Difference between revisions of "Energy Risk"
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== Definition == | == Definition == | ||
'''Energy Risk''' denotes the uncertainty and potential impact to an entity's objectives of the [[Energy Access | availability]] (at the desired amount and type) and [[Energy Cost | cost]] of different forms of [[Energy]]. | '''Energy Risk''' denotes the uncertainty and potential impact to an entity's objectives of the [[Energy Access | availability]] (at the desired amount and type) and [[Energy Cost | cost]] of different forms of [[Energy]]. | ||
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| + | A realization of energy risk is an [[Energy Risk Events | energy risk event]]. | ||
== Risk Taxonomy == | == Risk Taxonomy == | ||
Revision as of 12:35, 11 March 2024
Definition
Energy Risk denotes the uncertainty and potential impact to an entity's objectives of the availability (at the desired amount and type) and cost of different forms of Energy.
A realization of energy risk is an energy risk event.
Risk Taxonomy
Energy Risk is a type of Commodity Risk. In contrast with other commodities that refer to material substances (solid, liquid or gaseous, organic or inorganic) energy is an intangible property of matter.
Context
Energy risk materializes in the context of a given Energy System, the set of physical and societal elements that enable and govern the provision of different forms of energy in an economic system.
Manifestations
- Energy Access to the desired forms of energy, both as a short-term Business Continuity risk and longer term sustainability implications.
- Energy Security, or ability to maintain access to the desired forms of energy. Disruption of energy provision may further create various forms of Operational Risk
- Cost Risk of securing the desired forms of energy which for corporate entities may determine Business Model viability
- Legal Risk (liabilities) from Externalities associated with Energy Consumption and Stranded Assets in connection with the utilization (production, transformation or consumption) of energy forms
- Reputation Risk as stakeholder perceptions and expectations change
Issues and Challenges
- In recent years energy risk has been elevated into a significant Risk Type due to a combination of environmental and geopolitical events.
