New Challenges in Energy Security

The UK in a Multipolar World

C. Mitchell,J. Watson,J. Whiting,Kenneth A. Loparo

• Éditeur: Palgrave Macmillan
• Année: 2013
• ISBN:
  9781137298850
• Sujet: Economics
• Sous-sujet: Environmental Economics

Researchers and practitioners explore the effect of evolving global economic and political powers on energy security within the UK and puts forward practical options for moving towards a more energy secure system over both the short and long terms.

1

Introduction: Conceptualising Energy Security

Catherine Mitchell and Jim Watson

1.1 Introduction

Energy security has risen up the political agenda over the last decade or so in the UK. Depleting North Sea oil and gas production, rising global energy prices, blackouts in European and North American power systems and fuel protests have all increased the prominence of energy security since the year 2000. These events and trends, combined with changing patterns of energy use around the world, have stimulated questions about what energy security for the UK is, and whether our current way of thinking about energy security is ‘fit for purpose’. This book argues that so much has changed and is changing within global energy systems that Britain needs to have a much broader and more flexible way of thinking about energy security. Hitherto, the community of academics, analysts and policymakers concerned with energy security has, to a significant extent, operated in a separate domain from the equivalent community concerned with transitions to low carbon energy systems. Because of this energy security policies have often been developed separately from energy policies for climate change mitigation. The UK can no longer afford to think of policies for energy security and climate change mitigation in different silos. Moreover, as we move from a fossil dominated energy system to one that deals effectively with the challenges of long-term sustainability, analysis of energy security has to widen. Whilst it has traditionally focused on fossil fuel supply chains, it will need to widen so that it is also concerned with resilient supply chains for a whole series of new technologies, products and practices for sustainable, low carbon energy systems.

This book starts from the premise that energy security is a property of energy systems rather than of individual components of those systems (e.g. particular energy technologies or individual fuel supply routes). Hence, we deliberately favour the term ‘energy security’ over ‘security of supply’. This perspective moves away from almost exclusive focus on energy supply of much energy security analysis, though we recognise that such a focus remains important. Energy resources, be they conventional fossil fuels or renewable energy sources, are exploited, transformed, distributed and delivered to consumers (e.g. individuals, businesses and the public sector) to provide energy services, such as heating, lighting, cooking, manufacturing and transport. Some of those services are more critical than others. There are core services that it may be dangerous to interrupt, even for very short periods of time. These include refrigeration of food supply, domestic space heating and lighting, and emergency services such as health, fire and police. Then there are services of intermediate importance such as hot water heating which may be interrupted for limited periods without significant social or economic impact. Finally, there are lower importance services such as access to television that are not urgently critical to wellbeing, but that provide services that society values such as entertainment and education.

From this perspective, the level of security is not determined by access to supplies of energy alone, but also by the immediate balance between supply and demand and trade-offs such as those between more energy security and environmental considerations (e.g. more onshore wind farms versus open spaces or more nuclear power versus increasing amounts of radioactive waste or risk of nuclear proliferation); or between energy security and affordability or social concerns, such as reducing fuel poverty.

This book is one of the outputs of the ESRC/EPSRC Energy Security in a Multipolar World (ESMW) research cluster, which was created to explore UK energy security. That research cluster produced a discussion paper on definitions of energy security early on in its four-year life. This chapter draws heavily on that discussion paper (Barrett et al., 2010). All of the other chapters are also the product of ESMW activities. ESMW purposefully encouraged meetings to be organised by people of different academic disciplines and situations and it wanted to be ‘open’ to new ideas about energy security. The cluster’s intention was always to develop its own views of UK energy security, and this book represents some of these views.

Many of the contributions to the book approach energy security analysis from the point of view of tractable policy and societal problems, and the development of practical solutions to the energy security challenges associated with them. A significant amount of discussion about energy security within the academic literature focuses on its definition (e.g. Chester, 2010; Winzer, 2012). Whilst such discussions are important, they can sometimes be overly theoretical, and do not take the next step of asking what such definitions mean for policy. Since any person, institution, company or Government that uses or interacts with energy has to some degree their own definition, and given the increasing complexity of global energy use, this book argues that much of the debate about definitions of energy security is unhelpful. Instead, we argue that energy security can be approached from a number of specific perspectives – including, for example, the governance of energy security, timescales for energy security, who is responsible for energy security, and what global interdependencies mean for energy security. Many of the chapters in this book therefore break down the energy security problem, and focus on more specific perspectives or dimensions. They analyse energy security risks and possible responses that flow from this more focused analysis.

Through this approach, this book analyses some of the ‘big’ questions raised by energy security debates in the UK, while at the same time offering practical policy suggestions. This means a primary focus on what the UK government should do, but the book also has a significant focus on the roles other UK stakeholders can (or should) play. The book challenges some received wisdoms, for example assertions that a particular course of action or technological option is ‘good’ for energy security under all circumstances. For example energy efficiency is often said to be the ultimate ‘win win’ strategy that is both good for energy security and climate change. Advocates of other technological options often make the same case. The book also focuses on other areas, such as the role of individuals and communities, or the relative importance of supply chains, which appear to have been under-explored in the debate so far.

