Security concerns in the Middle East for oil supply: Problems and solutions

Comprising 65–70% of the world's oil reserves, the Gulf States (Saudi Arabia, Iran, Iraq, Kuwait, UAE and Qatar) are key countries for the solutions to the energy supply matters of the world. Free flow of oil to the world markets from Gulf region is an indispensable part of the major security issues. The Middle East has had mainly security related problems such as Arab–Israeli wars and conflicts, Arab–Iranian war and conflicts, Arab–Arab war and conflicts, US–Gulf wars and conflicts and more recently radicalism and terrorist attacks. Energy supply security requires the enhancement of the peace and cooperation between countries instead of competition. Preventive policy approaches are more suitable to address energy supply matters. Preventive strategy might be possible with the active participation of NATO within the “out of area” type operations to the Middle East and quite possibly indirectly to the Asia-Pacific regions. Religious and ethnic radicalism and terrorist attacks has also direct effects over oil supply security matters.     

Valuing diversity in energy supply

There is renewed interest in the role of supply diversity in promoting energy security. This paper explores ways of valuing diversity. A possible incentive mechanism for promoting diversity which takes account of underlying “disparities” between different technology options is developed. The mechanism provides a way of trading off cost and diversity and results in an “efficient” cost-diversity frontier by analogy with financial portfolio theory. If all technologies are believed to be equally disparate, the appropriate mechanism is a “levy” imposed on market share. If the technologies are not equally disparate, the levy needs to be adjusted by technology-specific multipliers that take account of levels of disparity and patterns of market share. The analysis is applied to two stylised situations. In the long-run equilibrium case, the implications of both different patterns of disparity and different values attached to diversity are investigated. The paper also explores the implications of applying such a mechanism to the current Great Britain electricity system. The implications in terms of financial flows, for both the market as a whole and for individual operators, are investigated. Finally, the appropriateness of such a mechanism in the light of other policy goals, and possible future research directions, is discussed.     

Developing electricity distribution networks and their regulation to support sustainable energy

A more sustainable energy system will alter the current patterns of electricity demand and generation. This means technical, commercial and regulatory change for electricity network systems such as distribution networks. This paper traces the links in Great Britain between changes in energy policy since privatisation, changes in the objectives of the electricity regulator and changes in the objectives of the distribution networks and their owners, the distribution network operators (DNOs). The paper identifies tensions in regulatory policy and suggests reforms to the regulatory framework to support a lower-carbon future.     

Conceptualising energy security and making explicit its polysemic nature

Twenty-first century access to energy sources depends on a complex system of global markets, vast cross-border infrastructure networks, a small group of primary energy suppliers, and interdependencies with financial markets and technology. This is the context in which energy security has risen high on the policy agenda of governments around the world and the term ‘energy security’ has quietly slipped into the energy lexicon. The limited discourse about the nature of the term or its underlying assumptions has been totally eclipsed by an almost overwhelming focus on securing supplies of primary energy sources and geopolitics. An examination of explicit and inferred definitions finds that the concept of energy security is inherently slippery because it is polysemic in nature, capable of holding multiple dimensions and taking on different specificities depending on the country (or continent), timeframe or energy source to which it is applied. This ‘slipperiness’ poses analytical, prediction and policy difficulties but if explicitly recognised through definitional clarity, new levels of understanding will enrich the policy debate to deal with obstacles impacting on the constantly evolving nature of energy security.     

Conceptualizing and measuring energy security: A synthesized approach

This article provides a synthesized, workable framework for analyzing national energy security policies and performance. Drawn from research interviews, survey results, a focused workshop, and an extensive literature review, this article proposes that energy security ought to be comprised of five dimensions related to availability, affordability, technology development, sustainability, and regulation. We then break these five dimensions down into 20 components related to security of supply and production, dependency, and diversification for availability; price stability, access and equity, decentralization, and low prices for affordability; innovation and research, safety and reliability, resilience, energy efficiency, and investment for technology development; land use, water, climate change, and air pollution for sustainability; and governance, trade, competition, and knowledge for sound regulation. Further still, our synthesis lists 320 simple indicators and 52 complex indicators that policymakers and scholars can use to analyze, measure, track, and compare national performance on energy security. The article concludes by offering implications for energy policy more broadly.     

