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Energy policies are the government's strategies and decisions regarding theproduction,distribution, andconsumption of energy within a specificjurisdiction. 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 includelegislation, international treaties,energy subsidies and otherpublic policy techniques.
The energy sector emits more greenhouse gas worldwide than any other sector.[1] Therefore, energy policies are closely related toclimate policies. These decisions affect how high thegreenhouse gas emissions by that country are.
The main components of energy policy include:
The energy sector is the largest contributor to global greenhouse gas (GHG) emissions, accounting for over 73% of total CO2 emissions worldwide. As a result, energy policies are intrinsically linked to climate policies. Decisions regarding energy infrastructure—such as reliance on coal versus renewables—determine a nation's carbon footprint and its ability to meet international climate commitments (Intergovernmental Panel on Climate Change. For instance, countries investing in wind, solar, and nuclear energy typically achieve faster decarbonization than those dependent on coal and oil.
Given the urgency of climate change, many nations are transitioning toward low-carbon energy systems through policies like the U.S. Inflation Reduction Act (IRA) and the European Green Deal, which incentivize renewable energy adoption while reducing fossil fuel dependence.[6]
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.[7]
The "human dimensions" ofenergy use are of increasing interest tobusiness, utilities, and policymakers. Using thesocial sciences to gain insights into energyconsumer behavior can help policymakers to make better decisions about broad-basedclimate and energy options.[8] This could facilitate moreefficient energy use,renewable-energy commercialization, andcarbon-emission reductions.[9]
The attributes of energy policy may includelegislation, international treaties, incentives to investment, guidelines forenergy 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.
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:[10]
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 supportingsocial policy,[11] but thus causingair pollution and so impedingheath policy andenvironmental policy.[12]: 13 On the other hand energy policy may be dominated bydefense policy, for example some counties started building expensive nuclear power plants to supply material for bombs.[13] Or defense policy may be dominated for a while, eventually resulting instranded assets, such asNord Stream 2.
Energy policy is closely related toclimate change policy because totalled worldwide the energy sectoremits more greenhouse gas than other sectors.[1]
Energy policy decisions are sometimes not taken democratically.[14]
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".[15] Corporatepower purchase agreements can kickstart renewable energy projects,[16] but the energy policies of some countries do not allow or discourage them.[17]
Nuclear energy policy is a national and internationalpolicy concerning some or all aspects ofnuclear energy and thenuclear fuel cycle, such asuranium mining, ore concentration, conversion,enrichment fornuclear fuel,generating electricity bynuclear power, storing andreprocessingspent nuclear fuel, and disposal ofradioactive waste. Nuclear energy policies often include the regulation of energy use and standards relating to thenuclear fuel cycle. Other measures include efficiency standards, safety regulations,emission standards,fiscal policies, andlegislation on energy trading, transport ofnuclear waste andcontaminated materials, and their storage. Governments might subsidize nuclear energy and arrange international treaties and trade agreements about the import and export ofnuclear technology,electricity,nuclear waste, anduranium.