Whilst this leads to an analysis and policy prescriptions that differ from current energy policies to some degree, the book does not argue for a turn away from the low carbon and sustainable energy transition that UK has embarked upon. However, it does argue that energy security cannot continue to be separated from other energy policy concerns. This is increasingly recognised by the UK government, as shown by the Energy Security Strategy published in November 2012 (DECC, 2012a). When it is possible, this means putting in place ‘win win’ policies that strengthen energy system sustainability and energy security. Where conflicts and tensions between energy security and other energy policy goals arise, such tensions need to be recognised and to be mitigated as far as possible through additional policies and actions. This book diverges from most current energy policy in Britain in its view of the desirable balance between markets, competition and regulation. We argue that due the urgency of climate change, and the energy security challenges associated with the transition to a low carbon economy, the market alone cannot deliver energy security in the medium- to long-term.

The remainder of this introductory chapter is divided into five further sections. The next section offers a brief review of how energy security relates to current energy policy debates in the UK. This is followed by sections that discuss the different risks to energy security, and the different dimensions of energy security that are the focus of much of the book’s analysis. To draw these risks and dimensions together, the chapter then outlines a framework for understanding energy security developed by Andrew Stirling (Stirling, forthcoming) that has underpinned some of the ESMW network’s activities. Finally, brief summaries of the book’s other chapters are presented.

1.2 British energy policy and energy security

British energy policy aims to fulfil a number of inter-linked, but not necessarily complementary goals. The importance of energy security derives from the critical role that energy plays in all aspects of everyday and business life. Fossil fuels, particularly oil and gas, are the energy resources that underpin modern society. These serve both as fuels (to enable transport, light and heat) but also as the basic inputs, along with other resources, for manufacture and distribution of goods and services necessary for economic wellbeing and development. The economic and social implications of a breakdown in energy security can be very severe.

The energy policy context has changed rapidly over the last twenty or so years, with major ongoing impacts on Britain’s energy security. Britain’s energy security has become the focus of increasing attention for a number of reasons raised above and also including the UK becoming a net importer of energy, blackouts in power systems around the world, geopolitical concerns such as the gas dispute between Russia and Ukraine or implications of the Arab Spring, industrial action and the blockade of refineries and fuel depots, renewed doubts about the safety of nuclear power following the events at Fukushima in Japan and concerns over global conventional oil depletion.

The increasing liberalisation and privatisation of energy industries in some countries (primarily, but not entirely, since about 1990) means that energy resources and infrastructure may be owned by companies whose interests are not necessarily the same as those of ‘Government’, and in particular, the British Government. At the same time, the increasing importance of National Oil Companies (NOCs) has had implications for global oil markets and access to oil – important for those countries, such as Britain, which have expressed strong faith in the market as an efficient provider. Natural gas has become the fuel of choice for electricity and heat within Britain, because of economic and environmental reasons, thereby fundamentally altering the trajectory of natural gas demand and energy security concerns. Coal use in the UK, while continuing to decline over time, has shifted from domestic production to imports as a result of liberalisation and the comparatively high cost of British coal. Coal demand in the UK fell to 30 million tonnes in 2011, 63% of which was imported (BP, 2012a). At the same time, the recognition of the threat of climate change has led to the slow but inexorable inclusion of environmental concerns in mainstream energy policy.

Finally, in the last few years the UK has moved from being a net exporter of energy to being a net importer, heralding greater concern about the sources of the latter. This has not necessarily had a negative impact on UK energy security. Imported energy can improve energy security by adding to diversity and enabling access to lower cost supplies. Nevertheless, the UK’s return to net importer status has had an impact on the UK political discourse. For example, a report by former energy minister Malcolm Wicks MP that was commissioned by the then Prime Minister emphasised the importance of ‘home grown’ energy (Wicks, 2009). This impact has not, however, been as strong as in other countries. In the United States in particular, the notion of energy independence carries considerable political weight irrespective of the economic rationale for such a goal.

At the same time, the balance of global economic and political power has also rapidly altered. The world has been moving away from the bipolar axis of the Cold War towards a multipolar world driven by the rise of Asia and the relative decline of Europe, and arguably of the United States of America. This transition has accelerated as a result of the differential impacts of the recent global financial crisis. The increasing insecurity of the Middle East, whether about the Arab Spring or about Iran’s possible future nuclear capability, is also raising concerns and together, all these issues, are precipitating alterations in the various dependencies between oil consuming and supplying countries. The fall of the Berlin Wall in 1990 has had major political ramifications, with the enlargement of the European Union (EU); the break-up of the Former Soviet Union (FSU); and the emergence of Russian nationalism. New economic and political world actors, such as Russia, India, China and Brazil, have led to a shift in the multipolar balance of power with complex structures of governance, and with a respective rise in energy consumption. In their 2012 World Energy Outlook, the IEA (2012a) forecasts that energy global demand will rise by 35% by 2035, that most of this growth will come from non-OECD countries, and that one country – China – will account for 33% of that growth (IEA, 2012a).

