Energy Market Design and Policy, Specialization Course

This course covers methods and theory for policy, regulation and market design and analysis, specific towards energy and electricity markets with large shares of renewable energy, and considering integration of networks for different energy carriers. Specific topics include 1. Characterization of electricity and energy markets. 2. Market design and regulation. 3. Policy analysis. The course covers literature and methodologies useful for the course TIØ4580 Sustainable Energy Systems and Management, Specialization Project.

The course will provide theory, models, methods, and concepts from economics and engineering to analyse, explain, steer and predict the behavior of agents in energy markets. By the end of the course, the students should be able to use theory and quantitative methods to: 1. analyze, explain and predict agent behavior and implications for supply, demand, energy flows and prices in capacity-constrained energy markets under different regulatory regimes and conditions of certainty and uncertainty; 2. discuss and describe the main forms of market failures prevalent in energy markets and analyze and predict consequences for the market equilibria and social welfare (i.e., agent profits and consumer surpluses); 3. compare and analyze how different market designs and regulatory regimes for infrastructure access affect the competitive environment, investment behavior, agent profits and consumer surpluses in energy markets. 4. suggest improvements to existing regulatory frameworks in energy markets to increase competition and facilitate market penetration of flexibility services. The course shall stimulate, facilitate and contribute to the development of economic intuition and knowledge and energy market and systems knowledge.

Self-study of a selection of relevant academic literature and discussion sessions during regular meetings with the instructors. Some modeling or simulation exercises, as well as writing assignments and presentations may be part of the course.