Energy Finance Course

Lesson 1 • Structure of Global Energy Markets

Maps the architecture of oil, gas, power, and renewables markets. Establishes the market framework that underpins all subsequent financial analysis.

Lesson 2 • Regulatory and Policy Environment

Surveys the regulatory frameworks governing energy trading and investment. Grounds students in compliance obligations relevant to financial practice.

Lesson 3 • Energy Commodity Price Drivers

Identifies supply, demand, geopolitical, and seasonal factors that move energy prices. Connects price dynamics to financial risk and opportunity.

Lesson 1 • Energy Options and Exotic Derivatives

Introduces vanilla and exotic options specific to energy markets, including Asian and barrier options. Prepares students for options pricing covered in the next chapter.

Lesson 2 • Futures and Forwards in Energy

Explains standardized futures and bespoke forward contracts for energy commodities. Provides the foundation for hedging and speculation strategies covered later.

Lesson 3 • Carbon and Environmental Instruments

Surveys emissions allowances, renewable energy certificates, and carbon offset instruments. Establishes the financial mechanics of environmental compliance markets.

Lesson 4 • Physical vs. Financial Energy Contracts

Distinguishes contracts requiring physical delivery from purely financial settlements. Clarifies how each contract type affects balance sheets and cash flows.

Lesson 1 • Valuation of Energy Assets and Projects

Applies discounted cash flow and real options methods to upstream, midstream, and generation assets. Connects pricing theory to capital investment decisions.

Lesson 2 • Cost-of-Carry and Forward Pricing

Applies cost-of-carry theory to energy forward curves, incorporating storage and convenience yield. Bridges commodity economics with derivative pricing fundamentals.

Lesson 3 • Stochastic Models for Energy Prices

Introduces mean-reversion, jump-diffusion, and multi-factor models for energy price simulation. Equips students to select appropriate models for different energy assets.

Lesson 4 • Options Pricing for Energy Derivatives

Adapts Black-Scholes and Black-76 frameworks to energy options, addressing seasonality and mean reversion. Enables accurate premium calculation and Greeks analysis.

Lesson 1 • Credit Risk Measurement in Energy

Quantifies counterparty exposure using mark-to-market, potential future exposure, and credit valuation adjustment. Prepares students for credit risk management in trading.

Lesson 2 • Taxonomy of Energy Financial Risks

Categorizes price, volume, credit, liquidity, and operational risks in energy businesses. Provides the classification framework for all subsequent risk measurement work.

Lesson 3 • Conditional Value at Risk and Tail Risk

Introduces CVaR and extreme value theory to capture tail losses beyond VaR. Addresses the fat-tailed distributions common in energy price data.

Lesson 4 • Value at Risk for Energy Portfolios

Explains parametric, historical simulation, and Monte Carlo VaR methods applied to energy positions. Enables students to compute and interpret VaR for trading books.

Lesson 1 • Hedge Accounting and Reporting

Applies fair value and cash flow hedge accounting standards to energy derivatives. Connects hedging strategy design to financial statement presentation requirements.

Lesson 2 • Options-Based Hedging Strategies

Uses puts, calls, collars, and participating structures to hedge while retaining upside. Extends futures-based hedging to more flexible option strategies.

Lesson 3 • Hedge Ratio Determination

Derives optimal hedge ratios using regression, minimum-variance, and cross-hedging methods. Provides the quantitative basis for sizing all hedging positions.

Lesson 4 • Basis Risk Management

Addresses the mismatch between hedge instrument and exposure location or grade. Equips students to minimize residual basis risk in imperfect hedges.

Lesson 1 • Project Finance Fundamentals

Explains the non-recourse project finance model, SPV structures, and cash flow waterfall mechanics. Establishes the structural foundation for energy project lending and investment.

Lesson 2 • Financial Modeling for Energy Projects

Builds integrated project finance models incorporating construction draws, operations, and debt service. Develops the modeling skills required for investment committee presentations.

Lesson 3 • Debt and Equity in Energy Projects

Analyzes senior debt, mezzanine, and equity tranches in energy project capital stacks. Connects capital structure choices to risk allocation among project stakeholders.

Lesson 4 • Risk Allocation in Project Agreements

Maps construction, operational, market, and force majeure risks to contractual parties. Prepares students to negotiate and assess risk allocation in project documents.

Lesson 1 • Risk Limits and Position Management

Establishes VaR-based and notional risk limits for trading desks and portfolio managers. Integrates risk measurement from earlier chapters into governance frameworks.

Lesson 2 • Algorithmic and Quantitative Trading

Introduces systematic trading model development, backtesting, and execution for energy markets. Prepares students for quantitative roles in energy trading firms.

Lesson 3 • Performance Measurement and Attribution

Measures trading and portfolio performance using risk-adjusted return metrics and P&L attribution. Enables objective evaluation of energy trading strategies and managers.

Lesson 4 • Portfolio Construction for Energy Assets

Applies mean-variance optimization and correlation analysis to energy asset portfolios. Extends classical portfolio theory to the unique return distributions of energy assets.

Lesson 1 • Strategic Risk and Scenario Planning

Uses long-horizon scenario analysis and strategic risk frameworks to stress-test energy business models. Synthesizes the course by applying all risk and valuation tools at the strategic level.

Lesson 2 • Energy Transition Finance

Examines financing mechanisms for low-carbon energy assets, including green bonds and blended finance. Positions students to advise on capital flows in the energy transition.

Lesson 3 • ESG Integration in Energy Investment

Incorporates environmental, social, and governance factors into energy investment analysis and valuation. Responds to growing investor and regulatory demand for ESG-aligned energy finance.

Lesson 4 • Energy Sector Mergers and Acquisitions

Analyzes valuation, due diligence, and deal structuring for energy M&A transactions. Applies asset valuation and project finance skills to corporate-level transactions.