Energy policy

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Example of energy policy decisions: The goal of the Southern Gas Corridor, which connects the giant Shah Deniz gas field in Azerbaijan to Europe, is to reduce Europe's dependency on Russian gas. TAP TANAP SCP Schah Denis.png
Example of energy policy decisions: The goal of the Southern Gas Corridor, which connects the giant Shah Deniz gas field in Azerbaijan to Europe, is to reduce Europe's dependency on Russian gas.

Energy policies are the government's strategies and decisions regarding the production, distribution, and consumption of energy within a specific jurisdiction. Energy is essential for the functioning of modern economies because they require energy for many sectors, such as industry, transport, agriculture, housing. The main components of energy policy include legislation, international treaties, energy subsidies and other public policy techniques.

Contents

The energy sector emits more greenhouse gas worldwide than any other sector. [1] Therefore, energy policies are closely related to climate change mitigation policies. These decisions affect how high the greenhouse gas emissions by that country are.

Purposes

Access to energy is critical for basic social needs, such as lighting, heating, cooking, and healthcare. Given the importance of energy, the price of energy has a direct effect on jobs, economic productivity, business competitiveness, and the cost of goods and services.

Frequently the dominant issue of energy policy is the risk of supply-demand mismatch (see: energy crisis). Current energy policies also address environmental issues (see: climate change), particularly challenging because of the need to reconcile global objectives and international rules with domestic needs and laws. [2]

The "human dimensions" of energy use are of increasing interest to business, utilities, and policymakers. Using the social sciences to gain insights into energy consumer behavior can help policymakers to make better decisions about broad-based climate and energy options. [3] This could facilitate more efficient energy use, renewable-energy commercialization, and carbon-emission reductions. [4]

Approaches

The attributes of energy policy may include legislation, international treaties, incentives to investment, guidelines for energy conservation, taxation and other public policy techniques. Economic and energy modelling can be used by governmental or inter-governmental bodies as an advisory and analysis tool.

Energy planning is more detailed than energy policy.

National energy policy

Some governments state an explicit energy policy. Others do not but in any case, each government practices some type of energy policy. A national energy policy comprises a set of measures involving that country's laws, treaties and agency directives.

There are a number of elements that are contained in a national energy policy. Some important elements intrinsic to an energy policy include: [5]

Relationship to other government policies

Energy policy sometimes dominates and sometimes is dominated by other government policies. For example energy policy may dominate, supplying free coal to poor families and schools thus supporting social policy, [6] but thus causing air pollution and so impeding heath policy and environmental policy. [7] :13 On the other hand energy policy may be dominated by defense policy, for example some counties started building expensive nuclear power plants to supply material for bombs. [8] Or defense policy may be dominated for a while, eventually resulting in stranded assets, such as Nord Stream 2.

Energy policy is closely related to climate change policy because totalled worldwide the energy sector emits more greenhouse gas than other sectors. [1]

Energy policy decisions are sometimes not taken democratically. [9]

Corporate energy policy

In 2019, some companies “have committed to set climate targets across their operations and value chains aligned with limiting global temperature rise to 1.5°C above pre-industrial levels and reaching net-zero emissions by no later than 2050”. [10] Corporate power purchase agreements can kickstart renewable energy projects, [11] but the energy policies of some countries do not allow or discourage them. [12]

By type of energy

Nuclear energy

Nuclear energy policy is a national and international policy concerning some or all aspects of nuclear energy and the nuclear fuel cycle, such as uranium mining, ore concentration, conversion, enrichment for nuclear fuel, generating electricity by nuclear power, storing and reprocessing spent nuclear fuel, and disposal of radioactive waste. Nuclear energy policies often include the regulation of energy use and standards relating to the nuclear fuel cycle. Other measures include efficiency standards, safety regulations, emission standards, fiscal policies, and legislation on energy trading, transport of nuclear waste and contaminated materials, and their storage. Governments might subsidize nuclear energy and arrange international treaties and trade agreements about the import and export of nuclear technology, electricity, nuclear waste, and uranium.

