This book provides an introduction to energy economics. It shows how to apply general economic theory as well as empirical and advanced econometric methods to explain the drivers of energy markets and their development. Readers learn about the specific properties of energy markets as well as the physical, technological, environmental, and geopolitical particularities of energy sources and products. The book covers all types of energy markets, ranging from liquid fuels, gaseous fuels, and solid fuels to electricity. It also addresses emission allowances, energy efficiency, and nuclear risks. The authors discuss the engineering properties of energy technologies  including renewables, the economics of natural resources and environmental protection, market liberalization, and energy trade as well as the experience of the German energy transformation. This book will serve students as a textbook and practitioners as a reference for their understanding of energy markets and their development.

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This book provides an introduction to energy economics. It shows how to apply general economic theory as well as empirical and advanced econometric methods to explain the drivers of energy markets and their development. Readers learn about the specific properties of energy markets as well as the physical, technological, environmental, and geopolitical particularities of energy sources and products. The book covers all types of energy markets, ranging from liquid fuels, gaseous fuels, and solid fuels to electricity. It also addresses emission allowances, energy efficiency, and nuclear risks. The authors discuss the engineering properties of energy technologies including renewables, the economics of natural resources and environmental protection, market liberalization, and energy trade as well as the experience of the German energy transformation. This book will serve students as a textbook and practitioners as a reference for their understanding of energy markets and their development

Preface 1. Introduction 1.1 Philosophical and Evolutopnary Aspects of Energy 1.2 Why Energy Economics? 1.3 History of Energy Economics 2. Energy in Science and Engineering 2.1 Energy and the Natural Sciences 2.2 Engineering and Energy 2.3 Energy Balance 2.4 Cumulated Energy Requirement 3. Investment and Profitability Calculation 3.1 Basics 3.2 Interest Rate and Price of Capital 3.3 Inflation-Adjusted Interest Rate 3.4 Social Time Preference 3.5 Interest Rate and Risk 3.6 Real Option Valuation 4. Bottom-Up Analysis of Energy Demand 4.1 Process Analysis 4.2 Stock of Appliances, Buildins, Vehicles, and Machineries 4.3 Energy Efiiciency 5. Top-Down Analysis of Energy Demand 5.1 Population Growth 5.2 Economic Growth 5.3 The Price of Energy 5.4 Technological Change 6. Energy Reserves and Sustainability 6.1 Resource and Reserves 6.2 Profit-Maximizing Resource Extraction 6.3 Optimal Resource Extraction: Social Welfare View 6.4 Sustainability 7. External Costs 7.1 The Coase Theorem 7.2 Aggregate Emissions 7.3 Instruments of Environmental Policy 7.4 Measuring External Costs of Energy Use 8. Markets for Liquid Fuels 8.1 Types of Liquid Fuels and Thier Properties 8.2 Crude Oil Market 8.3 Oil Price Formation 9. Markets for Gaseous Fuels 9.1 Gaseous Fules and Gas Infrastructures 9.2 Natural Gas Economy 9.3 Gas Markets and Gas Price Formation 9.4 Thied Party Access to the Gas Infrastructure 10. Markets for Solid Fuels and CO2 Emissions 10.1 Solid Fules amd Their Technologies 10.2 The Greenhouse Gas Problem 10.3 Market for Emission Rights 11. Uranium and Nuclear Energy 11.1 The Foundations of Nuclear Technology 11.2 Uranium Market 11.3 Risk Assessment of Nuclear Energy 12. Markets for Electricity 12.1 Features of Electricity Market 12.2 Electricity Generation 12.3 Power Plant Investments 13. Economics of Electrical Grids 13.1 Grid Properties and System Service 13.2 Regulation of Grid Fees 13.3 Economic Approach to Transmission Bottlenecks 14. Epilogue Index