Abstract
The chapter deals with investment risks in the energy markets. Two important aspects are compared: efficiency and effectiveness. Efficiency is related to the optimal use of resources, both financial and human, to achieve goals. Efficiency is assessed by the achievement of the final goals and expected results. Investment risk management in the energy sector of developing countries requires a balance between efficiency and effectiveness. The chapter gives unexpected results in the management of investment risks in the renewable energy market in developing countries, which may be interesting and meaningful for discussion and further research. An accurate assessment of investment risks in alternative energy and fossil energy depends on specific conditions, regional characteristics, and other factors. However, in the long term, there are arguments in favor of the fact that investment risks in alternative energy may be higher than the risks of investments in fossil energy.
TopBackground
Developing countries have a variety of economic, social, geographic, and political conditions that significantly affect the energy market. When analyzing the energy markets of these countries, it is necessary to take into account all these unique features in order to develop adequate strategies and solutions for sustainable energy development and energy risk management.
Studying the energy market of developing countries and their prospects in the field of renewable energy sources provides important information for decision-making in the energy sector, and can also serve as a starting point for further research and development aimed at the sustainable and efficient use of energy resources in these countries.
Key Terms in this Chapter
Investment Risk in the Energy Sector: The possibility of loss of capital or return for investors who invest their money in energy projects or companies.
Alternative Energy Risks: Factors and events that may adversely affect the development, production, distribution, or use of renewable energy sources such as solar, wind, hydropower, geothermal and biomass.
Alternative Energy: Energy from natural and renewable sources, such as solar or wind.
Energy Efficiency: The use of less energy to perform the same task or produce the same result.
Fossil Energy: Sources, including oil, coal, and natural gas, are non-renewable resources that formed when prehistoric plants and animals died and were gradually buried by layers of rock.
Fossil Energy Risks: Factors and events that may adversely affect the extraction, production, transportation, or consumption of fossil energy sources such as oil, natural gas and coal.
Investment Risk Management in the Energy Sector: A process and methodology aimed at identifying, analyzing, reducing, and controlling the risks associated with investing in energy projects or companies.
Energy Effectiveness: The degree to which energy is successful in producing a desired result.