Course content

The course discusses different models for analysis of energy markets and how energy companies adjust to these. Emphasis is put on the relationship between technical and economic features in natural gas and electricity markets. The course focuses on how market-driven optimization of the value chains and production resources of energy companies can be modelled and how energy markets work and form prices. Uncertainty in market prices and resource availability is handled with a basis in financial theory and in methods of operations research.

Learning outcome

Position and function in the PhD program:
The course is meant for PhD students in management science, broadly defined. We assume that students have a foundation in selected areas of finance and optimization, comparable to a Master of Science in Industrial Economics and Technology Management. Specifically we build on courses having subjects such as optimization under uncertainty, equilibrium models (microeconomics) and real options analysis. The course audience is PhD students having an interest in computational equilibrium models, energy and environment in the interface between energy economics and technical systems analysis, and investment under uncertainty. The course is given every second year. It will give the students in-depth knowledge and a competence foundation making them able to participate in research processes so they can develop new knowledge within the area.

After following this course the student should:
- have knowledge about regulation and market mechanisms in electricity and gas markets.
- have knowledge about theory of investment under uncertainty in energy projects.
- be able to model advanced energy systems and markets and use these models for analysis.
- be able to discuss advanced features of energy market design.
- be able to model and discuss the links between markets and the physical characteristica of underlying technologies.

Learning methods and activities

Lectures, seminars, project work and excursions.

Recommended previous knowledge

TIØ4117 Microeconomics, TIØ4126 Optimization and Decision Support for Industrial Business Planning, and TIØ4145 Corporate Finance.

Course materials

Scientific articles and selected literature. Given at course start-up.

Credit reductions