The National Fund of the Republic of Kazakhstan (NFRK): From accumulation to stress-test to global future

Sovereign Wealth Funds (SWF) have different titles, goals and rules, but they share the underlying objective of helping governments deal with the problems created by large and variable revenues (mainly from energy or other commodity related sectors). In Kazakhstan, such a fund (the National Fund of the Republic of Kazakhstan (NFRK)) was established in 2000. This fund operates as both a stabilisation and a savings fund. The first test for the NFRK was 2007–2009 financial crisis, where the NFRK “saved” the economy and guarantied its speedy recovery. The paper analyses the NFRK's operation up to 2007 and during the crisis years 2007–9, before drawing conclusions and implications for the future. Between 2001 and 2007 the NFRK conservatively accumulated assets, which proved to be useful in limiting the impact of the post-2007 crisis. However, the pre-2007 experience indicated structural weaknesses associated with discretionary executive authority and non-transparency. The paper concludes by observing that this history has created significant challenges for the future.     

中国主权财富基金与国家能源安全研究

主权财富基金的兴起是20世纪90年代初石油价格暴增导致的商品价格的上升和全球收支失衡的直接结果。主权财富基金从建立之初,就隐含着保证国家发展的稳定性和安全性的动机。基于国家安全的战略目的,中国的主权财富基金在能源领域的投资倾向越来越明显。由于能源具有战略属性,对能源的投资一方面为保证我国的能源安全提供了一种解决的途径,另一方面,也引发了其他国家对于地缘性政治战略的敏感反映。各国对于主权财富对重要能源的投资均有不同程度的限制,这在一定程度上使得能源市场更加复杂,对能源安全产生了不利影响。本文初步探讨了我国主权财富基金在能源领域的投资对我国的能源安全的影响,并给出相关建议。     

Energy conservation investments: A comparison between China and the US

Growth in energy consumption in China has soared from 2001 to 2004, driven largely by a booming economy and heavy investment in infrastructure and housing. In response, China has poured billions of dollars of investment in building power plants—at a rate of one large power plant (1000 MW) per week. In fact, China in 2004 has added the entire generating capacity of California or Spain in a single year. In contrast, investment in energy conservation projects has weakened considerably in recent years. This paper examines trends in energy efficiency investments in China and the US. The comparison highlights the potential of energy conservation investments in addressing China's current energy crisis as well as the inadequacy of such investments in China. Finally, the paper outlines a few scenarios for appropriate levels of investments in energy efficiency in China in the future.     

United States cost of military force projection in the Persian Gulf, 1976–2007

This paper presents the first estimate of United States military cost for Persian Gulf force (C_PGfp) derived entirely by a quantitative method. An activity-based cost (ABC) model uses geographic distribution of aircraft carriers as a proxy allocator of Department of Defense (DoD) baseline cost to regional operations. Allocation follows simply from DoD data that since 1990 no less than one aircraft carrier has been continuously on-station in the Persian Gulf; that eight are required to keep one on-station there; that the Navy has had eleven–fifteen carriers since 1990; and that Army and Air Force units are virtually never deployed to combat operations without Navy units. For 1976–2007 C_PGfp is estimated to be $6.8×10¹² and for 2007 $0.5×10¹² (2008$). This substantial military investment is not a remedy for the market failure at the heart of regional security problem, which is oil market power. When C_PGfp is added to economic losses attributed to market power in another recent study ( Greene, 2010), the severity of this market failure becomes more apparent.     

More heat and light

One hundred years before the advent of modern power systems, William Blake in The Marriage of Heaven and Hell argued with the Devil asserting that “Energy is Eternal Delight”. That delight however, remains beyond the reach of the two to three billion of people disadvantaged by a lack of modern energy services—a number that has remained relatively unchanged over recent decades. This is arguably the most disturbing of insights from an examination of global energy-use trends, and a simple, clear justification for a political prioritisation of the issue.     

Securing energy equity

Addressing energy poverty rather than energy equity conveniently evades the problem of the gap in energy consumption per capita in the developed and developing world. For energy security policies to adequately address energy poverty it requires a widening of scope from national to global. This is a comment to the forthcoming presentation of IEA's proposition for a new architecture for financing universal modern energy access to be presented at the conference ‘Energy for all—Financing access for the poor’ held in Oslo in October 2011.     

Indicators of energy security in industrialised countries

Energy security has become a popular catch phrase, both in the scientific arena as well as in the political discussion. Yet, in general the applied concepts of energy security are rather vague. This paper sheds some light on concepts and indicators of energy security. First, we conceptually discuss the issue of energy supply security and explain why it is not to handle by one science alone and what economics may contribute in order to structure the topic. After providing a brief survey of existing attempts to define or measure energy security we suggest an additional dimension along which indicators of energy security may be classified: ex-post and ex-ante indicators. Finally, we illustrate our concept on the basis of several simplified indicators. While ex-post indicators are mostly based on price developments, ex-ante indicators are to a greater extent aimed at illustrating potential problems. Our illustration suggests that it is worthwhile to take into account the market structure along with the political stability of exporting countries.     

