Energy Economics of the Green Transition
Course content
The course provides an understanding of the challenges associated with the transition from fossil-based fuels to renewable energy, considering both the supply and demand side of energy markets. This includes the technological challenges of introducing renewable energy in the energy system and the regulatory challenges of designing optimal policies to facilitate the transition. While the course generally deals with the several energy markets, special emphasis is placed on electricity markets due to the significant role of electricity in a carbon neutral energy system.
The course applies theory and analytical tools from microeconomics, macroeconomics, and econometrics. A large part of the course is also based on numerical structural models of the energy system.
The exam consists of a written assignment on a relevant topic chosen by the students. The exam paper has to based on a formal analysis, but the student is free to choose if the paper is mainly theoretical, quantitative, or econometric.
MSc programme in Economics – elective course
Students enrolled at the Master programme and the 3rd year of the Bachelor programme can take the course.
Bacheloruddannelsen i økonomi – valgfag på 3. år
The Danish BSc programme in Economics - elective at the 3rd year
The course is open to:
- Exchange and Guest students from abroad
- Credit students from Danish Universities
- Open University students
After completing the course, the student should be able to:
Knowledge:
- Account for the structure of the main energy markets and the differences between them.
- Account for the key pathways in the transitition to renewable energy, including direct and indirect electrification.
- Account for the main technical challenges for an energy system that increasingly relies on intermittent renewable energy.
- Identify and discuss the economic effects of expanding generating capacity based on intermittent energy sources.
- Account for the potential technologies aimed at solving the challenges of intermittent energy supply and assess their potential for mitigating the costs of intermittency.
- Discuss the price responsiveness of short-run energy demand along with its determinants and evaluate the corresponding policy implications of making energy demand more elastic.
- Discuss the concept of network effects and asses the implications for green technology adoption.
- Discuss the energy efficiency gap and identify the corresponding optimal policy to foster investments in green technologies.
- Discuss and evaluate optimal and second-best policies for reducing energy related emissions, including a discussion of the main European and Danish energy- and climate policies.
Skills:
- Characterize and formulate models of the electricity system with/without intermittency, cross-border trade, energy storage, coupled energy markets (e.g. hydrogen and district heating systems), and long-run planning of generation capacity.
- Master linear programming by both deriving first-order conditions characterizing the optimal solution as well as numerically solving linear programming models of the energy system.
- Numerially solve and structurally estimate non-linear models of the energy system.
- Evaluate the cost-effectivenes of energy- and climate policies such as carbon taxes, cap-and-trade systems, technology subsidies, feeed-in-tariffs, and renewable energy targets.
Competencies:
- Perform advanced model analyses of the energy system.
- Perform a comprehensive critical evaluation of the strengths and weaknesses of energy market designs.
- Evaluate and suggest energy- and climate policies targeting the energy sector.
Lectures present relevant theory, models, and empirics.. Roughly
half of the lectures are centered around structural models of the
electricity system.. The other half of the lectures deal with other
aspects of transitioning to net-zero emissions through selected
papers on the research frontier of Energy Economics.
As a complement to the ordinary lectures, the course includes guest
lectures by Danish industry experts and/or policy makers, who
discuss relevant topics suchs as the recent energy crises and the
decarbonization of the Danish energy sector.
- Machiel Mulder: “Regulation of Energy Markets: Economic Mechanisms and Policy Evaluation” Springer 2021, ISBN: 978-3-030-58321-7.
- Anna Cretí and Fulvio Fontini: “Economics of Electricity: Markets , Competition and Rules” Cambridge University Press 2019, ISBN: 978-1-316-88461-4.
- Jonathan M. Harris and Brian Roach: “Environmental and Natural Resource Economics: A Contemporary Approach”, Routledge 2021, ISBN: 978-0-367-53138-6. (Chapter 11)
- Selected papers from the research frontier of Energy Economics.
- A handful of lecture notes on electricity system modeling.
The student should have followed courses similar to “Microeconomics I” and “Microeconomics II”, “Macroeconomics I” and “Macroeconomics II”, “Mathematics A” and “Mathematics B”, “Probability theory and statistics” and “Econometrics I” at the Bachelor of Economics, University of Copenhagen. It is also highly receommeded that students have programming experience in Python. Part of the requirements for registering for the exam is to pass an exercise from the exercise classes based on formulating and solving a numerical electricity system model programmed in Python. Note, however, that it is not required to use programming in the exam paper.
Schedule:
3 hours lectures every week from week 36 to 50 (except week
42).
The students receive oral feedback from the lecturers during lectures.
The students may attend the biweekly office hours during the semester to discuss ideas for the exam paper
For enrolled students: Rules etc at Master(UK) and Master(DK)
When registered you will be signed up for exam.
- Full-degree students – sign up at Selfservice on KUnet
- Exchange and guest students from abroad – sign up through Mobility Online and Selfservice- read more through this website.
- Credit students from Danish universities - sign up through this website.
- Open University students - sign up through this website.
The dates for the exams are found here Exams – Faculty of Social Sciences - University of Copenhagen (ku.dk)
Please note that it is your own responsibility to check for overlapping exam dates
- ECTS
- 7,5 ECTS
- Type of assessment
-
Home assignment, 12 hours
- Type of assessment details
- It is possible to collaborate up to 3 persons.
- Examination prerequisites
-
Students should pass two selected exercises from the exercise classes. At least one of these exercises will be based on programming a structural model of the electricity system.
- Aid
- All aids allowed
Use of AI tools is permitted. You must explain how you have used the tools. When text is solely or mainly generated by an AI tool, the tool used must be quoted as a source.
- Marking scale
- 7-point grading scale
- Censorship form
- No external censorship
- Exam period
-
Exam information:
The examination date can be found in the exam schedule here
More information is available in Digital Exam from the middle of the semester. In special cases decided by the Department, the exam can change to another day and/or time than announced.
More information about examination, rules, aids etc. at Master (UK), Master (DK) and Bachelor (DK).
- Re-exam
-
The reexamination form is the same as the ordinary exam.
Reexam info:
The submission date can be found in the reexam schedule here
More information in Digital Exam in February.
More info: Master(UK), Master(DK), Bachelor(DK).
Criteria for exam assessment
Students are assessed on the extent to which they master the learning outcome for the course.
In order to obtain the top grade "12", the student must with no or only a few minor weaknesses be able to demonstrate an excellent performance displaying a high level of command of all aspects of the relevant material and can make use of the knowledge, skills and competencies listed in the learning outcomes.
In order to obtain the passing grade “02”, the student must in a satisfactory way be able to demonstrate a minimal acceptable level of the knowledge, skills and competencies listed in the learning outcomes.
Single subject courses (day)
- Category
- Hours
- Lectures
- 42
- Preparation
- 152
- Exam
- 12
- English
- 206
Kursusinformation
- Language
- English
- Course number
- AØKA08243U
- ECTS
- 7,5 ECTS
- Programme level
- Full Degree Master
Bachelor
- Duration
-
1 semester
- Placement
- Autumn
- Price
-
Information about admission and tuition fee: Master and Exchange Programme, credit students and guest students (Open University)
- Studyboard
- Department of Economics, Study Council
Contracting department
- Department of Economics
Contracting faculty
- Faculty of Social Sciences
Course Coordinators
- Rasmus Kehlet Skjødt Berg (18-756476707876316e686b6f6877316568756a4368667271316e7831676e)
- Janek Værnet Eskildsen (3-6c64674267657170306d7730666d)
Teacher
See ‘Course responsibles’
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Kursusinformation for indskrevne studerende