Syllabus

ER59: Energy Economics

Dr. Robin Roche
2016/09/19

Level

Semester

Credits

Workload

Language

Bac+4/+5

Fall

6 ECTS

150 hours

English

Objectives

This course aims at giving students an overview of energy economics. In the first part, we discuss
how electric power producers, system operators and retailers interact to ensure economic and reliable power delivery to their customers. In the second part, we cover energy transition issues, from
primary energy sources to current energy policy options and their consequences.
Contrary to other engineering courses that only focus on technical aspects, ER59 considers the
impact of economics on technical decisions, and vice versa. After completing the course, students
should be able to:
Explain why and how the electricity sector was restructured,
Describe and compare the various types of electricity markets and contracts,
Establish basic strategies for participating in markets,
Describe how power systems and markets impact each other,
Optimize the operation of a portfolio of plants,
Evaluate generation and transmission investment projects,
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 Conduct a basic analysis of primary energy markets (oil, gas, coal, uranium),
Explain why and how climate change is happening and what are its consequences,
Describe the challenges and opportunities related to the transition to sustainable energy,
Analyze energy policies and their consequences.
This course is especially useful for students intending to work in the fields of power generation and
power systems.

Organization

Contents and schedule

The lists of lectures and labs are given in Tables 1 and 2:
Lectures are designed to give students the basic necessary information to understand the
topic at hand: context, why this is useful, how it works, what are the limits and perspectives,
etc. Examples are provided, and questions/discussions are encouraged.
Labs are designed to enable students to put into pratice the information and methods covered
in the lectures. Activities may take the form of tutored exercises or projects, where dedicated
software is typically used. Students, working in groups, must submit a report for each lab or
project.
There is no tutorial for this course. The online schedule of lectures and labs for the semester is
available as a Zimbra calendar, and will be updated if necessary.

No.

Lecture title
Part I: Electric power economics

1
2

Electric energy: generation, T&D and consumption

Industry restructuring
Microeconomics basics

Wholesale electricity markets

Transmission networks and markets

Optimal generation scheduling

6
7

Generation and transmission expansion

Project finance
Part II: Energy transition

Primary energy sources: oil, gas, coal, uranium

9
10

Climate change

11

Renewable energy

12

Energy policy
Table 1: List of lectures.

No.

Lab title

Load profile analysis and forecasting

Trading simulation

Transmission networks and markets

4
5

Optimal generation scheduling

6
7

Investing in generation and transmission

8
9
10

Energy policy project

11
12
Table 2: List of labs.

Pre-requisites
There is no pre-requisite for taking ER59. We do however highly recommend EL47 (basics of power
systems). The following other courses/skills are beneficial but not required:
OI43: Matlab programming,
ER53: power plant fundamentals,
ER56: power plant operations and maintenance,
ER57: power system analysis and control.

Instructors
Course coordinator and instructor: Dr. Robin Roche
Contact: robin.roche@utbm.fr Room F244
Office hours: by appointment
Guest instructor: TBD, if any
Further instructions may be sent to students via the course mailing list (er59@utbm.fr). Students
who enrolled late might not be included in the mailing list, and must inform the course coordinator.

Course website
The course website is available at the following address: http://robinroche.com/er59. Lecture
slides, lab instructions and files, as well as other course-related documents are available there.

Evaluation

Grading
The same grading rules apply to all students, including foreign and exchange students. The final
grade for the course is computed as the weighed average of the items listed in Table 3. All grades
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are given out of 20 points, with 20/20 being the best possible grade. A grade not verifying any of
the minimum grade conditions will imply a failing grade for the course.

Item

Coefficient

Min. grade requirement

Lab/project reports

50%

Midterm exam

25%

Final exam

25%

7/20

Total

100%

10/20

Table 3: Course grade items.

The final letter grade for the course is assigned based on the final grade out of 20, and is curved
according to the ECTS system requirements:
A: excellent, best 10%
B: very good, following 25%
C: good, following 30%
D: average, following 25%
E: sufficient, last 10%
Letters A to E correspond to a passing grade. Failing grades are X (insufficient) and F (poor), and
are typically assigned when poor results are obtained (average < 10/20).
Grades a uploaded to Moodle so each student has only access to his/her grade. Students who
do not have access to the courses page on Moodle must email the course coordinator to request
access. Students may see their exam paper for two weeks after it has been graded.

Attendance
Attendance is compulsory and will be checked during lectures, labs and exams.
Unjustified absences to labs proportionally decreases the maximum grade the student can
obtain for the corresponding lab reports. For example, if a lab project is expected to last for
four lab sessions and the student has two unjustified absences among these four lab sessions,
the maximum grade the student can obtain is 10/20.
Absences may be justified for a variety of reasons, including sickness, internship interviews, or
the funeral of a family member. A valid proof (e.g., a medical certificate) must be provided for
all reasons. Personal comfort reasons, e.g., catching a cheaper plane ticket, are not considered
as valid reasons.
All students are required to take all exams. A student with an unjustified absence will
automatically obtain a grade of 0/20 for the exam and/or the letter grade ABS for the
course.

Ethics and academic integrity

Academic integrity is of the utmost importance: your grade should reflect your work, not someone elses work. Plagiarism, or the non-authorized or non-acknowledged use of someone elses work,
will not be tolerated and will be considered as a theft of intellectual property.
Automatic plagiarism detection software will be used with lab reports. Sanctions will be applied if
necessary. Sanctions can range from penalties on grades to the exclusion from any higher education
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institution in France (dcret no 92-657 du 13 juillet 1992).

References

[1] D. Kirschen and G. Strbac,

Fundamentals of power system economics, Wiley, 2004.
[2] D. Gan, D. Feng and J. Xie,
Electricity Markets and Power System Economics, CRC Press, 2013.
[3] D.R. Biggar and M.R. Hesamzadeh,
The Economics of Electricity Markets, IEEE/Wiley, 2014.
[4] J.A. Momoh and L. Mili,
Economic market design and planning for electric power systems, IEEE/Wiley, 2010.
[5] S. Stoft,
Power System Economics: Designing Markets for Electricity, IEEE/Wiley, 2002.
[6] S. Sim,
Electric Utility Resource Planning: Economics, Reliability, and Decision-Making, CRC Press,
2011.
[7] H. Seifi and M.S. Sepasian,
Electric Power System Planning: Issues, Algorithms and Solutions, Springer Science & Business Media, 2011.
[8] G. Darmois, and J.-P. Favennec,
Les marchs de lnergie : lnergie, quel prix ?, Technip, 2013.
[9] J.-P. Hansen, and J. Percebois,
nergie : conomie et politiques, De Boeck, 2010.
[10] E. Grand, and T. Veyrenc,
LEurope de llectricit et du gaz, Economica, 2011.
The course is primarily based on [1]. Buying the book is not required. Several copies are available
at the library.