How Does Energy Demand and Supply Relate to Energy Markets?

energy is always changing with time

Energy supply is the complete delivery of energized fuels or converted fuels to specific end-use in a system. It potentially encompasses the generation, transmission, production, supply and distribution of energy. Energy is a unique and complex phenomenon in that it is neither a product of nature nor a pure force. It is often described as a dynamic process where energy is changing from its potential to its actual state. The actuality of energy is always changing with time.

There are several types of energy supply. The first is renewable supply. This includes energy sources like wind, solar, geothermal, tidal, wave and other renewable energies. As these sources are not completely depleted, they can potentially be utilized over again.

non-renewable supply

A second type of energy supply is non-renewable supply. Examples of non-renewable energy sources are fossil fuels like oil, gas, coal and uranium. There are three distinct periods when we are currently running out of the energy supply we are using currently. These periods are known as Peak petroleum, Peak natural gas and Peak oil. These periods have major implications for the world economy and the way we use energy.

When there are less energy supply than we used, the price of energy increases. For example, if there are more energy demands than there is supply, then the price of energy will increase. Similarly, if the energy demands decrease but the supply does not decrease then the price of energy will decrease. One example of non-renewable energy supply is coal. Coal is becoming rarer as mines are closing, but there is still a significant amount of it available.

An increasing concern for global warming is climate change. This has a direct impact on energy supply. Changes in climatic conditions may lead to extreme weather events such as floods and droughts, which can increase demand for electricity. Other changes in the climate may include shifting of species around the world, which also affects the demand for energy resources.

energy markets

Governments and energy markets around the world look to the supply elasticities of energy resources. These provide the basis for determining how prices and supply vary in the energy markets. Governments usually fund research into areas that have a high potential for future growth. For example, the Australian government has recently announced a number of research programs into biofuels and other energy resources.

Energy markets often attempt to determine the relationship between supply and demand. Supply is expressed as the amount of energy that is needed to power an appliance or machine and the demand is expressed as how much energy must be supplied to meet the demand. Changes in supply may affect prices as supply increases and demand decreases.

There is a large amount of focus on the quantity of fossil fuel used in generating electricity. The three most significant energy sources of fossil fuel are oil, natural gas, and coal. It is estimated that the fossil fuel industry contributes around 25% of the total global carbon intensity. In an effort to reduce this carbon intensity, many countries have implemented carbon dioxide caps, a tax on carbon emissions, as well as other legislation related to reducing carbon intensity.

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