Measuring the security of external energy supply in the European Union

The security of energy supply is one of the main objectives of EU energy policy. In this paper, we introduce an index designed to evaluate the short-term risks associated with the external supply of energy to the EU Member States. It combines measures of energy import diversification, political risks of the supplying country, risk associated with energy transit, and the economic impact of a supply disruption. We construct separate indexes for three primary energy types, oil, gas and coal, and demonstrate that Member States' levels of supply risk exposure differ across energies. Most other studies of this kind provide aggregate indexes combining different types of energy. our results suggest that an aggregate approach could be misleading, at least for discussions of the short-term response to risks. We discuss the implications of our findings for the common energy policy. (C) 2009 Elsevier Ltd. All rights reserved.