MAS504 Energy Economics

Contents and structure

The course has two main sections:

1. Sustainable society with an emphasis on the environment.
2. Cost theory, investment and financing theory, including the assessment of uncertainty and real options theory.

The future economic system is circular, and the UN's Sustainable Development Goals operationalize the requirements for future organizations. The economic actors' scope of action is determined by the sustainability goals. This forms the basis of the course content. The course will illuminate sustainability from the three dimensions of economy, environment, and social conditions. How should we manage renewable and non-renewable resources? What about the green economy and energy use? How do we address social aspects such as distribution, justice, and welfare? What can governments and other actors contribute to ensure the goal of a more sustainable society?

When the goal is to produce or save energy, investments must be profitable for both the company and society. To evaluate such investments, students will gain insight into: cash flow budgeting, opportunity costs, required rate of return, inflation, calculation of net present value and internal rate of return, and calculation of return on equity. Students will also gain insight into the costs associated with different types of loans and how taxes, subsidies, uncertainty, and options for change affect the profitability of investment projects.

Learning Outcome

Upon completing the course, the student should have the following knowledge, skills, and general competence.

Knowledge

The student...

• has insight into the topic of sustainability and the challenges society faces.
• has in-depth knowledge of fundamental cost concepts.
• has in-depth knowledge of the basic concepts in investment and financing theory.
• understands how the goal of a circular economy affects investment decisions.
• has knowledge and insight into how uncertainty and options for change affect investment and financing decisions.

Skills

The student...

• can calculate the profitability of investments in energy-related projects from both a business and societal perspective.
• can perform analyses, calculations, and simulations to map the uncertainty of investment projects.
• can reflect on sustainability challenges and know what measures can be implemented to achieve a more sustainable society.
• can identify the advantages and disadvantages of various instruments and objectives.

General Competence

The student...

• can present and explain results both orally and in writing.
• can explain the difference between the circular economic system and the traditional linear economic system.

Entry requirements

None

Recommended previous knowledge

None

Teaching methods

Lectures with embedded exercises.

Compulsory learning activities

At least one mandatory work with written submission.

The work requirement must be approved in order for the student to submit an assignment.

Assessment

Individual project assignment with adjusting oral exam, 30 minutes.

Grading scale is A-F, where F is fail.

If a student fails the project assignment or wants to improve the grade, the student must write a completely new project assignment. A new project assignment can be submitted in the following semester.

Examination support material

Individual project assignment: All support material is permitted.

Adjusting oral exam; No support material.

More about examination support material