Critical Energy Issues: Comparison
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Please note this is a comparison between Version 2 by Lindsay Dong and Version 1 by Catalin Popescu.

The impact of energy related to issues, such as energy poverty, energy transition, and energy security has been heavily debated. The concept of energy poverty is considered, in general terms, as being unable to have access to regular and sufficient energy due to high cost or a lack of proper infrastructure. The definition provided by the International Energy Agency states that energy security is having uninterrupted access to energy sources at affordable prices. The concept of energy transition means a transition to clean energy. However, there are concerns that some policies that push toward environmentally sustainable energy can decrease economic development and increase poverty.

  • energy poverty
  • energy transition
  • energy security

1. Energy Poverty

Energy poverty is an important social and economic topic in 2020 as in the EU, 50 million household live in energy poverty, and COVID-19 pandemic aggravated the situation even more [7][1]. Studies, such as [8[2][3],9], show that there is a worsening of the energy poverty situation in the EU due to the negative effects of COVID-19 crisis. The negative effects of this crisis causing the worsening energy poverty will improve slowly, according to the authors, but not many countries will be able to return to prepandemic levels. In addition, the transition to renewable energy introduces further costs that increase the price of electricity and energy in general, and this can push many households to energy poverty. According to [10][4], the transition to renewable energy can increase costs in the short run. However, in the long run, this cost is most likely going to be neutralized and the adoption of the renewable energy could provide partial resilience to shocks in energy poverty and contribute to economic development and one’s well-being.
In 2019, around 30 million Europeans were unable to keep their home adequately warm [4][5]. According to [2][6], around 16.5% of household in Poland are in hidden energy poverty. The importance of access to affordable reliable, sustainable, and modern energy was recognized and included in the United Nation’s Sustainable Development Goals (SDG) in the 2030 agenda. Access to affordable and uninterrupted energy has an impact on one’s well-being and wealth. Energy provides thermal comfort, cooked food, hot showers, internet, and many other facilities that are important for daily life. According to [11][7], it provides energy services that are considered to be benefits produced for human well-being, depending on what the users of energy want, such as a cooked meal, warm home, fast internet, etc. Access to energy is essential for socioeconomic development because it makes it possible to use resources, time, and technology in an efficient way. This increases productivity and leads to economic growth. Studies have shown that there is a correlation between economic growth and access to energy [1,3][8][9].
Boardman defines household energy as being poor if the cost of energy exceeds 10% of the total household income [12][10]. This methodology has its own problems, as it identifies the rich households, who overuse energy as poor. Therefore, there are discussions on which variable should be used to measure energy poverty. According to [4][5], in 2020, there is still a lack of both a definition and a methodology on how to quantify energy poverty. The EU Energy Poverty Observatory, a project launched in 2018, acknowledges energy poverty as a multidimensional phenomenon and developed a set of four primary indicators: arrears on utility bills, low absolute energy expenditures, inability to keep one’s home adequately warm, and high percentage of energy cost taken from income. There are two ways to determine energy poverty according to the European Fuel Poverty Observatory: The first suggests subjective variables and the second expenditure line suggest variables such as energy expenditures [13][11]. The authors of Ref. [14][12] also highlight that there is no consistent international or regional definition of energy poverty. The definition varies between developing to developed economies. In developed economies, the definition highlights the lack of access to modern energy services, and in developing economies, it emphasizes the access to affordable energy services.

2. Energy Transition

Energy is the driving force of economies nowadays, and we cannot imagine societies functioning without energy. Clearly, for the moment, the world relies on fossil fuels, which is a very unsustainable and is causing environmental problems, such as air pollution and global warming [15][13]. Therefore, there is a need for transition to cleaner, sustainable, and more environmentally friendly energy sources. An energy transition is seen as an evolving process, and throughout history, societies have transitioned between major energy sources, with some of these shifts lasting over a century or longer. However, in the 21st century, the world will need to shift faster considering the scarcity of petroleum supplies and global climate changes [16][14]. The current energy transition is a shift towards cleaner, low-carbon energy sources, and electricity, which is the most important source. The most successful clean energy is electricity generated by solar-, wind-, and hydropower technologies, and many countries are promoting the usage of this energy source in industries and buildings to reduce carbon emissions [17][15]. In the Paris Agreement held in 2015, as a response to global warming, it was decided to reaffirm the goal of limiting the global temperature increase to well below 2 degrees Celsius, while pursuing efforts to limit the increase to 1.5 degrees. Therefore, since then countries are shifting towards using different policies to transition towards low-emission energy sources. One of the characteristics of this transition identified by [18][16] is the difference from past energy transition processes. This transition is driven by policies that aim for low carbon emissions. Although technology plays an important role, the main driver of the transition appears to be policies. Governments are using a variety of policies, such as those that stimulate the technological progress of renewable energy in order to impose taxes and tariffs for the consumption of energy sources that are not friendly for the environment, such as coal. While the first type of policies creates a positive supply shock, the second create a negative supply shock as they increase the price of energy. The authors of Ref. [16][14] argue that it is extremely difficult and unlikely that a global energy transition will happen very fast even though there are international agreements and policies to shift to cleaner and more sustainable energy sources. The transition to clean energy is an important and necessary step for Europe and the world. However, this transition to clean energy has its risks. According to [2][6], a transition to clean energy in Poland means replacing coal with natural gas. However, this can have an impact on energy poverty as it increases energy cost for households. This transition, in case of Poland, increases hidden energy poverty by 19.3%. The authors of Ref. [14][12] discuss that increasing energy prices due to renewable energy levies create a heavy burden for low-income households in the case of Germany. Therefore, low carbon development energy policies that are designed to support the improvement of energy efficiency, production of clean energy, and reduction in energy consumption need to be in accordance with energy poverty mitigation policies. While approaches such as levies and taxes increase energy prices and create a burden for low-income households by increasing energy poverty, approaches that target increasing energy efficiency and the reduction in energy consumption, such as the construction of energy efficient houses, help households escape energy poverty. According to [18][16], renewable energy represents the solution to energy poverty, representing a transition from fossil fuels to renewable energy, which supports low-income households and lowers CO2 emissions. In this context, the transition to renewable energy (RE) was impetuous, with energy sources that do not pollute being the primary goal [19][17]. Besides benefits to the environment, this transition is considered as an important transition that positively influences economic growth [20,21,22,23][18][19][20][21].

