Energy Access and Security
Out of the three pillars of EAPI energy triangle, the energy access and security pillar is probably the most complex and unpredictable. Evolution in this area is being shaped by the fast transition underway within the energy sector, with several elements playing important roles, such as the fast growth of distributed renewable energy, the developments in digital technology and international security.
A common definition for energy security
Energy security is an umbrella term that covers a range of issues linking energy, economic growth and political power, such as the security of energy supply, the level and quality of access and uncertainty over prices. The concept emerged in the 1970s as a consequence of supply disruptions and price volatility, which resulted from OPEC oil embargoes in 1973 and the Iranian revolution in 1979. A commonly used taxonomy for energy security, published by the Asia Pacific Energy Research Centre in 2007, is the “four As” of energy security:
- Availability (geological and physical elements)
- Accessibility (geopolitical elements)
- Affordability (economic elements)
- Acceptability (social and environmental elements)
Energy security can be part of a broader vision, where energy is generally an element of global security. The concept has evolved over time and is more frequently viewed in relation to the vulnerability of energy systems. In 2012, the Global Energy Assessment referred to energy security as the “uninterrupted provision of vital energy services”. Similarly, in 2014, Cherp and Jewell explored the concept in terms of vulnerabilities and resilience, describing it as “low vulnerability of vital energy systems”.
In line with the approach taken by stakeholders such as the International Energy Agency (IEA), an outcome-oriented definition has been adopted here: energy security is “an uninterrupted availability of energy sources at an affordable price”.
The framework for understanding energy security
Although the definition of energy security is clear, the dimensions affecting it are more complex. The proposed framework set out here for evaluating energy security includes six components, both quantitative (e.g. self-sufficiency and diversity of supply) and qualitative (e.g. governance and emergency response mechanisms). The quantitative components are assessed by metrics within the index, whereas the qualitative components sit outside the index’s scope. Understanding both aspects is critical to providing a comprehensive overview of energy security (Figure 1 below).
Figure 1: Framework for assessing energy security and access
Energy access and security across geographies
The interpretation of energy security and access varies by country and context, reflecting the relative importance of each dimension given the geopolitical, economic, physical and social environment in a particular region. Self-sufficiency, for example, is an area of concern in regions such as East Asia and Europe, whereas the level and quality of access to energy concern India (24) and Sub-Saharan Africa. A 2014 study by the US Department of State concluded that climate change is one of the most significant long-term security challenges posed by energy considerations (25). Net energy exporters will focus on maintaining “security of demand” (26) in order to keep vital revenue streams. Comparing material issues globally can be a challenge because they depend on regions. The EAPI framework thus seeks a balance between relevance and objectivity to set an impartial basis for analysis and debate.
The EAPI shows that self-sufficiency alone does not guarantee energy security. Most countries ranked in the top 10 of the energy access and security sub-index (Figure 2), with the exception of Norway and Canada, are, counterintuitively, net importers of energy. However, domestic production covers a significant share of national demand in these countries, such as in Denmark (although the country’s EAPI score significantly benefits from the proximity to the electricity systems of neighbouring Norway and Sweden). Denmark imported 9% of its electricity demand in 2014; while not a significant amount in absolute terms, it was critical for balancing variable input from renewables (27).
The countries with high performance in the sub-index also enjoy a stable geopolitical situation and varied sources of energy supply that leverage both domestic and diversified import partners. A diversified domestic energy mix and a diversified group of energy import counterparts both contribute to a reduced risk of supply disruptions related to any fuel source or energy trading partner. The top performers also have highly efficient energy infrastructures that provide quality access to electricity; these factors more than compensate for their lack of energy independence. In fact, energy imports and trade can support the goal of secure energy supplies at an affordable cost, especially with multiple import and export counterparts. Net energy importers and exporters alike will need to plan and invest in measures intended to improve their overall energy security, even when they benefit from a high degree of self-sufficiency. In contrast, many countries in Sub-Saharan Africa and major developing economies, such as India, score poorly on the EAPI partly due to inefficient energy infrastructures and lack of energy access.
Figure 2: Heat map for energy security and access
How is the concept of energy access and security changing?
With digital enablers and renewable energy, the energy sector has seen more changes in the last decade than in the previous century. Historically, discussions about energy security have centred on securing supplies of hydrocarbons and transporting them to market. Attention has therefore focused on issues such as the stability of the Middle East, the Straits of Hormuz or Europe’s relationship with Russia. While these concerns are still relevant, a number of changes to the framework’s six components are driving unprecedented change across the energy security landscape. Three key trends are shaping the transition:
Trend 1: Infrastructure and resilience
The transition towards more renewable energy and diversified supplies is creating opportunities and challenges for energy security. Renewables are now part of the energy portfolio and rapidly gaining market share, supporting the diversification of the energy mix and therefore enhancing security. Distributed generation is also growing at a fast pace worldwide, with installed capacity expected to more than double in the next decade (30). Such growth presents long-term potential for improved performance across the value chain. However, as the energy generation portfolio transitions and diversifies further, new challenges are emerging, which require changes to the electric utility business model and regulatory policies to ensure secure and reliable supply (see “Infrastructure resilience during the energy transition”).
Trend 2: Digital disruption
The convergence of technologies and physical assets is creating not only new opportunities, but also threats. On the one hand, technology is instrumental for realizing intelligent grids and interconnected assets; on the other hand, it introduces new threats. The increasing interconnectivity and proximity of energy systems mean that conflicts can have ripple effects on energy markets and prices, and the increase of new technologies, such as batteries and grid-embedded generation, is driving an emerging focus on cybersecurity of grid systems. Global inexperience in handling large-scale cyberattacks, combined with the greater capabilities of state and non-state actors, has increased the likelihood that future wars and attacks will have a larger cyber component (see “Digital to accelerate the energy transition” (31).
Trend 3: The new global energy security order
The rebalancing of energy supply and demand is leading to a rebalancing of power and a new global energy security order. The recent drop in oil prices has led to a significant shift in wealth from net oil exporters to oil importers. At the same time, the development of unconventional sources of oil and gas, as well as the recent economic slowdowns in emerging markets, such as China and India, have contributed to price readjustments against the backdrop of a general shift in energy supply patterns. Geopolitical shifts, the new distribution of powers and energy trade flows will create challenges and opportunities for energy security in the new energy architecture (see “The new global energy security order”).
Infrastructure resilience, the convergence of technologies and physical assets, and the new global energy security order will affect most regions around the globe and across the energy supply chain. This new energy security paradigm is explored further in the following section.