Methodology for quantitatively assessing the energy securityof Malaysia and other southeast Asian countries

Shahnaz Sharifuddin n

Institute of Strategic and International Studies, No. 1 Persiaran Sultan Salahuddin, P.O. Box 12424, 50778 Kuala Lumpur, Malaysia

H I G H L I G H T S

� Thirty-five indicators representing 13 elements grouped into five aspects of energy security.� Normalization process of converting indicator results into a standard unit.� Synthesis of results into indexes for elements, aspects and overall energy security.� Designed to suit data availability of Malaysia and other Southeast Asian countries.� Suitable for multi-year and multi-country application.

a r t i c l e i n f o

Article history:Received 6 September 2012Received in revised form5 August 2013Accepted 18 September 2013Available online 7 October 2013

Keywords:Energy securityIndicatorsMalaysia

a b s t r a c t

This paper presents a methodology for quantitatively assessing energy security. The methodology istailored to suit the limited data availability of Malaysia and other Southeast Asian countries. In thismethodology, energy security is conceptualized as having 5 core aspects which sub-divide into 13elements. A total of 35 indicators have been identified as measurements of these 13 elements. Themethodology details the means by which the indicator results are converted into a common unit i.e. anormalization process into a 0-to-1 scale. Also detailed are the weights used in the weighted-averageprocess by which normalized indicators are synthesized into composite scores representing the 13elements, the 5 core aspects, and 1 overall energy security index.

& 2013 Elsevier Ltd. All rights reserved.

1. Introduction

1.1. The need for a tool of quantitative assessment

Energy security is a complex field of research that extends beyonda range of core issues, such as availability and affordability, to includea number of other related issues such as economic, environmental,technological, risk management, social and geopolitical. It is not clearhow many issues are there and how they relate to each other. Thiscomplexity leads to any discussion on energy security often becom-ing subjective and unbalanced towards one related issue or another,thereby losing focus on the core. For example, so much emphasison energy independence can lead one to neglect other issues such asresource sustainability and affordability, and to forget that it ispossible to be energy secure without being energy independent.

Moreover, there is not always a clear measurement to indicatewhether or not the situation has improved with respect to any one

issue. For example, year-on-year increases in electricity prices areoften used to indicate increasing unaffordability of energy, but anindicator of affordability should also take into account increases inincome. At the same time, the issue of affordability includes the costto the government, the nation as a whole, as well as to householdsand industries. This means that the issue of affordability will haveseveral indicators dedicated to it and it will be a problem tointerpret these indicators together, as it will be when we considerall together the various issues that make up energy security.

Hence there is a need to identify the core issues (or core aspects,as they shall also be referred to) and to identify how other issues arerelated to them. There is also a need to introduce a method (or tool)to quantitatively assess these issues and to synthesize the findingsinto a single figure representing the level of energy security. Such atool can provide an objective assessment that is as useful to thediscussions of decision makers and analysts in the field of energysecurity as the method that calculates the gross domestic product(GDP) is to discussants in the field of economics. That is, whileeconomists may hold varying opinions on the economy, theyconstantly refer to the GDP and its component figures such asgovernment spending, investments and net imports in their

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n Tel.: þ60 3 2693 9366; fax: þ60 3 2694 9227.E-mail addresses: s_sharifuddin@isis.org.my, s_sharifuddin@yahoo.com

Energy Policy 65 (2014) 574–582

discussions. At the same time, decision makers find the GDP usefulin assessing whether or not their decisions will result in a netimprovement to the economy and they often refer to the GDP intheir communications. Likewise, the field of energy securityrequires a tool of quantitative assessment that produces an indexthat summarizes the assessment (at the national level) in a singlefigure so as to facilitate discussion and analysis.

1.2. Existing methods of measuring energy security

There is to-date a number of different means of measuringenergy security. The Supply/Demand Index developed byScheepers et al. (2006) is based on the structure of the country'senergy demand and supply. Hughes and Shupe (2011) employ adecision matrix that ranks a country's sources of energy alter-natives according to four criteria. von Hippel et al. (2011) measureenergy security along different scenarios using indicators identi-fied with six aspects of energy security.

Other methods are mostly concerned with the elements ofimport dependency and diversity of supplies. The InternationalEnergy Agency (IEA, 2007a) and Nicolas Lefèvre (2010) focus onresource concentration as a driver of longer-term energy securityusing two indicators: one is for the price component of energysecurity (competitiveness and volatility), based on diversity of fuelexporters and fuel-types. The second is for the volume componentof energy security (availability and stability), based on dependencyon pipeline gas imports (a variation of import source diversity).The indicator for the price component also forms the ex-anteindicator of Löschel et al. (2010).

The Asia Pacific Energy Research Centre (APERC, 2007) uses fiveindicators of energy security which measure net import depen-dency, net oil import dependency, Middle East import dependency(also a variation of import source diversity), diversity of primaryenergy types and non-carbon based fuel portfolio (a variation offuel-type diversity).

Jansen et al. (2004) and Frondel et al. (2009) base their supplyrisk measurements on diversity of fuel types and import sources.Diversity of import sources also features as the basis of the methodof Cohen et al. (2011).

