Energy market: Difference between revisions
Makes more sense grammatically |
HeyElliott (talk | contribs) |
||
(46 intermediate revisions by 28 users not shown) | |||
Line 1: | Line 1: | ||
{{Short description|System enabling the sale and purchase of the physical property used for work}} |
|||
{{multiple issues| |
|||
{{ |
{{More citations needed|date=June 2008}} |
||
An '''energy market''' is a type of [[commodity market]] on which electricity, heat, and fuel products are traded. Natural gas and electricity are examples of products traded on an energy market. Other energy commodities include: oil, coal, carbon emissions (greenhouse gases), nuclear power, solar energy and wind energy. Due to the difficulty in storing and transporting energy, current and future prices in energy are rarely linked. This is because energy purchased at a current price is difficult (or impossible) to store and then sell at a later date. There are two types of market schemes (for pricing): spot market and forward market.<ref>{{cite book |last1=Edwards |first1=DW |title=Energy Trading and Investing: Trading, Risk Management and Structuring Deals in the Energy Market |date=1 November 2009 |publisher=McGraw Hill Professional |isbn=9780071629072 |pages=1, 43 |url=https://books.google.com/books?id=JBwsqoUGhM8C |access-date=6 February 2023}}</ref> |
|||
{{cleanup-bare URLs|date=April 2013}} |
|||
}} |
|||
'''Energy markets''' are [[commodity market]]s that deal specifically with the trade and supply of [[Energy (society)|energy]]. Energy market may refer to an [[electricity market]], but can also refer to other sources of energy. Typically [[energy development]] is the result of a government creating an [[energy policy]] that encourages the development of an [[energy industry]] in a [[competitive]] manner. |
|||
Typically, [[energy development]] stems from a government's [[energy policy]] which encourages the development of an [[energy industry]] specifically in a [[competitive]] manner (as opposed to non competitive). |
|||
⚫ | Until the 1970s when energy markets underwent dramatic changes, |
||
⚫ | Until the 1970s when energy markets underwent dramatic changes, such markets were characterized by [[monopoly]]-based organizational structures.<ref name="esmr">{{cite book |title=Energy Security: Managing Risk in a Dynamic Legal and Regulatory Environment |last=Andrei |first=Konoplyanik |chapter=International Energy Markets |editor-first=Barry |editor-last=Barton |year=2004 |publisher=[[Oxford University Press]] |isbn=0199271615 |page=49 |url=https://books.google.com/books?id=ZKsTFgArP50C |access-date=27 June 2013}}</ref> For instance, most of the world's petroleum reserves were controlled by the [[Seven Sisters (oil companies)|Seven Sisters]]. In the case of petroleum energy trade, circumstances then changed considerably in [[1973 world oil market chronology|1973]] as the influence of [[OPEC]] grew and the repercussions of the [[1973 oil crisis]] affected global energy markets. |
||
==Liberalization and regulation== |
==Liberalization and regulation== |
||
Energy markets have been liberalized in some countries |
Energy markets have been liberalized in some countries. They are regulated by national and international authorities (including liberalized markets) to protect [[consumer right]]s and to avoid [[oligopoly|oligopolies]]. Some such regulators include: the [[Australian Energy Market Commission]] in [[Australia]], the [[Energy Market Authority]] in [[Singapore]], the [[Energy Community]] in Europe (which replaced the [[South-East Europe Regional Energy Market]]) and the [[Nordic energy market]] for [[Nordic countries]]. Members of the [[European Union]] are required to liberalize their energy markets.{{Citation needed|reason=Nothing in this paragraph is proven.|date=November 2023}} |
||
Regulators seek to discourage [[Volatility (finance)|volatility]] |
Regulators tend to seek to discourage price [[Volatility (finance)|volatility]], to reform markets (if needed) and to both search for evidence of- and enforce compliance against [[anti-competitive behavior]] (such as the formation of an illegal [[monopoly]]).{{Citation needed|reason=Prove this.|date=November 2023}} |
||
Due to the [[oil price increases since 2003|increase in oil price since 2003]] |
Due to the [[oil price increases since 2003|increase in oil price since 2003]] coupled with increased market [[speculation]], energy markets have been reviewed; and, by 2008, several conferences were organized to address the energy market sentiments of petroleum importing nations.<ref>{{cite web |url=http://afp.google.com/article/ALeqM5jcQ3Vn4nmwZPvNIj64wVTTSZOq_A |title=EU leaders split on how to tackle soaring oil prices |access-date=2008-06-20 |url-status=dead |archive-url=https://web.archive.org/web/20081220223832/http://afp.google.com/article/ALeqM5jcQ3Vn4nmwZPvNIj64wVTTSZOq_A |archive-date=2008-12-20 }}</ref> In Russia, the markets are being reformed by the introduction of harmonized and all-Russian consumer prices.<ref>{{cite web |url=http://www.barentsobserver.com/murmansk-struggles-with-higher-electricity-prices.4493743-16149.html |title=Murmansk struggles with higher electricity prices|publisher=Barentsobserver.com |access-date=2008-06-20 }}</ref> |
