Since the liberalisation of the energy sector (particularly electricity), its constituent parts have received distinct treatments, leading some segments to be opened to competition while others have remained as regulated natural monopolies. This course introduces students to analyse the different parts of the energy sector from an economic perspective. In particular, it makes the students familiar with the models, modelling techniques, results, and applications of economic analysis to market competition and regulation of the energy markets.

The structure of the course is based on two interlinked sections. The first includes a review of some concepts from microeconomics needed for the rest of the course. Then it is followed by an introduction to competition policy and regulatory economics from a theoretical perspective. The topics covered in the first section include the following:

·         Microeconomics: demand, industrial organisation, vertical relations/B2B (retail / wholesale), market power, market failures, economies of scale, externalities, natural monopoly

·         Introduction to economic regulation: theory and principles

·         Optimal pricing, incentive regulation, natural monopoly regulation and dynamic issues

·         Economic regulation of (potentially) competitive markets

The second section of the module follows a practical approach in which the theoretical concepts described in the first section are applied to the energy context. Energy sector is arguably the largest industry in the world. At the same it is a major contributor to air pollution and greenhouse gas emissions. This section encompasses the following topics:

·         Major energy sources and their uses: fossil fuels (oil, gas, coal), nuclear, renewables; electricity, transport

·         Microeconomics of energy use, energy demand and energy supply

·         Economic analysis of domestic and international energy market structures: competitive, monopoly, oligopoly, cartel

·         Economic regulation of energy markets and utilities

·         Economics of investment in renewable energy sources

·         Economics and political economy of climate change, national policy and international cooperation

This module is endorsed by the Copenhagen School of Energy Infrastructure (CSEI) at CBS and it is embedded in its overall strategy of research and education. CSEI is directly supported by the European Commission (DG Energy).