Leverage demand-side policies for energy security

Abstract

Energy security is a top priority for governments, companies, and households because energy systems and the critical functions that they support are threatened by disruptions from wars, pandemics, climate change, and other shocks (1). More often than not, governments rely on policies focused on energy supply to enhance energy security while generally ignoring demand-side possibilities. Further, the indicators traditionally used to measure energy security are also tilted toward the supply side; this fails to capture the full spectrum of vulnerability to energy crises. Energy security assessments need to reflect the wider benefits of security related interventions more accurately. To that end, we develop a systematic approach to measuring the energy security impacts of policy interventions that explicitly considers energy demand (buildings, transport, and industry). Here, we determine that demand-side actions outperform conventional supply-side approaches at making countries more resilient. Energy demand links more directly than supply to the satisfaction of critical social functions and human well-being that are at the core of energy security. Yet, demand-side perspectives tend to be neglected or underrepresented in analysis and policy debates on energy security. Factors that contribute to this supply-side bias include the traditional sectoral organization of industries and policy institutions along fuels (coal, oil, and gas) and energy forms (electric utilities) as well as the decentralized and multivaried activities characteristic of energy demand (from vehicles to household appliances to manufacturing and more), which leads to a multitude of actors and institutional fragmentation. The basic fundamentals of energy systems and markets, where demand and supply are intricately linked, have also not yet risen from vague awareness to a central organizing principle among policy-makers for structuring the energy security discourse.