||
==Current and past energy usage in the United States== |
==Current and past energy usage in the United States== |
||
[[File:A1 Houston Office Oil Traders on Monday.jpg|thumb|US energy market [[trading room]], 2004]] |
[[File:A1 Houston Office Oil Traders on Monday.jpg|thumb|US energy market [[trading room]], 2004]] |
||
The United States currently uses over four trillion kilowatt-hours per year in order to fulfill its energy needs. Data given by the [[United States Energy Information Administration]] (EIA) |
The United States currently uses over four trillion kilowatt-hours (kWh) per year in order to fulfill its energy needs. Data given by the [[United States Energy Information Administration]] (EIA) has shown a steady growth in energy usage dating back to 1990, at which time the country consumed around 3 trillion kWh of energy. Traditionally, the United States's energy sources have included oil, coal, [[Nuclear power|nuclear]], [[renewable energy|renewables]] and [[natural gas]]. The breakdown of each of these fuels as a percentage of the overall consumption in the year 1993, per EIA was: coal at 53%, nuclear energy at 19%, natural gas at 13%, renewable energy at 11% and oil at 4% of the overall energy needs. In 2011, the breakdown was: coal at 42%, nuclear at 19%, natural gas at 25%, renewable energy at 13% and oil accounted for 1%. These figures show a drop in energy derived from coal and a significant increase in both natural gas and renewable energy sources.<ref>Electricity Generation. (Dec. 5, 2012). Retrieved from www.eia.gov/forecasts.</ref> |
||
According to the [[United States Geological Survey]] (USGS) data from 2006, hydroelectric power accounted for most of the renewable energy production in the United States. However, increasing government funding, grants, and incentives have been drawing many companies towards the biofuel, wind |
According to the [[United States Geological Survey]] (USGS) data from 2006, hydroelectric power accounted for most of the renewable energy production in the United States. However, increasing government funding, grants, and other incentives have been drawing many companies towards the biofuel, wind and solar energy production industries.{{Citation needed|reason=Nothing in this paragraph is supported.|date=November 2023}} |
||
==Moving towards renewable energy== |
==Moving towards renewable energy== |
||
In recent years, there has been a movement towards renewable and sustainable energy in the United States. This has been caused by many factors, including |
In recent years,{{when|date=February 2020}} there has been a movement towards renewable and sustainable energy in the United States. This has been caused by many factors, including consequences of climate change, affordability, government funding, tax incentives and potential profits in the energy market of the United States. According to the most recent{{when|date=February 2020}} projections by the EIA forecasting to the year 2040, the renewable energy industry will grow from providing 13% of the power in the year 2011 to 16% in 2040. This accounts for 32% of the overall growth during the same time period. This increase could be profitable for companies that expand into the renewable energy market in the United States. {{Citation needed|reason=Bold statements coupled with specific figures and dates: provide source(s).|date=November 2023}} |
||
This movement towards renewable energy has also been affected by the stability of the global market. Recent economic instability in countries in the Middle East and elsewhere has driven American companies to further develop American dependence on foreign sources of energy, such as oil. The long term projections by the |
This movement towards renewable energy has also been affected by the stability of the global market. Recent{{when|date=February 2020}} economic instability in countries in the Middle East and elsewhere has driven American companies to further develop American dependence on foreign sources of energy, such as oil. The long term projections by the EIA for renewable energy capacity in the United States is also sensitive to factors such as the cost and availability of domestic oil and natural gas production. |
||
Countries around the world also face the challenge of up-skilling professionals in order to create the workforce required for the transition from fossil fuel to renewable energy. Organisations such as the [[Renewable Energy Institute]] are assisting with this transition, but more is required to meet targets set by governments around the world, including those set by the [[Paris Agreement]]. |
|||
==Renewable energy sources== |
==Renewable energy sources== |
||
Currently, the majority of the United |
