Energy Economics & Policy

Energy economics and policies are important factors in today’s national economies, especially in relation to the socio-economic costs of energy, industrial competitiveness, the cost to consumers and the green transition.

Energy economics and policies influence the entire energy sector as well as the entire energy value chain through investments, production, distribution and transmission towards end-use.

To facilitate the green transition, the energy sector has become highly regulated, with large up-front investment costs, security of supply prioritised and natural monopolies a defining feature of network markets. Regulations are typically based on a mix of policy instruments, such as taxes on energy use and subsidies for renewable energy, as well as the regulation of natural monopolies and price controls.

These policies are designed and implemented in an increasingly complex business climate and must be constantly adapted to face new challenges, such as handling numerous intermittent energy sources in the electricity market. To do this effectively requires not only complex analysis and insightful advice on policy design, but also the provision of fact-based advisory to businesses operating at either end of the energy value chain.

Our energy team helps public and private sector clients by assessing the impact of different policy designs on the economy and advising on utility sector regulation. Our aim is to provide relevant and useful advice on appropriate business strategies as well as efficient policy design.

Copenhagen Economics is heading the Nordic Energy Efficient Mortgage Hub (NEEM Hub), a Horizon 2020 research programme, focused on scaling up green mortgage lending to decarbonise housing and the building stock in Northern Europe.

We help our clients with

We advise on the economics of energy markets and design issues in response to the increasing amount of intermittent energy sources.

We offer commercial advisory on valuation across the energy value chain, specialising in strategy, valuation and commercial support. With extensive work experience in every part of the energy sector, our team of experts can help with valuation in M&A support, regulatory due diligence support, commercial due diligence support and market forecasts.

We conduct and advise on power market modelling, using our advanced power market model CEPOM. We conduct price forecasting, scenario development and risk assessment of price risk and volatility, PPA evaluations, analysis and advisory on financial forward markets, and portfolio strategy work.

We advise on how to design efficient support mechanisms for renewable energy with a view to their implications on low-cost implementation and industrial competitiveness.

We advise on the design of sector regulation including unbundling, WACC and yardstick regulation. In combination with sector regulation, we design and execute sophisticated benchmark models that estimate cost efficiency and merger potential among individual utility units.

We conduct advanced cost benefit analyses within several different areas, including energy economics, which can inform investment decisions and guide policy choices.

Copenhagen Economics provided the right expertise at the right time: We needed solid evidence based on real-life case studies to assist in defining the optimal de-carbonisation path as part of an integrated and fair district-based energy transition and the quality work done by CE contributed effectively in this regard.
Sorcha Edwards, Secretary General, Housing Europe