Import diversity, diversity of supplies and their variations do notadequately capture the multi-dimensionality of energy security. Thereare more comprehensive methods developed by institutions in thedeveloped countries (DECC, 2011; Institute for 21st Century Energy,2010; METI, 2010). However, these are unsuitable for application toSoutheast Asian (SEA) countries as they require data which are notregularly published, if at all collected. For example, statistics of thetransport sector and households are very limited in Malaysia. As such,indicators such as average fuel consumption per kilometer driven orelectricity consumed per square meter of commercial space, whilevaluable and insightful, are not applicable. Likewise, indicators basedon energy consumption and expenditure of the poorest 20% ofpopulations are applied by Thierry Lefèvre (2006). Methods that relyon such indicators are not practical for application to a plurality of SEAcountries, and to a number of different years.

Moreover, some indicators from these comprehensive methodsare of limited value for assessing the energy security of SEAcountries. For example, indicators of technological development,typically based on expenditures on research and development ofenergy technologies, are not suited for application to Malaysia andmost other SEA countries as these are technology adopters ratherthan technology developers.

Likewise, global political–military security issues are taken asexternal variables by SEA countries which do not have thediplomatic or military influence to affect them. Therefore, inclu-sion of such issues needs careful consideration as to how they canbenefit any assessment of energy security of SEA countries.

As such, there is a requirement to refine the available tools tosuit the needs and limitations of Malaysia and other SEA countries.

2. Objectives

We seek to develop a tool to quantitatively assess energysecurity that is practical for application to the case of Malaysiaand other SEA countries (allowing for the exceptions of Myanmar,Laos and Cambodia for which data are too scare for any but thesimplest methodologies). The tool shall consist of a set of indica-tors that cover the core aspects of energy security. These coreaspects will be developed in Section 3.1. Further, the tool shouldbe practical for application on an annual basis so as to allowtrending of results over time, as well as multi-country comparison.

The tool will be further developed by expressing each indicator ona 0-to-1 scale. This is to allow multiple indicators to be synthesizedinto composite scores – one for each core aspect and one for overallenergy security (the Energy Security Index or ESI).

3. Methodology

3.1. Development of the core aspects of energy security

For this tool, the concept of energy security is developed bygathering the concepts from other works, eliminating the dupli-cate aspects (or dimensions, as they are often called) and selectingfor inclusion only those aspects that can be applied to Malaysiaand other SEA countries, given their data availability. It is intendedfor aspects that are excluded due to irregular availability of datathat are to be analyzed separately and those that do not lendthemselves to measurement are to be left to discussion.

Winzer (2012) reviewed the literature on security of energysupply and found that “the common concept behind all energysecurity definitions is the absence of, protection from or adapt-ability to threats that are caused by or have an impact on theenergy supply chain.” Individual authors limit their concept ofenergy security along one or several dimensions due to thedifficulty of measuring all of those threats at once. One dimensionfocuses on the sources of those threats (technical, human andnatural). Another dimension focuses on the scope of the impact ofthose threats. These are measured in terms of continuity ofcommodity supplies, service supply, the economy and the envir-onment and society. Many authors further limit their concept ofenergy security by distinguishing between secure and insecurelevels of continuity based on the speed, size, duration, singularityand sureness of the threat.

Winzer further proposed certain limitations to distinguishbetween the concept of energy security and the concepts ofenvironmental sustainability and economic efficiency. These lim-itations are meant to address a problem commonly found inenergy security measurement which is that double-countingarises from the attachment of additional meanings to the term‘energy security’ that are largely contained in other policy goals.According to Winzer, the impact of the environment on the energysupply chain belongs to the concept of energy security, while theimpact of the energy supply chain on the environment belongs tothe concept of environmental sustainability. Likewise, the impactof the economy on the energy supply chain belongs to the conceptof energy security, while the impact of the energy supply chain onthe economy belongs to the concept of economic welfare. Theselimitations bring the definition of energy security closer to that ofScheepers et al. (2006) which leads to a consideration of the short-term and long-term risks affecting the energy supply chain.

S. Sharifuddin / Energy Policy 65 (2014) 574–582 575

On the other hand, measuring the impact of environmental andeconomic issues on energy security can be very difficult –

measuring the impact of adverse weather on energy security, forexample, is much more complicated than measuring the pollutioncaused by energy production. Simplifying the quantification canresult in indicators that, intuitively, do not appear as relevant. Forexample, we would not think of annual rainfall or central banklending rate as indicators of energy security (the latter through itsimpact on energy investments), but we would think it appropriateto use energy sector water withdrawal or investments in energyinfrastructure as same. It is not surprising then that Winzer'slimitations lead the definition of energy security away from thoseof other works such as APERC (2007), IEA (2007a), von Hippel et al.(2011), Lefèvre (2010) and Löschel et al. (2010) which all takeinto consideration the impact of the energy supply chain on theenvironment and/or the economic welfare.

Winzer found that the vast majority of energy security defini-tions focus on the continuity of commodity supplies. Certainly,energy security is traditionally seen as an issue of providingadequate and reliable supplies of energy at affordable prices. Thisis reflected in the definitions of energy security from varioussources, such as IEA (2001, 2007b) and APERC (2003).

Concepts of energy security have widened over time, however.APERC, for example, expanded its concept of energy security toinclude the aspects of accessibility and acceptability of energy(APERC, 2007). Hughes and Shupe (2011) and Kruyt et al. (2009)based their measurement tools on this concept of energy security.

Lefèvre (2010) and Löschel et al. (2010) based their concepts ofenergy security on that of Bohi and Toman (1996), which focuseson the impact of energy security on welfare. Welfare is also thefocus of IEA (2007a). However, the calculation of actual orpotential impact of the energy supply chain on welfare is compli-cated, such that proxy measurements based on concentrationratios are used. Löschel et al. also introduced proxy indicators thatcompare current fuel price and volume to their medium-termlevels.

