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