Energy policy addresses how best to utilize global energy resources. It encompasses decisions regarding fossil fuels, renewables and energy efficiency.
Many countries set goals to increase the proportion of energy from renewable sources in electricity or primary energy production, or policies to discourage or promote specific energy options. Financial incentives like tax credits and direct spending also influence how energy systems evolve.
Costs and Benefits
Energy policies determine demand and supply. Strategies may include carbon pricing, energy efficiency mandates and other incentives – each strategy has different costs and benefits associated with them.
Renewable energy subsidies allow utilities to purchase power from wind and solar developers at a fraction of what it would cost them from conventional sources, supporting new technology development while lessening competition for incumbent energy firms.
Other energy policy instruments, like carbon taxes, shift some of the estimated damages caused by climate change to producers and consumers of fossil fuels. The cost associated with emissions then translates into market prices to reflect its true cost; this price signal helps avoid subsidies or other forms of government support for emerging technologies while improving electricity price forecasting for infrastructure planning purposes ensuring supply meets demand cost-effectively while protecting the environment.
Environmental Impacts
Energy production and consumption activities often have environmental repercussions that have an adverse impact on humans or ecosystems in various ways. Regional air pollution from automobiles and energy plants located in large cities threatens the health of its residents while oil spills and strip mining destroy natural resources and soil, while chemical pollutants such as CFCs in aerosols deplete ozone in the atmosphere, altering global climate.
Fossil fuels contribute significantly to global warming, and their limited supply is of concern. Alternative energy sources offer some relief but often bring their own set of issues, including methane leakage during natural gas transmission and storage or carbon dioxide emissions when producing electricity.
Some energy policies rely on financial incentives to change people’s energy decision-making behavior. For instance, taxes on fossil fuels may decrease their relative price and boost renewables’ appeal; green funds encourage investors to support companies that provide environmentally-friendly energy solutions.
Security and Safety
Energy security means ensuring a country can consistently meet its energy requirements without being dependent on outside sources, taking into account factors like cost, technology, political issues and environmental concerns.
Secure energy supplies depend on both physical availability of energy resources and infrastructure for their extraction, transport and distribution – such as pipelines, power lines and storage facilities that deliver energy directly to consumers. Geopolitical considerations and international relations also play a part in energy security; embargoes or sanctions could limit foreign sources.
Reaching energy security requires an integrated approach that includes effective risk management, diversification of energy sources, investment in clean technologies and compliance with safety protocols such as Lockout/Tagout (LOTO). Such strategies can help countries mitigate risks and ensure the reliability of their energy supply, but may not be within the means of lower income households whose monthly energy costs strain household budgets and prevent participation in programs dedicated to alternative energies.
Technology
New technologies that increase renewable energy sources’ cost effectiveness will help stabilize and potentially decrease energy prices, and make managing customer energy usage simpler, leading to increased efficiency and cost savings. Smart technology may also make customer usage tracking simpler and resulting in additional efficiency and cost reductions.
Energy policy seeks to establish guidelines, objectives, and regulations that oversee the production, distribution, and consumption of energy to foster economic development, social well-being, and environmental sustainability. Balancing stakeholder interests ensures a goal that maximizes benefits while minimising costs is at its heart.
This report investigates the first commercialization of four distinct energy technologies–thin film photovoltaics, wind turbine blades, dual-stage refrigeration evaporators and fuel cells for material handling equipment–to identify key features which may inform R&D and business decisions in energy technology development. These features include aligning government research priorities with market forces for successful public-private partnerships to enable R&D and commercialization efforts; as well as flexible R&D funding approaches which promote an array of diverse energy technologies that meet customer value propositions and address societal challenges.