During the 1980s and 1990s, energy policy concentrated on privatization, liberalization, and competition, in response to the underlying conditions of excess supply and low fossil fuels. These conditions changed around 2000, in response to the coincidence of a structural upward shift in oil prices, the aging of the assets, network failures, and greater import dependency. The focus moved from asset sweating towards investment, and has been accompanied by a paradigm shift in the objectives of energy policy—towards security of supply and climate change. This article sets out the implications for the choice of instruments and institutions, in the context of liberalized markets. In respect of security of supply and climate change, market-based instruments are advanced—in the former, capacity markets, and in the latter, carbon taxes and permits. Finally, consideration is given to the case for a single integrated energy agency, both to enhance credibility and to ensure consistency.