What are the key determinants of building and developing an energy sector that will provide the national economy with a high level of energy security, a high level of multi-year energy independence?
How to build an energy sector with a high level of energy security, will be resilient to energy crises, and will take into account reductions in greenhouse gas emissions, will take into account the priorities for future generations of citizens, i.e. also the protection of the planet's climate and biosphere?
The key risk factors that determined the development of the current climate crisis were already operating in previous years, but they occurred with less intensity and were ignored. Among the main determinants of the scale of the development of the climate crisis in the national scope are the issue of national energy security and energy independence shaped by many national factors. Changes in energy commodity prices on international commodity markets are one of the key external factors. However, many more factors operating domestically shape the level of domestic energy security and independence. Key domestic influential factors shaping the issue of national energy security and independence include the scale of diversification of energy sources, including primarily domestic energy sources. In terms of diversification of energy sources, a particularly important issue is the level of development of renewable and emission-free energy sources. The issue of emission-free energy sources is also particularly important in the context of the developing climate crisis, the reduction of greenhouse gas emissions to slow down the progressive process of global warming. The unfolding climate crisis in the future may generate further energy crises due to the projected increase in demand for electricity. The increase in electricity demand in the future will also be related to a warming climate, as the scale of the use of refrigeration equipment, air conditioners, cold pumps, pumps installed in new deep-water intakes in a situation of increasingly severe and permanent periods of drought, etc., will increase. In addition, national energy policy is also determined by the issue of political-business ties in companies in the energy and fossil fuel extraction sectors, in a situation where these business entities are government-controlled state-owned companies. Consequently, pricing policy is also shaped in such a way that companies in the fossil fuel extraction sector and the energy sector burning these fossil fuels operating as SOEs generate exceptionally high above-average profits benefiting from the current energy crisis. The pricing policy is conducted in such a way that most of these above-average high profits in the form of dividends go to the state budget burdened with high social spending. Besides, state-owned companies, including those operating in the energy sector, subsidize various pro-government projects carried out by other public institutions, foundations and media with pro-government information policies. As part of this pro-government information policy, citizens are informed with a propaganda message according to which the country's energy security is determined by the development of dirty combustion energy and renewable energy sources are not worth developing because they are unstable, e.g., the sun does not always shine and the wind does not always blow. Of course, only a part of the citizens believe in this kind of propaganda information run by the pro-government meanstream media. In addition to these media, there are also media that are independent and provide information objectively, where citizens are given facts, including the reality of the issue of energy security in the country. Therefore, in countries where the scale of development of renewable and emission-free energy sources is low and the production of heat and electricity is based mainly on dirty combustion energy, the current energy crisis is particularly acute for citizens and is a derivative of years of omission, slowing down and blocking the development of clean renewable energy based on various sources and technologies, and ignoring the issue of the ongoing process of global warming, the negative effects of climate change, ignoring the issue of protecting the climate, biosphere and biodiversity of natural ecosystems, ignoring the issue of living conditions for citizens of future generations. In a situation where, as in Poland, for example, neglected in previous years and still 3/4 of heat and electricity is generated on the basis of dirty combustion energy in the context of the current energy crisis, additional costs have emerged from this neglect, which are being passed on to consumers under the current energy policy. Subsidies and handouts, interventionist reductions in sales taxes on fossil fuels, electricity and certain ranges of food products are being introduced to reduce high and rising inflation and, in fact, to postpone the potential increase in inflation by another few percentage points for the future, when the so-called Anti-Inflation Shields are no longer in place, i.e., when foreign investors stop buying Treasury bonds, the public debt begins to grow rapidly, etc. There is also the electoral calendar, as Poland will hold another parliamentary election in the fall of 2023, which probably also has a significant impact on the current energy policy as an important element of economic policy. In view of the above, we distinguish various key determinants of building and developing an energy sector that will provide the national economy with a high level of energy security, a high level of long-term energy independence. A modern energy sector should be characterized by a high level of energy security, should be resilient to energy crises, and should take into account reductions in greenhouse gas emissions, should also include priorities for future generations of citizens, i.e. also protection of the climate, biosphere and biodiversity of the planet?
