FE406 Energy Economy
Course description for academic year 2019/2020
Contents and structure
- Introduction to investment theory
- Presentation of factors that affect the cash flows of given renewable-electricity projects
- Application of investment theory on concrete projects
- Have knowledge on the most used analytical tools for assessing the profitability and risk of renewable-electricity investment projects.
- Have overview of factors, including policy, technology and natural resources, that influence the cash flows of such projects.
- Be able to assess whether to invest in such projects given uncertainty in the factors mentioned above.
- Understand how the economic characteristics of a power plant are influenced by its source of renewable energy.
- For a given technology, be able to identify what cash flows the project will generate across its lifetime.
- For a given technology, be able to identify how uncertain conditions (market, technology, policy, natural resources) that will influence these cash flows.
- Have knowledge on how uncertainty affect investor¿s risk and how such risk should be included in an investment analysis.
- Be able to use this knowledge to develop good tools that can assist investment decisions in concrete cases.
Recommended previous knowledge
MA415 Elementary calculus and FE405 Energy Systems and Production Technologies, or similar background.
Lectures and exercises.
Compulsory learning activities
3 mandatory work requirements. Groups of 1-3 students.
Project assignment. Groups of 1-3 students. Grade by letters A-F.