IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v86y2009i10p1894-1901.html
   My bibliography  Save this article

The analysis of security cost for different energy sources

Author

Listed:
  • Jun, Eunju
  • Kim, Wonjoon
  • Chang, Soon Heung

Abstract

Global concerns for the security of energy have steadily been on the increase and are expected to become a major issue over the next few decades. Urgent policy response is thus essential. However, little attempt has been made at defining both energy security and energy metrics. In this study, we provide such metrics and apply them to four major energy sources in the Korean electricity market: coal, oil, liquefied natural gas, and nuclear. In our approach, we measure the cost of energy security in terms of supply disruption and price volatility, and we consider the degree of concentration in energy supply and demand using the Hirschman-Herfindahl index (HHI). Due to its balanced fuel supply and demand, relatively stable price, and high abundance, we find nuclear energy to be the most competitive energy source in terms of energy security in the Korean electricity market. LNG, on the other hand, was found to have the highest cost in term of energy security due to its high concentration in supply and demand, and its high price volatility. In addition, in terms of cost, we find that economic security dominates supply security, and as such, it is the main factor in the total security cost. Within the confines of concern for global energy security, our study both broadens our understanding of energy security and enables a strategic approach in the portfolio management of energy consumption.

Suggested Citation

  • Jun, Eunju & Kim, Wonjoon & Chang, Soon Heung, 2009. "The analysis of security cost for different energy sources," Applied Energy, Elsevier, vol. 86(10), pages 1894-1901, October.
    • Handle: RePEc:eee:appene:v:86:y:2009:i:10:p:1894-1901
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306-2619(08)00309-7
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Grubb, Michael & Butler, Lucy & Twomey, Paul, 2006. "Diversity and security in UK electricity generation: The influence of low-carbon objectives," Energy Policy, Elsevier, vol. 34(18), pages 4050-4062, December.
    2. Yanhui Liu & Parameswaran Gopikrishnan & Pierre Cizeau & Martin Meyer & Chung-Kang Peng & H. Eugene Stanley, 1999. "The statistical properties of the volatility of price fluctuations," Papers cond-mat/9903369, arXiv.org, revised Mar 1999.
    3. Regnier, Eva, 2007. "Oil and energy price volatility," Energy Economics, Elsevier, vol. 29(3), pages 405-427, May.
    4. Correlje, Aad & van der Linde, Coby, 2006. "Energy supply security and geopolitics: A European perspective," Energy Policy, Elsevier, vol. 34(5), pages 532-543, March.
    5. Peter Ferderer, J., 1996. "Oil price volatility and the macroeconomy," Journal of Macroeconomics, Elsevier, vol. 18(1), pages 1-26.
    6. Costantini, Valeria & Gracceva, Francesco & Markandya, Anil & Vicini, Giorgio, 2007. "Security of energy supply: Comparing scenarios from a European perspective," Energy Policy, Elsevier, vol. 35(1), pages 210-226, January.
    7. Turton, Hal & Barreto, Leonardo, 2006. "Long-term security of energy supply and climate change," Energy Policy, Elsevier, vol. 34(15), pages 2232-2250, October.
    8. Paul G. Simmonds, 1990. "The combined diversification breadth and mode dimensions and the performance of large diversified firms," Strategic Management Journal, Wiley Blackwell, vol. 11(5), pages 399-410, September.
    9. Fleming, Jeff & Ostdiek, Barbara, 1999. "The impact of energy derivatives on the crude oil market," Energy Economics, Elsevier, vol. 21(2), pages 135-167, April.
    10. William Acar & Kizhekepat Sankaran, 1999. "The myth of the unique decomposability: specializing the Herfindahl and entropy measures?," Strategic Management Journal, Wiley Blackwell, vol. 20(10), pages 969-975, October.
    11. Margaret E. Slade, 1991. "Market Structure, Marketing Method, and Price Instability," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1309-1340.
    12. Bielecki, J., 2002. "Energy security: is the wolf at the door?," The Quarterly Review of Economics and Finance, Elsevier, vol. 42(2), pages 235-250.
    13. Mane-Estrada, Aurelia, 2006. "European energy security: Towards the creation of the geo-energy space," Energy Policy, Elsevier, vol. 34(18), pages 3773-3786, December.
