Energy security may be one of the most pressing issues facing states in the long term. With conventional sources of energy facing increasing demand and dwindling supplies, new strategies to meet demand must be investigated. New concepts in energy storage may provide the key to integrating additional renewable energy into the grid. Developments in energy efficient technologies may help cover additional shortfalls in supply and help delay the need for new generation capacity.
The NRG Expert Smart Technology Report defines energy security as a state’s capacity to procure sufficient energy supplies to meet demand at prices that are not detrimental to economic growth. Robust energy security requires access to an uninterrupted supply of fuel resources (such as oil and gas), electricity, heating etc. It is also essential that the supply is plentiful enough to meet changes in demand. A nation that lacks energy security is vulnerable to economic turmoil caused by fluctuating energy prices.
Typically, discussions of energy security focus on reserves of oil and gas. “Peak oil” (or the point at which oil production will begin to decline) does not appear to have occurred yet, with actual reserves of oil and gas expected to last another 46 and 59 years respectively based on current rates of consumption. This is in part due to new discoveries and advancements in technology that makes the extraction of known but challenging reserves cost-effective. However, companies are growing more reluctant to explore and develop new reserves due to volatile prices and uncertainty over future demand. Geopolitical risk can influence prices as well, with events in unstable regions rippling outwards to affect other nations.
These factors, in turn, have economic and political repercussions domestically. The Deepwater Horizon accident is an example of an unconventional reserves operation that has gone awry and soured public opinion of such projects. Legislation governing similar projects has since been under review, causing costly delays to existing and future projects. Nuclear programs worldwide have seen a similar pattern play out in the wake of the Fukushima accident as various national governments re-evaluate their reliance on nuclear power.