Energy Security Blog

Both academic literature and policy documents often refer to “diversity” as an aspect of energy security but their understanding of diversity is pretty different. Academic literature often focuses on diversity of primary energy sources in the overall energy mix as a ‘hedge’ against unknown risks and thus a key aspect of energy security. It advocates energy security indicators based on diversity of energy options.

On the other hand, energy security policies primarily use the rhetoric of diversity to justify measures chosen on other grounds:

“In practice, all sorts of policies have been justified in the name of diversity. For example, maintaining nuclear; expanding gas; supporting coal; and renewables. In other words, all the main fuel sources have claimed priority on diversity grounds, and diversity has in practice proved a rationale for wider political objectives.” (Dieter Helm, 2002)

‘Diversity’ which is really targeted in energy security policies is usually diversity of suppliers or supply routes to mitigate against specific risks associated with energy imports.

There are several explanations of why diversity policies have not been pursued as vigorously as prescribed by the academic literature. Any energy security policy is based on providing clear answers to three questions: “What to protect?”, “From which risks?” and “By what means?”. It means that it should (a) address a vital energy system, whose collapse may affect the functioning and the stability of the society or at least seriously harm certain political interests; (b) address risks which are perceived as sufficiently significant; and (c) use means which are within the capacity of the country to implement and compatible with its institutions and other policies. Pursuing diversity of primary energy sources rarely if ever meets these criteria.

First, the overall diversity of energy sources is not a characteristic of any vital energy system. The national energy system ‘as a whole’ is rarely a subject of energy security policy: normally the focus is on particular fuels such as oil or gas (in which case ‘diversity’ does not make sense), carriers such as electricity or liquid fuels, or end-use sectors such as electricity. Diversity of carrier production and energy used in end-use sectors is indeed an important parameter targeted in many energy security policies. For example, the fact the the transport sector in most countries is dominated by oil products with no readily available substitutes explains the preoccupation of policy makers with this sector and fuel.

Secondly, even if certain ‘vital energy systems’ such as electricity or transport are based on non-diverse energy sources it does not mean that they cause security concerns. For example, electricity in both Belarus and in Norway are generated more or less from one single source: natural gas imported from Russia (in case of Belarus) or hydropower (in case of Norway). Both sectors have very low diversity but while Belarus is prepared to take extreme measures to replace gas in electricity generation (including by building nuclear power barely affordable for this country), Norway considers its situation pretty satisfactory. This is because diversity is in principle good for protecting energy systems against ‘uncertain’ and ‘unknown’ risks but policy makers much prefer to concentrate on ‘certain’ and ‘known’ risks. This is because the policy process should be based on a convincing narrative. A risk should be clearly portrayed to justify investment in protecting against it. It is difficult to convincingly portray ‘uncertain’ risks and therefore if there is any choice ‘certain’ or at least more easily imaginable risks us usually prevail. Under no circumstances will a policy maker be able to justify introducing a more risky energy source on diversity grounds.

Thirdly and finally, any policy measure only works if it has institutional support. As Helm notes, diversity is invoked by various lobbies to justify expansion of various sectors (be is gas, coal or nuclear) but of course no lobby would ever advocate contraction of its own sector even in case it makes the energy system less diverse. It is perfectly ok for the natural gas lobby to advocate increasing diversity of pipelines, LNG terminals, storage locations or trade partners. It is unlikely that this body would argue that the share of gas in the energy mix should be decreased because it is already too dominant. On the other hand, power companies and related government agencies may find it expedient to advocate a more diverse mix of fuels in electricity generation if this does not incur other risks or costs. This, however would once again be sectoral rather than overall energy diversity.

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In a recent 800-word post to Energy Policy’s forum I address the perennial issue of defining energy security. Here is the abstract:

The recent contribution by Benjamin Sovacool proposes 20 dimensions and 320 indicators of energy security in Asia. However, the method for identifying these dimensions and indicators – 64 semi-structured interviews – has three shortcomings. First, Asian policy makers responsible for energy security are absent from the pool of respondents dominated by academics. Second, no prioritization or contextualization of energy security concerns is attempted, leading to an excessively long generic list. Third, no disagreements between the interviewed experts are accounted for. Future attempts to define energy security based on perceptions should involve relevant social actors, include mechanisms for discriminating between primary and secondary concerns and find ways to constructively report on disagreements.

Benjamin responded with some 3000 words explaining his method in more detail. See for yourselves if he addresses any of my comments.