The changing role of the State in the expansion of electricity supply in Latin America

Throughout the history of the electricity industry, regulatory reform has been driven by the pursuit of tools able to create conditions that would favour infrastructure investment and, generally, to surmount the obstacles that hinder system expansion. This article addresses the interaction between regulatory schemes and electric power generation investment, with a review of the changing role of the State in the expansion of electricity supply in Latin America. It contains a critical assessment of changes in the regulatory framework since the outset of electric power market reform, describing the successive approaches to regulation adopted in the last three decades. The aim of this analysis is to help identify the key factors underlying the evolution of energy policies and to contribute to the formulation of a prospective view of the direction this evolution may reasonably be expected to take.     

China’s energy security: The perspective of energy users

The article explores the energy security concerns faced by China from the point of view of energy users working in government, university, civil society and business sectors. The authors first derive a set of seven hypotheses related to Chinese energy security drawn from a review of the recent academic literature. We then explain each of these seven hypotheses, relating to (1) security of energy supply, (2) geopolitics, (3) climate change, (4) decentralization, (5) energy efficiency, (6) research and innovation of new energy technologies, and (7) self sufficiency and trade. Lastly, the article tests these hypotheses through a survey distributed in English and Mandarin completed by 312 Chinese participants. The conclusion presents insights for policymakers and energy scholars.     

The importance of incorporating reliability of supply criteria in a regulatory system of electricity distribution: An empirical analysis for Austria

Grid tariffs are the main source of income for distribution system operators (DSOs). Reductions of tariffs increase the cost pressure on DSOs; assuming they work efficiently, tariff reductions potentially lead to a decrease of the electricity system's quality if no reliability of supply criteria are incorporated in the regulatory system. Our statistical analysis shows that the correlation between grid tariffs and electricity supply interruptions in a regulatory regime neglecting this incorporation is significant and that furthermore decreasing tariffs harm the reliability of supply even in the short run. Our econometric analysis of the influence of tariffs on reliability of supply shows a significant correlation between the grid tariffs and the duration of power outages in the Austrian electricity grid; an annual average interruption duration per installed capacity of a specific grid increases ceteris paribus by 1.36 min if the grid tariff of this specific grid is decreased in the previous year by 1€/MWh.     

Evaluating energy security performance from 1990 to 2010 for eighteen countries

This study provides an index for evaluating national energy security policies and performance among the United States, European Union, Australia, New Zealand, China, India, Japan, South Korea, and the ten countries comprising the Association of Southeast Asian Nations (ASEAN). Drawn from research interviews, a survey instrument, and a focused workshop, the article first argues that energy security ought to be comprised of five dimensions related to availability, affordability, technology development, sustainability, and regulation. The article then breaks these dimensions down into 20 components and correlates them with 20 metrics that constitute a comprehensive energy security index. We find that the top three performers of our index for all data points and times are Japan, Brunei, and the United States and the worst performers Vietnam, India, and Myanmar. Malaysia, Australia, and Brunei saw their energy security improve the most from 1990 to 2010 whereas Laos, Cambodia, and Myanmar saw it decline the most. The article concludes by calling for more research on various aspects of our index and its results.     

Evaluating energy security in the Asia pacific: Towards a more comprehensive approach

The energy security conundrum – how to equitably provide available, affordable, reliable, efficient, and environmentally benign energy services – is a technology and policy challenge, perhaps unlike any other. The recent article on an energy security in the Asia Pacific by Vlado Vivoda is an excellent starting point for how to best capture the unique energy security challenges facing the region. This article builds on Vivoda’s work, but also points out some shortcomings with his analysis.     

Measuring the security of external energy supply in the European Union

The security of energy supply is one of the main objectives of EU energy policy. In this paper, we introduce an index designed to evaluate the short-term risks associated with the external supply of energy to the EU Member States. It combines measures of energy import diversification, political risks of the supplying country, risk associated with energy transit, and the economic impact of a supply disruption. We construct separate indexes for three primary energy types, oil, gas and coal, and demonstrate that Member States’ levels of supply risk exposure differ across energies. Most other studies of this kind provide aggregate indexes combining different types of energy. Our results suggest that an aggregate approach could be misleading, at least for discussions of the short-term response to risks. We discuss the implications of our findings for the common energy policy.     

