Market Mechanisms for Risk Management in Energy

Abstract

Energy is a strategically important sector for the Bulgarian economy as significant public and private financial and human resources are concentrated in the sector. Energy resources represent about 20% of the imports and 15% of exports. The development of the sector is important for the consumption of energy resources, the management of which requires significant financial and material resources. Furthermore, sustainability of energy is one of the main objectives of the Europe 2030 strategy. In this context, the EU sets itself goals aimed at integrating European energy markets and thus ensuring energy security and improving energy efficiency. The need for a high degree of dynamism in the Energy sector is indisputable as it requires timely and adequate risk management measures to be taken. Thus, the paper aims to present how, through the application of various market mechanisms, prevention can be achieved and how it contributes to good risk management in the sector. The main tasks are: to identify the risk factors influencing energy security, to systematize them and to assess them. Emphasis is placed on the disclosure of market mechanisms and the new market regulations in the Energy law and resp. on the instrument for reducing energy risk. The main results are focused on summarizing guidelines for risk management in the energy sector.