Latin American energy sectors and regulatory institutions differ significantly from those in North America and Europe. Over the past ECON 20 years, annual electricity consumption in many Latin American countries (LACs) has grown at more than three to four times the rate observed in North America and Europe. This course will be co-taught by Center for Latin American Studies Tinker Visiting Professor Alexandre Street of Pontifical Catholic University of Rio de Janeiro using the Program on Energy and Sustainable Development's (PESD) Energy Market Game modified to fit the LAC context as the main teaching tool. The goal of the course is to provide students with both theoretical and hands-on understanding of important energy and environmental market concepts that are critical to market functioning as they apply in Latin American countries. Concepts covered that are specific to LACs include: 1) administrative cost-based markets popular throughout Latin America versus offer-based markets that exist in North America and Europe, 2) the challenges created by hydroelectric energy-dominated industries that face periodic El Nino (low water inflows) and La Nina events (high water inflows), 3) thin markets for fossil fuels--natural gas, fuel oil, and coal, 4) transmission congestion and locational marginal pricing, 5) fixed-price forward financial contracts and their effect on short-term market outcomes, 6) day-ahead and real-time energy markets, and 7) limited experience with market design and regulatory oversight. This course is useful background for those interested in working in the energy sector, particularly those in Latin American countries.
5 units · Letter or Credit/No Credit
Latin American energy sectors and regulatory institutions differ significantly from those in North America and Europe. Over the past 20 years, annual electricity consumption in many Latin American countries (LACs) has grown at more than three to four times the rate observed in North America and Europe. This course will be co-taught by Center for Latin American Studies Tinker Visiting Professor Alexandre Street of Pontifical Catholic University of Rio de Janeiro using the Program on Energy and Sustainable Development's (PESD) Energy Market Game modified to fit the LAC context as the main teaching tool. The goal of the course is to provide students with both theoretical and hands-on understanding of important energy and environmental market concepts that are critical to market functioning as they apply in Latin American countries. Concepts covered that are specific to LACs include: 1) administrative cost-based markets popular throughout Latin America versus offer-based markets that exist in North America and Europe, 2) the challenges created by hydroelectric energy-dominated industries that face periodic El Nino (low water inflows) and La Nina events (high water inflows), 3) thin markets for fossil fuels--natural gas, fuel oil, and coal, 4) transmission congestion and locational marginal pricing, 5) fixed-price forward financial contracts and their effect on short-term market outcomes, 6) day-ahead and real-time energy markets, and 7) limited experience with market design and regulatory oversight. This course is useful background for those interested in working in the energy sector, particularly those in Latin American countries.