Risk,resilience, and environmentally sustainable cities

In recent years, ideas of security and resilience have become increasingly embedded in urban planning and design practice, and in national security and energy policy, as attempts have been made to make the built environment and critical energy infrastructure more resistant to disruptive challenges. This has taken place with particular regard to the threat of climate change and to the security challenges faced by many cities as a result of the threat of terrorism. In this context, this paper explores the possible synergies between security and environmental issues, and policies connected to the planning, design, and engineering of the built environment. As the paper illustrates, there may be opportunities for further integration between these areas of concern.     

Germany and energy security in the 2000s: Rise and fall of a policy issue?

After some two decades of inattention, the issue of energy security once again moved to the top of the policy agenda in Germany in the mid-2000s. After briefly achieving renewed prominence, however, it was eclipsed in German energy policy, at least temporarily, by heightened concerns about climate change. This paper explains the re-emergence of concerns about energy insecurity in recent years as well as the reasons for their subsequent overshadowing. It describes and explains the steps that have been taken during this period to promote German energy security and analyzes their adequacy. The paper identifies a number of reasons to be skeptical about how much the agreed policies will improve Germany's energy security, but it concludes that there are nevertheless good reasons to expect the issue to regain the attention of policy-makers in the future.     

Hard coal subsidies: A never-ending story?

In Germany, hard coal has been subsidized for almost half a century. Despite the declining significance of hard coal production for the domestic labor market, the subsidies have continued to increase until the middle of the last decade, reaching a peak at €6.7 billion in 1996. While these subsidies have been continually shrinking since then, settling at €2.7 billion in 2005, it is very likely that hard coal support will be extended in Germany well into the next decade and even beyond. This article questions the main arguments raised by the proponents of hard coal subsidization in Germany and other EU countries. Most importantly, in addition to the drain these subsidies impose on public budgets, substantial opportunity costs are implied, leading funds away from alternative, more beneficial public investments. From a social welfare perspective, we, therefore, recommend the rapid abolition of these subsidies not only in Germany, where in real terms the accumulated amount of subsidies has now far exceeded €165 billion, but also all across Europe.     

Energy security,efficiency and carbon emission of Chinese industry

For the Chinese industry as the mainstay of the national economy and dominant energy user and carbon emitter, an integrative assessment is performed from major energy policy perspectives of energy security, energy efficiency and carbon emission. Extensive systems indicators, including oil dependence ratio, average oil growth rate; indices of energy diversity, of carbonization and of oil growth risk; ratios of energy use to output, to value added and to compensation for laborers; ratios of carbon emission to output, to value added and to compensation for laborers, are devised to assess the Chinese industry 2002–2007 with most recent statistics availability. Combined indicators are identified by sparse principle component analysis to characterize sector performances. The industrial sectors are classified into five clusters and the main features of each cluster are pinpointed using fuzzy clustering algorithm. Concrete results facilitate comparisons of sectors to enable more accurate policy recommendations.     

Energy,economy and development (EED) triangle: Concerns for India

In this paper we discuss issues involving energy security with economic growth and development that brings out (i) the dimension of physical security alternative, (ii) framework for a pan South East Asian platform to support energy security and (iii) requirement of promoting regional energy cooperation and specific energy peace initiatives. Sustaining projected economic growth rate coupled with energy security in future is a concern for all developing countries like India. The energy security of these nations is threatened by the disruption of energy supplies by ongoing energy terrorism and geopolitical conflicts in the region. India's geo-strategic position and increasing energy dependence raises concerns for its energy security. We discuss energy security, examine factors and approaches to attempt the energy security in the light of economic growth and development.     

Energy supply,demand, and policy in Viet Nam,with future projections

This article provides background on the current status and recent trends of energy use in Viet Nam, as well as projections of energy demand and energy supply in the coming decades. The article summarizes the results of the current national Master Plan for developing the electricity supply sector to meet increasing electricity demand. Also described are the evolution and current status of Viet Nam’s energy policies, including those related to energy security, energy efficiency and conservation, the environment, and development of renewable energy sources, as well as strategies for power sector development and restructuring of the energy sector toward greater use of competitive energy markets. The initial phase of the Viet Nam energy sector modeling effort under the Asian Energy Security (AES) project is described. The final section of this article offers conclusions regarding the status of Viet Nam’s energy sector and policies, and recommendations regarding “next steps” in energy security analysis.     

