This document provides a summary of markets for various energy resources including oil, natural gas, coal, electricity, and renewable energy. It discusses the key characteristics of each market, including major producers and consumers, pricing regimes, historical crises that impacted prices, and emerging trends. The markets are complex with interactions between supply, demand, infrastructure for transportation, pricing benchmarks, and government policies. Renewable energy is an increasing focus as technologies progress and costs decline, while fossil fuels still dominate current energy production and trade globally.

1. Markets For Oil, Gas, Coal,
Electricity And Renewable
Energy
Resources And Alternate
Fuels
GROUP 6
BY : SIDHARTH GAUTAM
ADM NO : 2014MT0226

2. INTRODUCTION

3. WHAT IS MARKET ??
• In mainstream economics, the concept of a market
is any structure that allows buyers and sellers to
exchange any types of goods , service and
information.
• Market allow any trade-able item to be evaluated
and priced.
• The exchange of goods with or without money is
called Transaction.

4. ENERGY MARKET
• Energy Markets are commodity markets that deal
specifically with the trade and supply of energy.
• Typical Energy development is the result of a
government creating an energy policy that
encourages the development of an energy industry
in a competitive manner

5. CURRENT ENERGY
SCENARIO

9. MARKETS OF OIL

10. CRUDE OIL
• Crude oil has been refined to make fuels, like petrol and
diesel, lubricants, and industrial chemicals since the
1850s. Industrialization owes its development to oil,
and today, the world's two largest companies - Exxon
Mobil, and PetroChina - are oil refiners and distributors.
• Oil is an essential scarce resource, and there are still no
cost effective alternatives to oil for producing vehicle
fuels like petrol and diesel. World sales of oil in 2008
were $1,600 billion.
(Sources: Oil Daily, 2008, US Congressional Research Service, 2009. FT.Com, 2009.)

11. THE DEMAND FOR OIL
• The demand for oil has a number of important
characteristics.
• Demand is increasing in the advanced, OECD economies,
which make up approximately 66% of total world demand.
Between 1980 and 2008, world demand increased by 40%,
from 60m barrels per day to over 85m barrels.
• The demand for oil is relatively inelastic with respect to price,
given that oil has few direct substitutes.
• Similarly, demand for oil is relatively inelastic with respect to
income in the advanced, OECD economies. However, income
elasticity of demand (YED)in developing economies like China
and India is likely to be higher, with estimates suggesting that
YED is close to 1 .

12. WORLD'S MAJOR OIL IMPORTERS
• According to industry experts, the world has approximately
1.2 trillion barrels of proven oil reserves. Experts estimate
that, at the current rate of consumption, and with no more
discoveries of reserves, these proven reserves will be
exhausted in approximately 40 years.

13. OIL PRODUCERS

14. Chart of crude oil prices since 1861

15. SUCCESSIVE PRICE REGIMES
• Before 1880: “Disorder” in the US
• 1880-1910: the Standard Oil Trust Regime
• 1910-1930: Transition
• 1930-1970: the 7 Sisters Pricing Regime:
• Posted prices controlled by the companies
• 1970-1985: the OPEC Pricing Regime:
• Posted prices controlled by the producing countries
• 1985-87: the Netback Pricing Regime:
• Transition period
• 1987 to date: the Reference Pricing Regime

16. AFTER 1987: THE REFERENCE
PRICING REGIME
• “Reference pricing” means that the price of a
crude which is not freely traded is tied by some
formula to the price of another crude which is
freely traded.
• The two main reference crudes are Brent and WTI
(West Texas Intermediate)

17. OIL CRISIS
• Oil Crisis is a great price rise in the supply of oil
resources to an economy.
• CAUSES :
• Government actions like tax hikes, nationalization of
energy companies and regulation of the energy sector
shift supply .
• A crisis can develop due to industrial actions like union
organized strikes and government embargoes.
• The cause may be over consumption , aging
infrastructure.

18. HISTORICAL CRISIS
The 1970s energy crisis was a period in which the
economies of the major industrial countries of the
world, particularly the United States, Canada,
Western Europe, Japan, Australia, and New Zealand
were heavily affected and faced substantial
petroleum shortages.
The two worst crises of this period were the 1973 oil
crisis and the 1979 energy crisis, caused by
interruptions in exports from the Middle East.

19. • The 1973 oil crisis began in October 1973 when the
members of the Organization of Arab Petroleum
Exporting Countries (OAPEC, consisting of the Arab
members of the OPEC plus Egypt, Syria and Tunisia)
proclaimed an oil embargo. By the end of the
embargo in March 1974, the price of oil had risen
from $3 per barrel to nearly $12.
• The oil crisis, or "shock", had many short-term and
long-term effects on global politics and the global
economy. It was later called the "first oil shock",
followed by the 1979 oil crisis, termed the "second
oil shock."

