(The) analysis of energy security costs considering the dynamics of technology innovation

Abstract

Energy security is becoming more important around the world as countries’ energy consumption escalates with their economic growth. This study analyzes the energy security costs from economic and environmental security perspectives for different energy sources over a long-term time span. In doing so, we overcome the limitation of the existing model of energy security cost by considering the dynamic changes in energy technology, supply disruption probability, and diversification of nuclear fuel suppliers. Particularly, this study adopts the model of technology S-curve in capturing the predicted evolution of energy technologies’ performances over the medium- and long-term in analyzing the case of the U.A.E. We also develop and analyze different energy mix scenarios for different energy sources including nuclear power, renewable energy, natural gas, and clean coal power. In the analysis, key parameters contributing to the results were identified and the related sensitivity analysis was followed by using probabilistic analysis with @Risk$^ⓒ$ program. The results show that by introducing multiple nuclear fuel fabrication suppliers, U.A.E. can significantly reduce its economic security cost of energy. From the perspective of environmental security, the expansion of nuclear power and renewable energy significantly lowers carbon emissions and reduces the environmental security costs of energy of the U.A.E. Therefore, this study suggests that diversifying the suppliers in every stage of nuclear fuel assembly is important for securing low energy security costs, validating the benefits of nuclear and renewable energy from the perspective of environmental security. The study will be a good guide for other countries developing energy policies and strategies for the advancement of renewable and nuclear technologies as well as energy mix planning.