Since about 2001 the term nuclear renaissance has been used to refer to a possible nuclear power industry revival, but nuclear electricity generation in 2012 was at its lowest level since 1999. [13] [14] Since then it had increased back to 2,653 TWh in 2021, a level last seen in 2006. The share of nuclear power in electricity production however is at a historic low and now below 10% down from a maximum of 17.5% in 1996. [15]

Following the March 2011 Fukushima I nuclear accidents, China, Germany, Switzerland, Israel, Malaysia, Thailand, United Kingdom, and the Philippines are reviewing their nuclear power programs. Indonesia and Vietnam still plan to build nuclear power plants. [16] [17] [18] [19] Thirty-one countries operate nuclear power stations, and there are a considerable number of new reactors being built in China, South Korea, India, and Russia. [20] As of June 2011, countries such as Australia, Austria, Denmark, Greece, Ireland, Latvia, Lichtenstein, Luxembourg, Malta, Portugal, Israel, Malaysia, and Norway have no nuclear power stations and remain opposed to nuclear power. [21] [22]

Since nuclear energy and nuclear weapons technologies are closely related, military aspirations can act as a factor in energy policy decisions. The fear of nuclear proliferation influences some international nuclear energy policies.

Renewable energy

Public policy has a role to play in renewable energy commercialization because the free market system has some fundamental limitations. As the Stern Review points out: "In a liberalised energy market, investors, operators and consumers should face the full cost of their decisions. But this is not the case in many economies or energy sectors. Many policies distort the market in favour of existing fossil fuel technologies." [23] The International Solar Energy Society has stated that "historical incentives for the conventional energy resources continue even today to bias markets by burying many of the real societal costs of their use". [24]

Fossil-fuel energy systems have different production, transmission, and end-use costs and characteristics than do renewable energy systems, and new promotional policies are needed to ensure that renewable systems develop as quickly and broadly as is socially desirable. [25] Lester Brown states that the market "does not incorporate the indirect costs of providing goods or services into prices, it does not value nature's services adequately, and it does not respect the sustainable-yield thresholds of natural systems". [26] It also favors the near term over the long term, thereby showing limited concern for future generations. [26] Tax and subsidy shifting can help overcome these problems, [27] though is also problematic to combine different international normative regimes regulating this issue. [28]

Examples

China

China is both the world's largest energy consumer and the largest industrial country, and ensuring adequate energy supply to sustain economic growth has been a core concern of the Chinese Government since the founding of the People's Republic of China in 1949. [29] Since the country's industrialization in the 1960s, China is currently the world's largest emitter of greenhouse gases, and coal in China is a major cause of global warming. [30] However, from 2010 to 2015 China reduced energy consumption per unit of GDP by 18%, and CO2 emissions per unit of GDP by 20%. [31] On a per-capita basis, China was only the world's 51st largest emitter of greenhouse gases in 2016. [32] China is also the world's largest renewable energy producer (see this article), [33] and the largest producer of hydroelectricity, solar power and wind power in the world. The energy policy of China is connected to its industrial policy, where the goals of China's industrial production dictate its energy demand managements. [34]    

India

The energy policy of India is to increase the locally produced energy in India and reduce energy poverty, [35] with more focus on developing alternative sources of energy, particularly nuclear, solar and wind energy. [36] [37] Net energy import dependency was 40.9% in 2021-22. [38] The primary energy consumption in India grew by 13.3% in FY2022-23 and is the third biggest with 6% global share after China and USA. [39] [40] [41] The total primary energy consumption from coal (452.2 Mtoe; 45.88%), crude oil (239.1 Mtoe; 29.55%), natural gas (49.9 Mtoe; 6.17%), nuclear energy (8.8 Mtoe; 1.09%), hydroelectricity (31.6 Mtoe; 3.91%) and renewable power (27.5 Mtoe; 3.40%) is 809.2 Mtoe (excluding traditional biomass use) in the calendar year 2018. [42] In 2018, India's net imports are nearly 205.3 million tons of crude oil and its products, 26.3 Mtoe of LNG and 141.7 Mtoe coal totaling to 373.3 Mtoe of primary energy which is equal to 46.13% of total primary energy consumption. India is largely dependent on fossil fuel imports to meet its energy demands – by 2030, India's dependence on energy imports is expected to exceed 53% of the country's total energy consumption. [43]

