New Challenges in Energy Security

During the 1990s hydrocarbon fuels were relatively cheap and plentiful and it was assumed that the investments of the international energy companies, together with a functioning global market, would deliver secure and affordable supplies of energy. Since the turn of the century, however, there has been growing concern about the ability of energy producers to match rapidly increasing demand. The increasing economic expectations of the populace of energy-exporting states and the geopolitical actions of some of the major oil and gas reserve holding states has raised concerns about both the affordability and security of current and future energy supplies. In addition, the demands of climate change policy in the guise of the low carbon energy transition add an additional layer of complexity given that the energy system is the single largest source of greenhouse gases (GHGs). This chapter is about energy security within an international relations context, about shifting patterns of energy supply and demand and their governance patterns and knock-on affects. It uses a geopolitical lens to highlight a shift in how OECD governments and international organisations now perceive and seek to govern energy security issues in the second half of the 2000s and into the 2010s.

UK energy policy is currently aimed at the achievement of three principal objectives: ensuring energy security, mitigating for climate change and reducing energy poverty. These goals have over the past few years become commonplace amongst OECD and non-OECD countries as well as within a variety of international institutions. There has also been some considerable effort put into the establishment of new governance institutions which can deliver both energy supply security and climate change mitigation. This is sometimes done, as discussed below, without the same level of attention applied to energy poverty objectives. What is important to note is that energy policy is increasingly based upon assumptions that energy and climate change are not only interlinked, but that policies which centre upon the development of clean energy and on energy efficiency will serve to achieve both sets of objectives (IEA, 2007a; Kuzemko, 2013 forthcoming). As examples of this interlinking of previously discrete policy areas the UK now has a single department for energy and climate, the Department of Energy and Climate Change (DECC), the USA has merged its energy and climate foreign policy unit, and the EU is pursuing ‘climate policy integration’ with energy policy (Dupont and Primova, 2011). This evolving range of active interconnections within policy practice will be referred to here as the energy security-climate nexus.

Great Britain is often cited as a historical example in discussions of energy policy, due to both its early and deep energy liberalisation and its early commitments to climate protection. This chapter reviews past and current British energy security policy to elicit a wider understanding of the importance of security and resultant policy. Various alternative strategic approaches to energy security are outlined, drawing possible policy recommendations and implications for energy security policy into the future.

As the opening chapter of this book sets out, the multi-dimensional and multi-temporal nature of energy security and the risks and threats to it, stand in the way of any simple assumptions about how to improve British energy security. The role that demand can play in improving energy security is also complex and there is currently a lack of clarity within policy discussions, with terms such as energy efficiency, demand reduction and energy conservation used interchangeably, and rarely applied with rigour. It is also apparent that the current British emphasis is on security of supply, and that demand side debates are generally characterised in terms of carbon, and therefore as if they have little to do with security. We argue that the role of demand should be central to analysis, modelling and policy to meet the goals of creating a secure, affordable and low carbon energy system.

This book builds from a basic premise that energy security can be understood and approached in multiple different ways. In this chapter, the focus is on examining how people and communities reconfigure debates about energy security, in particular by bringing to light alternative, sometimes conflictive, understandings of both the problem and its potential solutions. Central to our approach is the concept of framing, which has been defined as, ‘the different ways of understanding or representing a social, technological or natural system and its relevant environment … this includes the ways system elements are bounded, characterized and prioritized, and meanings and normative values attached to each’ (Leach et al., 2010: xiii, emphasis in original).

Infrastructures have a key role to play in the delivery of energy services in a sustainable and reliable manner. Infrastructure investment however presents a challenge because distributing the costs and benefits of investing in and maintaining a reliable energy system is not straightforward. There are a number of important issues which need to be addressed such as the allocation of risk between investors and energy customers and the degree to which today’s customers should pay for an energy system which will be enjoyed by customers long into the future. A number of solutions have been adopted throughout the years; for example, during the period of nationalised infrastructures in the UK, costs and risks were socialised as part of centrally planned public investment programmes. The subsequent restructuring of the energy sector saw private investors being exposed to market signals and the associated risk of making bad investments.

The multidimensional nature of energy security, including the time and scale by which it is assessed, makes its measurement, definition and the assessment of risks and threats to it, problematic. This chapter argues that, regardless of these difficulties, an analysis of the role of current and future supply chains needs to be central to any assessment of energy security. This reflects the fact that, at a macro level, our energy system is essentially a supply chain, comprising multiple and inter-related sub-chains based on different infrastructures, actors, technologies and fuels. It is these that enable energy to be transformed and distributed to meet the demands for energy services such as thermal comfort, power and mobility. In a secure energy system, these supply chains need to operate effectively on an ongoing basis to ensure that the demand for energy services can be balanced with sufficient supply.

This chapter seeks to summarise the main areas in which the European Union, through its various institutions, is seeking to address energy security concerns and how these actions are compatible with developments and policies in the UK. While the ongoing Euro crisis is leading to polarised views and uncertainties as to the degree of future integration of European structures and functions, the same cannot be said for the energy sector. Over the last few decades, there has been a gradual but far-reaching reform of European legislation which has significantly increased its engagement in the energy sectors in Member States.

This chapter presents a survey of ways to measure energy security with reference to the UK. ¹ We start by explaining the purpose of indicators and some of their limitations and pitfalls, including those specific to the energy security measures discussed elsewhere in this book. We go on to draw attention to those relatively few measures which are used in practice, and those which are promoted by the academic community as having merit. We discuss some of the methods and frameworks for aggregating simple indicators into compound ‘high-level’ measurements of energy security. Finally, we discuss how the indicators and metrics of energy security can be broadened to take account of a wider range of factors relevant to long-term energy security.

As the chapters of this book have shown, the existence of a multipolar world fundamentally changes British energy security risks and threats, including the geopolitical context that Britain exists within. During the 1990s hydrocarbon fuels were relatively cheap and plentiful and it was assumed that the investments of the international energy companies, together with a functioning global market, would deliver secure and affordable supplies of energy. However, there is now growing concern about the ability of energy producers to match rapidly increasing demand in emerging economies. New resource finds are altering relationships between countries. The increasing economic expectations of the populace of energy-exporting states and the geopolitical actions of some of the major oil and gas reserve holding states has raised concerns about both the affordability and security of current and future energy supplies. In addition, the demands of climate change policy in the guise of the low carbon energy transition add an additional layer of complexity given that the energy system is the single largest source of greenhouse gas emissions.