Promoting regional energy co-operation in South Asia

Energy is a key ingredient of the socio-economic development of any region. South Asia is not only one of the fastest growing regions in the world; it is also one of the poorest, which thus puts energy at the very heart of the development process in the region. This paper looks at the challenges faced by the South Asia sub-region for economic co-operation (SASEC) comprised of Bangladesh, Bhutan, India and Nepal, and also at the role of greater regional energy co-operation therein. The region is characterized by pressures of growing economies and increasing population. While the per capita energy consumption is one of the lowest in the world, energy intensity continues to be very high. A large portion of the population lacks access to modern sources of energy and depends on traditional sources that are not only inefficient but also have severe health and environmental problems associated with them. Increasing oil import dependency and huge investment needs for energy market development pose a further challenge. The region has a good resource potential and tremendous scope for energy co-operation, which can play a key role in addressing many of these energy security concerns and in putting it on the path of sustainable development. It is ironic that the record in the area has been so limited and that too in the most basic form of co-operation, i.e. bilateral arrangements between countries. This paper puts forth a multi-pronged strategy for sub-regional energy co-operation encompassing softer options aimed at confidence building to more substantial and larger scale co-operation efforts. Delays in decision making to ensure stronger and mutually beneficial co-operation efforts are associated with high costs not only to the energy sector but also for the entire development agenda. With the precarious energy situation in the region and unprecedented increases in international oil prices seen in recent times, it is high time for policy makers, financing institutions, NGOs and the civil society to push for a greater integration of the SASEC energy sector.     

Energy security and climate change protection: Complementarity or tradeoff?

Energy security and climate change protection have risen to the forefront of energy policy—linked in time and a perception that both goals can be achieved through the same or similar policies. Although such complementarity can exist for individual technologies, policymakers face a tradeoff between these two policy objectives. The tradeoff arises when policymakers choose the mix of individual technologies with which to reduce greenhouse gas emissions and enhance energy security. Optimal policy is achieved when the cost of the additional use of each technology equals the value of the additional energy security and reduction in greenhouse gas emission that it provides. Such an approach may draw more heavily on conventional technologies that provide benefits in only one dimension than on more costly technologies that both increase energy security and reduce greenhouse gas emissions.     

Interactions between energy security and climate change: A focus on developing countries

We briefly consider the tensions between climate change and energy security policy imperatives, and highlight some concepts that may bring additional clarity to decision-making at the nexus of the two areas. We focus on developing countries and use the case of the Medupi supercritical coal plant in South Africa. The justification for the plant's construction stemmed from an Integrated Resource Planning process informed by South Africa's national utility. Often, as in the case of South Africa, there are tensions not easily captured in quantitative algorithms between, inter alia, a lack of access to electricity by millions of people (and associated welfare losses) and greenhouse gas emissions from electricity generation. It is difficult to identify any formal processes that have prioritised climate change considerations over those of energy access. Thus, it becomes imperative to have a clear understanding of the consequences of this reality when considering power system expansion. We find that the processes often employed do not provide an entirely satisfactory precedent for future planning analyses, and the justifications do not adequately reflect the complexity of the decision space. Finally, we highlight some options by which these tools might be enhanced in areas including explicit and formal consideration of risk.     

Germany's solar cell promotion: Dark clouds on the horizon

This article demonstrates that the large feed-in tariffs currently guaranteed for solar electricity in Germany constitute a subsidization regime that threatens to reach a level comparable to that of German hard coal production, a notoriously outstanding example of misguided political intervention. Yet, as a consequence of the coexistence of the German Renewable Energy Sources Act (EEG) and the EU Emissions Trading Scheme (ETS), the increased use of renewable energy technologies does not imply any additional emission reductions beyond those already achieved by ETS alone. Similarly disappointing is the net employment balance, which is likely to be negative if one takes into account the opportunity cost of this form of solar photovoltaic (PV) support. Along the lines of the international energy agency [IEA, 2007. Energy policies of IEA countries: Germany, 2007 review. International Energy Agency, OECD, Paris, p. 77], we recommend the immediate and drastic reduction of the magnitude of the feed-in tariffs granted for solar-based electricity. Ultimately, producing electricity on this basis is among the most expensive greenhouse gas abatement options.     

Measuring energy security: Can the United States achieve oil independence?

Stochastic simulation of the direct economic costs of oil dependence in an uncertain future is proposed as a useful metric of oil dependence. The market failure from which these costs arise is imperfect competition in the world oil market, chiefly as a consequence of the use of market power by the Organization of the Petroleum Exporting Countries (OPEC) cartel. Oil dependence costs can be substantial. It is estimated that oil dependence costs to the US economy in 2008 will exceed $500 billion. Other costs, such as military expenditures or foreign policy constraints are deemed to be largely derivative of the actual or potential economic costs of oil dependence. The use of quantifiable economic costs as a security metric leads to a measurable definition of oil independence, or oil security, which can be used to test the ability of specific policies to achieve oil independence in an uncertain future.     

印度保障能源安全的举措及启示

印度在能源安全方面面临多重挑战,能源需求不断增长,对外依存度进一步扩大。印度通过能源外交,促进了能源多样化发展,开辟了稳定的海外石油供应渠道,增强了能源技术创新能力,保证了印度的能源安全和经济的持续稳定增长。     

Smart grid cyber security for Europe

In Europe, environmental and economic considerations are driving a revolution in power transmission and distribution. Specifically of interest to this paper, utility companies are increasingly using information and communication technology (ICT) to increase the efficiency and reliability of the grid, as well as to incorporate smaller-scale sources of intermittent wind and solar power into our electricity supply. This should have a positive effect on Europe's energy policy objectives. However, developments in the field of international security have made clear that increased reliance on ICT within the electricity sector will create new vulnerabilities that may undermine these gains.