Currently, the majority of the United States's renewable energy production comes from hydroelectric power, solar power and wind power. According to the [[U.S. Department of Energy]], the cost of wind power doubled between the years of 2002 to 2008. However, since then, the prices of wind power have declined by 33%. Various factors have contributed to the decline in the cost of wind power, such as government subsidies, tax breaks, technological advancement and the cost of oil and natural gas.<ref>Wind Power Economics: Past, Present, and Future Trends. (Nov. 23, 2011). Retrieved from energy.gov</ref> |
||
[[Hydroelectric power in the United States|Hydroelectric power]] has been the |
[[Hydroelectric power in the United States|Hydroelectric power]] has been the main source of renewable energy because it has been reliable over time. Nonetheless, there are challenges in hydropower. For example, traditional hydroelectric power required damming rivers and other sources of water. Damming disrupts the environment in and near the water, proximally because the dam necessarily creates a lake at the water source. Other complications may include protest by environmentalists. However, new forms of hydroelectric power that harness wave energy from oceans have been in development in recent years. Although these power sources need further development to become economically viable, they have potential to become significant sources of energy.<ref>Hydroelectric Power Water Use. (Feb 14, 2013). Retrieved from www.ga.water.usgs.gov.</ref> |
||
In recent years, [[wind energy]] and [[solar energy]] have made the largest steps towards significant energy production in the United States. These sources have little impact on the environment and have the highest potential of renewable energy sources used today. Advances in technology, government tax rebates, subsidies, grants, and economic need have all lead to huge steps towards the usage of sustainable wind and solar energy today. |
In recent years,{{when|date=February 2020}} [[wind energy]] and [[solar energy]] have made the largest steps towards significant energy production in the United States. These sources have little impact on the environment and have the highest potential of renewable energy sources used today. Advances in technology, government tax rebates, subsidies, grants, and economic need have all lead to huge steps towards the usage of sustainable wind and solar energy today. |
||
==Energy market in the U.S.== |
==Energy market in the U.S.== |
||
The |
The energy industry is the third-largest industry in the United States.<ref name="eius">{{cite web |url=http://selectusa.commerce.gov/industry-snapshots/energy-industry-united-states |title=The Energy Industry in the United States |work=commerce.gov |publisher=USA Government |access-date=28 June 2013 |archive-date=2 April 2019 |archive-url=https://web.archive.org/web/20190402054415/http://selectusa.commerce.gov/industry-snapshots/energy-industry-united-states |url-status=dead }}</ref> This market is expected to have an investment of over $700 billion over the next two decades{{when|date=February 2020}} according to selectusa. Furthermore, there are many federal resources enticing both domestic and foreign companies to develop the industry in the United States. These federal resources include the Department of Energy Loan Guarantee, the American Reinvestment and Recovery Act, the Smart Grid Stimulus Program, as well as an Executive Order on Industrial Energy Efficiency. Harnessing the power of wind, solar and hydroelectric resources in the United States will become the focus of the United States's renewable sources of energy. |
||
==See also== |
==See also== |
||
Line 43: | Line 45: | ||
*[[Energy derivative]] |
*[[Energy derivative]] |
||
*[[Energy intensity]] |
*[[Energy intensity]] |
||
*[[Food vs fuel]] |
*[[Food vs. fuel]] |
||
*[[Renewable energy commercialization]] |
*[[Renewable energy commercialization]] |
||
*[[ |
*[[Cost of electricity by source]] |
||
*[[Spark spread]] |
*[[Spark spread]] |
||
==References== |
==References== |
||
{{ |
{{Reflist}} |
||
{{Electricity delivery}} |
{{Electricity delivery}} |
||
{{Authority control}} |
|||
{{DEFAULTSORT:Energy Market}} |
{{DEFAULTSORT:Energy Market}} |
||
[[Category:Commodities market]] |
|||
[[Category:Energy economics]] |
[[Category:Energy economics]] |
||
[[Category:Energy markets| ]] |
[[Category:Energy markets| ]] |
Revision as of 02:06, 16 May 2024
This article needs additional citations for verification. (June 2008) |
An energy market is a type of commodity market on which electricity, heat, and fuel products are traded. Natural gas and electricity are examples of products traded on an energy market. Other energy commodities include: oil, coal, carbon emissions (greenhouse gases), nuclear power, solar energy and wind energy. Due to the difficulty in storing and transporting energy, current and future prices in energy are rarely linked. This is because energy purchased at a current price is difficult (or impossible) to store and then sell at a later date. There are two types of market schemes (for pricing): spot market and forward market.[1]
Typically, energy development stems from a government's energy policy which encourages the development of an energy industry specifically in a competitive manner (as opposed to non competitive).