Another major strand of energy security concepts stems fromvon Hippel et al. (2011), which defined energy security as theavailability of fuel and energy services to ensure the survival of thenation, the protection of the national welfare and the minimiza-tion of risks associated with the supply and use of the saidservices. According to this definition, energy security is composedof six dimensions: energy supply, economic, technological, envir-onmental, social and cultural, and military and security.

Vivoda (2010) built on the work of Von Hippel et al. by addingfurther 5 dimensions: demand management, efficiency, humansecurity, international, and policy. Vivoda further deepened the6 dimensions of Von Hippel et al. by adding 10 “attributes” to them(as well as introducing another 34 attributes with his own fivedimensions).

Sovacool (2011) found Vivoda's concept of energy security to beincomplete. He also found that, at times, the actual metrics andindicators conflate with dimensions or components. Sovacool builtupon Vivoda's work by proposing a list of 20 dimensions and 200metrics. This list is very similar to the concept of energy securitydeveloped through interviews and surveys, discussed below.

Sovacool and Brown (2010) surveyed the academic literature onenergy security and concluded that it is composed of four dimen-sions: availability, affordability, efficiency and environmentalstewardship. These are measured by a total of 10 indicators.

Sovacool et al. (2011) interviewed global energy experts andfound energy security to be composed of five dimensions: avail-ability, affordability, technology development and efficiency, envir-onmental sustainability, regulation and governance. These fivedimensions are broken down into 20 components and measuredby 20 indicators.

Sovacool and Mukherjee (2011) conducted interviews, surveys,workshops and literature review to find that energy security iscomposed of five dimensions: availability, affordability, technologydevelopment, sustainability, and regulation. These five dimensionsare broken down into 20 components and measured by 372indicators.

More dimensions and more indicators do not necessarilyproduce a better tool. Many indicators are variants of one another– although they present different ways of looking at the samepiece of information, they could lead to double counting. To anextent, this could be remedied by weighting the indicators;however weighting is complicated if indicators that are based onthe same information are contained within different dimensions.

As such, the dimensions introduced in the works discussed will bereconciled into the fewest number of aspects possible. This will bedone by examining the indicators introduced, removing those thatcannot be applied due to unavailability of data and eliminating theduplicates and variations of the same indicator. Indicators that expressresults in relative values will be preferred to their variants that expressresults in absolute values. For example, ‘energy supply per capita’ willbe preferred over ‘total energy supply’ as a measurement of energyavailability as the latter will bias results in favor of larger countries.

Table 1Indicators of energy security organized according to the elements and aspects of energy security.

Aspect Element Indicator(s)

Availability Volume Primary energy supply per capitaAccessibility Electrification level; access to modern cooking fuels levelIndependence Net import-to-consumption ratios (crude oil, refined petroleum products, natural

gas, coal, electricity)Stability Resource sustainability Proved reserves-to-production ratios (crude oil, natural gas, coal)

Supply security Risk-weighted domestic and world production diversity indicesa (crude oil, natural gas, coal)Fuel diversity Fuel mix diversity indicesa (primary energy, electricity generation, transport sector)Infrastructure adequacy Refinery output-to-capacity ratio; actual electricity generation-to-generation potential ratioEmergency response capability Total stocks-to-annual consumption ratio (crude oil, refined petroleum products)

Affordability Price levels Electricity retail price-to-GDP ratio (industry, commercial, residential)Liquid fuel retail price-to-GDP ratio (diesel, gasoline)

National accounts Energy subsidies-to-government budget ratioEnergy import cost-to-total export revenue ratio

Efficiency Energy consumption Residential sector energy consumption per household or per capitaTransport sector energy consumption per capita-kilometer

Energy intensity Sectoral energy intensity (industry, commercial, agriculture)Environmental impact CO2 emissions Energy sector CO2 emissions per unit energy

Energy sector CO2 emissions per capita

a Using the Shannon–Weiner or the Herfindahl–Hirschman diversity indices.

S. Sharifuddin / Energy Policy 65 (2014) 574–582576

Based on the works discussed in this section, as well as Frondelet al. (2009), Institute for 21st Century Energy (2010) and METI(2010) mentioned in Section 1.2, energy security is conceptualized forthis tool as having at least five core aspects: availability, stability,affordability, consumption efficiency and environmental impact.As per Table 1, each of these aspects is broken down into compo-nents called elements of energy security; and for each element theindicator(s) are identified for its quantitative assessment.

For consistency, this tool is designed to utilize mainly annualenergy data and statistics published by sources such as the IEA,Energy Information Administration (EIA), BP, APERC, and financialdata and statistics from the World Bank (WB), the InternationalMonetary Fund (IMF) and the World Trade Organization (WTO).

3.2. Overcoming data limitations with proxy indicators

Actual electricity generation-to-generation potential ratio isused as a proxy to the more accurate indicator of infrastructuraladequacy i.e. electricity generation reserve margin, for which datamay not be available.

World production diversity indices are used as proxies toimport diversity indices as a country's import sources and theirvolumes are not readily available. Weighted with risk factors, theseare combined with risk weighted-domestic production index toproduce an approximation to security of supply indices.

Likewise, the indicator transport sector energy consumptionper capita-kilometer is included as a proxy for the more accurateindicator of energy consumption efficiency i.e. transport sectorenergy consumption per kilometer traveled.

