A Review of the Nigerian Energy Industry

Africa: Energy security planning hampered by variable indices

Wind turbine on a wind farm in Gudihalli village.
Wind turbine on a wind farm in Gudihalli village.

05 February 2015 – Policymakers are struggling to determine the energy security of developing countries because of a lack of consistency in energy indices, according to a study from India.

The paper by the Indira Gandhi Institute of Development Research (IGIDR) in Mumbai, shows that the energy security rankings of different countries vary wildly from one index to the next, especially for countries that are largely energy insecure.

The study compared the three most commonly used energy indices, the Energy Sustainability Index (ESI), the International Index of Energy Security Risk (ES Risk) and the Energy Architecture Performance Index (EAPI).

It found that India, for example, has better energy security than Russia, China, Japan, Brazil and South Korea in the ES Risk 2013 index, but comes ahead of only China in the EAPI 2014 index and last among these countries using ESI’s methodology.

The paper states that these inconsistencies are down to a large variation in the indicators selected to work out each index. There are also differences in the way each indicator is weighed and the method used to calculate the indices, the authors say.

For example, Kapil Narula, the lead author of the paper and an IGIDR researcher, says: “Energy intensity, defined as total primary energy consumed per dollar of GDP [gross domestic product], is one such indicator used in calculating each index. However, the weight given by each of the three indices to this indicator is starkly different.”

Such differences are magnified when indicators are being extrapolated, he adds.

The paper found that developing countries where energy security is generally lower are most affected by such differences in calculation. At the other extreme, nations such as Canada, Germany and the United States have fewer inconsistencies because they have more robust energy systems. This means they are less sensitive to variation in single indicators, the authors say.

The inconsistencies are a concern because they make it harder for policymakers to correctly assess the extent to which a country has the necessary attributes to achieve its energy policy objectives, the paper warns.

“Everybody is looking at certain aspects of energy security and not at energy security in its entirety,” says Narula.

Indian policymakers are wary of energy indices due to the variation in their scope and meaning, says Rajiv Panda, a researcher at the Integrated Research and Action for Development think-tank.

“Even if they have been included in policy discourse, they have not impacted policymaking in any tangible manner,” he says.

But the IGIDR study says that existing energy indices are still useful because countries with a high ranking on all indices generally have more-secure energy systems.

The authors urge governments to collaborate more on creating indices that consider their specific needs, and give a reliable picture of energy security across different energy systems in developing countries.
*Archita Bhatta – SciDev.Net

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