Until the 1970s when energy markets underwent dramatic changes, such markets were characterized by monopoly-based organizational structures.[2] For instance, most of the world's petroleum reserves were controlled by the Seven Sisters. In the case of petroleum energy trade, circumstances then changed considerably in 1973 as the influence of OPEC grew and the repercussions of the 1973 oil crisis affected global energy markets.
Liberalization and regulation
Energy markets have been liberalized in some countries. They are regulated by national and international authorities (including liberalized markets) to protect consumer rights and to avoid oligopolies. Some such regulators include: the Australian Energy Market Commission in Australia, the Energy Market Authority in Singapore, the Energy Community in Europe (which replaced the South-East Europe Regional Energy Market) and the Nordic energy market for Nordic countries. Members of the European Union are required to liberalize their energy markets.[citation needed]
Regulators tend to seek to discourage price volatility, to reform markets (if needed) and to both search for evidence of- and enforce compliance against anti-competitive behavior (such as the formation of an illegal monopoly).[citation needed]
Due to the increase in oil price since 2003 coupled with increased market speculation, energy markets have been reviewed; and, by 2008, several conferences were organized to address the energy market sentiments of petroleum importing nations.[3] In Russia, the markets are being reformed by the introduction of harmonized and all-Russian consumer prices.[4]
Current and past energy usage in the United States
![](http://upload.wikimedia.org/wikipedia/commons/thumb/f/f1/A1_Houston_Office_Oil_Traders_on_Monday.jpg/220px-A1_Houston_Office_Oil_Traders_on_Monday.jpg)
The United States currently uses over four trillion kilowatt-hours (kWh) per year in order to fulfill its energy needs. Data given by the United States Energy Information Administration (EIA) has shown a steady growth in energy usage dating back to 1990, at which time the country consumed around 3 trillion kWh of energy. Traditionally, the United States's energy sources have included oil, coal, nuclear, renewables and natural gas. The breakdown of each of these fuels as a percentage of the overall consumption in the year 1993, per EIA was: coal at 53%, nuclear energy at 19%, natural gas at 13%, renewable energy at 11% and oil at 4% of the overall energy needs. In 2011, the breakdown was: coal at 42%, nuclear at 19%, natural gas at 25%, renewable energy at 13% and oil accounted for 1%. These figures show a drop in energy derived from coal and a significant increase in both natural gas and renewable energy sources.[5]
According to the United States Geological Survey (USGS) data from 2006, hydroelectric power accounted for most of the renewable energy production in the United States. However, increasing government funding, grants, and other incentives have been drawing many companies towards the biofuel, wind and solar energy production industries.[citation needed]
Moving towards renewable energy
In recent years,[when?] there has been a movement towards renewable and sustainable energy in the United States. This has been caused by many factors, including consequences of climate change, affordability, government funding, tax incentives and potential profits in the energy market of the United States. According to the most recent[when?] projections by the EIA forecasting to the year 2040, the renewable energy industry will grow from providing 13% of the power in the year 2011 to 16% in 2040. This accounts for 32% of the overall growth during the same time period. This increase could be profitable for companies that expand into the renewable energy market in the United States. [citation needed]
This movement towards renewable energy has also been affected by the stability of the global market. Recent[when?] economic instability in countries in the Middle East and elsewhere has driven American companies to further develop American dependence on foreign sources of energy, such as oil. The long term projections by the EIA for renewable energy capacity in the United States is also sensitive to factors such as the cost and availability of domestic oil and natural gas production.
