The introductory course has given you a general background of energy security topics. We have seen a general overview of global primary energy resource trends, world markets and European fuel mix. Concepts of energy diversification, of energy intensity as well as of willingness to pay must be understood in the context of energy policy. The course also highlights specificities of gas and of electricity, both sectors gain an increasing importance. Specificities of isolated and of post-command economies have been also mentioned.
Energy Charter Treaty is one of the most important aspects of international energy governance. Its main structure, provisions as well as controversies are thus highlighted. The most important subject of energy policy is energy investment. Its value chain is very complex. One needs to understand the concepts of discount rates, of transaction costs and of risks related to energy investment. Moreover, each sector (oil, gas, nuclear, etc) have its own specific structure of risks.
Facts to know about energy policy:
- Energy policy is mostly about institutions which stimulate infrastructure
- Energy security is not linearly linked to dependence
- Gas markets are specific because of the rigid structure of transport costs
- A successful gas hub (including LNG trade) is conditioned to an important level of demand and of price
- Market risks can be related to regulatory failures
- Green energy is stimulated via demand for electricity in order to increase the rates of capacity utilisation
- Energy Charter process includes various dimensions, including energy trade, transit and investment
- Energy Charter is not a EU-based instrument and is not EU-Russia relations instrument, the Treaty has an objective of a global energy governance
- Russia applied the ECT provisionally, and halted the provisional application, however is still a signatory party to the Treaty
- Reserves are related to the price
- Discount rates for nuclear are higher than for oil and gas
- Transaction costs can become the main non-quantified barriers for energy policy
We hope you enjoyed this introductory course of European Union energy policy! In case of questions please take contact with European College or with responsible lecturer of this course Prof Andrey Belyi.
If you are interested in studying more about energy policy take additional related courses from European College of University of Tartu.
Upcoming courses on this spring semester of 2014 are:
(P2EC.00.206) Energy Security Policies in Europe (6ECTS)
(P2EC.00.198) European Energy and Climate Policy (6ECTS)