Article in Journal

Managing Energy Security: The Analysis of Interfuel Substitution and International Energy Trade

Svetlana A. Ikonnikova, Sofia Berdysheva
CESifo, Munich, 2022

EconPol Forum 23 (6), 23-27
  • Energy security and affordability are major concerns in the coming winter as Germany seeks substitutes for Russia’s energy supplies
  • We highlight the role of energy transition on its exposure to energy price shocks and its failure to include security considerations in its trading arrangements
  • We analyze the global trade of coal, oil, and natural gas to track 1) interfuel switching, and 2) cross-country variance in security of supply (i.e., import concentration)
  • We examine how energy security and affordability can be improved by domestic production, interfuel demand allocation, and trade balance
  • We provide policy recommendations on coordination in 1) domestic energy production, 2) energy mix, and 3) new imports by destination, emphasizing the role of multinational coordination.