Energy security - CHAPTER THREE LITERATURE REVIEW

CHAPTER THREE LITERATURE REVIEW

3.3 Energy security

Several studies have highlighted the relationship among energy, growth and climate change by focusing on economics, technological innovation and geopolitics (Winkler, 2005; Brown et al., 2008; Schaeffer et al., 2012). However, few studies champion the need for social science research to inform shifts in the energy discourse. Sovacool and Dworkin (2015) advocate for interdisciplinary energy studies that attempt to promote sustainability in the energy sector through greater cognisance of the social underpinnings. Therefore, it can be said that attempts to transform the energy sector to ensure a sustainable future are embedded in multi-dimensional approaches that not only seek to curb reliance on fossil fuels but promote radical shifts among all energy consumers towards energy conservation, and efficiency. Thangavelu et al. (2015) add that encouraging energy planning that underscores the use of renewable energy, diversity in the energy mix and GHG reductions will provide long term benefits related to energy cost and security.

The evolution of the energy discourse warrants the need to adopt trans- and interdisciplinary approaches and research. Issues such as energy security and poverty alleviation emerge as constants within the energy discourse and remain critical development needs. Kaygusuz (2009) states that the majority of the world’s poor still lack access to modern energy sources and services, necessitating a redress of energy equality and access across socio-economic and geographic gradients. The next section describes differences along these gradients by providing an overview of energy security and poverty.

Although the concept of energy security emerged during the late 1970s, to date there is no agreement on a universally accepted definition (Ang et al., 2015). Studies show that energy security is an extensive, context specific term that deals with a broad range of variables, thus making it difficult to address (Chester, 2010; Sovacool & Mukherjee, 2011; Ang et al., 2015).

According to Sovacool et al. (2011: 5846), energy security is “how to equitably provide available, affordable, reliable, efficient, environmentally benign, proactively governed and socially acceptable energy services to end users”. According to Jansen and Seebregts (2010:

1655), energy security is defined as “the certainty level of enduring, uninterrupted access of the population in a defined region to affordably and competitively priced environmentally acceptable energy end-use services”. Likewise, Blum and Legey (2012: 1983) state, “to ensure that an economy can reach its maximum level of welfare, it is necessary to ensure the supply and demand of adequate quantities of affordable and environmentally sustainable energy services”.

Energy security therefore refers to the sustained supply of environmentally-friendly energy sources and services at a cost-effective rate. Bohi and Toman (1999, cited in Löschel et al., 2010: 1665) state that energy security refers to “the loss of economic welfare that may occur as a result of a change in the price or availability of energy”. The IEA (2011: 12) define energy security as the “the welfare impact of either the physical unavailability of energy, at prices that is not competitive or overly volatile”. Kruyt et al. (2009) describe energy security as an elusive term that lacks precise definition but is closely linked to security of supply of energy services and sources. Ang et al. (2015) suggest that due to energy being innately linked to all facets of life and production, the term is in constant evolution incorporating contemporary challenges such as climate change and poverty. Similarly, Chester (2010: 890) argues that energy security is intimately linked to climate change and therefore is more about managing risks; the author defines energy risk as “risk of uninterrupted, unavailable energy supplies; the risk of insufficient capacity to meet demand; the risk of unaffordable energy prices; the risk of reliance on unsustainable sources of energy”.

Cherp and Jewell (2014: 415) define energy security as the “low vulnerability of vital energy systems”. As suggested by the various studies above, energy security is a complex phenomenon incorporating issues of risk, welfare, affordability, energy demand and supply, and sustainability. However, permeating these debates is the consensus that energy security is a multi-dimensional issue and results in a variety of context specific symptoms. Johansson

(2013) asserts that energy is a vital commodity for the functioning of society and energy security is therefore the absence of threats to the energy system. These threats to energy security are considered to be multi-level consisting of primary, secondary and tertiary causes (Table 3.1) (Johansson, 2013). Although these threats are indicative of the prevailing socio- economic conditions, it is argued that they may not necessarily differ but simply have diverse expressions as a consequence of other externalities, for example, average population income, availability of energy sources, infrastructure, and price of energy sources, technologies and services (Jansen & Seebregts, 2010; Cherp & Jewell, 2014).

