Energy markets are national and international regulated markets that deal specifically with the trade and supply of

energy In physics, energy (from Ancient Greek: ἐνέργεια, ''enérgeia'', “activity”) is the quantitative property that is transferred to a body or to a physical system, recognizable in the performance of work and in the form of ...

. Energy market may refer to an

electricity market In a broad sense, an electricity market is a system that facilitates the exchange of electricity-related goods and services. During more than a century of evolution of the electric power industry, the economics of the electricity markets had u ...

, but can also refer to other sources of energy. Typically

energy development Energy development is the field of activities focused on obtaining sources of energy from natural resources. These activities include production of renewable, nuclear, and fossil fuel derived sources of energy, and for the recovery and reuse ...

is the result of a government creating an

energy policy 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 contr ...

that encourages the development of an

energy industry The energy industry is the totality of all of the industries involved in the production and sale of energy, including fuel extraction, manufacturing, refining and distribution. Modern society consumes large amounts of fuel, and the energy indus ...

in a

competitive Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, indivi ...

manner. Until the 1970s when energy markets underwent dramatic changes, they were characterised by

monopoly A monopoly (from Greek language, Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situati ...

-based organisational structures. Most of the world's petroleum reserves were controlled by the Seven Sisters. Circumstances changed considerably in 1973 as the influence of

OPEC The Organization of the Petroleum Exporting Countries (OPEC, ) is a cartel of countries. Founded on 14 September 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela), it has, since 1965, been headqua ...

grew and the repercussions of the

1973 oil crisis The 1973 oil crisis or first oil crisis began in October 1973 when the members of the Organization of Arab Petroleum Exporting Countries (OAPEC), led by Saudi Arabia, proclaimed an oil embargo. The embargo was targeted at nations that had su ...

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 avoid

oligopolies An oligopoly (from Greek ὀλίγος, ''oligos'' "few" and πωλεῖν, ''polein'' "to sell") is a market structure in which a market or industry is dominated by a small number of large sellers or producers. Oligopolies often result fr ...

. Regulators includes the Australian Energy Market Commission in

Australia Australia, officially the Commonwealth of Australia, is a sovereign country comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands. With an area of , Australia is the largest country by ...

, the Energy Market Authority in

Singapore Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...

, the Energy Community in Europe, replacing the South-East Europe Regional Energy Market and the

Nordic energy market Nordic electricity market is a common market for electricity in the Nordic countries. It is one of the first free electric-energy markets in Europe and is traded in NASDAQ OMX Commodities Europe and Nord Pool Spot. In 2003, the largest market sha ...

for

Nordic countries The Nordic countries (also known as the Nordics or ''Norden''; lit. 'the North') are a geographical and cultural region in Northern Europe and the North Atlantic. It includes the sovereign states of Denmark, Finland, Iceland, Norway and Sw ...

. Members of the

European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...

are required to liberalize their energy markets. Regulators seek to discourage volatility of prices, reform markets if needed, and search for evidence of anti-competitive behavior such as the formation of a

. Due to the increase in oil price since 2003 and the increase of

speculation In finance, speculation is the purchase of an asset (a commodity, goods, or real estate) with the hope that it will become more valuable shortly. (It can also refer to short sales in which the speculator hopes for a decline in value.) Many ...

, energy markets are being reviewed and by 2008, several conferences were organized to address the energy market sentiments of petroleum importing nations. In Russia, the markets are being reformed by the introduction of harmonized and all-Russian consumer prices.

Current and past energy usage in the United States

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) shows a steady growth in energy usage dating back to 1990, which showed the United States used around 3 trillion kilowatt hours of energy that year. Traditionally, the energy sources used to fulfill the United States energy needs have been oil, coal,

nuclear Nuclear may refer to: Physics Relating to the nucleus of the atom: *Nuclear engineering *Nuclear physics *Nuclear power *Nuclear reactor *Nuclear weapon *Nuclear medicine *Radiation therapy *Nuclear warfare Mathematics *Nuclear space *Nuclear ...

renewable energy Renewable energy is energy that is collected from renewable resources that are naturally replenished on a human timescale. It includes sources such as sunlight, wind, the movement of water, and geothermal heat. Although most renewable energy ...

