78456 - Economics And Management of Energy Utilities M

Learning outcomes

The course provides the basics for understanding the regulation of public utilities, the design of electricity markets and the guiding principles of business management for the energy sector. At the end of the course students are able to understand the main challenges of infrastructural and power investments, and can engage them both in public perspective of regulation and competition policy of utilities and in the enterprise perspective of capital budgeting. Futhermore students are finally able to identify key management issues of engineering, procurement, construction and operation phases of industrial projects, and can deal with them applying project and process management techniques.

Course contents

The course introduces the most relevant economic theories and empirical perspectives, from microeconomics to macroeconomics and regulatory economy fundamentals. Public policies and regulation such as competition, natural monopolies, renewable energy support, environmental policies and energy efficiency measures are analysed throughout the course. Economics of energy resources and markets, focusing on Oil&Gas, grids and networks, traditional power and renewable energy are discussed focusing on major industry trends and dynamics. After an extensive overview of the market context, management and other business-related tools will be provided from project management to capital budgeting.

The course is divided in four modules:

1. Introductory topics and basics of macroeconomics and resource economy
   • Fundamental Concept of Energy
   • Energy supply and the economics of exhaustible resources
   • Introduction to theory of the firm and market structures
2. Energy and power regulation
   • Introduction to regulatory economics
   • European energy regulation: a single market for gas and electricity
   • Wholesale power markets: competition and antitrust issues
   • The green shift: how to promote green economy and energy efficiency
3. Energy markets, industries and technologies
   • Global energy trends: Oil&Gas markets, energy security and peak oil
   • Geopolitics and energy
   • The electricity sector: power plants, networks and new technologies
   • Renewable energy and energy efficiency technologies
4. Management of energy companies and investment projects
   • Introduction to capital budgeting and corporate finance
   • Economic and financial aspects of generation technologies
   • LCOE – Levelized Cost of Energy
   • Project Management concepts

Readings/Bibliography

No assigned textbook for the course. Lectures will be supported by power point presentation.

Lecture notes will be available at the web site AMS campus [https://campus.unibo.it/].

Suggested readings:

• IEA - International Energy Agency, World Energy Outlook 2018, and in general all IEA free publications (https://www.iea.org/publications/ )
• IRENA - the International Renewable Energy Agency, REthinking Energy 2017, and other relevant IRENA free publications (http://www.irena.org [http://www.irena.org/] )
• BNEF - Bloomberg New Energy Finance, Global Trends in Renewable Energy Investment 2018, and in general all BNEF free publications (https://about.bnef.com/clean-energy-investment/ )
• Mckinsey Global Institute, Beyond the super-cycle: how technology is reshaping resources, (http://www.mckinsey.com/mgi/overview )
• BP, Energy Outlook 2018, http://www.bp.com/en/global/corporate/energy-economics/energy-outlook.html

Suggested bibliography:

• Pearce D W, Turner R K, Economics of Natural Resources and the Environment, Johns Hopkins Univ Pr (December 1989)
• Kirschen D, Strbac G, Fundamentals of Power System Economics, John Wiley & Sons, (2004)
• Stoft S, Power System Economics: Designing Markets for Electricity, Wiley, (2002)

Teaching methods

• Class lectures;
• Case studies / excel laboratories;
• Meetings with energy experts/business managers;
• Other activities (e.g. visit to a control room, visit to operating power plant, etc.);

Assessment methods

Final exam consisting of:

• Written test: multiple choice questions + open questions + exercises
• Project work: groups of 2-3 students, whose presentation will be discussed in class and evaluated in the final exam
• Oral exam: discretionary if the student has given the project work, mandatory if not.

Office hours

See the website of Giuseppe Mastropieri