20. • The 1979 (or second) oil crisis or oil shock occurred
in the United States due to decreased oil output in
the wake of the Iranian Revolution.
• The global oil supply decreased by ~4 %.
• Widespread panic resulted in higher price than
justified supply.
• The price of crude rose to $39.50 per barrel.
• The 1990 oil price spike occurred in response to
the Iraq invasion of Kuwait on August 2, 1990.
• Average monthly prices of oil rose from $17 per
barrel in July to $36 per barrel in October.

21. MARKETS
OF
NATURAL GAS

22. NATURAL GAS
• Natural gas is one of the most abundant energy
resources on the planet, yet more than one-third of
global natural gas reserves remain stranded and
undeveloped.
• 70% of gas traded internationally is exported by
pipeline; 30% by liquefied natural gas (LNG)
• Alternative technologies have been refined and
developed in recent years but are yet to make
serious inroads into the challenges of developing
remote gas fields

23. NATURAL GAS COST STRUCTURE
• For oil the most important cost component is field
development.
• For gas it is transportation.
• Natural gas is transported:
• In gaseous form by gas pipelines
• In liquefied form in LNG carriers
• Methane liquefies under atmospheric pressure at -
161.5 C°. This is Liquefied Natural Gas or LNG.

24. TECHNOLOGIES AVAILABLE TO
TRANSPORT NATURAL GAS

25. PIPELINE ADVANTAGE
• The cost of a pipeline is directly proportional to the
distance covered
• It is also proportional to the diameter, but volume
transported is proportional to the square of
diameter: the larger the pipe, the lower the cost
per cubic meter
• It is also a function of “terrain”: overland or
underwater, difficult terrains etc.

26. LNG ADVANTAGE
• A significant share of the gas produced is burned to
liquefy the rest – independently of distance.
• Distance influences the number of required carriers
(ships) – but cost increases less than w. pipeline.
• For long sea passages, LNG is the sole alternative.

27. CONSUMPTION TRENDS
0
5
10
15
20
25
30
35
ELECTRICITY FERTILISER OTHER INDUSTRY RESIDENTIAL
Chart Title
2005 2015 2025
IN
bm3

28. INDIA NATURAL GAS SECTOR
STRUCTURE
PRODUCTION
ONGC
OIL
BG INDIA
GSPC
RIL
CAIRN
INDIA
NIKO
RESOURSE
LNG SUPPLIERS
PLL
SHELL
RGPLL
ONGC
TRANSPORT
GAIL
OIL
GSPC
RIL
AGCL
ONGC
CITY GAS/ CNG
DISTRIBUTION
GGCL
MGL
IGL
BGL
RIL
BG India
GAS
MARKETING
GAIL
ONGC
GSP
AGCL
INDIAN OIL
BPCL
BG India

29. MARKET SHARE
32%
21%
24%
19%
4%
RELIANCE
GAIL
ONGC
CNG
OTHERS

30. MARKETS
OF
COAL

31. COAL
• Coal is a combustible black or brownish black
sedimentary rock .
• Coal is primarily composed of carbon along with
variable quantities of hydrogen , sulfur , oxygen and
nitrogen.
• The energy administration estimates coal reserves
at 948 x 109 tons.
• Coal is used mainly for generation of electricity.

32. TRADED COAL IN GLOABAL HARD
COAL PRODUCTION
1139
1029
791
5498
110
238
HARD COAL PRODUCTION INTERNATIONAL TRADE SEABORNE TRADE
Seaborne
trade
Cross
border
trade
Coking
Coal
trade
Steam
Coal
trade
Domestic
consumption
International
trade

33. LOW RANK COAL TRADE
• The growth of low rank steam coal is a new trend in
global seaborne trade.
• Low rank coal also designed as “off-spec” consists
of sub-bituminous coal with a low calorific value
(4,900 kcal/kg in the case of Indonesia, 5,500 kcal
for Australia) and a high ash content (up to 24%).
• Sold at a discount
• An estimated 200 million tons traded in 2011
• Australia is now a regular supplier of low rank coal
on the spot market.
• The suppliers save money as they don’t have to
wash the coal.

34. COKING COAL – A GLOBAL
MARKET
• Four countries/regions dominate coal imports
• China, India, the grouping Japan/South
Korea/Taiwan which constitutes the traditional
Asian buyers, and Europe
• Together they account for 84% of total coal
imports.
• China became the world’s top importer in 2011,
taking over the position that Japan has occupied for
three decades.
• India became the third largest importer in 2012,
overtaking South Korea

35. • Concentration of exports in one country, Australia,
which accounts for half of global coking coal trade.
• Australia is therefore responsible for supplying
customers all around the world with its high-quality
coking coals .
• The other exporters include the United States,
Canada, Mongolia and Russia
• Coking coal exports amounted to 291 million tons
in 2012 (254 million tons were seaborne trade)
• Whereas steam coal trade accounts for 15% only of
steam coal production, coking coal trade reaches
29% of coking coal production (2011).

