Factors Affecting Demand and Supply of Energy

Question 1

Sustainability

Answer 1

Means we must meet our current energy needs without compromising the ability of future generations to meet their energy needs. Also no unacceptable damage to environment.
* Many countries signing the Kyoto treaty shows we are aware of this, as it is an international treaty which commits countries to reducing GHG E’s.
NORWAY -
- Has CO2 tax, increased support of research into renewables, electric vehicle promotion by adjusting taxes.
- Aim to be carbon neutral by 2030.

Question 2

Technology

Answer 2

• Technology of energy continually changing over time. Early coal mines were small and shallow as technology needed to ventilate. Invention of internal combustion engine using petrol affected demand, as coal then went down and petroleum went up. Similar with invention of air con and heating, affects demand. Overall, also affects supply as new energy sources are invented.
  NORWAY -
• Off shore wind in Norway now growing rapidly, including moving to floating rather than bottom fixed.
• There are 36 onshore and offshore wind projects panned for the next 5 years. eg Hywind Tampen.
• Big push for electric vehicles, with over 80% of new cars bought being electric.

Question 3

Pollution.

Answer 3

• In West Virginia USA, whole mountains are being destroyed to get to layers of coal within them.
• (include some environmental problems from energy sources cue cards).
• Burning fossil fuels => GHG E’s. Often, LICs and MICs ignore these environmental impacts due to cost benefit analysis, whereas HICs are looking for more clean energy.
  NORWAY -
• Although clean in it’s own energy, 96% of electricity mix HEP, still exporting lots of oil and gas.
• Since 1990, over 2,500 acute oil spills on the Norwegian shelf.
• Moving to wind to reduce oil/gas usage.

Question 4

World energy prices.

Answer 4

• World energy prices vary, generally increasing over time as demand is growing much more rapidly than supply.
• New technology, eg solar panels, expensive when new, as becomes more common decreases.
• Eg strip mining of coal makes harvesting coal cheap, makes it cheaper.
  NORWAY -
• Due to Russia/Ukraine, Norway exporting more to European countries.

Question 5

Levels of development.

Answer 5

• HICs use more energy than MICs and LICs. People in HICs can afford high levels of energy eg private cars, air con, heating. Also industry and commercial agriculture.
• NICs have a medium, but rapidly-growing energy use eg Brazil.
  NORWAY -
• A HIC, increased demand of energy such as heating for colder winters.
• Level of development has allowed them to develop technology, such as electric vehicle push.

Question 6

Capital.

Answer 6

• Most energy resources require large amounts of money to extract and use. Power stations are expensive to build, infrastructure to transport energy from it’s point of extraction to use is costly, such as pipelines. Even smaller wind turbines in UK costing about £70,000
• Many LICs have to rely on TNCs to afford this.
  NORWAY -
• Have the capital for investments, such as approving over $18 billion in oil and gas investments in 2023.
• Also earning a lot from energy production.

Question 7

Resource endowment.

Answer 7

• egs, such as Russia, Norway, Canada (uranium).
• Solar and wind as well.
  NORWAY -
• Mountainous terrain and numerous river makes Norway ideal for HEP.
• Oil and gas reserves also.
• Also investing in wind and solar power.
• Allows large profit from exporting energy, mainly to European countries eg UK.

Question 8

Climate.

Answer 8

• links to resource endowment, eg solar in warm weather, wind better on coastal areas/islands such as UK, Yarmouth. Again, use Norway as an eg.
  NORWAY -
• Cold winters leading to high demand.
• Rainy climate => HEP.

Question 9

Energy policy.

Answer 9

• Governments can have a big impact on energy production with energy policies. Most governments are aware that the energy market is imperfect, so adopt policies to ensure energy security and so that the price of energy is not too high for consumers.
• This can include grants for companies investing in renewables, bans/laws eg banning filament lightbulbs in UK and reducing road tax on cars which emit fewer carbon emissions.
• Can link to Paris agreement etc.
  NORWAY -
• Adjusted taxes to promote electric vehicles.
• Investing in HEP, such as Ulla-Førre.
• Has an energy security policy to improve energy efficiency and promote decarbonisation. It includes rules on electricity rationing.