3. Energy Security

The definition of energy security has changed over time. In 1970, the definition of energy security was about avoiding oil supply shocks from the Middle East. Later on, the definition evolved with the changes in the world’s energy regime [24][22]. Nowadays, the definition focuses on three primary energy sources: oil, gas, and electricity [25][23]. The authors of Ref. [26][24] define energy security as the “low vulnerability of vital energy systems”. According to the authors, this definition of energy security is flexible enough to be applied even in the future, when energy systems might change. The vulnerability of energy systems is a combination risk and resilience. Energy security is about protecting energy systems, as any issues with these systems can send society into a state of instability. The authors of Ref. [27][25] state that although there is not a commonly accepted definition of energy security, there are however definitions that have three desirable elements of energy security. These elements are the physical availability and accessibility of supply sources, the economic affordability, and the long-term environmental sustainability. In general, according to [28][26], there is a focus in the literature on the supply side of energy security, which emphasizes the security of primary energy sources. Other works from the International Energy Agency [29][27] define energy security as consisting of two components: one is the physical availability component, and the other is price component. According to the International Energy Agency [29][27], “the relative importance of these depends on the market structure, and in particular the extent to which prices are set competitively or not”. In an earlier definition, [30][28] refers to energy security as the reduction in the welfare as a result of changes in the prices or availability of energy. Therefore, nowadays, energy security is seen as energy market functioning properly, and a competitive market is seen as the most effective way of delivering energy. In competitive markets, in the case of a supply shortage, prices increase, and this leads to consumers reducing their consumption as they are unwilling to pay higher prices. When there is no link between prices and the volume of energy, a supply shortage can lead to the physical unavailability of energy. The authors of Ref. [31][29] state that energy security definitions fall into two categories: the first category is about the supply and availability of energy and its price, and the second category includes more dimensions, such as availability, affordability, adequate capacity, and sustainability. According [31][29], a more comprehensive broader definition of energy security is needed. The authors believe that there are four more dimension that should be addressed with the concept of energy security: (a) economic, (b) technological, (c) environmental, and (d) sociocultural and military/security.

4. Other Critical Energy Issues

Apart of positive spillovers during an energy transition to new sources and renewable solutions for the environment, an important contribution is also observed in economic growth [32,33][30][31]. Indeed, in order to go through such a transition into innovative solutions, governments and businesses have to invest in technological innovation [34,35,36,37,38,39][32][33][34][35][36][37]. In order to conclude the transition into an energy supply, there are technological challenges to need be fixed, leading to innovations that are considered a crucial factor in the process of the transition [19][17]. In this regard, developed countries are the leaders in creating a suitable environment for innovation, including renewable energies [40][38]. Other key factors that support innovation are the well-established institutions and a robust economy that are considered important pillars to such development [41,42,43,44][39][40][41][42]. The breakthroughs of technology may be displayed in patent filings [22][20]. Referring the study of [45][43], there exists a database called the International Standards and Patents in Renewable Energy that maintains information on the patents and pursues them. Furthermore, an additional crucial factor to facilitate such a transition and to achieve a sustainable development is companies’ adoption of the Green Finance Framework, which is focused on nonfossil fuels projects, the main segments of which being renewable energy, clean transportation, and pollution prevention and control [46,47][44][45]. In this regard, the United Nations Sustainable Development Goals (SDGs) has focused on solving the challenges that contemporary society has faced by involving SDG7, which aims to improve energy sustainability. Lastly, it could be said that technology is a promising new and practical solution to energy and related issues given the robustness of energy security, accessible, affordable, and clean energy required to prevent and mitigate energy poverty and improve societal well-being.

