Chapter 1
The wide-scale representation of the energy security of a country covers the physical accessibility of power supply services (reliable power supply of energy resources and availability of technical capacities for their reprocessing and transportation, transmission of generated energy to the ultimate customers) to population and business entities provided acceptable conditions: at an affordable price and acceptable environmental and social conditions of power generation, as well as sufficient extent of the country's energy independence. The energy independence refers to such commodity and geographical composition of energy resources' supply to the country, which disables the influence on its choice and implementation of domestic and foreign policies (not only in the energy branch), in other words when the energy resources' supplies tool can not be applied as a capable instrument of political and economic leverage. Thereby, the energy independence depends not only on supply of external resources to the country, but also on the ownership structure of domestic power industry facilities (the monopoly level on energy markets, possibility of major power industry facilities' owners to influence the state activities and policies etc.).

Definition of the national energy security, similarly to the definition of the national security in general, has been considerably transformed over the period of Ukrainian independence. Three decades ago, the energy security of the country was mostly associated with external security, i.e. reliability of energy resources' supplies and securing against external involvement into the energy supply processes. Today, interpretation of this definition has shifted toward ensuring the human right to cover personal energy needs and possibilities to exercise these rights fully and unrestricted. In addition to uninterruptible supply of resources, an increasingly important role in understanding and the energy security is given today to provisioning of the reliable operation of the energy sector infrastructure facilities, effective use of energy resources, as well as to pricing eligibility of energy supply services for consumers and environmental safety of energy generation.

Approaches of countries to the energy security are tightly related to specific nature of works management of their energy sector and the structure of the energy mix; the above-mentioned current aspects of the energy security interpretation are reflected namely there.

Today, several basic aspects of the energy sector development tendencies can be traced in many countries; these are mainly determined by three groups of intentions and aspirations:
to decrease the environment pollution level caused by power generation

caused by power generation
to improve the consumer's accessibility

to high-quality and reliable power supply services (i.e. combating the energy poverty)
to improve the efficiency of energy use

Taking into account that the full coverage of consumers with energy supply systems is typical for developed countries, the guiding motif of transforming their energy sector is conditioned by the desire of assuring environmental acceptability and economic effectiveness of energy generation processes. Major current tendencies of the power sector in such countries are:

  • desire to restrict the volume of greenhouse gases' emissions, in particular contamination with carbon-containing compounds (so-called de-carbonization of energy sector and of industry in general) and movement towards the economic growth provided non-increase of greenhouse gases contamination (so-called decoupling of economic growth from greenhouse gases contamination, primarily carbon dioxide), as well as extending the use of renewable energy sources (hereinafter - RES) being a strategic path of achieving such goals;
  • reduction of the economy energy intensity, striving for eliminating the direct dependence of economic growth from the power consumption, as well as achieving the economic growth provided non-increasing energy consumption (decoupling of economic growth from the energy consumption);
  • decentralization of energy generating capacities and diminishing of space disproportions in consuming energy resources and energy supply sources;
  • increase of information technologies' role in managing energy supply processes (digitalization);
  • increase of the role of energy vector in international political and economic relations and diplomatic activities of countries (formalization of the energy diplomacy).
Next to positive consequences of these energy sector tendencies, there are negative consequences, such as: emergence of qualitatively new threats to the power supply reliability caused by the high vulnerability level of energy infrastructure to the physical impact and interference into information control systems.

De-carbonization of energy sector and changes in energy mix
Threat of the climate change, conditioned by high volumes of thermal contamination and greenhouse gases' emissions, have resulted in emergence of number of relevant global, regional and national environmental initiatives. The latter impact considerably development of the energy sector, as it is causing about 70 % of all greenhouse gases' contamination (out of which about 90 % is the carbon dioxide). The Kyoto protocol (initiated in 1997) was the global initiative to achieve these goals, this was later replaced by the Paris Climate Agreement on joint participation of parties in preventing climate changes, according to which the member countries have taken an obligation to decrease СО2 emissions. At that, participants to agreements are not restricted in developing and implementing internal energy and economy general de-carbonization programs and in defining their own emission reduction targets' systems. So much, the own program of increasing the share of renewable energy resources in the energy balance to 20%, decrease of energy consumption and greenhouse gases contamination by 20% until 2020 compared to 1990 is applied within the EU.

