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How can various factors influence the supply and demand of energy? -…
How can various factors influence the supply and demand of energy?
National wealth
As average incomes increase living standards improve, which involves the increasing use of energy and the use of a greater variety of energy sources.
Changes in demand
Demands can change for many reasons. For example, Britain's trains were powered by coal and coal was used to heat many homes. The demand changed as natural gas was discovered in the North Sea which could then be used as energy instead of using coal gas.
Changes in price
When energy prices rise significantly, companies increase spending on exploration and development.
The relative prices of the different types of energy can influence demand. Electricity production in the UK has been switching from coal to gas over the last 20 years, mainly because power stations are cheaper to run on natural gas.
Environmental factors
Today, we are a lot more aware of how energy sources impact the environment. This can change demand as people want to help protect the environment that we depend upon.
Public opinion
Public opinion can influence decisions made by governments. People today are much better informed about the environmental impact of energy sources than they were in the past. This can influence demand as some people influence others to avoid using certain harmful energy sources in order to protect the environment.
Technology
Technology has allowed us to develop new ways to source our energy and also help us to be more efficient in producing energy so there is less waste and a lower impact on the environment.
Physical
Deposits of fuel are only found in certain locations
Large power stations require flat land and geologically stable foundations
Wind power needs high average wind speeds throughout the year
Economic
The most accessible, lowest-cost deposits of fuel are invariably developed first
Oneshore deposits of oil and gas are usually cheaper to develop than offshore deposits.
When energy prices rise significantly, companies increase spending on exploration and development.
Political
Countries wanting to develop nuclear electricity require permission from the International Atomic Agency.
Potential HEP schemes on 'international rivers' may require the agreement of other countries that share the river.
Governments may insist on energy companies producing a certain proportion of their energy from renewable sources.