Since about 2001 the termnuclear renaissance has been used to refer to a possiblenuclear power industry revival, but nuclear electricity generation in 2012 was at its lowest level since 1999.[18][19] 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.[20]
Following the March 2011Fukushima 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.[21][22][23][24] Thirty-one countries operatenuclear power stations, and there are a considerable number of new reactors being built in China, South Korea, India, and Russia.[25] As of June 2011, countries such asAustralia,Austria,Denmark,Greece,Ireland, Latvia, Lichtenstein,Luxembourg,Malta,Portugal,Israel,Malaysia, andNorway have no nuclear power stations and remain opposed to nuclear power.[26][27]
Since nuclear energy andnuclear weapons technologies are closely related,military aspirations can act as a factor in energy policy decisions. The fear ofnuclear proliferation influences some international nuclear energy policies.Public policy has a role to play in renewable energy commercialization because the free market system has some fundamental limitations. As theStern 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."[28] TheInternational 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".[29]
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.[30]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".[31] It also favors the near term over the long term, thereby showing limited concern for future generations.[31] Tax and subsidy shifting can help overcome these problems,[32] though is also problematic to combine different international normative regimes regulating this issue.[33] | This article needs to beupdated. Please help update this article to reflect recent events or newly available information.(April 2024) |
ThePeople's Republic of China is both theworld's largest energy consumer and thelargest industrial country. China is currently the world's largest emitter ofgreenhouse gases, andcoal in China is a major cause ofglobal warming.[34]China is also the world's largest renewable energy producer, and the largest producer ofhydroelectricity,solar power andwind power in the world. The energy policy of China is connected to itsindustrial policy, where the goals of China'sindustrial production dictate itsenergy demand management.[35]
Being a country thatdepends heavily on foreignpetroleumimport for both domestic consumption and asraw materials forlight industrymanufacturing,electrification is a huge component of the Chinese national energy policy.Theenergy policy of India is to increase the locally producedenergy in India and reduceenergy poverty,[36] with more focus on developingalternative sources of energy, particularlynuclear,solar andwind energy.[37][38] Net energy import dependency was 40.9% in 2021-22.[39] Theprimary energy consumption in India grew by 13.3% in FY2022-23 and is the third biggest with 6% global share after China and USA.[40][41][42] The total primary energy consumption from coal (452.2 Mtoe; 45.88%), crude oil (239.1Mtoe; 29.55%), natural gas (49.9 Mtoe; 6.17%), nuclear energy (8.8 Mtoe; 1.09%), hydroelectricity (31.6 Mtoe; 3.91%) andrenewable power (27.5 Mtoe; 3.40%) is 809.2Mtoe (excluding traditional biomass use) in the calendar year 2018.[43] 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.[44]
About 80% of India'selectricity generation is fromfossil fuels. India is surplus in electricity generation and also a marginal exporter of electricity in 2017.[45] Since the end of the calendar year 2015, huge power generation capacity has been idling for want of electricity demand.[46] India ranks second after China in renewables production with 208.7 Mtoe in 2016.[47] Thecarbon intensity in India was 0.29 kg of CO2 per kWhe in 2016 which is more than that of USA, China andEU.[48] 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.[41] The energy intensity of agriculture sector is seven times less than industrial sector in 2022-23 (see Table 8.9[40])
| This article needs to beupdated. Please help update this article to reflect recent events or newly available information.(March 2022) |
Theenergy policy of the United Kingdom refers to the United Kingdom's efforts towards reducingenergy intensity, reducingenergy 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 reducecarbon 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 historicenergy security is currently ceasing to exist (due to the decline ofNorth Sea oil production).[citation needed]
The United Kingdom historically has a good policy record of encouragingpublic 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 encouragehybrid vehicle use orethanol fuel use, options which represent viable short term means to moderate rising transport fuel consumption. Regardingrenewable energy, the United Kingdom has goals forwind andtidal 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 theDepartment for Energy Security and Net Zero (DESNZ), after theDepartment for Business, Energy and Industrial Strategy was split into theDepartment for Business and Trade and theDepartment for Science, Innovation and Technology in 2023. Energy markets are regulated by theOffice of Gas and Electricity Markets (Ofgem).
Areas of focus for energy policy by the UK government have changed since theElectricity Act 1989 and theGas 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[60] have included managing energy prices,decarbonisation, the rollout ofsmart meters, and improving theenergy efficiency of the country's building stock.Theenergy 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 vialegislation, regulation, court decisions, public participation, and other techniques.
Federalenergy policy acts were passed in 1974, 1992, 2005, 2007, 2008, 2009,[61] 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.[62]
Federal energy policies since the1973 oil crisis have been criticized for having an alleged crisis-mentality, promoting expensive quick fixes and single-shot solutions that ignore market and technology realities.[63][64]Energy policies vary by country, see tables below.
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