Table 3.1: Threats to and causes of energy security (Johansson, 2013: 201)

Threats Primary causes Secondary causes Tertiary causes Energy

interruptions

Technical errors

Handling errors

Lack of maintenance of energy infrastructure

Poor functioning markets

Inadequate energy sector regulation

Price shocks

Weather and antagonistic events (terrorism)

Supply and demand imbalances

Lack of education and awareness

Lack of physical security

Political instability in energy producer and distributor countries

Long term

high prices Lack of physical resources

Lack of investment in search for alternative energy

Unsuccessful development of alternative energy sources

Nussbaumer et al. (2012) claim that energy security is a principal factor when addressing issues such as poverty, inequality, food security and climate change, and therefore is equally important in developed and developing countries. Jansen and Seebregts (2010) postulate the following to be important considerations in relation to energy security:

 Limiting reliance on fossil fuels over long-term periods will enhance security in the energy economy.

 Re-evaluating energy demand within a population may promote more efficient energy usage and provide more resilience against energy shocks.

 The use of indices that track medium and long-term changes in the availability and accessibility of energy services may reduce overall vulnerability.

Evidently, energy security is a broad polysemic term, manifesting in context specific definitions, impacts and contributors (Chester, 2010). Månsson et al. (2014) assert that the

multi-dimensionality stems from stakeholders displaying different perceptions of the definition of energy security, the path to an energy secure future, and the point at which energy security is achieved. Cherp and Jewell (2014) propose that the diversity can be attributed to variation in available energy systems across the globe that in turn result in different energy related problems. They further state that policies on energy security often incorporates other contemporary challenges such as climate change and poverty which are prioritised and experienced differently across developing and developed countries.

Furthermore, energy has evolved into a complex system of interconnections that are influenced by temporal and geopolitical variations which comprise objective and subjective dimensions (Johansson, 2013).

These dimensions are further influenced by the following (Johansson, 2013: 200):

 Security of supply and demand through resource availability, market performance, income stability and energy infrastructure;

 Economic and political risk which is a function of resource scarcity, over reliance on finite resources and power through energy necessities;

 Technological risks associated with skills, availability, maintenance, costs and applicability;

 Environmental risk such as climate change, pollution of air and water and threats to ecological systems, specifically biodiversity; and

 National and human security aspects which describe the ability to maintain modes of production and transport and sustain various livelihood needs, respectively.

Kruyt et al. (2009) claim that owing to the variety of contributing factors, there will always be different perspectives of energy security across the world, however, availability, accessibility, and affordability are among the key determinants. Likewise, Sovacool and Mukherjee (2011) are of the opinion that defining the factors that contribute to energy security may allow for the establishment of general frameworks that can be applicable across different contexts. Similarly, Ang et al. (2015: 1081) indicate that energy security comprises seven key themes: “energy availability, infrastructure, energy prices, societal effects, environmental impacts, energy governance and energy efficiency”. By the same token, Sovacool and Mukherjee (2011) underscore the robustness of the term by examining affordability, availability, technology development and efficiency, environmental and social sustainability, and regulation and governance.

Permeating these debates is the underlying concept of vulnerability, and understanding exactly who is vulnerable to changes in the energy sector and under what conditions may

provide a more nuanced approach to energy security. According to the UNDP (2014), vulnerability frameworks unpack issues such as health and economic shocks experienced by individuals or the household (Figure 3.2). In relation to energy, the loss of income or the death of bread winners or persons responsible for the accumulation of energy sources could exacerbate energy risk and insecurity (UNDP, 2014). Matutinović (2009) states that economic and political stability and constructs influence resource performance and are therefore an important indicator of physical and financial accessibility to energy. Buzar (2007) asserts that most poor households lack the capacity to respond to changes in energy markets, thus increasing vulnerability. Similarly, Pachauri and Rao (2013) highlight that women are often the most vulnerable to energy poverty due to the distribution of power, decision-making capacity within the household, and various cultural practices and household chores, such as cooking and the collection of fuelwood.

Figure 3.2 Dimensions of vulnerability (adapted from: UNDP, 2014: 19)

Chester (2010) and Kaygusuz (2011) state that energy security debates within developing countries are dominated by issues of accessibility and affordability whilst unsustainable consumption and environmental concerns remain a challenge in the developed world. Based on the diversity of definitions and the multiple expressions of energy security, there is a need to extend the scope of energy security measurements. Winzer (2012) argues that even though energy security is a key factor in current energy policy owing to its broad definitions, it is difficult to measure and evaluate progress towards energy security. Similarly, Cherp and Jewell (2014) claim that past assessments that were dominated by the political economy of energy supply did not adequately unpack the underlying socio-cultural factors contributing to energy security.

There are approximately 372 indices that measure energy security and overall performance.

