Energy Policy

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 policy is the manner in which a given entity (often governmental) has decided to address issues of energy development including energy conversion, distribution and use as well as reduction of greenhouse gas emissions in order to contribute to climate change mitigation. The attributes of energy policy may include legislation, international treaties, incentives to investment, guidelines for energy conservation, taxation and other public policy techniques. Energy is a core component of modern economies. A functioning economy requires not only labor and capital but also energy, for manufacturing processes, transportation, communication, agriculture, and more. Energy planning is more detailed than energy policy.

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

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.

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. The energy policy of a sovereign nation may include one or more of the following measures:

• statement of national policy regarding energy planning, energy generation, transmission and usage
• legislation on commercial energy activities (trading, transport, storage, etc.)
• legislation affecting energy use, such as efficiency standards, emission standards
• instructions for state-owned energy sector assets and organizations
• active participation in, co-ordination of and incentives for mineral fuels exploration (see geological survey) and other energy-related research and development policy command
• fiscal policies related to energy products and services (taxes, exemptions, subsidies, etc.)
• energy security and international policy measures such as:
  • international energy sector treaties and alliances,
  • general international trade agreements,
  • special relations with energy-rich countries, including military presence and/or domination.

There are a number of elements that are naturally contained in a national energy policy, regardless of which of the above measures was used to arrive at the resultant policy. The chief elements intrinsic to an energy policy are:^[5]

• What is the extent of energy self-sufficiency for this nation
• Where future energy sources will derive
• How future energy will be consumed (e.g. among sectors)
• What fraction of the population will be acceptable to endure energy poverty
• What are the goals for future energy intensity, ratio of energy consumed to GDP
• What is the reliability standard for distribution reliability
• What environmental externalities are acceptable and are forecast
• What form of "portable energy" is forecast (e.g. sources of fuel for motor vehicles)
• How will energy efficient hardware (e.g. hybrid vehicles, household appliances) be encouraged
• How can the national policy drive province, state and municipal functions
• What specific mechanisms (e.g. taxes, incentives, manufacturing standards) are in place to implement the total policy
• Do you want to develop and promote a plan for how to get the world to zero CO₂ emissions?
• What future consequences there will be for national security and foreign policy

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](p13) 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

Renewable energy

By country

Energy policies vary by country, see tables below. Script error: No such module "World topic". Script error: No such module "World topic".

Examples

China

India

Ecuador

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.

Russia

United Kingdom

United States

See also

• Energy balance
• Energy industry
• Energy law
• Energy security
• Energy supply
• Environmental policy
• Oil Shockwave
• Sustainable energy
• World Forum on Energy Regulation (WFER)
• All pages with titles containing Energy policy of

References

External links

• "Energy Policies of (Country x)" series, International Energy Agency
• UN-Energy - Global energy policy co-ordination
• Renewable Energy Policy Network (REN21)
• Information on energy institutions, policies and local energy companies by country, Enerdata Publications

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