Economics 17N: Energy, the Environment, and the Economy
Examines the intimate relationship between environmental quality and the production and consumption of energy. Assesses the economics efficiency and political economy implications of a number of current topics in energy and environmental economics. Topics include: the economic theory of exhaustible resources, Greenhouse Gas Emissions (GHG) control (cap and trade mechanisms and carbon fees), GHG emissions offsets, the Strategic Petroleum Reserve (SPR), the "smart" transmission grid for electricity, nuclear energy and nuclear waste, the real cost of renewable energy, natural gas and coal-fired electricity production, the global coal and natural gas markets, Corporate Average Fuel Efficiency (CAFE) and Low-Carbon Fuel Standards (LCFS), Energy Efficiency Investments and Demand Response, and Carbon Capture and Sequestration (CCS). For all topics, there will be reading to explain the economics and engineering behind the topic and class discussion to clarify and elaborate on this interaction.
Economics 156/256: Energy Markets and Policy
Transforming the global energy system to reduce climate change impacts, ensuring security of supply, and fostering economic development of the world's poorest regions depends on the ability of commercial players to deliver the needed energy at scale. Technological innovation is a necessary but not sufficient condition for this to occur. The complex institutional frameworks that regulate energy markets in the United States and around the world will play a major role in determining the financial viability of firms in the energy sector. In this course we survey the institutional contexts for energy enterprises of all types and consider what kinds of business models work in each setting. We will study the business models pursued by small and large companies to: develop and deploy breakthrough low-carbon energy technology, evolve smart grids, extract energy in politically-unstable regions, support national goals without compromising core businesses (for the case of state-owned enterprises), build out critically-needed electricity and pipeline infrastructure, and bring clean and reliable energy to the poorest populations. Particular attention will be paid to ways in which the institutional environments and challenges in major emerging markets like China and India differ from those in the United States. The objective of the course is to provide a robust intellectual framework for analyzing how a business can most constructively participate in any sector like energy that is heavily affected by government policy.
Economics 158/Law 220: Regulatory Economics
Economics 158/Law 220 examines public policies for dealing with problems arising in markets in which competitive forces are weak. The focus is on monopolies, oligopolies, cartels, and other environments where market mechanisms are unlikely to produce outcomes that benefit consumers more than the alternatives involving costly government intervention. The two main areas examined are competition policy and economic regulation. Competition policy refers to laws that define certain market behavior as illegal because it is harmful to competition or fails to provides consumer benefits that justify its costs to consumers. Economic regulation refers to policies in which government controls prices and/or decides the terms and conditions under which firms can participate in a market. A growing area of study and policy design is the introduction of market mechanisms into formerly regulated industries such as: telecommunications, electricity, airlines, railroads, postal delivery services and environmental regulation. Students completing this course will have a firm foundation for a career in business consulting, law, or investment banking.
Economics 261/Electrical Engineering 268: The Engineering Economics of Electricity Markets
This course presents the power system engineering and economic concepts necessary to understand the costs and benefits of the energy transition. The course begins by reviewing the engineering of grid supplied electricity. The technical characteristics of generation units and transmission and distribution networks will be introduced, as well as the mechanisms used to operate the electricity supply industries. This followed by brief history of the evolution of the electricity industry, concluding with a discussion of the economic rationales for electricity industry restructuring. The fundamental economics of multi-settlement locational marginal pricing (LMP) wholesale markets will be introduced. Purely financial products such as virtual bids and financial transmission rights will be discussed and their impact on system operation analyzed. How intermittent renewables impact the price and quantity of physical and financial products traded in electricity markets (e.g., energy, capacity, ancillary services, and financial contracts). Long-term resource adequacy mechanisms will be introduced and their properties analyzed. The role of both short-duration and seasonal energy storage in facilitating renewables integration will be analyzed. Mechanisms for determining the engineering and economic need for transmission network expansions in a wholesale market will be discussed. The impact of distributed versus grid-scale generation on the performance of electricity supply industries will be discussed. A detailed treatment of electricity retailing will focus on the importance of active demand-side participation in a low carbon energy sector
