Energy economics scope of the study covers energy commodities and resources. The scope of coverage in energy economics involving these commodities and resources include;
Forces that influence the consumers and firms to use, transport, supply, dispose, and convert energy resources.
Energy regulatory and market structures
Environmental and distributional consequences related to energy
Economically efficient ways of using energy
The field of energy economics is dependent on the features of energy. These properties of energy are used to devise effective ways of use and application during various energy-related economic situations. These include;
Energy originates from the physical environment and returns there too.
Energy can only be converted to different forms; cannot be created or destroyed.
In addition to these characteristics of energy, consumers and firms use the following guiding facts to make economically sound decisions about energy;
That consumers apply energy conversion processes to acquire energy services
The demand of energy is influenced by the consumer’s preferences and this demand is dependent on energy conversion costs and technology.
The market forces have a possibility of influencing a transition to renewable resources.
Energy use by humans is that of depletable resources, especially fossil fuels.
Energy commodities are considered economic constituents in energy economics.
Energy resources are divided into two; storable or non-storable and renewable or depletable.
The use of energy has resulted in environmental damages and costs. This has triggered economic intervention through the implementation of policies that aim at reducing these damages and factoring in the externalities.