Postgraduate Course: Energy Finance (CMSE11153)
Course Outline
| School | Business School |
College | College of Humanities and Social Science |
| Credit level (Normal year taken) | SCQF Level 11 (Postgraduate) |
Availability | Available to all students |
| SCQF Credits | 15 |
ECTS Credits | 7.5 |
| Summary | The course aims to integrate conventional finance with energy finance, and to provide a basis for understanding the links between these and carbon finance. |
| Course description |
The Course Organiser will draw on both theoretical and applied concepts and will be taught by experienced practitioners, with knowledge of structured and energy finance. In addition to introducing the students to the wider literature on energy finance, Dr Kretzschmar's publications and case studies will be used to ensure that students will come away from the course with specific skills in the evaluation of risks and opportunities associated with energy finance.
The International Energy Agency (IEA) estimates that US$10 trillion incremental energy investment will be needed between 2010 and 2030 to stabilize greenhouse gas emissions. Energy consumption accounts for the largest percentage of global greenhouse gas emissions, and the energy sector is likely to dominate global low-carbon investment in the decades to come. Thus energy finance is a core component of carbon finance. The trading of energy, and financial products associated with energy and carbon, is increasing at a rapid pace. This requires an energy or carbon finance professional to have a systemic understanding of the segments of the energy industry, the structure of energy markets, the uncertainties of energy policy, the development of energy commodities derivatives, the evolution of energy technologies and the challenges of financing and operating an energy project.
Syllabus
Corporate Finance Intensive Lecture Week
Introduction to Energy Finance and Energy Market
Project Finance and Levelised Cost of Electricity
Energy Risk Management
Introduction to Stochastic Modelling in Excel
The Political Economy of Sustainable Energy & Finance
Experience Curve and Technology Learning in the Green Economy
Energy Finance Field trip
Energy Finance Revision
Managing CO2 Issues and CCS Projects in Shell
Student Learning Experience
Formal teaching occurs in lectures, tutorials, computer lab sessions and a field trip. Much of the learning will be the result of students¿ own reading and reflection, and preparation for coursework. A high level of student participation is expected, through discussion in class and working in groups. Scholarly endeavour is fundamentally about building on the discoveries and insights of others, and we hope that team co-operation will enrich all students. There will be time for questions and discussion in class as well as practice for cash flow and stochastic modelling in computer labs.
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Entry Requirements (not applicable to Visiting Students)
| Pre-requisites |
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Co-requisites | |
| Prohibited Combinations | |
Other requirements | For Business School PG students only, or by special permission of the School. Please contact the course secretary. |
Information for Visiting Students
| Pre-requisites | None |
| High Demand Course? |
Yes |
Course Delivery Information
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| Academic year 2015/16, Available to all students (SV1)
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Quota: None |
| Course Start |
Semester 1 |
Timetable |
Timetable |
| Learning and Teaching activities (Further Info) |
Total Hours:
150
(
Lecture Hours 20,
Seminar/Tutorial Hours 20,
Supervised Practical/Workshop/Studio Hours 8,
Summative Assessment Hours 2,
Programme Level Learning and Teaching Hours 3,
Directed Learning and Independent Learning Hours
97 )
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| Assessment (Further Info) |
Written Exam
60 %,
Coursework
40 %,
Practical Exam
0 %
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| Additional Information (Assessment) |
The course is assessed by coursework worth 40% of the total mark. Of this 40%, 20% is a group mark for a group presentation and 20% is a group mark for group coursework. The end-of-semester examination counts for 60%. |
| Feedback |
All students will be given at least one formative feedback or feedforward event for every course they undertake, provided during the semester in which the course is taken and in time to be useful in the completion of summative work on the course. Such feedback may be at course or programme level, but must include input of relevance to each course in the latter case.
Feedback on formative assessed work will be provided within 15 working days of submission, or in time to be of use in subsequent assessments within the course, whichever is sooner. Summative marks will be returned on a published timetable, which has been made clear to students at the start of the academic year.
Feedback will comprise feedback on formative exam (does not count towards course mark), lecturer responses to reports and project presentations and generic feedback on the final exam. |
| Exam Information |
| Exam Diet |
Paper Name |
Hours & Minutes |
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| Main Exam Diet S1 (December) | Energy Finance | 2:00 | |
Learning Outcomes
On completion of this course, the student will be able to:
- Explain and apply principles of finance in the energy sector
- Describe and discuss critically the principal features of the energy industry, energy technologies, energy markets and capital markets
- Apply some of the main techniques of financial analysis, risk analysis and risk management, including basic stochastic modelling techniques applied to an energy project in situations of uncertainty
- Critically evaluate financial decision-making within an energy firm
- Develop strategies for mitigating and/or transferring energy risks
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Reading List
GARP, 2009. Foundations of Energy Risk Management, Wiley Finance.
Fundamentals of Corporate Finance (Sixth Edition) by Richard A. Brealey, Stewart C. Myers and Alan J. Marcus. McGraw-Hill International Edition
James, T. 2008. Energy Markets: Price Risk Management and Trading, Wiley Finance.
Mott MacDonald, 2011. UK Electricity Generation Costs: Update.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/65716/71-uk-electricity-generation-costs-update-.pdf
(Methodology Section)
Savage, S. L. 2003. Decision Making with Insight, South-Western College Pub.
World Energy Council, 2013. World Energy Scenarios: Composing Energy Futures to 2050. http://www.worldenergy.org/publications/2013/world-energy-scenarios-composing-energy-futures-to-2050/
International Energy Agency, 2014. Work Energy Investment Outlook. http://www.iea.org/publications/freepublications/publication/weio2014.pdf |
Additional Information
| Graduate Attributes and Skills |
Cognitive Skills:
After completing this course, students should be able to:
Critically evaluate press coverage of energy finance issues
Use a financial calculator for simple discounted cash flow analysis and bond valuation
Use Excel-based modelling and simulation tools
Co-operate with others from different professional, educational and cultural backgrounds to produce group analysis and present the results of group work
Subject Specific Skills:
After completing this course, students should be able to:
Undertake simple financial computations, namely compounding and discounting in order to derive future values and present values for a series of cash flows
Apply concepts in energy economics, such as levelised cost of energy, externalities
Identify key stages in financing an energy project
Categorise and quantify energy risk exposures
Use basic financial methodologies, namely present and future value calculations, to solve problems in finance |
| Keywords | EF |
Contacts
| Course organiser | Dr Xi Liang
Tel: (0131 6)51 5328
Email: Xi.Liang@ed.ac.uk |
Course secretary | Miss Ashley Harper
Tel: (0131 6)51 5671
Email: Ashley.Harper@ed.ac.uk |
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