    14. Sezgen, Osman & Goldman, C.A. & Krishnarao, P., 2007. "Option value of electricity demand response," Energy, Elsevier, vol. 32(2), pages 108-119.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ioannidis, Alexis & Chalvatzis, Konstantinos J. & Li, Xin & Notton, Gilles & Stephanides, Phedeas, 2019. "The case for islands’ energy vulnerability: Electricity supply diversity in 44 global islands," Renewable Energy, Elsevier, vol. 143(C), pages 440-452.
    2. Ang, B.W. & Choong, W.L. & Ng, T.S., 2015. "Energy security: Definitions, dimensions and indexes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 1077-1093.
    3. Bhattacharyya, Subhes C., 2009. "Fossil-fuel dependence and vulnerability of electricity generation: Case of selected European countries," Energy Policy, Elsevier, vol. 37(6), pages 2411-2420, June.
    4. Löschel, Andreas & Moslener, Ulf & Rübbelke, Dirk T.G., 2010. "Indicators of energy security in industrialised countries," Energy Policy, Elsevier, vol. 38(4), pages 1665-1671, April.
    5. Aleh Cherp & Jessica Jewell, 2013. "Energy security assessment framework and three case studies," Chapters, in: Hugh Dyer & Maria Julia Trombetta (ed.), International Handbook of Energy Security, chapter 8, pages 146-173, Edward Elgar Publishing.
    6. Chuang, Ming Chih & Ma, Hwong Wen, 2013. "Energy security and improvements in the function of diversity indices—Taiwan energy supply structure case study," Renewable and Sustainable Energy Reviews, Elsevier, vol. 24(C), pages 9-20.
    7. Xavier Labandeira & Baltazar Manzano, 2012. "Some Economic Aspects of Energy Security," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 47-64.
    8. Redlinger, Michael & Eggert, Roderick, 2016. "Volatility of by-product metal and mineral prices," Resources Policy, Elsevier, vol. 47(C), pages 69-77.
    9. repec:ers:journl:v:xv:y:2012:i:sie:p:47-64 is not listed on IDEAS
    10. Franki, Vladimir & Višković, Alfredo, 2015. "Energy security, policy and technology in South East Europe: Presenting and applying an energy security index to Croatia," Energy, Elsevier, vol. 90(P1), pages 494-507.
    11. Oguzhan Aslanturk & Goktug K pr zl, 2020. "The Role of Renewable Energy in Ensuring Energy Security of Supply and Reducing Energy-Related Import," International Journal of Energy Economics and Policy, Econjournals, vol. 10(2), pages 354-359.
    12. Blum, Helcio & Legey, Luiz F.L., 2012. "The challenging economics of energy security: Ensuring energy benefits in support to sustainable development," Energy Economics, Elsevier, vol. 34(6), pages 1982-1989.
    13. Regnier, Eva, 2007. "Oil and energy price volatility," Energy Economics, Elsevier, vol. 29(3), pages 405-427, May.
    14. Jewell, Jessica & Cherp, Aleh & Riahi, Keywan, 2014. "Energy security under de-carbonization scenarios: An assessment framework and evaluation under different technology and policy choices," Energy Policy, Elsevier, vol. 65(C), pages 743-760.
    15. Dakpogan, Arnaud & Smit, Eon, 2018. "Measuring electricity security risk," MPRA Paper 89295, University Library of Munich, Germany.
    16. Shrestha, Prabal & Arslan-Ayaydin, Özgür & Thewissen, James & Torsin, Wouter, 2021. "Institutions, regulations and initial coin offerings: An international perspective," International Review of Economics & Finance, Elsevier, vol. 72(C), pages 102-120.
    17. Valdés Lucas, Javier Noel & Escribano Francés, Gonzalo & San Martín González, Enrique, 2016. "Energy security and renewable energy deployment in the EU: Liaisons Dangereuses or Virtuous Circle?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 1032-1046.
    18. Doukas, Haris & Papadopoulou, Alexandra & Savvakis, Nikolaos & Tsoutsos, Theocharis & Psarras, John, 2012. "Assessing energy sustainability of rural communities using Principal Component Analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(4), pages 1949-1957.
    19. Johansson, Bengt, 2013. "A broadened typology on energy and security," Energy, Elsevier, vol. 53(C), pages 199-205.
    20. Pointvogl, Andreas, 2009. "Perceptions, realities, concession--What is driving the integration of European energy policies?," Energy Policy, Elsevier, vol. 37(12), pages 5704-5716, December.
    21. Vivoda, Vlado, 2019. "LNG import diversification and energy security in Asia," Energy Policy, Elsevier, vol. 129(C), pages 967-974.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:86:y:2009:i:10:p:1894-1901. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.