For a wide range of countries, a desire for de-carbonization caused by environmental motifs and corresponding arrangements and commitments become one of key motifs for considerable structural changes of energy mix, involving decreasing the volume of high-carbon energy resources used and transition to low-carbon resources. In addition to renewable resources, the most acceptable from the viewpoint of preventing climate changes are some non-renewable resources: gas and nuclear industry.

Utilization and development of the nuclear industry is associated with considerable challenges concerning the nuclear safety and security, as well as with concerns about NPP's accidents (the last major accident at NPP Fukushima in 2011 demonstrated existence of such threats despite of considerable progress in technologies' development and Chernobyl accident lessons learned), which resulted in significant slowdown in the industry development. Despite this, several countries are intensively developing this branch and are increasing their potential; the leading country in this respect is definitely China. In addition, about 45 countries are interested in constructing nuclear power plants on their territories, the following are amongst them: UAE and Turkey, who already carry out activities in this field. However, certain countries (in particular, Germany and Italy) have taken a decision to entirely refuse the nuclear industry on own territories.

Under such circumstances, renewable energy sources and natural gas will in the nearest future become major energy resources for many countries. According to forecasts of miscellaneous organizations and major energy traders (in particular, OPEC, ВР), demand for coal and oil will sharply reduce within the following 3-4 decades, however natural gas consumption and use of renewable energy sources will increase instead. Namely the natural gas is expected to become the mostly consumed energy resource in Europe in the nearest future (there is an assumption that its consumption will increase by 75 %), because the speed of renewable energy branch development will most likely be insufficient to replace the reduction of coal, oil, nuclear energy consumption and in particular to achieve the determined environmental goals. It is clear that increase of the natural gas role would arise new and escalate existing challenges for many countries, with regard to comparatively low number of countries supplying this resource and due to considerable concentration level on this market resulting from existence of major players. Increase of the natural gas role will expectedly result in new rounds of geopolitical tension related to its trade.
Energy efficiency increase
and decoupling of economic growth from energy consumption
Current aspirations to decrease the environment pollution by changing the energy mix structure is followed by the efficiency level increase of energy carriers' use and aspirations to ensure economic growth provided lower energy demands, and consequently lower specific volumes of the environment pollution.

USA is one of examples amongst developed countries showing a successful economic growth decoupling from energy carriers' volume. Over the period 2007-2016, the county's GDP increased by 12 %, and the total energy consumption along this period decreased by 3.6 %. At that, the USA's economic growth until 2007 has been followed by the increase of the total energy consumption; exactly 2007 became a turning point for positive decoupling tendencies. However, when comparing the economic growth speed and energy consumption of a certain country, one has to consider whether the decrease of energy consumption (and of caused by it environment pollution) is not caused by the transfer of certain highly energy-intensive industries to other countries.
Decentralization of energy generation
Decentralization of the energy industry is an important actual tendency; it is related to increasing the number of energy generation facilities whilst at the same time decreasing the space disproportions of their location. Decentralization of energy industry is related to the use of renewable resources in the location their potential is available and therefore the energy generation facilities will be of comparatively lower capacity (with respect to the system organized according to the principle of centralized energy generation), and transmission of energy generated over large distances is either economically counter-productive or technologically impossible. At that, the energy generated where potential exists can be transferred to the united power grid or be consumed locally without connection to the united grid.