About 80% of India's electricity generation is from fossil fuels. India is surplus in electricity generation and also a marginal exporter of electricity in 2017. [44] Since the end of the calendar year 2015, huge power generation capacity has been idling for want of electricity demand. [45] India ranks second after China in renewables production with 208.7 Mtoe in 2016. [46] The carbon intensity in India was 0.29 kg of CO2 per kWhe in 2016 which is more than that of USA, China and EU. [47] The total manmade CO2 emissions from energy, process emissions, methane, and flaring is 2797.2 million tons of CO2 in CY2021 which is 7.2% of global emissions. [40] The energy intensity of agriculture sector is seven times less than industrial sector in 2022-23 (see Table 8.9 [39] )

Ecuador

Energy policy in Ecuador is driven by its need for energy security as a developing country as well as its conservation efforts. [48] Despite past and ongoing attempts to take charge in energy sustainability (as with the now defunct Yasuni-ITT initiative), oil production and exportation still supports its small $5,853 GDP/capita economy at an average of 549,000 barrels/day in 2016. [49] The push and pull between energy independence/nationalism and appeasement of conservationist groups (representing the concerns of environmentalists and indigenous groups) has been evident in the country’s shifting stance on renewable energies and fossil fuels. [48]

European Union

Russia was a key oil and gas supplier to Europe (map from 2013). This changed with the Russian invasion of Ukraine in 2022. RF NG pipestoEU.gif
Russia was a key oil and gas supplier to Europe (map from 2013). This changed with the Russian invasion of Ukraine in 2022.
The energy policy of the European Union focuses on energy security, sustainability, and integrating the energy markets of member states. [50] An increasingly important part of it is climate policy. [51] A key energy policy adopted in 2009 is the 20/20/20 objectives, binding for all EU Member States. The target involved increasing the share of renewable energy in its final energy use to 20%, reduce greenhouse gases by 20% and increase energy efficiency by 20%. [52] After this target was met, new targets for 2030 were set at a 55% reduction of greenhouse gas emissions by 2030 as part of the European Green Deal. [53] [54] After the Russian invasion of Ukraine, the EU's energy policy turned more towards energy security in their REPowerEU policy package, which boosts both renewable deployment and fossil fuel infrastructure for alternative suppliers. [55]

Russia

Russia's energy policy is presented in the government's Energy Strategy document, first approved in 2000, which sets out the government's policy to 2020 (later extended to 2030). The Energy Strategy outlines several key priorities: increased energy efficiency, reducing the impact on the environment, sustainable development, energy development and technological development, as well as improved effectiveness and competitiveness. Russia's greenhouse gas emissions are large because of its energy policy. [56] Russia is rich in natural energy resources and is one of the world's energy superpowers. Russia is the world's leading net energy exporter, and was a major supplier to the European Union until the Russian invasion of Ukraine. Russia has signed and ratified the Kyoto Protocol and Paris Agreement. Numerous scholars posit that Russia uses its energy exports as a foreign policy instrument towards other countries. [57] [58]

United Kingdom

The energy policy of the United Kingdom refers to the United Kingdom's efforts towards reducing energy intensity, reducing energy poverty, and maintaining energy supply reliability. The United Kingdom has had success in this, though energy intensity remains high. There is an ambitious goal to reduce carbon dioxide emissions in future years, but it is unclear whether the programmes in place are sufficient to achieve this objective.[ citation needed ] Regarding energy self-sufficiency, UK policy does not address this issue, other than to concede historic energy security is currently ceasing to exist (due to the decline of North Sea oil production).[ citation needed ]

The United Kingdom historically has a good policy record of encouraging public transport links with cities,[ citation needed ] despite encountering problems with high speed trains, which have the potential to reduce dramatically domestic and short-haul European flights. The policy does not, however, significantly encourage hybrid vehicle use or ethanol fuel use, options which represent viable short term means to moderate rising transport fuel consumption. Regarding renewable energy, the United Kingdom has goals for wind and tidal energy. The 2007 White Paper on Energy set a target that 20% of the UK's energy must come from renewable sources by 2020.

