Course details

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Energy Economics

Teaching: Completely taught in English

ECTS: 4

Level: Graduate

Semester: Winter

Prerequisites:

Load:

Lectures	Exercises	Laboratory exercises	Project laboratory	Physical education excercises	Field exercises	Seminar	Design exercises	Practicum
30		0	0	0	0	0	0	15

Course objectives:

Studying methods of investment evaluation in energy sector, methods for energy production cost calculation and energy pricing methodology.

Student responsibilities:

Grading and evaluation of student work over the course of instruction and at a final exam:

Evaluation of the results achieved at the colloquies (50%), - Evaluation of the project assignments (50%).

Methods of monitoring quality that ensure acquisition of exit competences:

Monitoring of the student attendance at the classes, interactive teaching process with active student participation in discussions during lectures and laboratory exercises. Project is used to assess the student"s ability for solving real practical problems related to preparation of the techno-economic studies for projects related to RES and energy efficiency. Evaluation of the student presentation of the project. Evaluation of the results achieved at the colloquium. Consultations. Student questionnaires.

Upon successful completion of the course, students will be able to (learning outcomes):

After successfully passing the exam, student will be able to: - assess the justification of investment in the energy projects by applying the NPV and IRR methods, - evaluate and compare the technical and economic parameters of different renewable energy, - recommend technology for power plants with renewable energy sources in accordance with the requirements of the project, - review and evaluate energy certification systems and incentives for the production of heat and power from renewable energy sources, - analyze the energy and industrial processes from the standpoint of environmental protection, - evaluate and analyze the economic characteristics and the efficiency of the components.

Lectures

1. Introduction. Energy and economy. Influence of cost of energy on economy. Influence of economy on energy cost. Influence of cost of energy on technology developement.

2. Microeconomics I. Cash flow model. End-of-period convention. Middle-of-period convention. Continuous flow convention. Time value of money. Future worth of money. Present worth of money. Uniform series future value. Sinking fund payment. Uniforma series present worth. Capital recovery. Gradient present worth.

3. Microeconomics II. Equipement life-time. Equipment cost. Project benefits and costs. Evaluation of project proposals I: Payback method. Average rate of return method.

4. Microeconomics III. Evaluation of project proposals II: Present value method. Profitability index.

5. Microeconomics IV. Evaluation of project proposals III: Internal rate of return (IRR). Mutual exclusion and dependancy. Comparision of different methods. Investment decisions, investment uncertainty, investment risk.

6. Colloquy I.

7. Microeconomics V. Life-cycle cost analysis. Emission certificates. Green certificates.

8. Microeconomics VI. Systematic economic analysis technique. Income tax. Depreciation. Inflation.

9. Tariff systems. Electricity production costs in different conversion systems. Internal and external costs. Energy costs. Fixed and variable costs.

10. Colloquy II.

11. Electricity and heat production cost calculation methodology I.

12. Electricity and heat production cost calculation methodology II.

13. Electricity and heat production cost calculation methodology III.

14. Energy production cost calculation methodology III.

15. Exam.

Exercises

1. Essay. Test.

2. Future worth of money. Present worth of money. Uniform series future value. Sinking fund payment. Uniforma series present worth. Capital recovery. Gradient present worth. Test.

3. Payback method. Average rate of return method. Test.

4. Present value method. Profitability index. Test.

5. Internal rate of return (IRR).

6. Colloquy I.

7. Influence of decommission cost on energy cost.

8. Income tax and present worth method, profitabillity index, internal rate of return.

9. Costs calculation.

10. Colloquy II.

11. WECS electricity cost calculation. TPP electricity cost calculation. HPP electricity cost calculation.

12. NPP electricity cost calculation. PV + battery systems electricity cost calculation.

13. Solar heat cost calculation. Heat and power cost calculation from cogeneration.

14. RES/H2 energy costs calculation.

15. Exam.

Compulsory literature:

Charles M. Gottschalk: Industrial Energy Conservation, UNESCO Energy Engineering Series, John Wiley & Sons Ltd., Chichester, West Sussex, UK, 1996

T. W. Berrie, Electricity Economics and Planning, Iee Power Engineering Series, No 16, 1993

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