Introduction: Background
Energy security is regarded as being essential to human security as its services are vital for both modern economies and post-modern lifestyle. It relates to dialogue about energy issues as well as climate change. The key issues that mitigate climate change in the aspect of technological development and doption are: negative externalities of climate change, knowledge spillovers, the scale of adoption, path dependence, principal-agent problems and behavioural change.
Due to it’s ubiquitous nature, energy security tends to be beneficial in, many areas such as the use of oil, coal, uranium and natural gas for our vehicles, working environment, food and manufacturing products. On the other hand, this widespread nature of energy security makes it vulnerable to failure in the market as well as under-distribution. This tend to create two-sided issues: neglect of its inclusive constraints due to its confined nature, or the extensiveness nature that often leads to inconsistency and accuracy.
Thus, energy security has evolved as a result of the transformation of the world’s energy regime in terms of the growing dominance of non-renewable fossil fuels and increasing reliance on oil, the 1970s economic crisis and liberalisation of energy markets, development of nuclear energy, fluctuating fortunes for coal and gas, escalating energy demands of developing nations, and the impacts of political instability and large-scale natural events and the energy regime of the 21st century.
It is no gainsaying that the 21st century access to energy sources depends on open global markets and a vast infrastructure network of offshore platforms, pipelines, tankers, refineries, storage, generation capacity, and transmission and distribution systems (UNDP, 2004; Clentech Up, 2005; Yergin; 2005; Birol, 2006; Newell, 2009; Chester; 2010; Sovacool and Mukherjee, 2011; Muller et al., 2011).
Energy Security: Various Definitions
Scholars and practitioners have come with various definitions of energy security. For instance whilst Muller et al. (2011, pp9) believes involves “the process of sufficient and reliable energy supplies to satisfy demand at all times at affordable price whilst also avoiding environmental impact”; Wikipedia, using the U.S. Navy F/A Super Horner describes it as the relationship between national security and the availability of natural resources for the purpose of consuming energy.
The Institute of Energy Agency – IEA (2010b, pp1) however defines energy security as “the uninterrupted availability of energy sources at an affordable price”. Energy security is thus a fundamental to modern society and has numerous aspects such as long-term and long-term. Whilst the long-term energy security relates to timely investments to supply energy as impacted by the need for a sustainable environment and economic development; short-term energy security occurs when a swift change in the demand-supply balance impacts on the energy system. Some of the constraints of energy security would have direct relationship with adverse economic and social impacts of the energy not being readily available, and/or non-competitive prices or excessively impulsive.
The concept of energy security focuses on two main sources – oil and gas. However, review of literature has shown that electricity is the most prevailing energy supply form to the global economy and critical to energy security; it is also second only to oil in respects of final energy consumption.
In their own views, Bohi and Toman (1996: pp1) defined energy in security “as the loss of economic welfare that may occur as a result of a change in the price or availability of energy”. At market-centric energy security has various definitions with the main concentration on the economic issues that relates to the market behaviour.
(Bohi and Toman, 1993: p.1094; IEA, 2011)
Figure 1 below illustrates the key aspects defining energy security, as extracted from IEA data and analysis.
Figure 1. Defining Energy Security (Source: OECD/IEA, 2015)