LOG776 Economics of Energy Value Chains (Spring 2021)
- ECTS Credits:
- 7.5
- Responsible faculty:
- Avdeling for logistikk
- Campus:
- Molde
- Study level:
- {code=HN, name=Second degree level}
- Duration:
- ½ year
Table of contents
Contents
- Fundamentals of Energy Economics: Market design. Market failure and externalities. Competition vs regulation. Energy infrastructure: natural monopolies. Public/private ownership and operation. Investments: risk, capital asset pricing, real options. Basics of auction theory. Market equilibrium modelling (GAMS Software).
- Economics of Conventional Energy Sources: Oil: cartels, futures and options. Natural gas: costs, price regulation, transport infrastructure. Coal: connection with electricity generation. Economics of nuclear energy.
- Economics of Alternative Energy Sources: Solar and wind: subsidies. Hydropower and geothermal energy. Economic analysis of future energy-mixes (incl. technologies for energy storage, tidal power, hydrogen, CCS)
- Electricity Markets and Regulations: The electricity supply chain and its connection with the primary energy sources. Rate-of-return regulation, marginal cost pricing, peak-load pricing. Regulation and deregulation. Energy efficiency.
- Energy Policy and Environmental Policy: Energy security. Energy externalities. Carbon trading. Energy transition. Trade-offs between efficiency, equity, and sustainability. Appraisal of infrastructure development: CBA.
The course is connected to the following study programs
Recommended knowledge
The student's learning outcomes after passing the exam
Upon completing this course, the candidate:
- Has an in-depth understanding of energy value chains, from primary energy sources to final consumption, which form a complex interdependent energy system.
- Can apply theoretical tools like game theory to structure and analyze real-life problems related to interactions in energy markets.
- Has skills necessary to model energy markets with numerical tools (GAMS) and can use the results for analysis of practical problems.
- Has necessary knowledge and tools for socio-economic analysis of plans and programs and appraisal of investments within the energy sector.
- Can understand and analyze economic aspects of climate change and sustainability issues related to energy production, transportation, and consumption.
- Can analyze and discuss questions related to energy efficiency vs economic efficiency.
Forms of teaching and learning
Exam
Form of assessment: Home assessment
- Proportion: 20%
- Grouping: Group
- Grading scale: Letter (A - F)
- Support material: All printed and written supporting material
Form of assessment: Home assessment
- Proportion: 20%
- Grouping: Group
- Grading scale: Letter (A - F)
- Support material: All printed and written supporting material
Form of assessment: Home assessment
- Proportion: 60%
- Duration: 4 Hours
- Grouping: Individual
- Grading scale: Letter (A - F)
- Support material: A Calculator with empty memory + general dictionary in mother tongue/Norwegian/English in paper version
Comment:
Two mandatory homework assignments, each contributing 20% to the total grade, will be evaluated with a character (A – F) grade. Students are allowed to work on and hand-in these assignments by groups (2-3 students). The final 4-hours exam at the end of the semester is evaluated with a character (A – F) grade, and it contributes 60% to the final grade for this course.
Pensum
Main handbook: Schwarz, P. Energy Economics, Routledge, New York, 2018, 432 pages.
Supporting material:
Zweifel, P., Praktiknjo, A. and G. Erdmann. Energy Economics: Theory and Applications, Springer, 2017, 324 pages.
Gabriel, S.A., Conejo, A.J., Fuller, J.D., Hobbs, B.F., Ruiz, C. Complementarity Modeling in Energy Markets. Springer, 2013, 220 pages.