India’s energy security: A sample of business,government, civil society,and university perspectives

This article explores the concept of energy security perceived and understood by a sample of government, business, civil society, and university stakeholders in India. Based on a literature review, the authors hypothesize what energy experts suggest energy security is for India. The article then tests these hypotheses through the use of a survey completed by 172 Indian respondents. The article begins by describing its methodology before summarizing the results of the literature review to distill seven working hypotheses related to energy security in India. These hypotheses relate to (1) security of energy supply, (2) equitable access to energy services, (3) research and development of new energy technologies, (4) energy efficiency and conservation, (5) self-sufficiency and trade in energy fuels, (6) nuclear power, and (7) the energy-water nexus. It then tests these hypotheses with our survey instrument before concluding with implications for energy policy in India and beyond.     

Secure energy supply in 2025: Indonesia's need for an energy policy strategy

Indonesia as an emerging country with one of the fastest growing economies requires sufficient supply with energy for national development. Domestic energy production cannot satisfy the domestic demand, and the deficiency necessitates growing imports. The present energy mix consists of 96% from non-renewable sources, i.e. fossil fuels, less than 4% from renewables. Government Regulation 5/2006 aims at increasing the proportion of renewable sources to 17%. Two scenarios for the energy situation in 2025 have been elaborated and are discussed. An overall energy policy strategy and regulatory framework covering non-renewable and renewable resources are crucial for securing energy demand.     

Indicators for energy security

The concept of energy security is widely used, yet there is no consensus on its precise interpretation. In this research, we have provided an overview of available indicators for long-term security of supply (SOS). We distinguished four dimensions of energy security that relate to the availability, accessibility, affordability and acceptability of energy and classified indicators for energy security according to this taxonomy. There is no one ideal indicator, as the notion of energy security is highly context dependent. Rather, applying multiple indicators leads to a broader understanding. Incorporating these indicators in model-based scenario analysis showed accelerated depletion of currently known fossil resources due to increasing global demand. Coupled with increasing spatial discrepancy between consumption and production, international trade in energy carriers is projected to have increased by 142% in 2050 compared to 2008. Oil production is projected to become increasingly concentrated in a few countries up to 2030, after which production from other regions diversifies the market. Under stringent climate policies, this diversification may not occur due to reduced demand for oil. Possible benefits of climate policy include increased fuel diversity and slower depletion of fossil resources.     

Efficiency analysis of energy networks: An international survey of regulators

Incentive regulation for networks has been an important part of the reform agenda in a number of countries. As part of this regulatory process, incentives are put in place to improve the cost efficiency of network companies by rewarding good performance relative to a pre-defined benchmark. The techniques used to establish benchmarks are central to the efficiency improvements that are ultimately achieved. Much experience has been gained internationally in the application of benchmarking techniques and we now have a solid understanding of the main indicators of best practice. What we are lacking is a more complete understanding of the factors that influence choice of methods by regulators. In this paper, we present the results of an international survey of energy regulators in 40 countries conducted electronically between June and October 2008. Regulators from European, Australasian and Latin American countries are represented in the survey. Our results show that benchmarking techniques are now widespread in the regulation of gas and electricity networks. Best practice, however, is limited to a small number of regulators. We conclude by summarising existing trends and offering some recommendations on overcoming barriers to best practice efficiency analysis.     

