I do not have any idea of how it will be with the exam and I myself did not ever tried this way of examination. Maybe it worth for the class which have several students like what I am now (just me in this special course) but it is not working for the group of more than 100 students in one time as what I have experienced while teaching in the university.
Until now, I have completed all chapters as required in Stochastic Modeling of Electricity and Related Markets with emphasizing on Chapter 1, 6, 7 and 8. Most all parts in the chapters can be well understood however some technical parts need more clarification with the empirical cases even the descriptive statistics can be explain explicitly if we are working in depth. I have asked this problem to my principal supervisor Prof. Fred, but he sincerely noted me not to go too far which leads to complexity task.
Chapter 1 gives the introduction to the overall, discussing about the problem in modeling the energy market in which the market (specific on futures contract) is different to other commodity market having fixed settlement date. On the contrary, we can see that the commodity is settled over the period of time (time interval which the energy is delivered continuously). Other stylized fact that ruin the modeling of the commodity market are low storage possibilities (since the consumer cannot store the electricity and producer may store in reservoir (hydro-based) and gas (for thermal-based)) and mainly cause of seasonality (maybe spikes in short-end). The utility of electricity much more depend on temperature while people consume more for heating in winter season and cooling in summer. This means that the electricity prices are strongly correlated to the seasonality.
Next week will be a meeting with Fred regarding the exam (this meeting supposed to be in this week but he is going to skiing on a mountain), so I need to wait for him. This post is just for relaxing my mind after (etter-in Norge) a heavy reading on his book as one technique of memorizing. I will continue with the next chapter tomorrow that will be more interesting chapter to be discussed (probably for mathematicians and maybe for financial practice).