The indicators electricity retail price-to-GDP and liquid fuelretail prices-to-GDP are calculated as ratios of per unit price (perkWh or per liter) to GDP per capita per day. They serve as proxiesto the better representatives of affordability i.e. per unit price toaverage daily income of bottom 20% of society or percentage ofincome spent on energy by bottom 20% of society.

3.3. Reconciliation with other works

The aspects of energy security included in this tool aresufficient to cover the dimensions of energy security conceptua-lized in APERC (2007) and similar works.

This tool's indicators of import reliability substitute for theconcentration ratios of IEA (2007a) and its derivatives that focuson the impact of energy insecurity on welfare. As to the ex-postindicator introduced by Löschel et al. (2010) which comparescurrent energy price and volume to their medium-term trend,this is approximated by this tool's method of scoring whichcompares results of different years (see Section 3.4 Standardizingthe indicator measurements).

Table 2 gives a summary of the reconciliation of the 20dimensions of Sovacool (2011) with this tool's five core aspects.Some of the 20 will be left to discussion and some to independentmeasurement. Sovacool (2011) is the culmination of the worksstemming from the conceptual of von Hippel et al. (2011). It is alsosufficiently similar to represent the concepts that are derivedthrough interviews and surveys.

As Table 2 indicates, some elements of energy security have tobe measured independently even though they rightly belongintegrated into this tool. This is because the data required mayonly be available for some countries and for some years – aninconsistency which renders them unsuitable for inclusion in thetool. They include Sovacool's dimensions of land use, water andpollution.

In addition, five further elements left to independent measure-ment for the same reason are not found as dimensions in Sovacool'smethodology – they are created by gathering valuable indicators of

Sovacool's methodology that suffer from data limitation, andgrouped into elements to fit with other elements of this paper'stool. These elements are market diversity which focuses on competi-tion in the local energy market; infrastructure diversity which isindicative of the resilience of the energy sector to infrastructuralfailures; supply reliability which focuses on the record of disruptions;energy supply efficiency which focuses on electricity generation anddistribution loses; and price volatility. The latter focuses on intra-yearvolatility, which is not captured by this tool's method of scoring(although the method is sufficient to indicate inter-year volatility).These elements and the indicators of Sovacool's methodology fromwhich they are arrived at are given in Table 3 (for brevity, thecorrespondence between the elements of this paper's tool and theindicators from Sovacool (2011) are limited to these five elementsand not to include all 200 indicators from Sovacool (2011)).

As Table 2 also indicates, four dimensions are left out to beassessed through discussion. They are the dimensions of innova-tion, investment, literacy and governance. The indicators forinnovation and investment given by Sovacool require data thatare not collected in Malaysia and most other SEA countries.Moreover these countries are technology adopters rather thantechnology developers. This means that it is acquisition of tech-nology from abroad and investment in energy infrastructure –

rather than innovation – that is important to these countries.However, due to the long service life of energy infrastructures andthe relatively small sizes of SEA countries, we expect investmentsto be intermittent. This does not lend to year-on-year analysiswhich this tool is designed for. Rather, investments should beevaluated separately, through discussion, against projected energydemand and asset replacement requirement.

Table 2The 20 dimensions of Sovacool (2011) and the corresponding elements of energysecurity from this measurement tool.

Dimension(from Sovacool, 2011)

Elements(from this measurement tool)

Availability Resource sustainability, volume,independence

Dependency Independence, supply security, nationalaccounts

Diversification Supply security, fuel diversity,infrastructure diversitya, market diversitya,emergency response capability

Decentralization Fuel diversityInnovation Left to discussionInvestment Left to discussionTrade Supply security, infrastructure diversitya,

infrastructure adequacyProduction Resource sustainability, infrastructure

adequacy, volume, energy intensity,infrastructure diversitya

Price stability Price volatilitya, energy intensityAffordability National accounts, price volatilitya, price

levels, energy intensity, market diversitya

Governance (Left to discussion but partly covered bysupply security, CO2 emissions)

Access Volume, accessibility, energy consumption,price levels

Reliability Infrastructure diversitya, supply reliabilitya

Literacy (Left to discussion)Resilience Infrastructure adequacy, emergency

response capabilityLand use Land usea

Water Watera

Pollution Pollutiona

Efficiency Energy intensity, energy consumption,energy supply efficiencya

Greenhouse gasemissions

CO2 emissions

a Elements to be measured independently.

S. Sharifuddin / Energy Policy 65 (2014) 574–582 577

Also left out are the dimensions of literacy and governance.These dimensions are too subjective to be practically measuredand included into this tool. This is because – in Malaysia, andperhaps in other SEA countries – there is perceived to be a gulfbetween the existence of institutions, policies, goals and regula-tions, and the effective functioning, implementation and adher-ence to them. As much as possible, this tool will capture theperformance of the energy system that is indicative of effectivegovernance, while leaving to discussion the scope and quality ofgovernance.

3.4. Standardizing the indicator measurements

Included in this tool are 35 indicators representing 13 elementsand grouped into five aspects. With multiple indicators in differentunits, it is necessary to convert them all to a standard unit in orderto allow synthesis of results. The standard unit of this tool is the0-to-1 scale, with 0 expressing the poorest result and 1 the best.

Synthesis of the indicators begins with calculating a compositescore for each element. Next, the scores of elements are putthrough a function to obtain the composite score for each aspectand, finally the scores of aspects are put through another functionto obtain an overall index for energy security (the ESI). Hence, eachcomposite score will be expressed on the 0-to-1 scale.

