MINA330 Project Economics for Renewable Energy and Forestry

In this course, the student learn theories for the organization and economic assessment of investment and financing projects and develops skills in applying these in the energy or forestry sector, depending on the specialization chosen.

To be able to apply the theories to realistic problems, many of the lectures in part II of the course will follow two parallel tracks - one for renewable energy and one for forestry.

Part I (25%) gives a brief introduction to investment and financing theory with an emphasis on the Net Present Value method. Budgeting of cash flows, discounting, profitability assessments and sensitivity analyzes are central.

Part II (50%) shows how this theory can be applied in practice to projects taken from either the renewable energy or forestry sector. Development of Excel spreadsheets adapted to various purposes is central. We use several methods to analyze uncertainty.

• Renewable energy students learn to assess the relationship between technology, cost structure, profitability and sensitivity. This is used to calculate technology-specific unit costs (LCOE). They get a thorough introduction to current regulatory and economic framework conditions for the energy sector, and how these affect decisions and values. Students learn methods for measuring and managing market and policy uncertainty.

• Forestry students get an introduction to profitability assessments applied to forestry projects. The concept of income is central and is used to value forests for various purposes and to analyze the effect of price changes and regulatory and economic framework conditions. Students learn methods for measuring and dealing with uncertain factors such as climate, technology, market and politics.

Part III (25%) provides an introduction to project analyses such as work form, structure and planning models, project phases and timeline as well as models for project organisation.

Knowledge:

Reproduce theories and methods for project management and financial analysis of projects in either the energy sector or the forestry sector.

Reproduce key conditions that affect implementation, risk and profitability of projects in either the energy sector or the forestry sector.

Skills:

After completing the course, students must master:

1. Preparation, planning and evaluation of projects.

2. Analyzes of investment and financing projects, asset management and valuation based on data from several information sources.

3. Methods for measuring, understanding the effect of and handling uncertainty in relevant factors.

General competence:

Master oral and written presentation, use Excel for economic evaluation and data analysis.