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What is the security of supply challenge?

Calculating the cost

Countries that rely on imported fossil fuels to power their electricity supply can potentially be exposed to security of supply issues, including fluctuating fuel prices and disruptions to fuel supplies due to political or geographical instability.

The price of imported fuel is affected by global supply and demand, so it can fluctuate. As demand for electricity in emerging economies increases, global demand for fuel that can be used in electricity generation is likely to increase overall. Meanwhile, the world's fossil fuel reserves continue to diminish. This combination of increasing demand and diminishing supply may drive up the international market price of fossil fuels.

Lack of investment or political disturbances in countries that export fuel can affect the amount of fuel they produce and sell, potentially disrupting electricity supplies in countries that import from them.

Information sources

/energyfuture/