energy economics

Topics: Energy, Energy development, Energy economics Pages: 36 (1377 words) Published: October 11, 2014
Introduction to the Energy Economics,
Energy Data, Measurement to Energy
Balances
Econ 3067 -Lecture 1

1

Lecture I Part I

2

Outline
• Introduction
• Reporting Energy Data

3

References
• Bhattacharyya : Energy Economics Concepts,
Issues, Markets and Governance, Chapter 1
• Bhattacharyya : Energy Sector Management
Issues: An Overview, International Journal of
Energy Sector Management 1(1):13-33.

4

Introduction





What is Energy Economics?
The complexity of the Energy sector.
Development of Energy Economics
Influences at the three levels of energy related
interactions

5

Energy Economics
• The term Energy Economics more precisely –
the economics of energy is a branch of
Applied Economics where the economic
principles and tools are applied to analyze
the issues of the energy sector. The intent is a
well-informed understanding (Bhattacharyya
2011

6

Why Understanding?
• The Energy sector requires understanding
because it affects many aspects of our lives
and is complex in nature

7

Factors leading to Complexity
• The highly technical nature of the constituent
industries
• Specific features of each industry segment
demands special attention
• A critical ingredient for any economic activity
availability affects society-Social influences
• Multi-disciplinary interactions at international,
national, local levels
8

Nature of Energy Economics
• Energy
problems
therefore
attract
interdisciplinary interests and there is the
profound influence of engineering, operations
research, and other decision support systems
in Energy Economics.

9

Development of Energy Economics
• Energy Economics developed as a specialized
branch of Economics after the first oil shock in
the 1970s ( Edwards 2003). The dramatic
increases in oil prices highlighted its
importance in economic development of
countries. Policy makers and researchers now
take a keen interest in energy studies and it is
now a branch of economics.
10

Concerns
• Overall -Allocation of scarce resources in the
economy
• Micro level-Energy supply and demand,
markets including market failure ( Energy
Economics I)
• Macro level –Investment, financing and the
linkages with the rest of the economy (Energy
Economics II)
11

Focus Change Over Time
• 1970s- Understanding of the energy industry, especially
oil, energy substitution and renewable energy,
integrated planning for energy systems especially in
developing countries
• 1080s- Environmental concerns of energy use and
economic development (Local regional and global
effects)
• 1990s-Energy markets liberalization and restructuring,
climate change, global and local environmental issues
• Recent years-High oil prices, energy scarcity, state
intervention vs. market led supply
12

Multidimensional Interactions of Energy

Source: Bhattacharyya

13

Global Influences
• Energy Trade – Transactions in energy
commodities
due
to
different
energy
endowments
• International institutions - These affect
interactions among countries and govern
transactions
• Other interactions- Interactions among and
between countries(cooperation, competition and
conflict) involving governments and other entities
e.g. firms influence the energy sector
14

Macro-level Interaction
• Energy in the economy- the mutual
interdependence between the energy sector
and economic activities defines a key role for
energy in the economy. Institutions also play a
vital role

15

Sources of macroeconomic influences
• The level of economic activities and its evolution over time • Interdependence of energy and other economic activities, interaction among economic activities
• The structure of each activity and its evolution over time • The technical composition and characteristics of the
economic activities and its evolution over time
• The institutional arrangements that provide the enabling environment for...

References: • IEA(2004) Energy Statistics Manual
http://www.iea.org/stats/docs/statistics_manual.
rays, or using rocks below the earth’s
surface.(IEA,2004)
Source :Condoni et al (1985) and Siddayao(1986)
26
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