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Energy security and improvements in the function of diversity indices—Taiwan energy supply structure case study

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  • Chuang, Ming Chih
  • Ma, Hwong Wen

Abstract

Facing the risk and uncertainty inherent in social and economic development, many countries have adopted an energy supply diversification strategy in their energy security policy to control the energy import risk and cost to ensure that sufficient energy can be obtained at an affordable price level. Diversification helps the energy system respond to external changes and shocks. Diversification can also lessen the vulnerability of a single energy source to supply shocks and the market power of various energy supply sources. This study develops the “diversity reliability index” and “co-vary diversity reliability index” based on the Hirschman–Herfindahl and Shannon–Wiener indices, investigates the contribution of different energy sources to the energy system, and analyzes the covariance between various energies and their impacts on energy security to determine the impact of energy diversity in reducing the risk of energy supply shortages and cost fluctuations.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:rensus:v:24:y:2013:i:c:p:9-20
    DOI: 10.1016/j.rser.2013.03.021
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