The current energy policy of the United Kingdom is the responsibility of the Department for Energy Security and Net Zero (DESNZ), after the Department for Business, Energy and Industrial Strategy was split into the Department for Business and Trade and the Department for Science, Innovation and Technology in 2023. Energy markets are regulated by the Office of Gas and Electricity Markets (Ofgem).

Areas of focus for energy policy by the UK government have changed since the Electricity Act 1989 and the Gas Act 1986 privatised these utilities. The policy focuses of successive UK governments since the full liberalisation of gas and electricity markets in 1998 and 1999 [59] have included managing energy prices, decarbonisation, the rollout of smart meters, and improving the energy efficiency of the country's building stock.

United States

The energy policy of the United States is determined by federal, state, and local entities. It addresses issues of energy production, distribution, consumption, and modes of use, such as building codes, mileage standards, and commuting policies. Energy policy may be addressed via legislation, regulation, court decisions, public participation, and other techniques.

Federal energy policy acts were passed in 1974, 1992, 2005, 2007, 2008, 2009, [60] 2020, 2021, and 2022, although energy-related policies have appeared in many other bills. State and local energy policies typically relate to efficiency standards and/or transportation. [61]

By country

Energy policies vary by country, see tables below.

See also

Related Research Articles

<span class="mw-page-title-main">Energy policy of the United Kingdom</span> United Kingdom legislation

The energy policy of the United Kingdom refers to the United Kingdom's efforts towards reducing energy intensity, reducing energy poverty, and maintaining energy supply reliability. The United Kingdom has had success in this, though energy intensity remains high. There is an ambitious goal to reduce carbon dioxide emissions in future years, but it is unclear whether the programmes in place are sufficient to achieve this objective. Regarding energy self-sufficiency, UK policy does not address this issue, other than to concede historic energy security is currently ceasing to exist.

<span class="mw-page-title-main">Energy in Thailand</span>

Energy in Thailand refers to the production, storage, import and export, and use of energy in the Southeast Asian nation of Thailand. Thailand's energy resources are modest and being depleted. The nation imports most of its oil and significant quantities of natural gas and coal. Its energy consumption has grown at an average rate of 3.3% from 2007 to 2017. Energy from renewables has only recently begun to contribute significant energy.

<span class="mw-page-title-main">Electric energy consumption</span> Worldwide consumption of electricity

Electric energy consumption is energy consumption in the form of electrical energy. About a fifth of global energy is consumed as electricity: for residential, industrial, commercial, transportation and other purposes. Quickly increasing this share by further electrification is extremely important to limit climate change, because most other energy is consumed by burning fossil fuels thus emitting greenhouse gases which trap heat.

<span class="mw-page-title-main">Energy policy of the European Union</span> Legislation in the area of energetics in the European Union

The energy policy of the European Union focuses on energy security, sustainability, and integrating the energy markets of member states. An increasingly important part of it is climate policy. A key energy policy adopted in 2009 is the 20/20/20 objectives, binding for all EU Member States. The target involved increasing the share of renewable energy in its final energy use to 20%, reduce greenhouse gases by 20% and increase energy efficiency by 20%. After this target was met, new targets for 2030 were set at a 55% reduction of greenhouse gas emissions by 2030 as part of the European Green Deal. After the Russian invasion of Ukraine, the EU's energy policy turned more towards energy security in their REPowerEU policy package, which boosts both renewable deployment and fossil fuel infrastructure for alternative suppliers.

