Evaluation of the Adaptability of the Ukrainian Economy to Changes in Prices for Energy Carriers and to Energy Market Risks

Olexandr Yemelyanov,Lilia Lesyk,Tetyana Petrushka,Roman Lesyk,Anastasiya Symak

doi:10.3390/en11123529

Abstract

The methodological framework for assessing adaptability of the economy to changes in energy prices and risks to energy markets was developed. The study proposes indicators for assessing the level of adaptability of the economic sectors to changes in prices for energy carriers and to risks of energy markets. The model of decomposition of adaptability level of the economy sectors to changes in energy prices has been developed. The theoretical and empirical analysis of the influence of energy prices on adaptability level of enterprises and households is carried out. Based on the empirical analysis, it was found that adaptability level of the sectors of Ukrainian economy significantly differs both in the years of the investigated period and in sectors of the economy. At the same time, most indicators of the level of adaptability vary from 0.4 to 0.7. Consequently, the actual decline in the profit of enterprises was 40–70% lower than the potentially possible decrease in the profit of these enterprises due to the prices rising for energy carriers. Moreover sectors which are less vulnerable to the growth of prices show higher adaptability level.The possibility of using the obtained results in developing a state energy saving strategy is substantiated.

Highlights

The modern economy is characterized by energy priceinstability
Based on the empirical analysis, it was found that adaptability level of the sectors of Ukrainian economy significantly differs both in the years of the investigated period and in sectors of the economy
The main goal of our research was to develop the methodological principles for assessing adaptability of economy to changes in prices for energy carriers and risks of energy markets, with further use of these principles on the example of Ukrainian economy

Summary

Introduction

The modern economy is characterized by energy priceinstability This instability causes constant changes in the conditions of activity for enterprises and households. The economic impact of changes in price for energy carriers varies considerably between different enterprises, industries and countries [8]. These differences are due to the current level of energy consumption. This level is characterized by the energy intensity of production, the ratio between the volumes of different types of used energy resources, the total amount of their consumption, etc. Enterprises that consume certain types of energy resources try to adapt to the changes of their prices. The purpose of this adaptation is to reduce the negative effects of changing prices for energy resources when these prices increase, or strengthening the positive effects if energy prices decrease

Objectives

Methods

Findings

Discussion

Conclusion