Advanced Energy Economics

 This training course is designed for professionals in the energy industry who seek to enhance their understanding of energy economics. It will be especially beneficial for:

• Financial professionals working within the energy sector
• Technical managers, including electrical power engineers, maintenance technicians, electrical supervisors, and engineering professionals, who need a deeper understanding of finance and economics
• Energy project managers
• Procurement and supply chain professionals
• Risk managers and related professionals

Day 1: The Economic Environment and the Energy Industry

• Understanding the economic environment and its impact on the energy industry
• Economic challenges faced by governments and the energy sector
• Economic evaluation of reserves and making decisions under uncertainty
• Techniques for economic decision-making: EMV (Expected Monetary Value) & decision trees
• The impact of economic variables such as interest rates, exchange rates, and energy prices

Day 2: Economic Modelling in the Energy Industry

• Revenue recognition and its role in energy economics
• The volatility of energy prices and its economic impact
• Cost estimation techniques in energy projects
• Joint venture agreements, production sharing agreements, working interest, royalties, and taxation considerations
• Forecasting cash flow and its implications for project planning

Day 3: Economic Evaluation of Energy Projects

• Evaluating accounting profit and return on equity (ROE)
• Conducting a cost-benefit analysis: Finance vs. economic value added
• Economic analysis techniques: NPV, NPVI, IRR, payback, adjusted NPV & adjusted payback
• Understanding the cost recovery method and government evaluation frameworks (Value for Money)

Day 4: Economic Finance and the Energy Industry

• Different types of finance in energy projects
• Calculating the cost of capital using WACC (Weighted Average Cost of Capital) and the Capital Asset Pricing Model (CAPM)
• Determining the economic hurdle rate and its role in project decision-making
• Managing energy projects economically through earned value analysis, budgetary control, and cost management

Day 5: Economic and Financial Risk Management in the Energy Industry

• Identifying and managing economic and financial risks in energy projects
• Developing and using risk models for economic forecasting
• Understanding financial derivatives: forwards, options, futures, and swaps
• Exploring international derivative markets and their role in energy risk management