Countries around the world also face the challenge of up-skilling professionals in order to create the workforce required for the transition from fossil fuel to renewable energy. Organisations such as the Renewable Energy Institute are assisting with this transition, but more is required to meet targets set by governments around the world, including those set by the Paris Agreement.
Renewable energy sources
Currently, the majority of the United States's renewable energy production comes from hydroelectric power, solar power and wind power. According to the U.S. Department of Energy, the cost of wind power doubled between the years of 2002 to 2008. However, since then, the prices of wind power have declined by 33%. Various factors have contributed to the decline in the cost of wind power, such as government subsidies, tax breaks, technological advancement and the cost of oil and natural gas.[6]
Hydroelectric power has been the main source of renewable energy because it has been reliable over time. Nonetheless, there are challenges in hydropower. For example, traditional hydroelectric power required damming rivers and other sources of water. Damming disrupts the environment in and near the water, proximally because the dam necessarily creates a lake at the water source. Other complications may include protest by environmentalists. However, new forms of hydroelectric power that harness wave energy from oceans have been in development in recent years. Although these power sources need further development to become economically viable, they have potential to become significant sources of energy.[7]
In recent years,[when?] wind energy and solar energy have made the largest steps towards significant energy production in the United States. These sources have little impact on the environment and have the highest potential of renewable energy sources used today. Advances in technology, government tax rebates, subsidies, grants, and economic need have all lead to huge steps towards the usage of sustainable wind and solar energy today.
Energy market in the U.S.
The energy industry is the third-largest industry in the United States.[8] This market is expected to have an investment of over $700 billion over the next two decades[when?] according to selectusa. Furthermore, there are many federal resources enticing both domestic and foreign companies to develop the industry in the United States. These federal resources include the Department of Energy Loan Guarantee, the American Reinvestment and Recovery Act, the Smart Grid Stimulus Program, as well as an Executive Order on Industrial Energy Efficiency. Harnessing the power of wind, solar and hydroelectric resources in the United States will become the focus of the United States's renewable sources of energy.
See also
- Commodity value
- Cost competitiveness of fuel sources
- Demand destruction
- Energy crisis
- Energy derivative
- Energy intensity
- Food vs. fuel
- Renewable energy commercialization
- Cost of electricity by source
- Spark spread
References
- ^ Edwards, DW (1 November 2009). Energy Trading and Investing: Trading, Risk Management and Structuring Deals in the Energy Market. McGraw Hill Professional. pp. 1, 43. ISBN 9780071629072. Retrieved 6 February 2023.
- ^ Andrei, Konoplyanik (2004). "International Energy Markets". In Barton, Barry (ed.). Energy Security: Managing Risk in a Dynamic Legal and Regulatory Environment. Oxford University Press. p. 49. ISBN 0199271615. Retrieved 27 June 2013.
- ^ "EU leaders split on how to tackle soaring oil prices". Archived from the original on 2008-12-20. Retrieved 2008-06-20.
- ^ "Murmansk struggles with higher electricity prices". Barentsobserver.com. Retrieved 2008-06-20.
- ^ Electricity Generation. (Dec. 5, 2012). Retrieved from www.eia.gov/forecasts.
- ^ Wind Power Economics: Past, Present, and Future Trends. (Nov. 23, 2011). Retrieved from energy.gov
- ^ Hydroelectric Power Water Use. (Feb 14, 2013). Retrieved from www.ga.water.usgs.gov.
- ^ "The Energy Industry in the United States". commerce.gov. USA Government. Archived from the original on 2 April 2019. Retrieved 28 June 2013.