36. MAJOR COKING COAL EXPORTING
COUNTRIES , 2011
140
62
24
20 17 16
AUSTRALIA US CANADA MONGOLIA RUSSIA OTHERS
Milliontons

37. FUTURE OF COAL TRADE
• Dominance of steam coal in international coal trade
expected to continue
• International coal trade expected to grow at an
average annual rate of only 1.2%
• from about 20.8quadrillion Btu in 2007 to 27.6 quadrillion Btu in
2030
• Share of coal trade as a percentage of global coal consumption falls
to 14 percent in 2030
• Largest increase in demand from China
• Price volatility is likely continue
• Increasing “Resource Nationalism” in exporting
countries would deter trade

38. MARKETS
OF
ELECTRICITY

39. ELECTRICITY MARKET
• In economic terms, electricity (both power and energy)
is a commodity capable of being bought, sold and
traded.
• Electricity is by its nature is difficult to store and has to
be available on demand.
• Unlike other products , it is not possible , under normal
operating conditions , to keep it in stock, ration it or
have customer queue for it.
• Demand and supply vary continuously.
• There is therefore a physical requirement for a
controlling agency, the transmission system operator, to
coordinate the dispatch of generating units to meet the
expected demand of the system across the
transmission grid.

40. THE STRUCTURE OF THE POWER
INDUSTRY
• The electric power industry is a network industry
consisting of four segments:
• Generation (G)
• Transmission (T)
• Distribution (D)
• Retailing (supply) (R)

41. NATURE OF THE MARKET
• Electricity is by its nature difficult to store and has to be
available on demand. Consequently, unlike other products,
it is not possible, under normal operating conditions, to
keep it in stock, ration it or have customers queue for it.
Furthermore, demand and supply vary continuously.
• There is therefore a physical requirement for a controlling
agency, the transmission system operator, to coordinate the
dispatch of generating units to meet the expected demand
of the system across the transmission grid.
• The scope of each electricity market consists of the
transmission grid or network that is available to the
wholesalers, retailers and the ultimate consumers in any
geographic area.

42. WHOLESALE ELECTRICITY MARKET
• A wholesale electricity market exists when
competing generators offer their electricity output
to retailers.
• The retailers then re-price the electricity and take it
to market.
• Buying wholesale electricity is not without its
drawbacks (market uncertainty, membership costs,
set up fees, collateral investment, and organization
costs, as electricity would need to be bought on a
daily basis).

43. RETAIL ELECTRICITY MARKET
• A retail electricity market exists when end-use
customers can choose their supplier from
competing electricity retailers.
• There may be real time pricing (prices based on
the variable wholesale price) a price that is set in
some other way, such as average annual costs.
• Demand response may use pricing mechanisms or
technical solutions to reduce peak demand.

44. RENEWABLE
ENERGY
MARKET

45. Renewable energy
• Renewable energy is generally defined as energy
that comes from resources which are naturally
replenished on a human timescale such as sunlight
,wind, rain, tides, waves and geothermal heat.
• Renewable energy replaces conventional fuels in
four distinct areas:
• electricity generation
• hot water/space heating
• motor fuels
• rural (off-grid) energy services.

46. BIOMASS
• Biomass is biological material derived from living,
or recently living organisms. It most often refers to
plants or plant-derived materials which are
specifically called lignocellulose biomass.
• As an energy source, biomass can either be used
directly via combustion to produce heat, or
indirectly after converting it to various forms of
biofuel.
• Biomass can be converted to other usable forms of
energy like methane gas or transportation fuels
like ethanol and biodiesel.

47. RENEWABLE
ENERGY
COMMERCIALIZATION

48. • Renewable energy commercialization involves the
deployment of three generations of renewable energy
technologies dating back more than 100 years.
• First-generation technologies, which are already mature
and economically competitive, include biomass,
hydroelectricity, geothermal power and heat.
• Second-generation technologies are market-ready and
are being deployed at the present time; they include
solar heating, photovoltaic, wind power, solar thermal
power stations, and modern forms of bioenergy.
• Third-generation technologies require continued R&D
efforts in order to make large contributions on a global
scale and include advanced biomass gasification, hot-
dry-rock geothermal power, and ocean energy.

49. ECONOMIC TRENDS
• Renewable energy technologies are getting
cheaper, through technological change and through
the benefits of mass production and market
competition.
• Hydro-electricity and geothermal electricity
produced at favorable sites are now the cheapest
way to generate electricity.
• Renewable energy costs continue to drop, and the
levelised cost of electricity (LCOE) is declining for
wind power, solar photovoltaic (PV), concentrated
solar power (CSP) and some biomass technologies.

51. ALTERNATE
FUEL

52. ALTERNATE FUEL
• Alternate fuel , known as non- conventional or
advance fuels are any material or substance that
can be used as fuel , other than conventional fuel ie
fossil fuel , coal & natural gas.
• Well known alternative fuels include biodiesel , bio-
alcohal , hydrogen , fuel cell , biomass.

54. THANKS