Decentralization of energy industry is an essential step towards enhancing the general reliability of power systems operation and minimizing their vulnerability against physical or virtual hazards: increase of energy sources (with simultaneous decrease of their capacities), their uniform distribution over the territory is practically decreasing probability of blackouts (caused by object-oriented physical or information impacts with the goal of the power supply failure).
Decentralization of energy generation
In many countries, increase of the role of information technologies for the power supply processes management is considered to be an important current tendency in the process of energy sector transformation. As of 2015, over 40 % of enterprises rendering communal services showed interest in investing into computer technologies as part of their business-strategy, and the energy branch was not an exception in this trend.

Digitalization is simplifying management of operation power supply processes, including balancing of energy flows, extending possibilities of ultimate consumers concerning management and energy saving through applying the intellectual accounting systems, simplifies relations between services' suppliers and consumers and is definitely related to improving efficiency and reliability of power supply.

However, introduction of such technologies is followed by the increasing risk of unlawful acts in the cyberspace, in particular of the cyber-terrorism, which is threatening not only with thefts and data losses, but also destabilization of energy facilities operation. Energy infrastructure belongs to the critical group, and its failures caused by interferences into the electronic management systems can cause chain reactions in other spheres and be a risk of technogenic accidents. The danger and hazard level of cyber-attacks in the energy sector are demonstrated by several examples. That, Busher NPP in Iran was cyber-attacked in 2010, later the virus-ware has been detected at NPP's in Germany and Belgium. In 2012, 30 thousand computers of the oil extraction company SaudiAramco have been put out of service for 2 weeks in the result of a cyber-attack. In 2013, 91 % of USA power companies have experienced cyber-attacks. By the end of 2015, a successful cyber-attack has caused a large-scale power supply failure: over 700 thousand consumers in Ukraine have been left without power supply for several hours. According to some sources, about 40 % of all cyber-attacks are directed particularly at the energy sector. Creating of new power supply management opportunities causes new hazards and risks: further guaranteeing of energy security would require further measures of computer and information security upgrade.

Institutional formalization of energy security mechanisms and application of the energy diplomacy policies
Application of the authorities' impact instruments with the goal of extending and securing sales markets for national companies-exporters of energy resources is quite widespread and is not a newly introduced practice. It has been extensively used in the first half of previous century to promote the USA oil extraction companies' interests worldwide, and is currently still actively exercised by some countries, in particular the Russian Federation. However, over the recent years the developed countries are extensively providing mechanisms of comprehensive coordination related to authorities' activities with the goal of harmonizing the internal domestic and foreign policies focused on achieving major goals of securing the domestic power supply reliability and protecting own energy-related foreign interests. This is not only due to the current importance of energy industry within the international relations scheme, but also due to the dynamic growing character of international markets, as well as growing number of active international players in the energy sphere. In the frameworks of national policies of the energy diplomacy, the states are selecting priority partners at their own discretion: separate countries, international organizations and unions, as well as methods of implementing this policy. Countries aiming at being global or regional players in the sphere of intergovernmental energy relations are developing a corresponding long-term policies and creating corresponding institutional structures, and the following three groups of intentions can serve as basic motifs of such activities:

  • to guarantee reliability and uninterrupted supply in case of energy-dependent countries;
  • to provide the long-term availability of sales markets for countries exporting energy resources;
  • to benefit from using energy levers in exercising own foreign energy policy for both the energy resources' net-importers and exporters.
Amongst developed countries, the practice of legal regulation of energy security related aspects is becoming widespread, this just confirming significance and increasing importance of such tasks in the modern context. As an example, the Canadian Energy Safety and Security Act is governing only aspects of securing reliability and safety of the energy infrastructure facilities, the environmental damage compensatory mechanisms. And this is not strange, as the country is the net-exporter of energy carriers, and the energy independence issue is irrelevant. In the European Union countries, a separate group of issues related to reliable and efficient energy supplies are governed by series of directives and regulations, which are currently composing a so-called third energy package. Corresponding acts are to be mandatory implemented by all EU members striving to create a unified energy market and being members of the European Energy and Climatic Union, which has been legally founded in 2015. The Third energy package has been aimed at liberalization and supporting competitiveness of energy markets and has envisaged unbundling of companies involved in generation, transfer, transmission and sale of energy resources and energy, and has determined the rules of energy markets functioning. To replace the currently applicable third package, a fourth energy package is currently under development, which is aimed at creating a united reliable energy market within the EU, at further decentralization of energy generation and at further balancing its space disproportions by means of particularly wide involvement of households into the energy generation market (which would finally contribute to enhancing physical reliability of energy supplies), as well as further stimulating the de-carbonization of the energy industry.

