International energy markets (ECON852_SOLEM )

• Semester 8
• Duration :  Within one semester  
• Type: Mandatory

• Student workload:  Lecture (CM): 21h hours, Tutorials (TD): Y hours , Lab (TP): Z hours,  W hours of self-study 

• Applicability: ESBC course only 

• Module examination:  A written report (40%), Homework and  exercises during class (40%),  Readings and discussion (20%) 

• Teaching and learning method : seminar, case studies,  discussion, 

Responsible person for the module : Fransesco RICCI

Major intended learning outcomes 

Upon completion of the module students will:

• have developed skills to identify the major players on specific energy markets, as well as the links between markets 
• understand and be able to analyse the links between energy markets involving trade across space and time 
• be aware of the rationales and main features of regulation of natural monopolies typical in specific energy markets (networks) 
• have experienced with applying back of envelop models to analyse case studies 
• be trained to apply the economic approach to analyse the role of specific instruments used to promote investment in renewable energy generation and strage capacity.  

Admission to 2nd semester

Introduction 

1: Oil market:  

1. 1. the value chain approach;  
   2. emergence and function of commodity markets;  
   3. rationale for industrial participants: competitive markets and cartels;  
   4. the role of traders in linking marketplaces;  
   5. linking markets across time: varying inventories, futures contracts. 

2: Gas market:  

1. 1. transportation capacity constraints;  
   2. rationale and features of long-term contracts;  
   3. network access regulation and major concession contracts. 

3: Electricity:  

1. 1. vertical integration versus unbundling and competition;  
   2. system operator, day-ahead and balancing;  
   3. markets for capacity. 

4: Supporting renewables:  

1. 1. main public policy instruments;  
   2. labels and voluntary approaches;  
   3. regulating storage capacity. 

Additional material will be presented in class.  

• Pindyck (2001), The dynamics of commodity spot and future markets, The Energy Journal, 22:1-28. 
• Mason (2014), The Organization of the Oil Industry, Past and Present, Foundations and Trends in Microeconomics, 10: 1-83