Instruction Plan_ EEP MSREE 2012

7/31/2019 Instruction Plan_ EEP MSREE 2012

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Instruction Plan: Economics of Energy Projects (EG854ES)

Year/part: I/II Instructor: Prof. Amrit M NakarmiLecture/tutorial: 3 hrs Start Date: 2

ndweek Jestha 2069

Tutorial: 1 hr End Date: 1st

week Bhadra 2069

Level: M.Sc. Program: MSREE

Objective of the course

This course aims to provide basic understanding of economics concepts in energy

projects especially the following:

To understand types of firm especially in the energy sector. To have knowledge about raising finance for energy projects bank loans,

equity, corporate bonds etc. and to know about the financial ratio analysis of

the energy companies.

To build a thorough understanding of the theoretical and conceptual basisupon which the practice of financial and economic project analysis is built.

To provide basic concepts in real options for project evaluation. To incorporate all critical decision-making toolsincluding the most

contemporary, computeroriented ones such as simulation techniques in risk

analysis so that engineers can make informed decision making under

uncertainty.

Prerequisite: good knowledge of Microsoft Excel, Word, and Powerpoint. If the

students are not familiar with these softwares, they have to get the knowledge of

them on their own during the course.

Mark distribution: total marks =100

Assessment: =40

(a)Attendance =4 (no attendance would be entertained if the student camelate or became absent. If absent due to illness, medical certificate have to

be furnished. This mark covers also the assignment submission in time.)

(b)Presentation and report on ratio analysis =6(c)

Assessment =10(d)Final course presentation and report =20 (on evaluation of energy -conventional or renewable- projects)

Final Examination =60

Text book: Chan S. Park, Contemporary Engineering Economics, 3rd

edition, Prentice Hall of India Pvt. Ltd., New Delhi, 2009.

Apart from above, handouts and notes will be provided to the students from time

to time. Students have to prepare the presentation and report based on their

knowledge gained through their studies during their experience and this program.


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hS.

no.

Week Month Topics Remarks

1 2 Jestha Introduction to the economics of energy

projects: What is economics? Types offirms

Lecture notes and handouts

2 3 Jestha Financing of projects: How can the

finance be raised? Equity: common

shares; preferred shares; bonds and loans

Assignment #1

3 4 Jestha Understanding financial statements and

ratio analysis: chapter 2; Continuation

of ratio analysis: use of templates for

ratio analysis of energy firms

Assignment #1 due;

assignment #2;selection of

company for financial ratio

analysis; Assignment #2

due

4 1 Ashadh Cost and revenue concepts: short-run

cost; long-run costs; revenue concepts;

Cost concepts contd.: SRMC and

LRMC.

Presentation and report of

financial ratio analysis,

assignment #2 due;

Assignment #3

5 2 Ashadh Capital budgeting techniques or project

evaluation techniques: time value of

money; compound interest rates;

Assignment #3 due and

assignment #4

6 3 Ashadh Capital budgeting techniques contd.;

cash flowsfree cash flows (FCF) and

discounted cash-flow modeling on

spreadsheet;


assignment #5

7 4 Ashadh Capital budgeting techniques contd.; NetPresent Value (NPV). Assignment #5 due,assignment #6 and group

course project finalization

8 1 Shrawan Capital budgeting techniques contd.;

IRR method and depreciation: straight

line & declining balance method: minor

test-II;

Assignment # 6 due and

Assignment # 7;

9 2 Shrawan Capital budgeting techniques contd.;

Income tax and spreadsheet financial

cash flow modeling: d.;


assignment #8

10 3 Shrawan Project risk analysis; sensitivity analysis;

breakeven analysis; probability conceptsand distributions on Excel: chapter 14

and


assignment #9

11 4 Shrawan Use of risk analysis software-Crystal

Ball Economic analysis in public sector:

benefit-cost analysis: chapter 17

12 1 Bhadra Real options and its use in energy

projects

Assignment #9 due;

13 2 Bhadra Review of the course and final course

project presentation


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Curriculum Vitae of Instructor (lectures)

Title Professor

Academic background MSc (honors) in mech. engg., FSU, 1978

M.Eng in engineering management, Canada, 1997

PhD (All but dissertation) in energy systems planning and policy analysis from SJM

School of Management, IIT Bombay, India, 2006 onwards.

Experience Teaching experience of more than 34 years & experience of more than

30 years in private and public enterprises

Member, High Level Committee on operations and reform of

Nepal Oil Corporation, Nepal Government, MarchApril 2011

Co-Team leader, Energy Resources Strategy for Nepal Projectunder Water & Energy Commission Secretariat, Government ofNepal, 2007 - 2010

Vice-President (CG Group), 19972004

GM, Nepal Oil Corporation Ltd., 1991-1995

Chairman & Director, Nepal Lube Oil Ltd. (Ex)

Director, Gorakhkali Rubber Udyog Ltd. (Ex)

Chairman & Director, Nepal Bitumen & Barrel Udyog Ltd. (Ex)

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Instruction Plan_ EEP MSREE 2012