presents a simple graphical model to help illustrate how situations of excess power supply can arise.

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Peak Demand & its Implications
How are Peak Demand, Installed Capacity and Capacity Margin Connected?

This short video illustrates the fact that power systems need sufficient supply capacity to meet demand at peak times – with a margin on top to allow for the unexpected too.

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How Often are Peaking Generators Used?

This video presentation highlights how infrequently peaking generators can be called upon to supply electricity; introducing the concept of load duration curves as a convenient way to visualise this.

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Different ways to Reduce Peak Power Demand

This article gives a brief description of three ways in which peak power demand can be reduced, each with different outcomes in terms of overall energy use.

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Efficiency in Power Systems
Defining 'Efficiency'

Like “power” and “energy”, efficiency is a term that you’ll hear used often, sometimes in relation to electricity generation, sometimes to consumption. This video presentation clears up the difference between the two.

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Efficiency in Power Conversion

This video presentation looks at power conversion efficiency from country to power plant scale, and clears up one common point of confusion: how efficiency and capacity factor are related.

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Illustrating Efficiency with Simple Calculations & a self-test Quiz

Using a simple online calculator to perform some calculations to illustrate example impacts of efficiency on the business of power generation.

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Energy Density & Land Use
Why does Energy Density Matter to the Power Business?

This video presentation illustrates the issue of energy density, comparing conventional to renewable energy sources – and discussing why it matters.

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Further notes on Energy Density

Some additional resources and comments around this controversial issue.

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Will Land Use Restrict the Growth of Renewables?

An article using some simple numerical examples to discuss whether land use is large enough to be a problem in the growth of renewable power generation capacity.

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Project Economics & Energy Costs
The Revenue/Cost Balance in Power Generation'

This video presentation provides a quick introduction to the key variables that impact the business case for power generation projects, linking them back to the concepts we’ve discussed previously.

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What Determines the Price (Value) of Electricity?

An article discussing how much electricity sells for, focusing in particular on wholesale prices and the concept of electricity markets and the “merit order”.

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The Merit Order Illustrated'

Using a simple graphical model, this video further illustrates the merit order concept, including the impact of low/zero marginal cost renewable power sources on wholesale prices.

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What is 'LCOE' (and its Limitations)

As one of the most oft-quoted metrics in this business, levelised cost of electricity deserves specific scrutiny. This video presentation describes what it is – and why reported numbers can vary so much.

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Illustrating LCOE with Simple Calculations & a self-test Quiz

Using an online LCOE calculator to perform calculations which illustrate the impact of some key economic variables on the business of power generation.

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Course Close
Where to Learn More

How I can help you further, plus an invitation to provide feedback.

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