New York University
School of Continuing and Professional Studies
M.S. Program in Global Affairs
The Economics and Finance of Energy, Y45.2420
Spring 2009, Wednesday, 3:30-6:10pm
March 7, 2010
INSTRUCTOR: Chris Gadomski
http://www.smidirect.net/nyu
OFFICE HOURS: Wednesdays by appointment
OFFICE PHONE:914.993.9060
E-mail:gadomski@nyu.edu
Course Calendar--Please check frequently as our schedule may change.
1. January 20th----PART One—The Economics of Energy: Getting a better grasp of energy supply and demand. Intro to topic, review of syllabus, review of semester project and financing models. How elastic is the demand for gas, oil and electricity? Assignment: Please complete by February 10th, Twilight in the Desert Read also $105 Oil, See: 105oil.pdf.
2. January 27th--Introduction to project finance and to the online NREL wind financing model. Class to meet in computer lab. Hands-on instruction in use of the model. Assignment: Prior to class familiarize yourself with Introduction to using a financing model, Renewable Energy Financing Model. See: http://analysis.nrel.gov/retfinance/login.asp. For your final you will need to solve a problem with this or a similar computer model. Submit in writing to me your price forecast for oil, natural gas and uranium yellow cake for May 1, 2010.
3. February 3rd--Let's start with oil supply and demand and the changing economics. Are Saudi Arabian fields running out? If so, how much is left? What about the rest of the Middle East. Where does this leave us, what other options exist? A look at the Alberta Tar Sands, and the Venezuelan heavy oils. In class review: Bill Roach, UTC, powerpoint on Tar Sands.Getting a handle on primary energy demand--how much primary energy do we use and how fast is it growing. Is peak oil for real? Are there new supplies available. If so, from where will it all come? Are there any other supply side solutions? Natural Gas? What about hydrogen? What about biodiesel? What about ethanol? What about coal-to-liquids? Assignment: Continue reading Twilight in the Desert. See also solar financing model on class website homepage.
4. February 10th--A look at electricity markets. What are energy externalities, (environmental, social, technological, health, political) how do we account for them in assessing power generation options? What are they, how do they effect the energy equations. What about the big one....carbon? How will this shape future generation option decisions. In class review: Steve Sprecher, EPRI, Economic Costs in a Carbon Contrained World. See: Financing Risk. Dealing with Risk, NIMBY, and new technology, Comparing power generation options. Why is coal cheap? Is nuclear power also inexpensive? Reassessing energy economics doing things differently with renewable technologies. Assignment: Finish, Twilight in the Desert, Read: The Economics of Nuclear Power, See: http://www.smidirect.net/nyu
5. February 17th--A look at modern power generation economics...what is changing? Emergence of distributed generation, and the emerging role of solar and wind in the electric generation portfolio. Is this for real? What are feed-in tariffs, PTCs, RECs, and RPSs? See Feed-In Tariffs. Assignment: StormFisher (A): Power with Purpose Oana Branzei; Stewart Thornhill; Adam Reeds English PDF | 908M92-PDF-ENG.
6. February 24th --PART TWO: Financing energy/power projects. Fundamentals of Project Finance, Challenges and sources of money. Understanding and defining risk in the non recourse project finance structure. Assignment: Read: Financing Energy Projects, Chapters 1-7. Investment: Risk, Return and The Role of Policy. Assignment: Overview of Project Finance and Infrastructure Finance---2006 Update
Benjamin C. Esty; Aldo Sesia Jr. English PDF | 207107-PDF-ENG.
7. March 3rd--Project Finance review continued. Financing Energy Projects, Chapters 8-11. See also: Feeling the heat.
8. March 10th-- I will post the take-home midterm exam on the blackboard, and it is to be handed-in to me in class on April 14th as well as emailed to me no later than 6:10 on April 14th.) Developing Project Finance Cash Flow. Review of Moody's article. Revisit/review of NREL Model, Assignment: Financing Strategy Gadomski, http://www.smidirect.net/published/catchthecredits.htm
Spring Break, no class on March 17th. Enjoy!
9. March 24th--PART THREE--Getting Projects Done. Putting the pieces together for a LNG financing. Looking at Successes and Failures, ie., Sempra's Energia Costa Azul, Enron and Dabhol. Assignment: Read: The California Energy Crisis, What Went Wrong at Enron, See links posted on class web page regarding LNG.
10. March 31st--Follow-up to Getting Projects Done, Planning and developing wind projects--a first hand look at Cape Wind. Dealing with NIMBY obstacles in the project development process. Assignment: The Carbon Market in 2008 Andre F. Perold; Forest Reinhardt; Mikell Hyman English PDF | 209064-PDF-ENG, Gadomski, http://www.smidirect.net/published/gimmeshelter.htm
11. April 7th--Midterm (The mid-term, as posted on March 10th, will be a take home exam in-lieu of class on this day.)
12. April 14th--The Role of Carbon. (Speaker Invited, Date tentative) Putting it all together: Understanding Consolidation and Vertical Integration in today's energy markets. Class Presentations. Assignment: International Carbon Finance and EcoSecurites Andre F. Perold; Forest Reinhardt; Mikell Hyman English PDF | 208151-PDF-ENG,
13. April 21st--Semester Projects Due. Class presentations. Semester Wrap-up. Take Home Final Goes Live on Blackboard.
14. April 28th--Take Home Final in lieu of last class due in my mail box outside of Room 441 no later than 6:10 and emailed to me.