The energy policy of India is to increase the locally produced energy in India and reduce energy poverty, with more focus on developing alternative sources of energy, particularly nuclear, solar and wind energy. Net energy import dependency was 40.9% in 2021-22. The primary energy consumption in India grew by 13.3% in FY2022-23 and is the third biggest with 6% global share after China and USA. The total primary energy consumption from coal, crude oil, natural gas, nuclear energy, hydroelectricity and renewable power is 809.2 Mtoe in the calendar year 2018. In 2018, India's net imports are nearly 205.3 million tons of crude oil and its products, 26.3 Mtoe of LNG and 141.7 Mtoe coal totaling to 373.3 Mtoe of primary energy which is equal to 46.13% of total primary energy consumption. India is largely dependent on fossil fuel imports to meet its energy demands – by 2030, India's dependence on energy imports is expected to exceed 53% of the country's total energy consumption.

<span class="mw-page-title-main">Low-carbon economy</span> Economy based on energy sources with low levels of greenhouse gas emissions

A low-carbon economy (LCE) is an economy which absorbs as much greenhouse gas as it emits. Greenhouse gas (GHG) emissions due to human activity are the dominant cause of observed climate change since the mid-20th century. There are many proven approaches for moving to a low-carbon economy, such as encouraging renewable energy transition, energy conservation, electrification of transportation, and carbon capture and storage. An example are zero-carbon cities.

<span class="mw-page-title-main">Greenhouse gas emissions</span> Sources and amounts of greenhouse gases emitted to the atmosphere from human activities

Greenhouse gas (GHG) emissions from human activities intensify the greenhouse effect. This contributes to climate change. Carbon dioxide, from burning fossil fuels such as coal, oil, and natural gas, is one of the most important factors in causing climate change. The largest emitters are China followed by the United States. The United States has higher emissions per capita. The main producers fueling the emissions globally are large oil and gas companies. Emissions from human activities have increased atmospheric carbon dioxide by about 50% over pre-industrial levels. The growing levels of emissions have varied, but have been consistent among all greenhouse gases. Emissions in the 2010s averaged 56 billion tons a year, higher than any decade before. Total cumulative emissions from 1870 to 2022 were 703 GtC, of which 484±20 GtC from fossil fuels and industry, and 219±60 GtC from land use change. Land-use change, such as deforestation, caused about 31% of cumulative emissions over 1870–2022, coal 32%, oil 24%, and gas 10%.

<span class="mw-page-title-main">Energy security</span> National security considerations of energy availability

Energy security is the association between national security and the availability of natural resources for energy consumption. Access to cheaper energy has become essential to the functioning of modern economies. However, the uneven distribution of energy supplies among countries has led to significant vulnerabilities. International energy relations have contributed to the globalization of the world leading to energy security and energy vulnerability at the same time.

<span class="mw-page-title-main">Energy policy of China</span>

China is both the world's largest energy consumer and the largest industrial country, and ensuring adequate energy supply to sustain economic growth has been a core concern of the Chinese Government since the founding of the People's Republic of China in 1949. Since the country's industrialization in the 1960s, China is currently the world's largest emitter of greenhouse gases, and coal in China is a major cause of global warming. However, from 2010 to 2015 China reduced energy consumption per unit of GDP by 18%, and CO2 emissions per unit of GDP by 20%. On a per-capita basis, China was only the world's 51st largest emitter of greenhouse gases in 2016. China is also the world's largest renewable energy producer, and the largest producer of hydroelectricity, solar power and wind power in the world. The energy policy of China is connected to its industrial policy, where the goals of China's industrial production dictate its energy demand managements.  

<span class="mw-page-title-main">Energy in Finland</span>

Energy in Finland describes energy and electricity production, consumption and import in Finland. Energy policy of Finland describes the politics of Finland related to energy. Electricity sector in Finland is the main article regarding electricity in Finland.

<span class="mw-page-title-main">Greenhouse gas emissions by Australia</span> Release of gases from Australia which contribute to global warming

Greenhouse gas emissions by Australia totalled 533 million tonnes CO2-equivalent based on greenhouse gas national inventory report data for 2019; representing per capita CO2e emissions of 21 tons, three times the global average. Coal was responsible for 30% of emissions. The national Greenhouse Gas Inventory estimates for the year to March 2021 were 494.2 million tonnes, which is 27.8 million tonnes, or 5.3%, lower than the previous year. It is 20.8% lower than in 2005. According to the government, the result reflects the decrease in transport emissions due to COVID-19 pandemic restrictions, reduced fugitive emissions, and reductions in emissions from electricity; however, there were increased greenhouse gas emissions from the land and agriculture sectors.