Security of supply and retail competition in the European gas market.: Some model-based insights

In this paper, we analyze the impact of uncertain disruptions in gas supply upon gas retailer contracting behavior and consequent price and welfare implications in a gas market characterized by long-term gas contracts using a static Cournot model. In order to most realistically describe the economical situation, our representation divides the market into two stages: the upstream market that links, by means of long-term contracts, producers in exporting countries (Russia, Algeria, etc.) to local retailers who bring gas to the consuming countries to satisfy local demands in the downstream market. Disruption costs are modeled using short-run demand functions. First we mathematically develop a general model and write the associated KKT conditions, then we propose some case studies, under iso-elasticity assumptions, for the long–short-run inverse-demand curves in order to predict qualitatively and quantitatively the impacts of supply disruptions on Western European gas trade. In the second part, we study in detail the German gas market of the 1980s to explain the supply choices of the German retailer, and we derive interesting conclusions and insights concerning the amounts and prices of natural gas brought to the market. The last part of the paper is dedicated to a study of the Bulgarian gas market, which is greatly dependent on the Russian gas supplies and hence very sensitive to interruption risks. Some interesting conclusions are derived concerning the necessity to economically regulate the market, by means of gas amounts control, if the disruption probability is high enough.     

Recommendations for implementation of energy strategy of the Republic of Croatia

The Energy Strategy of the Republic of Croatia was adopted by the Croatian Parliament in 2009 for the period until 2020 in order to harmonize national energy goals with goals and time framework of strategic documents of the European Union. The adoption of the Energy Strategy Implementation Program with associated measures is still in process. The goal of the Strategy was to create sustainable energy system that will make a balanced contribution to the security of energy supply, competitiveness and environmental protection in Croatia. In this paper an overview of the energy production, final energy consumption and planned development of energy infrastructure is given. The intention of the paper was to research and stress out the abilities and opportunities of Croatian energy system and to give recommendations for Energy Strategy implementation and practical realization of planned energy infrastructure projects for improvement of security of energy supply and competitiveness of energy system of the Republic of Croatia.     

Indicators of security of natural gas supply in Asia

Natural gas has become an increasingly valuable resource and a global commodity. The demand for it has significantly increased. Japan, Korea and Taiwan heavily rely on liquefied natural gas (LNG) imports for their gas supplies from Malaysia, Brunei, Indonesia, Australia and the Middle East. On the other hand, countries like Thailand and Singapore import gas via trans-border pipelines. Gas supply interruptions, volatile gas prices, transportation and distribution bottlenecks, and a growing reliance on imports over longer distances have renewed interest on gas security in Asia. This paper examines the relative vulnerability to natural gas supply disruptions of seven gas-importing countries in Asia for year 2008. Based on four indicators of security of gas supply, a composite gas supply security index is estimated as an overall indication of gas vulnerability for our sample countries. The results demonstrate that there are differences in the values of the overall indicator of gas vulnerability among countries and the assessment is useful in developing an effective strategy of natural gas supply security in countries in the Asian region.     

Decentralized energy supply: Suitability for the UK's industrial sectors

From the results reported here it is suggested that policy decisions about the potential contribution of decentralized energy supply systems to UK industrial energy requirements should be based on the suitability of individual sectors rather than averaged over all sectors. The suitability of decentralized energy sources is evaluated, based on a themodynamic match between source and demand. This suitability criterion is used to identify the most appropriate sector in manufacturing industries for the adoption of decentralized energy supply, leaving aside economic cost considerations and individual site requirements.     

Motor systems energy efficiency supply curves: A methodology for assessing the energy efficiency potential of industrial motor systems

Motor-driven equipment accounts for approximately 60% of manufacturing final electricity use worldwide. A major barrier to effective policymaking, and to more global acceptance of the energy efficiency potential in industrial motor systems, is the lack of a transparent methodology for quantifying the magnitude and cost-effectiveness of these energy savings. This paper presents the results of groundbreaking analyses conducted for five countries and one region to begin to address this barrier. Using a combination of expert opinion and available data from the United States, Canada, the European Union, Thailand, Vietnam, and Brazil, bottom-up energy efficiency supply curve models were constructed to estimate the cost-effective electricity efficiency potentials and CO₂ emission reduction for three types of motor systems (compressed air, pumping, and fan) in industry for the selected countries/region. Based on these analyses, the share of cost-effective electricity saving potential of these systems as compared to the total motor system energy use in the base year varies between 27% and 49% for pumping, 21% and 47% for compressed air, and 14% and 46% for fan systems. The total technical saving potential varies between 43% and 57% for pumping, 29% and 56% for compressed air, and 27% and 46% for fan systems.