The implications of these geopolitical shifts have been compounded by concerns about the long-term availability and price of oil, gas and uranium. The rapidly growing energy demand within China and other middle income countries has led some of them to develop new strategic alliances and energy supply chains. This is particularly notable in the case of China, which has concluded bilateral deals to secure supplies of oil from Iran and Angola. In addition, oil prices have remained high since the rapid price increases in 2008 and natural gas prices have remained similarly high outside North America. Whilst some commentators contend that high oil prices signal a peak in global production, the evidence for such a peak is contested (UKERC, 2009) – and there is increasing evidence that high prices are simply providing incentives for the global oil industry to develop more unconventional supplies of oil to help meet demand (IEA, 2012a). With respect to gas, the picture is different, and resource constraints are less of an issue. The key development has been the emergence of shale gas in the United States, which has dramatically reduced US natural gas prices and has exacerbated price differentials between the US and other regional natural gas markets.

In today’s uncertain and turbulent global markets, supply chain vulnerability is becoming an issue of increasing significance. As supply chains become more complex as a result of globalisation, supply chain risks are changing rapidly. Given that the world is increasingly multipolar, with increasing demand for resources of all kinds, some of these risks are arguably becoming more acute. Moreover, these supply chains are based on the availability of affordable fossil fuel resources. If oil and gas supplies become increasingly expensive, and if they and other technologies are not available when needed, there could be severe energy security concerns with serious implications for social, environmental and economic wellbeing. The challenge to Britain is to manage and mitigate these risks by developing more resilient, supply chains.

This is made more complicated by the planned transition to a low carbon UK energy system. This transition has already started to unfold, and is expected to accelerate over the next two decades. Not only is there a move from fossil fuels to low carbon sources of energy, there are also plans for new forms of heat production, transformations in transport and system control technologies, and a shift to smarter electricity grids. Where fossil fuels continue to be significant in our energy system, there is the potential for substantial mitigation of emissions through the use of carbon capture and storage technologies. Whilst a shift away from fossil fuels would mean that vulnerabilities in their supply chains could become less important, many of the new low carbon technologies that are required will also be globally sourced. Furthermore, a low carbon UK energy system will be radically different from that in place today – both in its composition and their operation – although what it will look like is still very uncertain. If the ambitions in the government’s recent Energy Efficiency Strategy are realised (DECC, 2012b), the UK energy system will also require much less energy to deliver the services society requires. All of these factors will mean that energy security risks are going to change, and that there is a need for government and other energy actors to analyse, understand and respond to these changes in a dynamic way.

1.3 Risks and threats for energy security

A common way to analyse energy security is to identify the different threats to security that might arise, and the risks of them occurring. These could be risks posed by humans and human activities; risks posed by technology failure; risks posed by factors related to the nature of the energy resources; and/or risks posed by environmental factors.

Some risks involve a combination of more than one factor. For example, the blackouts in the United States in 2003 occurred due to a combination of technological failures, underinvestment and environmental factors. The more recent accident at the Fukushima nuclear plant was partly due to extreme weather, poor plant design and possibly bad management. The impacts of such incidents can be felt at different timescales (e.g. over hours, years, decades), at a variety of geographical locations (e.g. local, regional, national and international), and in diverse parts of the economy (e.g. production, trade, end users). Protecting the system – or ensuring energy security – requires a good understanding of the causes and nature of risks, the level of dependency between the sources of risk, and what impact particular disruptions will have on the provision of, and access to, energy services.

The large variety of different risks and the complexity of their interactions make the problem of energy security difficult to quantify in a comprehensive way. Some risks are more predictable than others. For example, it is possible to track reducing capacity margins in electricity systems that may increase the risk of power system blackouts. By contrast, it is difficult to predict the likelihood, location and magnitude of natural disasters that could have a negative impact on energy infrastructures. At the same time, the predictability of the impacts of shocks and long-term trends on the energy system can vary widely – both with respect to their physical effects and their economic implications for consum...

Table des matières

• Cover
• Title
• Copyright
• Contents
• List of Illustrations
• Series Editor’s Preface
• Acknowledgements
• Notes on Contributors
• List of Acronyms and Abbreviations
• Chapter 1 Introduction: Conceptualising Energy Security
• Chapter 2 Energy Security: Geopolitics, Governance and Multipolarity
• Chapter 3 The Energy Security-Climate Nexus and the Environment
• Chapter 4 Energy Security Policy in Britain: Markets, Complexity and Challenges
• Chapter 5 Demand and Energy Security
• Chapter 6 People and Communities in Energy Security
• Chapter 7 Infrastructure, Investment and the Low Carbon Transition
• Chapter 8 Supply Chains and Energy Security
• Chapter 9 EU Energy Security and its Impact on the UK
• Chapter 10 Measuring Energy Security
• Chapter 11 New Challenges in Energy Security: The UK in a Multipolar World – Conclusions and Recommendations
• Annex ESMW Dashboard Indicators
• References
• Index