In 2011, the Energy Resources Bureau has been created within the U.S. State Department (U.S. foreign policy establishment), headed by the Special Envoy and Coordinator on international energy relations. Major task of the Bureau is to combine efforts of different subjects and institutions to achieve the goal in the energy generation and consumption spheres, and the authority head is practically acting as the major energy diplomat of the country. Implementation of the energy diplomacy policy, in particular for the purpose of energy security, has been enacted in the USA by the Energy Independence and Security Act in 2007. According to this document, implementation of this USA policy has to be performed with the goal of elaborating the national foreign energy policy, which among other things has to take into account global changes of energy infrastructure, has to provide for incorporating the energy security interests into the country's foreign political activities and coordinate the energy security activities with other authorities involved in these issues. It has to be noted that elaboration and implementation of the USA energy independence policy along the past half-century has was quite sluggish and unsystematic (except for attempts of President J. Carter's administration, whose initiatives have been mostly scaled down by following presidential administrations, starting from Nixon) and the fact of including the energy diplomacy issue into the energy security policy agenda for this country is really speaks for critical importance of this aspect for international relations and the energy security.

Special role of the energy (as the generally resource-related) diplomacy exists in the great but resource-poor Japan. Major priority of Japan in this sphere is the development of a collaboration system to avoid critical situations in energy supplies, establishing and maintaining close relationships with the Middle East countries, as well as with other energy-carriers' exporters, the commodities' and geographic diversification in supply of energy resources, increase of efficiency level of energy utilization and prevention of climate change.

China is the largest energy consumer worldwide and is paying considerable attention to diplomatic strategies oriented at guaranteeing supply of energy resources: extremely high importance of energy interests can clearly be traced in the general vector of diplomatic activities of this country, which is thriving to build up close relations with resource-rich countries despite of the general geopolitical climate related thereto, and the country's energy diplomacy is tougher compared to the soft nature of the general diplomatic policy. For example, the PRC has not supported sanctions against Iran and has for a long period collaborated with this country in the military area, supporting barter operations in exchange to the possibility of importing energy resources, as well as tried to ease sanctions. Thus, China continued the diplomatic, economic or military collaboration with other exporters of energy resources, which have been isolated by other great states during different periods: Iraq, Kuwait, Myanmar. Moreover, the country's government is supporting in every possible way introduction and operation of oil extracting companies in other regions worldwide.

Summarizing, we shall note that the practice of formalizing and sometimes institutionalizing the governmental policy related to provisioning reliability of energy supplies and guaranteeing the general energy security is becoming more widespread in the developed countries, as well as possibilities of using the energy resources' supply instrument to influence other countries' policies. Such policy includes often the comprehensive coordination of activities of different subjects, who are directly or indirectly involved into implementing tasks in spheres specified.

However, expansion and implementation intensity of currently actual energy industry development trends differ also geographically, as far as economical inability and socio-political unpreparedness of separate countries is often a barrier for transfer of up-to-date energy technologies and solutions, application of progressive changes in the energy industry. Thus, Ukraine particularly over the period of its independence has demonstrated insufficient speed of implementing the current progressive changes in its national energy sector. Ukraine still lacks a unified and systematic vision of the energy industry's future and of the corresponding energy mix structure, and approaches to organizing power supply and energy security could fairly be defined as obsolete.
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