Supplier diversity is considered a corner-stone of a secure energy supply system and is therefore frequently used as a key indicator to assess energy security. It is beneficial for an energy system both through extending choice and increasing competition. The rationale behind the enhancement of supplier diversity through energy efficiency measures is that energy savings allow for reduction of the share of the dominant supplier. Thus, the Herfindahl-Hirschman-Index can be improved.
This also overlaps with the co-benefit of reduced import dependency, since for most European countries the dominant supplier is non-domestic. Moreover, energy efficiency can also increase energy use diversity (demand-side) by decreasing the dependence on fossil fuels. It simplifies the integration of electrical energy, which can be imported to a large extent from European countries and is therefore less critical. However, despite the importance of supplier diversity for energy security, an energy system considered diverse is not necessarily a secure energy system and a secure energy system does not need to be diverse (Ranjan/Hughes 2014; Lo 2011).
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Ranjan, Ashish; Hughes, Larry, 2014
Lo, Liang-huey, 2011