Market analysis firm Euromonitor Worldwide has launched its first-ever International Power Vulnerability Index, as a part of its ‘New Financial Actuality: Rising Power Pressures’ report, revealing particular person nations’ publicity to power shocks.
The International Power Vulnerability Index 2023 is designed to assist leaders and companies assess and benchmark a rustic’s power safety, offering insights into potential dangers, challenges and alternatives within the markets the place they function or plan to develop into sooner or later.
Euromonitor Worldwide used six teams of indicators to measure every nation’s degree of power vulnerability:
- Power self-sufficiency (30% of complete rating (TS)),
- Options to fossils (35% TS),
- Power reserves potential (10% TS),
- Power accessibility (5% TS),
- Power effectivity (10% TS), and
- Financial resilience (10% TS)
Norway, Canada, Australia and the US rank on the high of the index resulting from their sturdy power self-sufficiency, ample power sources, various power combine and excessive financial resilience.
On the different finish of the desk¸ Belarus and Lebanon rank on the backside as each nations lack power sources and wrestle with poor power effectivity and financial uncertainty.
Singapore and Hong Kong additionally rank among the many backside 10 performers due to heavy reliance on power imports regardless of their good rating in power effectivity and financial stability. The smaller dimension of Singapore and Hong Kong additionally limits renewables capability, including to the city-states’ weaknesses.
Aleksandra Svidler, Guide for Economies at Euromonitor Worldwide, mentioned: “Understanding a rustic or a area’s vulnerability to power shocks will inform enterprise technique and allow an optimum plan for power sourcing, in addition to assist to establish the white areas for funding.
“General, economies which can be closely reliant on imports, with low adoption of renewables, weak power effectivity and financial instability are extra susceptible to power dangers.
“Many African nations proceed to grapple with underdeveloped infrastructure, poor entry to dependable and inexpensive power and low funding whereas growing Asian economies proceed to wrestle with low self-sufficiency charges, excessive dependency on fossil fuels and restricted entry to capital.”
Svidler added, that European nations additionally face challenges forward. “Though many European nations are higher positioned to climate disruptions as a result of rising renewables adoption and higher entry to capital, the area’s excessive reliance on power imports raises its publicity to power shocks.”
Euromonitor Worldwide chosen six teams of indicators to measure every nation’s power vulnerability often known as pillars. Low power self-sufficiency, as a result of weak home power manufacturing and excessive reliance on imports, raises the publicity of an financial system to disruptions in power provide, world worth shocks and geopolitical dangers. Excessive reliance on a single exterior power provider significantly undermines an financial system’s power safety.
Options to fossils pillar displays the diversification of an power combine away from fossil fuels by investing in various sources, corresponding to inexperienced renewables or nuclear energy, which may help to boost power safety, cut back publicity to world power worth and provide shocks, and improve sustainability.
Power reserves potential helps to evaluate the longer term availability of power sources at present manufacturing charges. Reserves of oil, fuel and coal can play a key function in boosting power self-sufficiency of a rustic. But, excessive useful resource potential doesn’t essentially assure ample future provide resulting from economical, technological and environmental constraints.
Power accessibility pillar illustrates the reliability and adequacy of energy provide in a rustic and factors to the state of power infrastructure. Lack of entry to energy and underdeveloped power infrastructure can result in vital social and financial challenges.
Power effectivity signifies the quantity of power wanted to supply items and companies. Larger power effectivity may help to cut back power consumption, and subsequently cut back prices and reliance on imports, enhance competitiveness and environmental advantages.
International locations with better financial resilience are higher outfitted to face up to power worth and provide fluctuations, as obtainable mechanisms and reserves permit them to handle power market shocks. In the meantime, increased financial freedom fosters funding in innovation and diversification.