While various ratios and diversity indices are readily expressedon a 0-to-1 scale, indicators of the elements of volume, resourcesustainability, nominal prices, energy consumption, energyintensity and CO2 emissions are expressed in different units.To convert them to 0-to-1 scale, some existing works “normalize”their results although this could entail different processes. TheInstitute for 21st Century Energy (2010) normalizes its results byconverting annual data into indices in which the value for the firstyear is set at 100 and values for subsequent years are set inproportion to the first year. This does not satisfy the requirementto convert results to a 0-to-1 scale as the indices could reachvalues of more than 200 i.e. more than 100% of the first result.

Cohen et al. (2011) rank the results of different countries byindicator and take the average rank of a country as the synthesizedindicator. This method is not ideal as it erases the magnitude ofdifferences between countries.

Hughes and Shupe (2011) expresses one country's indicatorvalue as a percentage of the total value of all country indicators.However, with a large number of countries this process returnslow values which are misleading on a 0-to-1 scale where 0.5 isexpected to be approximately the average.

The normalization process of World Energy Council (2008),Cabalu (2010) and Sovacool et al. (2011) involve expressing thedifference between one country indicator value and the minimum

of country indicator values in proportion to the range of countryindicator values. As well as being susceptible to outliers – whichbecomes more likely as sample size increases – this means ofconversion produces results that are somewhat misleading in thatwhere one of the converted results will be returned as 1, suggest-ing that there is no room for further improvement, which is clearlyfalse in the case of energy supply per capita. Also, another of theconverted results will be returned as 0, suggesting that there is noroom to do any worse, which is clearly false in the case of CO2

emissions.The same shortcomings also apply to the normalization process

of Jansen et al. (2004) which express one country's indicator valueas a percentage of the highest country indicator value andScheepers et al. (2006) which take it as a ratio to the average ofthe five best country indicator values (hence also allowing resultsof greater than 1 to be returned).

This tool's alternative means of normalization uses the follow-ing formula:

Ij ¼ probability ðZ⇐ZjÞ; Z � normal ð0;1Þwhere,

Zj¼ ðXj–mean½X�Þ=ðstandard deviation½X�Þ ð1ÞIn the formula, Ij is the indicator for country j on a 0-to-1 scale, andXj is the raw result of the indicator for country j. Z is a variable ofthe standard normal distribution with mean of 0 and variance 1.Zj, the standardized result for country j calculated based on themean and standard deviation a sample of n countries (Eq. (1)).Essentially, this means of normalization ranks the results inproportion to each other under the assumption that they arenormally distributed i.e. in a bell-shape when diagrammatized,ranging between �1 and 1. Although this means of conversionrequires a minimum inclusion of 5 countries, expanding thesample size reduces the effect of any outlier present.

As the 0-to-1 scale of this tool is an ascending scale where1 indicates the best score and 0 the worst, where necessary, theindicators are transformed in direction by means of a straight linetransformation:

In ¼ 1� I; 0⇐I; In⇐1

where In is the transformed indicator and I is the normalizedindicator.

3.5. Synthesizing the indicators

Indicators expressed on an ascending 0-to-1 scale can besynthesized into composite scores for the elements and aspectsof energy security, and an overall energy security index. The latter

Table 3Five elements from this measurement tool left to independent measurement, and the corresponding indicators from Sovacool (2011).

Elements (from this measurement tool) Indicators (from Sovacool, 2011)a

Market diversity Diversification of ownership of energy companies; % of capacity operated by independent power providers;% of competitiveness (market share of largest three companies)

Infrastructure diversity Geographic dispersion of energy facilities; number of transnational pipelines; number of LNG ports;volume of energy imported by rail; number of electricity interconnections on national borders;number of coal mines

Supply reliability Number of attacks and disruptions to energy infrastructure; number of natural disasters;number of coal mining accidents per year; number of energy accidents and failures per year;frequency of electricity blackouts or supply interruptions; duration of electricity blackouts or supply interruptions;interruptions in electricity supply per year per customer

Energy supply efficiency Thermal efficiency of combustion power plants; electricity transmission and distribution losses(Intra-year) price volatility Historical fuel price fluctuations; historical price escalations; risk of future price increases;

price increases for certain fuels

a These are the indicators that led to the creation of the elements of the left-hand column. Actual indicators to measure the latter may differ to suit the data availabilityand to achieve comprehensive coverage.

S. Sharifuddin / Energy Policy 65 (2014) 574–582578

can be a simple average of the scores of the five aspects, therebyattaching equal importance to the five aspects of energy security.Likewise, the score of an aspect can be a simple average of thescores of its elements, reflecting the equal importance attached tothe various elements within each aspect.

On the other hand, it may not be ideal to synthesize indicators intocomposite scores of elements by means of simple average. It may bebetter to weight the indicators according to their importance. Table 4gives the weighting that could be applied to indicators.

Table 5 gives the keys to the weighting formulas of Table 4.To give an example of the application of the weighting

formulas, refer to the case of the element of independence whichhas five indicators, three indicators for primary fuel-types crudeoil, natural gas and coal, and two indicators for final fuel-typesrefined petroleum products and electricity. These fuel-types aredenoted as Pft1, Pft2, Pft3, Fft1, Fft2.

