Energy self-sufficiency

Declining oil reserves, the concentration of the largest deposits in a small number of countries, geopolitical tensions and growing fuel demand are creating a scenario of unstable energy prices with an upward trend. As a result, many countries face supply vulnerability. For many households, relying on increasingly expensive inputs is already a challenge that may intensify in the future.

In this context governments are working to safeguard national energy security and, in some cases, to achieve the long-desired energy self-sufficiency. But what do these concepts mean, and how do they differ?

What is energy security?

Energy security is defined as the uninterrupted process of ensuring the energy required to sustain people’s lives and daily activities, while guaranteeing its affordability.

For the International Energy Agency (IEA), energy security has two main dimensions: short term and long term. In the short term, it refers mainly to the ability of the energy system to respond quickly to fluctuations in the energy supply and demand cycle. In the long term, it encompasses investment in energy supply and its relationship with economic developments and environmental needs.

The security of energy supply depends on the extent of the risks that may affect the continuity, quality, sustainability and price of energy. Broadly speaking, there are two main types of supply risk:

• Technical risks: associated with accidents, infrastructure failures or disasters that disrupt the flow of energy.  
• Economic risks: linked to energy price fluctuations that prevent it from being supplied to end-users at a reasonable price.

In addition to these risks, global energy supply is shaped by a range of factors, including: 

Physical or geographical factors: 
Regions with predominantly sedimentary geological formations are more likely to contain fossil fuel reserves than others.

Costs:
The depletion of non-renewable energy resources leads to extraction processes with very high costs. As demand rises, the exploitation of these resources becomes viable, which usually results in higher energy prices to cover extraction and production costs.

Technology:
Technological advances open the door to new possibilities in the sector, for example by making renewable energy sources more viable and productive.

Political factors:
Sociopolitical issues, such as international conflicts, have a high potential to disrupt energy supply and damage energy sources, making it difficult to maintain energy security.

In the context of the energy transition, and given the need to ensure supply, the concept of energy sovereignty has gained particular prominence. Unlike security, where the key actor is the State and there is no negotiation space around how energy is used, generated or for what purpose, energy sovereignty places communities and self-management at the centre. It refers to the right of individuals, communities and peoples to make their own decisions about the generation, distribution and consumption of energy, enabling them to adapt to ecological, social, economic and cultural circumstances.

The importance of critical facilities in energy security

The Inter-Agency Network for Education in Emergencies defines critical facilities as “primary physical infrastructure, technical installations, basic services and systems that are socially, economically or operationally essential for the functioning of a society or community, in both routine conditions and extreme emergency situations”.

This group includes essential national infrastructure such as transport systems, electricity, water, communication networks, schools, hospitals and healthcare centres, as well as fire stations, police and public administration services. Although critical infrastructure is similar across countries, its presence and characteristics vary depending on each country’s needs, resources and level of development.

In the case of the energy sector, these facilities are particularly vulnerable, as any failure can cause severe disruption at multiple levels, affecting essential socioeconomic activities.

What does energy self-sufficiency mean?

Energy autonomy is a country’s ability to meet its energy needs without relying on other countries. In other words, it goes beyond the concept of energy security. It not only requires an adequate flow of energy to supply a given population, but also that the resources used to achieve it are domestic, with no need for external purchases.

Not all countries have the resources or infrastructure needed to produce sufficient energy. Moreover, it is unlikely that any country can be fully self-sufficient in all types of energy. For example, a territory may be self-sufficient in oil but not in gas.

 SEE INFOGRAPHIC: The electricity market [PDF]

The depletion of fossil fuels not only makes energy production more expensive, but also increases the risk to economic stability, since all economies require energy to carry out productive processes and meet basic needs. For this reason, governments and international organisations seek to achieve energy autonomy. And the key to achieving this, in addition to energy efficiency and the role of households play in saving energy, is above all electrification. Electrification is key to energy security: electricity from renewable sources is based on local resources (our sun, our wind, our water) and therefore reduces our dependence on fossil fuel imports.

Using renewable energy helps mitigate climate change, ensures energy security and reduces dependence on third countries. It also provides stable prices, boosts economic activity and local production and creates employment.

Advantages and disadvantages of energy self-sufficiency

Energy self-sufficiency provides certain advantages beyond avoiding dependence on external supply sources and the associated price volatility. For example, it eliminates the cost of transporting hydrocarbons and prevents oil spills at sea, which have devastating effects on marine flora and fauna. Moreover, if self-sufficiency is achieved through renewable resources, pollution generated during production and use is reduced.

However, resources are unevenly distributed across the planet, meaning that countries have more or fewer renewable resources available. Achieving energy self-sufficiency in the short term may or may not be feasible depending on the comparative advantages of each country.

If you want to learn more about the fight against climate change, discover what the energy transition is and how Iberdrola is championing a cleaner, more responsible and smarter model.