Facts about the course

ECTS Credits:
Responsible department:
Faculty of Logistics
Course Leaders:
  • Katerina Shaton
  • Eivind Tveter
Lecture Semester:
½ year

LOG776 Economics of Energy Value Chains (Spring 2022)

About the course

The course covers the following topics:

  •  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 requirements

LOG775 Energy Analytics and Sustainable Technologies and SØK710 Industrial Organization or equivalents to these courses.

The student's learning outcomes after completing the course

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

Three hours of lectures per week; 3-4 sessions in computer class during the semester. ​


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 



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.


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.

Last updated from FS (Common Student System) Oct. 18, 2021 7:20:24 PM