5. Discussion and Conclusions

5. Conclusions

Energy plays a pivotal role in fostering the sustainable development of nations, encompassing social, economic, and environmental dimensions. Over the past decade, there has been a substantial increase in global energy consumption. Effective energy management is crucial for ensuring future economic prosperity and environmental security. To achieve efficient allocation of available resources, it becomes imperative to focus on energy demand management. In recent years, numerous innovative techniques have emerged to accurately forecast future energy requirements [53]. These research efforts aim to review various energy demand forecasting models, providing insights into their effectiveness and applicability.

Energy is a fundamental requirement for human existence, and the availability of a secure and accessible energy supply is essential for the sustainability of modern societies. However, the continued reliance on fossil fuels is expected to face several challenges. These challenges include the depletion of fossil fuel reserves, concerns related to global warming and other environmental issues, geopolitical tensions and conflicts, and more recently, persistent and significant increases in fuel prices [55].

Presently, energy poverty arises when a significant portion of consumers' income is devoted to paying energy bills or when they are forced to limit their household's energy usage to an extent that negatively affects their health and overall well-being. Therefore, decision-makers must prioritize affordability, accessibility, and sustainability, building upon reliability, resilience, and efficiency.

Additionally, some studies advocate for a broader approach to energy security, encompassing five interconnected aspects: availability, affordability, technological advancement, sustainability, and regulation [11]. Simultaneously, global discussions and discourse have prominently featured environmental concerns related to climate change and global warming, given their significant impact and far-reaching consequences [48].

Access to electricity and a reliable energy supply are crucial for local economic development and poverty alleviation. To address these challenges effectively, appropriate policies and mechanisms must be implemented at both national and regional levels. It is essential to create an enabling environment that promotes renewable energies and energy efficiency, as this not only preserves the environment and mitigates climate change effects but also reduces energy poverty and enhances living standards for the population [70]. Therefore, making this a primary objective of the government is imperative.

The shift towards sustainable energy has become a focal point in the realms of politics and science. A pertinent study utilizes a socio-technical and multi-level theory on transitions to glean valuable insights from a long-term analysis of the Dutch electricity system [73]. By investigating technological advancements, regulatory changes, and the social networks that either support or resist renewable energy options, the article adopts a comprehensive approach. It delves into both emerging renewable energy technologies and the underlying structural trends within the established electricity regime. The analysis reveals that an energy transition has been in progress since the 1960s and 1970s, primarily propelled by liberalization and European integration. While environmental concerns have become an integral part of this ongoing transition, they do not serve as its primary driving force. Numerous obstacles hinder the achievement of a sustainability transition; however, there are also opportunities to seize.

The energy transition must prioritize not only the adoption of renewable energy sources but also ensuring affordable energy prices for the population. Despite the varying levels of economic development among EU countries, energy poverty affects a certain segment of the population, persisting throughout the year, even in both summer and winter months. Energy poverty not only poses economic and social challenges but also leads to health issues [84-86]. Difficulties in accessing energy for certain groups have raised multidisciplinary concerns about applying principles of justice to different facets of energy, including policy, production and systems, consumption, activism, security, and climate change.

Energy security involves the assessment of two crucial elements: (1) the assurance of a secure energy supply and production, and (2) the identification of emerging insecurities concerning aspects such as availability and pricing. The main goal of energy security is to safeguard and maintain a stable energy supply and domestic production capabilities [76,77].

Access to energy has become a global priority, with increasing concerns about reducing energy poverty. To address this, the European Union has introduced a key instrument called the just transition, aiming to strike a balance between environmental protection through renewable energy use and mitigating the socioeconomic impact of this transition. The just transition mechanism allocates funding to areas with high CO2 emissions or regions reliant on fossil fuel-based industries, thereby creating new employment opportunities in the renewable energy sector.

Improving energy efficiency in homes could be a viable solution to combat energy poverty and enhance energy access. As a result, the goal of improved access to clean energy, provided consistently and at reasonable prices, can be achieved.

This comprehensive analysis reveals the key interests and concerns associated with the interplay of energy poverty, energy transition, and energy security issues. It identifies valuable contributions from representative authors over time and profiles potential future developments in these areas. Energy efficiency emerges as a potential solution to address energy poverty, enhance energy security, and facilitate the energy transition.

Indeed, unconsumed energy itself can serve as a valuable energy source. Therefore, investing in energy efficiency infrastructure is crucial for both the energy transition and the development of a low-carbon economy. Moreover, such investments promote the principles of a circular economy. For instance, constructing new buildings or improving the energy performance of existing ones leads to a reevaluation of construction and demolition practices, enabling the utilization of waste generated from these processes for energy production.

In the twenty-first century, energy is intricately linked to a convergence of crucial challenges and opportunities, prompting a growing focus on improving model-based analysis of energy systems. These challenges encompass ensuring the security, affordability, and resilience of energy supply, while also addressing a range of environmental issues, from local air and water pollution to the overarching threat of climate change and global sustainability [57]. However, amidst these challenges, there are opportunities to capitalize on, such as introducing innovative technologies to the market, promoting the growth of competitive industries, and providing abundant sustainable energy production to regions experiencing rapid economic development.

 

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