Each indicator in this element has two weights attached to iti.e. PFTS and ftPS. That is, the weights attached to the indicator forPftj are

PFTS½primary energy� n ftPS½Pf tj : Pf t1; Pf t2; Pf t3�; j¼ 1;2;3

and the weights attached to the indicator for Fftk are

PFTS½final energy� n ftFS½Ff tk : Ff t1; Ff t2�; k¼ 1;2

The weight ftPS for the indicator for Pftj is calculated asfollows:

ftPS½Pf tj : Pf t1; Pf t2; Pf t3� ¼ quantity½Pf tj�=ðquantity½Pf t1�þquantity½Pf t2�þquantity½Pf t3�Þ; j¼ 1;2;3

The same method of calculation is applied to the weight ftFS.As to the weight PFTS for the indicator for Pftj,

PFTS½primary energy�¼ quantity½primary energy�=quantity½total energy�¼ quantity½primary energy�=ðquantity½primary energy�þquantity½final energy�Þ

where

Quantity½primary energy�¼ ðquantity½Pf t1�þquantity½Pf t2�þquantity½Pf t3�Þ

and

Quantity½final energy� ¼ ðquantity½Ff t1�þquantity½Ff t2�ÞThe weight PFTS for an indicator based on Fftk is similarly

calculated, that is:

PFTS½final energy� ¼ quantity½final energy�=quantity½total energy�

4. An illustrative example of the methodology

A number of studies have quantitatively assessed various SEAcountries although only two have assessed Malaysia, which is thecountry for which this methodology is primarily designed. Theseare APERC (2007) and Sovacool et al. (2011).

Table 6 displays a summary of the results obtained by usingAPERC's method.

APERC's method has two major shortcomings: one is that theresults are not uni-directional in that two of the five indicators(ESI1 and ESI3) reflect improvement in energy security with higherscores while the other three indicators reflect the opposite.Secondly, it is not clear if the results can be synthesized into anoverall index for energy security. Besides the direction of scoring,this is also due to ESI1 and ESI2 being logarithmic functions andthe rest being linear functions. Therefore, when synthesized the

Table 4Weighting formulas for synthesizing indicators.

Element Indicators Weights

Volume Primary energy supply per capita 1Accessibility Electrification level, access to modern cooking fuels level ½ to each indicatorIndependence Net import-to-consumption ratios (crude oil, natural gas,

coal, refined petroleum products, electricity)PFTS[primary energy] n ftPS[crude oil, natural gas, coal]þPFTS[final energy] n ftFS[refined petroleum products, electricity]

Resource sustainability Proved reserves-to-production ratios(crude oil, natural gas, coal)

ftPS[crude oil, natural gas, coal]

Supply security Risk-weighted domestic and world productiondiversity indices(crude oil, natural gas, coal)

ftPS[crude oil, natural gas, coal] n DPS[crude oil, natural gas, coal]þftPS[crude oil, natural gas, coal] n NPS[crude oil, natural gas, coal]

Diversity Diversity indices (primary energy mix, electricity generationfuel mix, transport sector fuel mix)

1/3 to each indicator

Infrastructure adequacy Refinery output-to-capacity ratio, actual electricitygeneration-to-generation potential ratio

ftFP[refined petroleum products, electricity]

Emergency responsecapability

Total stockpile-to-annual consumption ratio(crude oil, refined petroleum product)

PFTS[crude oil, refined petroleum products]

Nominal price Electricity retail prices (industry, commercial, residential) ftFS[electricity] n sED[industry, commercial, residential]þftFS[refined petroleum products] n sFD[diesel, gasoline]Liquid fuel retail prices (diesel, gasoline)

National accounts Energy subsidies-to-government budget ratio ½ to each indicatorEnergy import cost-to-total export revenue ratio

Energy consumption Residential sector energy consumption per householdor per capita

sFD[residential, transport]

Transport sector energy consumption per capita-kilometerEnergy intensity Sectoral energy intensity (industry, commercial, agriculture) sFD[industrial, commercial, agriculture]CO2 emissions Energy sector CO2 emissions per unit energy ½ to each indicator

Energy sector CO2 emissions per capita

Table 5Keys to weighting formulas in Table 4.

Key Meaning

PFTS Relative share of Primary-Final energy in Total energy SupplyftPS Relative share of fuel-type in Primary energy SupplyftFS Relative share of fuel-type in Final energy SupplyftFP Relative share of fuel-type in Final energy ProductionsED Relative share of sector in Electricity DemandsFD Relative share of sector in Final energy DemandDPS Share of Domestic production in Primary Supply of fuel-typeNPS Share of Net imports in Primary Supply of fuel-type

(assign value of 0 to net exporter)

S. Sharifuddin / Energy Policy 65 (2014) 574–582 579

scale may not be symmetrical and it would be difficult to interpretthe synthesized index.

The methodology developed here overcomes the shortcomingsof APERC's tool through score transformation and normalization(see Section 3.4). Indicator scores can be synthesized into scores ofelements, then into scores of aspects and then into the ESI. The ESIwould be useful to policy makers and analysts as it could act as areference figure in their discussions, much as economists find theGDP to be an extremely useful reference in their discussions.Moreover, discussion is facilitated as each ESI is comparative toother ESI's calculated for other time periods and other countries,whereas a GDP is an absolute number that can have no relation toGDP from other years or other countries. On the other hand, thedrawback is that the ESI's have to be recalculated each time a newtime period or country is added into consideration.