<span class="mw-page-title-main">Energy in Switzerland</span>

Energy in Switzerland is transitioning towards sustainability, targeting net zero emissions by 2050 and a 50% reduction in greenhouse gas emissions by 2030.

<span class="mw-page-title-main">Energy in Italy</span>

Energy in Italy comes mostly from fossil fuels. Among the most used resources are petroleum, natural gas, coal and renewables. Italy has few energy resources, and most supplies are imported.

<span class="mw-page-title-main">Energy in Portugal</span>

Energy in Portugal describes energy and electricity production, consumption and import in Portugal. Energy policy of Portugal will describe the politics of Portugal related to energy more in detail. Electricity sector in Portugal is the main article of electricity in Portugal.

<span class="mw-page-title-main">Energy in Turkey</span>

Energy consumption per person in Turkey is similar to the world average, and over 85 per cent is from fossil fuels. From 1990 to 2017 annual primary energy supply tripled, but then remained constant to 2019. In 2019, Turkey's primary energy supply included around 30 per cent oil, 30 per cent coal, and 25 per cent gas. These fossil fuels contribute to Turkey's air pollution and its above average greenhouse gas emissions. Turkey mines its own lignite but imports three-quarters of its energy, including half the coal and almost all the oil and gas it requires, and its energy policy prioritises reducing imports.

<span class="mw-page-title-main">Energy in Slovenia</span>

Total primary energy supply (TPES) in Slovenia was 6.80 Mtoe in 2019. In the same year, electricity production was 16.1 TWh, consumption was 14.9 TWh.

<i>Energiewende</i> Ongoing energy transition in Germany

The Energiewende is the ongoing energy transition by Germany to a low carbon, environmentally sound, reliable, and affordable energy supply. The new system intends to rely heavily on renewable energy, energy efficiency, and energy demand management.

<span class="mw-page-title-main">Energy transition</span> Significant structural change in an energy system

An energy transition is a major structural change to energy supply and consumption in an energy system. Currently, a transition to sustainable energy is underway to limit climate change. Most of the sustainable energy is renewable energy. Therefore, another term for energy transition is renewable energy transition. The current transition aims to reduce greenhouse gas emissions from energy quickly and sustainably, mostly by phasing-down fossil fuels and changing as many processes as possible to operate on low carbon electricity. A previous energy transition perhaps took place during the Industrial Revolution from 1760 onwards, from wood and other biomass to coal, followed by oil and later natural gas.

<span class="mw-page-title-main">Greenhouse gas emissions by China</span> Emissions of gases harmful to the climate from China

China's greenhouse gas emissions are the largest of any country in the world both in production and consumption terms, and stem mainly from coal burning, including coal power, coal mining, and blast furnaces producing iron and steel. When measuring production-based emissions, China emitted over 14 gigatonnes (Gt) CO2eq of greenhouse gases in 2019, 27% of the world total. When measuring in consumption-based terms, which adds emissions associated with imported goods and extracts those associated with exported goods, China accounts for 13 gigatonnes (Gt) or 25% of global emissions. According to the Carbon Majors Database, Chinese state coal production alone accounts for 14% of historic global emissions.

<span class="mw-page-title-main">World energy supply and consumption</span> Global production and usage of energy

World energy supply and consumption refers to the global supply of energy resources and its consumption. The system of global energy supply consists of the energy development, refinement, and trade of energy. Energy supplies may exist in various forms such as raw resources or more processed and refined forms of energy. The raw energy resources include for example coal, unprocessed oil & gas, uranium. In comparison, the refined forms of energy include for example refined oil that becomes fuel and electricity. Energy resources may be used in various different ways, depending on the specific resource, and intended end use. Energy production and consumption play a significant role in the global economy. It is needed in industry and global transportation. The total energy supply chain, from production to final consumption, involves many activities that cause a loss of useful energy.

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