, and

natural gas Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbon d ...

. The breakdown of each of these fuels as a percentage of the overall consumption in the year 1993, according to the data given by the EIA is as follows; coal was 53%, nuclear energy was 19%, natural gas was 13%, renewable energy was 11%, and oil provided 4% of the overall energy needs. In 2011, the breakdown was as follows; coal was 42%, nuclear was 19%, natural gas was 25%, renewable energy was 13% and oil dropped down to 1%. These figures show a dramatic drop in energy from coal, and a significant increase in both natural gas as well as renewable energy. According to the

United States Geological Survey The United States Geological Survey (USGS), formerly simply known as the Geological Survey, is a scientific agency of the United States government. The scientists of the USGS study the landscape of the United States, its natural resources, ...

(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, and solar energy production industries.

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 the threat of climate change, cost, government funding, tax incentives, and potential profits in the energy market of the United States. According to the most recent projections by the EIA out to the year 2040, the renewable energy industry will be growing from providing 13% of the power in the year 2011 to 16% in 2040. This is equivalent to 32% of the overall growth during this time period. This large increase has the potential to be very lucrative for companies wishing to tap into the renewable energy market in the United States. 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 United States Energy Information Administration for renewable energy capacity in the United States is also sensitive to factors such as the cost of domestic oil and natural gas production, prices, and availability. 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 The Renewable Energy Institute is the global professional and educational body for the renewable energy and low carbon sectors. Its focus is education and professional membership for those working and upskilling to work in renewable energy, ener ...

are assisting with this transition, much more is required to meet targets set by governments around the world, targets in line with the

Paris Agreement The Paris Agreement (french: Accord de Paris), often referred to as the Paris Accords or the Paris Climate Accords, is an international treaty on climate change. Adopted in 2015, the agreement covers climate change mitigation, adaptation, and ...

set to help combat climate change.

Renewable energy sources

Currently, the majority of the United States’ 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 1/3, on average. Various factors have been contributing 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.

Hydroelectric power Hydroelectricity, or hydroelectric power, is electricity generated from hydropower (water power). Hydropower supplies one sixth of the world's electricity, almost 4500 TWh in 2020, which is more than all other renewable sources combined an ...

has been the most predominant source of renewable energy for quite some time due to the fact that it has been proven to be reliable and has been in use for quite some time. This source of energy has provided the majority of renewable energy and has been a significant source of overall energy production in the United States. The problem with traditional hydroelectric power has been the requirement of damming rivers and other sources of water. The problem created by damming is that the natural environment of the area is disrupted due to the formation of a lake caused by the damming of the water source. This creates uproar by environmentalists and a large obstacle to clear before being able to build a hydroelectric plant. However, new forms of hydroelectric power that harness wave energy from the oceans have been in development in recent years. Although these power sources still need much development before they become economically viable, they do have potential to become significant sources of energy. In recent years, wind energy and

solar energy Solar energy is radiant light and heat from the Sun that is harnessed using a range of technologies such as solar power to generate electricity, solar thermal energy (including solar water heating), and solar architecture. It is an essen ...

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. This market is expected to have an investment of over $700 billion over the next two decades according to selectusa. This allows for large amount of advancement in technological development in the near future. There are also many federal resources enticing both domestic and foreign companies to send investments towards the renewable energy 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. All these programs allow for a very lucrative investment for companies wishing to compete in the energy industry in the United States. With the advancement of technology in recent years, harnessing the power of wind, solar, and hydroelectric resources in the United States will become the focus of the United States’ shift towards alternative energy. This should also drive down the

price of oil The price of oil, or the oil price, generally refers to the spot price of a barrel () of benchmark crude oil—a reference price for buyers and sellers of crude oil such as West Texas Intermediate (WTI), Brent Crude, Dubai Crude, OPEC ...

due to a decrease in demand. There are more incentives now than ever before to develop these technologies and bring them into greater use.Energy Industry in the United States. Retrieved from selectusa.commerce.gov

References