As the focus of this paper is on methodology – and due to spatiallimitations – only some preliminary results are presented here toshow the value of the methodology (rather than to discuss the resultsin detail). Fig. 1 is a radar chart depicting the ESI for Malaysia,Indonesia, Philippines, Thailand and Vietnam for the years 2002,2005 and 2008. This figure would be useful to policy makers andanalysts for its clear summary of information, thus proving the valueof this methodology's transformation, normalization and synthesis ofscores. Fig. 1 shows that Malaysia's energy security – relative to fourother SEA countries – remained about the same level between 2002and 2005, but had noticeably deteriorated by 2008 although the ESIremained above average throughout.

A more detailed summary is possible through a breakdown ofthe ESI into its component aspects. Fig. 2 is a radar chart depictingthe scores of the core aspects of energy security for Malaysia, forthe years 2002, 2005 and 2008. More detail is available bybreaking down the score of each core aspect into its componentelements. Fig. 3 is a radar chart depicting the scores of theelements of the aspect of stability for Malaysia, for the years2002, 2005 and 2008. A breakdown of the elements into theircomponent indicators is also possible but not presented here.

Fig. 2 shows that the biggest deterioration occurred in the aspect ofstability, very closely followed by deterioration in the aspect ofenvironmental impact (falling by 0.15 points and 0.14 points).Drilling-down into the aspect of stability, Fig. 3 shows that thedeterioration was most drastic in the element of emergency responsecapability, falling from the highest score in the region to well belowthe average. This sends the message that Malaysia's stocks of crude oiland refined petroleum products are low compared to its consumptionlevels, and that other countries in the region maintain their stocks at asafer level. Thus it is easy to conclude that Malaysia's deterioratingenergy security was attributable mainly to its low stocks of crude oiland refined petroleum products relative to consumption levels, and toits high CO2 emissions relative to population size and energy con-sumption level (the latter is easily arrived at as the aspect ofenvironmental impact has only two indicators, both of which arebased on CO2 emissions).

Again, these radar charts prove the utility of this methodology'snormalization of scores, as well as its grouping of indicators into

elements and aspects of energy security – they allow for drilling-down from a headline figure useful in public communications tocomponent figures useful for analyses.

Drilling-down from a headline figure is also possible using themethod of Sovacool et al. (2011) as its 20 indicators grouped into fivedimensions are also normalized. However, as discussed in Section 3.4,this normalization process will always result in one country achievingthe perfect score of 1 for each indicator, and one country the worstscore of 0. This is somewhat misleading as it appears to imply thatresults cannot be improved upon or cannot deteriorate further. Incontrast, the methodology laid out in this paper uses the statisticalnormal distribution to avoid this problem.

Fig. 4 depicts in the form of a radar chart the ESI for Malaysia,Indonesia, Philippines, Thailand and Vietnam for the year 2005,calculated using the methodologies of this paper and of Sovacoolet al. (2011). The year 2005 is depicted as it is the only yearcommon to the application of the two methodologies.

Table 6APERC's energy security indicators for Indonesia, Malaysia, Thailand and Vietnam (2004).

Country ESI1 ESI2 ESI3 ESI4 ESI5

INA 0.75 0.04 0.04 0.05 0.25MAS 0.64 0.20 0.01 0.00 0.49THA 0.71 0.38 0.01 0.37 0.66VN 0.74 0.00 0.03 0.00

Primary energydiversity

Net energy import dependency(weighted)

Non-carbon based fuelportfolio

Net oil import dependency(weighted)

Middle east importdependency

00.10.20.30.40.50.60.70.80.9

1Indonesia

Malaysia

PhilipinesThailand

Vietnam

2002

2005

2008

Fig. 1. Energy Security Indices for Malaysia, Indonesia, Philippines, Thailand andVietnam (2002, 2005 and 2008).

00.10.20.30.40.50.60.70.80.9

1Availability

Stability

AffordabilityEfficiency

Environmental Impact

Malaysia 2002

Malaysia 2005

Malaysia 2008

Fig. 2. Scores of core aspects of energy security for Malaysia (2002, 2005and 2008).

S. Sharifuddin / Energy Policy 65 (2014) 574–582580

Clearly, this paper's methodology produced higher ESI's than thoseof Sovacool et al., although the latter did produce a better result forMalaysia relative to other countries. This is due to, first, the tool ofSovacool et al. includes 20 indicators (versus 35 in this tool). Second,the 12 common or closely approximated indicators are grouped underdifferent aspects/dimensions. Third, the methodology of Sovacool et al.uses average indicator scores to obtain the score of each dimensionwhereas in this methodology the score of aspects are weighted-averages of their component indicators. Fourth, the overall scoresdiffer because of the different normalization processes discussedabove. Finally, normalized scores are affected by the number ofcountries included with the application of the methodology – 18 forSovacool et al. and only five in this paper.

5. Conclusion

Presented here is a methodology (or tool) for the quantitativeassessment of energy security that builds upon existing works by

overcoming the impediment on applicability of those works posedby limited data availability for SEA countries. It does this bycondensing the nearly 400 identified indicators into 35 indicatorsthat are designed to utilize mainly data published by internationalinstitutions – this means that the tool should also be applicable fordeveloping countries in other regions.

The 35 indicators are grouped into 13 elements and five coreaspects of energy security i.e. availability, stability, affordability,efficiency and environmental impact. The indicator scores can besynthesized into scores of elements, core aspects and the ESI. Thisis possible through this methodology's normalization processwhich improves upon existing processes, some of which do nothave a theoretical upper-limit (and so return scores of greater than 1)or are unable to produce an overall index for energy security. Moresignificantly, it overcomes a flaw in some processes of returning top-and bottom-of the scale scores (i.e. 1 and 0), for each indicatorapplied. It does this by utilizing the statistical normal distribution i.e.a symmetrical, bell-shaped distribution ranging between -1 and 1and centered at 0, to produce scores on a 0-to-1 scale.