Some of these are listed below (Narula & Reddy, 2015: 150-151):

 Energy architecture performance index (EAPI)

 The international index of energy security risk

 Energy sustainability country index (ESCI)

 The diversity based index

 Energy security indices (ESIprice and ESIvolume)

 The willingness to pay function

 Oil vulnerability index (OVI)

 Vulnerability index

 Geopolitical energy security measure

 Economic and socio-political risk index

 Energy affinity index

 Energy sustainability index

 Aggregated energy security performance indicator (AESPI)

 Measuring short-term energy security index (MOSES)

Nonetheless, it is noted that in recent years’ energy security assessments have adopted user- centric approaches that incorporate issues such as energy consumption patterns and behaviour (Sovacool & Mukherjee, 2011, Johansson, 2013; Ang et al., 2015; Day et al., 2016). Also, Sovacool and Mukherjee (2011) state that energy security is a multi-dimensional phenomenon and appraisals of it should be designed to reflect on both broad and specific issues; those authors further argue that the use of singular methods such as consumption per capita provide inadequate assessments. According to Winzer (2012), due to the all- encompassing features of and contributors to energy security, it is often measured as a factor of the source of risk, the scope of impact and the severity at which the impacts are experienced by the end-user. Narula and Reddy (2015) propose that instead of the standard metrics used to examine energy security, energy indicators provide a more holistic assessment of performance and linkages between energy price, use and economic activity.

Johansson (2013) extends this debate by advancing that approaches to and measurements of energy security differ across countries and are dependent on local energy systems and historical experiences. Other studies call for radical changes in infrastructure and technology that promote social change; for example, energy behaviour in an attempt to address energy security challenges (Ang et al., 2015; Sovacool & Dworkin, 2015; Day et al., 2016).

Similarly, Winkler (2005) is of the opinion that qualitative analyses of energy needs, specifically cooking, heating, transport, production and industrial activities as well as the efficiency of energy sources and appliances at the household level provide a more robust

analysis of energy security compared with overall access to energy. Furthermore, Jansen and Seebregts (2010) affirm that price and scarcity of oil and other fossil-fuels like coal, impact demand and supply of energy services and are therefore important indicators of energy security. Adding to this, energy prices are noted as critical gauges as they echo resource shortages and sustainability of energy supply and demand, and sudden energy price spikes have been noted to stifle economic growth resulting in inflation and unemployment which affect overall energy security (Löschel et al., 2010). Closely linked to price is energy availability which is related to the total quantity of energy available to meet consumer needs and the capacity to produce energy (Löschel et al., 2010).

Månsson et al. (2014) describe the following aspects to be measures of energy security:

 Resource availability which is inclusive of economic and political factors impacting supply, and physical factors such as geographic concentration of stocks and limitations on extraction rates as a consequence of climate change concerns.

 Global markets and trade comprising issues pertaining to the ability to sustain the import of energy sources, trade linkages with export countries, market related risk and foreign policy.

 Domestic markets and infrastructure: volatility of local markets, especially in terms of energy costs, investment in energy infrastructure, diversity in reliance on sources of energy, and performance and reliability of energy infrastructure.

 Economic vulnerability determined by macro- and micro- economic policy that aims to mitigate the impacts of energy price increases, resilience to market failure (for example, recessions) and the ability to respond to unplanned interruptions to the supply of energy.

Narula and Reddy (2015) argue that energy security and sustainability are complimentary terms where energy security cannot exist at the expensive of irreversible environmental damage therefore emphasising environmental impact as another important indicator. Winzer (2012) defines policy goals, sustainability and economic efficiency to be central to security assessments. Correspondingly, Bazilian et al. (2014) introduce the concept of energy governance which focuses on energy access, affordability and quality. Meyar-Niami and Vaez-Zadeh (2012) show that policy and the role of government institutions come under scrutiny and can be important indicators of energy equality and distribution. Energy equality

across a population can therefore be considered a novel estimate of energy security compared with narrow measures used previously. The concept of energy equality will be discussed further in subsequent sections, particularly in relation to energy poverty and socio-economic development.

The combination of the diverse socio-economic constructs and local consumer energy needs produce significantly different energy landscapes across the globe. As a result, concepts such as energy security become increasingly difficult to define or measure. This is exacerbated by the notion that whilst energy systems are subject to insecurity threats, they also impose risk across many societies (Johansson, 2013). A critical aspect emerging from the energy security discourse is that of energy poverty which, in recent years, has become a critical development agenda, especially within developing countries (Modi et al., 2006; Kaygusuz, 2009; 2011;

Ang et al., 2015; Bouzarovski & Petrova, 2015). The following section provides an overview of definitions, key concepts and approaches to energy poverty.

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