Energy diversification means using multiple sources of energy to reduce dependence on any one source, including renewable and non-renewable energy. It strengthens economic and physical security and reduces the risk of manipulation by foreign entities. Governments secure contracts with multiple energy carriers and increase domestic production while investing in renewable energy sources. Lowering energy consumption also reduces reliance on foreign imports.
Energy diversification refers to a nation using multiple sources of energy to run its economy and public services, eliminating dependence on any one energy source. Such diversification can mean both renewable and non-renewable energy sources as well as multiple carriers, although the terminology leans increasingly towards investment in renewable energy. Objectively, energy diversification is a strategy implemented to strengthen both economic and physical security, thus mitigating the risk of manipulation by foreign entities that may have a monopoly on specific non-renewable energy sources, such as oil. Furthermore, renewable energy is also an important target in energy diversification due to the potential for scarcity associated with non-renewable sources, which in itself potentially creates threats to internal security due to economic uncertainty.
One of the main strategies used by governments globally is to secure contracts with multiple energy carriers from around the world and structure those contracts to be scalable. Mainly, these energy sources refer to non-renewable energy such as oil or hydrocarbons. Scalability refers to the potential to rapidly scale up delivery should the nation have to account for a sudden reduction in supply by another carrier. With multiple and scalable contracts, a nation is in a better bargaining position in international relations if those contracts are negotiated strategically.
Another aspect of energy diversification includes increasing domestic production and exploring non-renewable energy sources whenever possible, although most nations will try to conserve those resources to the extent possible. Thanks to this strategic position, consensus is shifting towards investment and domestic production of renewable energy sources. The potential exploitation of non-renewable sources can help nations achieve true energy diversification, energy independence and a measure of economic and physical security. Sustainability is a major concern of this process; therefore, investments and research in renewable energies require time and expertise. As such knowledge grows through productive endeavors, other diversification initiatives are being pursued intensely as previously mentioned.
Pursuing these strategies is crucial, because the global economy and all the nations that make up the global community, for the most part, rely on fossil fuels to keep their economies running smoothly. The diversification of such sources helps ensure that the economy remains productive and viable even in the event of adversity or conflict with other nations to include the carriers of these energy sources. In addition to supply for energy diversification, consumption strategies to lower demand levels are also considered. When nations consume less energy, that simply means they don’t have to buy or produce as much energy, which means less reliance on foreign imports.
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