In view of the above, I address the following question to the esteemed community of researchers and scientists:
How to build an energy sector characterized by a high level of energy security, will be resilient to energy crises, and will take into account reductions in greenhouse gas emissions, will take into account the priorities for future generations of citizens, i.e. also the protection of the planet's climate and biosphere?
What are the key determinants of building and developing an energy sector that will provide the national economy with a high level of energy security, a high level of multi-year energy independence?
What is your opinion on this issue?
Please answer,
I invite everyone to join the discussion,
Thank you very much,
Thank you,
Best wishes,
Dariusz Prokopowicz
A paper entitled “Understanding Energy Security” explains the concept of energy security, its importance, and the factors affecting it, among others. Energy security is defined “as the uninterrupted process of securing the energy needed to sustain people’s lives and daily activities while ensuring affordability.”
Per the International Energy Agency (IEA), energy security has two main aspects: a) long-term and b) short-term energy security. The former deals with investments in energy supply and how it connects to timely economic developments and environmental needs. On the other hand, the latter mainly tackles how the energy system can carry out prompt responses to sudden changes in the energy supply and demand cycle.
The energy security definition can vary per country depending on a variety of factors such as:
- location;
- natural resource;
- economic status;
- import and export activities on energy and its vulnerability to energy supply disruptions;
- political system;
- international relations.
Despite what has been said, it’s crucial to note that no universally accepted definition of energy security is bound to surpass the test of time. Hence, the meaning of energy security will always depend on the subject, threats, and energy security measures.
Why is energy security important? Access to energy affects the provision and sustainability of humans’ basic needs. Apart from that, it also contributes to a country’s economic growth, political stability, and overall development and security of other sectors, such as agriculture and manufacturing. Another substantial answer to the question mentioned above is that along with energy accessibility, affordability, and sustainability, energy security forms a significant part of determining sustainable energy planning. Moreover, energy security is tied to food security and food transportation in a way that the agricultural sector is both an energy user and an energy generator. Further, food production covers about 70% of water and 6% of energy on a global scale.
The rapid growth of energy demand brought about by economic expansion, population growth, new energy uses, and income growth makes energy security a pressing concern. This is why countries aim to ensure that their economies will function without disruptions in energy supply, providing people with adequate, reliable, and affordable supplies of modern and clean energy.
Global energy supply, being unevenly distributed, is affected by various factors. These include:
- Physical factors – Regions with a predominantly sedimentary geological makeup presumably possess more available fossil fuels than other regions.
- Costs – Depletion of non-renewable energy resources results in highly expensive extraction processes. Hence, exploitation of such resources only becomes viable when the demand increases, which often results in rising energy prices needed to support extraction and production costs.
- Technology – Technological advancements gave rise to the exploitation of new energy sources. Although there’s a high risk of posing environmental threats, technology helps make renewable energy more economically viable and productive.
- Political factors – Socio-political issues such as international conflicts have a high potential to disrupt the energy supply and destroy energy sources, making it challenging to maintain energy security.
The components of energy security are the following:
· Availability: With oil being one of the world’s major energy sources, the growing dependence on oil and its high prices have become one of the most crucial challenges to energy security. The ever increasing demand for energy might be disproportionate to the amount of oil in the world. Hence, having substitute sources of energy is detrimental to sustaining global consumption.
· Accessibility: There are economic and geopolitical factors, along with technological advancements, that serve as barriers to energy supply becoming accessible. These barriers include the following:
o Uneven distribution of global oil resources
o Locations of undiscovered resources are in very deep or arctic areas
o Shortage of adept workers in the oil and gas industry
o More expensive development and production of non-conventional oil
With these, meeting future demand growth poses challenges to energy security.
· Acceptability: The energy demand tends to contribute to the increase in energy-related impacts on the environment. Hence, policymakers worldwide attempt to combat such impacts, including pollution, by strictly implementing environmental regulations toward energy security.
· Affordability: With oil prices having high volatility due to geopolitical issues, supply disruptions and supply-demand imbalances result in inevitable oil price hikes. For this instance, investing in the oil sector during periods of high oil prices is highly encouraged to enable oil supply and price stability.
A good energy efficiency labeling system, an energy grid diverse and decentralized (close to the consumption point) should deliver energy security. The determination of the energy mix for the grid will depend on several factors, which includes geography and access to "fuel".
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