In addition, weights to synthesize the 35 indicators into scoresof elements are also presented here.

By synthesizing the indicators and producing an ESI, this toolfacilitates policy makers and analysts as the ESI acts as a referencefigure in their discussions on energy security, very much in the sameway as GDP facilitates discussions on the economy. Analysis of energysecurity is also easier using this tool as its synthesis of indicators intoscores of core aspects and elements allow for drilling-down from theESI. On the other hand, the drawback is that the normalization processrequires the scores to be recalculated each time a new time period orcountry is added into consideration.

Four dimensions identified in other works are excluded eitherbecause they are not suitable for quantification or because they arenot suited to year-on-year analyses. They are the dimensions ofinnovation, investment, literacy and governance. Therefore, thesedimensions are left to discussion.

Although a number of proxy indicators have been developed toovercome lack of data (those indicators are: actual electricitygeneration-to-generation potential ratio, world production diversityindices, transport sector energy consumption per capita-kilometer,electricity retail price-to-GDP and liquid fuel retail prices-to-GDP)eight elements of energy security identified in other works have tobe excluded from this tool due to data limitations. These elementsinclude land use, water, pollution, market diversity, infrastructurediversity, supply reliability, energy supply efficiency and intra-yearprice volatility. As such, there is room to significantly improve thistool by developing compatible methodologies to approximate theseelements, and to integrate the results into this tool.

Given the exclusion of dimensions and elements identifiedabove, and as assessment is made at the national level, it isimportant to stress that some aspects of energy security are notcaptured by this tool. It is also important to stress that theselimitations are not debilitating. The GDP – on which this tool ismodeled after – also does not cover some important aspects of theeconomy (welfare and the environment quickly come to mind). Yetthe GDP remains the most important tool of quantitative assess-ment of the economy; and economists well practiced in itsapplication know its limitations, its proper use and what discus-sions are necessary to accompany it. Therefore, it is hoped that, overtime and with practice, the limitations of this tool and insights intohow they can be overcome will emerge more apparent.

Appendix A

All data sourced from APERC Energy Handbook 2002, 2005, 2006;ASEAN Statistical Yearbook 2005, 2008; IEA World Energy Outlook

00.10.20.30.40.50.60.70.80.9

1Supply Security

Fuel Diversity

Infrastructure Adequacy

Emergency Response

2002

2005

2008

Fig. 3. Scores of elements of the aspect of stability for Malaysia (2002, 2005and 2008).

00.10.20.30.40.50.60.70.80.9

1Indonesia

Malaysia

PhilippinesThailand

Vietnam

Sharifuddin Sovacool et al

Fig. 4. Energy Security Indices for Malaysia, Indonesia, Philippines, Thailand andVietnam for the Year 2005, calculated using the methodologies of this paper(Sharifuddin) and Sovacool et al. (2011).

S. Sharifuddin / Energy Policy 65 (2014) 574–582 581

2004, 2007, 2010; BP Statistical Review of World Energy 2004, 2006,2009; WBWorld Governance Indicators 2011; EIA Statistical Database;JODI Database; APERC Energy Database; Report on the Performance of

the Electricity Supply Services in Malaysia 2002; Electricity SupplyIndustry in Malaysia 2006, 2008; GTZ International Fuel Prices 2003,2007, 2009; WB World dataBank; WTO Statistical Database; MalaysiaYearbook of Statistics 2009; Statistical Yearbook of Vietnam 2005,2007, 2009; and Sovacool et al. (2011) (Tables A1–A4).

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Table A3Data for Fig. 3: Scores of Elements of the Aspect of Stability for Malaysia (2002,2005 and 2008).

Elements of stability Year

2002 2005 2008

Supply security 0.54 0.55 0.52Fuel diversity 0.22 0.42 0.26Infrastructure adequacy 0.20 0.27 0.15Emergency response capability 1.00 0.60 0.41

Table A4Data for Fig. 4: Energy Security Indices for Malaysia, Indonesia, Philippines,Thailand and Vietnam for the year 2005, calculated using the methodologies ofthis paper (Sharifuddin) and Sovacool et al. (2011).

Country Methodology

Sharifuddin Sovacool et al. (2011)

Indonesia 0.56 0.37Malaysia 0.59 0.46Philippines 0.62 0.34Thailand 0.54 0.31Vietnam 0.46 0.28

Table A1Data for Fig. 1: Energy Security Indices for Malaysia, Indonesia, Philippines,Thailand and Vietnam (2002, 2005 and 2008).

Country Year

2002 2005 2008

Indonesia 0.54 0.56 0.59Malaysia 0.59 0.59 0.53Philippines 0.64 0.62 0.61Thailand 0.54 0.54 0.58Vietnam 0.48 0.46 0.47

Table A2Data for Fig. 2: Scores of Core Aspects of Energy Security for Malaysia (2002, 2005and 2008).

Aspects of energy security Year

2002 2005 2008

Availability 0.87 0.88 0.86Stability 0.49 0.46 0.34Affordability 0.91 0.90 0.85Efficiency 0.33 0.41 0.36Environmental Impact 0.37 0.31 0.23

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