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The International Energy Investment Dilemma

There never has been a global energy market. What there is, at the consumer end, is an amalgam of national energy systems developed from local resources onto which have been grafted various energy imports. Of these, the only truly internationally traded energy commodity is oil. For their base-load energy needs, most national economies have relied on committed systems of domestic supply usually embedded deeply in their own public utility infrastructure and industrial systems. The prices to the consumer of all these forms of energy are heavily masked by subsidy, taxation, and other forms of government control. The availability of domestic energy varies greatly from country to country. There are therefore great variations between countries (and also within countries) in the resource cost of energy and the price to the consumer.

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Energy Specializations: Energy Investment and Finance – Public and Private Risks, Risk Management; Energy Investment and Finance – Corporate Strategy

JEL Codes:
D81 - Criteria for Decision-Making under Risk and Uncertainty
D92 - Intertemporal Firm Choice: Investment, Capacity, and Financing

Keywords: Resource cost of energy, Energy investment, National energy systems

DOI: 10.5547/ISSN0195-6574-EJ-Vol4-No3-1

Published in Volume 4, Number 3 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.