Energy Markets & Economics

This course will cover a variety of theoretical and empirical topics related to the economics of the power sector. This includes concepts such as supply and demand for power, the structure of the industry (generation, transmission and distribution, retail supply), regulation of the power sector, wholesale power markets and their design (including competition issues), energy efficiency and retail supply, among other topics. We will also explore environmental consequences of energy consumption and production decisions. 

The core objective of this course is to gain a good understanding of the power sector with focus not only on theoretical concepts but also on a more practical application of economic concepts related to power markets. 

Course outline: 

1.Introduction to the economics of the power sector (supply and demand for power, structure of the industry – generation, transmission and distribution, retail supply); 
2.Possible models for organising the power sector, technical characteristics that affect that choice and sector liberalisation; 
3.Need for regulation and current approaches to regulation and related concepts (cost plus or rate of return, price cap vs revenue cap, RIIO, concept of RAB, etc.); 
4.Wholesale trade, including energy only markets, capacity markets and investment decision making, and competition issues; 
5.Energy efficiency and energy efficiency policies, renewable energy; and 
6.Retail supply, retail competition and pricing (including concepts of long run and short run marginal costs, average costs and market failures related to information).