Why Energy Security is not ‘out of fashion’

The concept of security of energy supply comes from ‘old days’. Traditionally it is associated with oil crises, as the one during the Suez Crisis in 1956, followed by those in 1973 and 1979, triggered by Yom Kippur War and Iran’s revolution, that immediately made evident the political nature of energy and its interlinkage with national interests and geopolitics. The topic has always fascinated the public opinion. Many novels have been written about energy security and many movies have been filmed. 

Since its early definition, the concept of energy security has greatly expanded to encompass several energy sectors and to include other dimensions. The emergence of big developing countries has further enriched the interests on security of oil supplies but the strategic nature of energy has quickly moved beyond the ‘black gold. The concept of energy security now embraces many more aspects of the energy system, starting from natural gas, given its rapid penetration in many domestic energy mix, and electricity, due to the electrification and digitalisation of our economies. At the same time, the geopolitical considerations related to energy security have become more complex and relevant with the global issue of climate change and the need for a quick and much more rapid clean energy transitions.

Paradoxically, the pandemic represents an element of rupture. It makes evident – once more – to what extent the development model adopted is unsustainable and offers, through the trillions of dollars coming from recovery stimulus plans, the possibility of ‘building back better’. 2020 has been also a gigantic stress test for the proper functioning of global energy systems. The test was successfully achieved - at least for those that have the privilege of a stable and reliable access to energy, which - worthy to remember and underline - remains just a part of global populations. Fuel supplies continued regularly; electricity furniture were not interrupted. However, some episodes reminded that the system is vulnerable and the security of its functioning should never be given for granted. Few examples:  

• The most striking example of 2020 is probably the so-called “Black April” during which the pandemic and associated mobility restrictions triggered an unprecedented 23 mb/d collapse of global oil demand and pushed oil prices for the first time in negative territory. Without a global concerted action, including an Extraordinary meeting of G20 plus countries, oil markets could have crashed with massive implications that could have affected countries as happened only in the occasions of oil embargo of 50 years ago;

• Towards the end of 2020, China has experienced worst power blackouts in a decade as certain regions suffered of power shortages given by combination of rapid economy recovery and first efforts of transitioning away from coal imposed by central government. 
• California, one of richest, modern and most advanced region of the world, had a major power crisis with its power system’s operator that ordered to shut off power to certain consumers in order to prevent the collapse of the system. While the situation resulted in a combination of different events, including near-record high temperatures, California’s experience provided an open-eyer signal to the importance of conjugating the transformation of the energy systems with adequate and innovative policies and mechanisms. 

 Those represent just few example of the challenges that a rapidly evolving energy system might have to face. And – to be clear – those are not in in any case a valid excuse for not transforming the energy sector in the way we need. On the contrary, it is a wake-up call about the need to keep an eagle-eye on the proper functioning of our energy systems while accelerating the clean energy transitions.

This implies a step change in several parts of the energy system: for instance, in the power sector, areas increasingly crucial to maintain its proper functioning, like investment in networks and in batteries, remain well below levels that are considered adequate in any scenario. Outside power, sectors like energy efficiency and renewables for heat and transport have been seriously hit by the crisis. And areas like cybersecurity and supply of minerals for clean energy technologies require new and enhanced efforts.

For all the reasons above (and many more), energy security is not out of fashion.

Not yet, at least…