Energy market
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,
Until the 1970s when energy markets underwent dramatic changes, such markets were characterized by
Liberalization and regulation
Energy markets have been liberalized in some countries. They are regulated by national and international authorities (including liberalized markets) to protect
Regulators tend to seek to discourage price
Due to the
Current and past energy usage in the United States
The United States currently uses over four trillion kilowatt-hours (kWh) per year in order to fulfill its energy needs. Data given by the
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
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,[
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
- ISBN 9780071629072. Retrieved 6 February 2023.
- 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.