Economics and Regulation of Sustainable Energy Systems

This course is a general introduction to energy economics. In this course, you learn the essentials of how actors in the energy system make economic decisions, when markets work well and when they may fail, and what options the government has to remedy market failures. Specifically, the following topics are addressed:

• Introduction to energy (electricity) markets: perfect competition; oligopoly

• Rational (and irrational) market behaviour; ABM ?

• Investment decision making; LCOE

• Opportunity costing / discounting; NPV; IRR; discount rate

• Markets, (perfect) competition and market failure (esp. externalities en lock-in)

• Private costs, external cost and social cost; empirical evidence (related to energy)

• LCOE; discounting; private discount rate; IRR and NPV

• Social cost-benefit analysis; social discount rate

The final grade of the course consists of the following components:

- Individual computer exam (80%)

- Report on the simulation game (20%)

Students should score at least 6 for both parts. All marks will be expressed on a scale of 1 to 10.

Final grade calculation: (0.8 * computer exam) + (0.2 * report)

In case of an insufficient final result, repair options may exist in accordance with Article 17A, Times and number of examinations, sub 1, of the Teaching and Examination Regulations, for:

- Computer exam: resit computer exam

- Report on the simulation: resubmission of the report

Disclaimer: information may change depending on unforeseen circumstances or measures (see: TER Art 2, sub 5).