Quantitative Assessment of Energy Supply Security: Korea Case Study

Abstract

Ensuring energy supply security has become one of the most important purposes for many countries. To make the strategies for ensuring the energy supply security of a country, it is essential to quantitatively assess the security. This paper aims to present a methodology to evaluate the energy supply security of a country by using different indices of energy dependence and energy diversity, which have been raised as two main paradigms of energy supply security. This study also proposes two indices reflecting the correlation between a country’s energy diversity and energy import dependence to evaluate its energy supply security based on easily accessible data. The presented methodology and indices were applied to the evaluation of the primary energy supply security of Korea from 1991 to 2018. The results show that a country highly dependent on energy imports is not evaluated as secure enough in terms of energy supply even if it obtains higher energy diversity. This finding supports the importance of the correlation of energy dependence and energy diversity of a country to ensure its energy supply security. This approach could be further adapted to other countries and help them to make their energy policy and strategies.

1. Introduction

The increase in population and social growth has accelerated energy consumption, bringing concerns over energy security [1]. Most countries have set their energy policies and strategies to ensure energy security for sustainable development and growth [2,3,4]. However, because of the geographical inequality of energy resources and resource depletion, many countries have difficulty in lowering their dependence on energy imports and ensuring their energy supply security. Moreover, energy supply security is exposed by exterior risks, such as energy price fluctuations, supply disruption, and geopolitical uncertainty.

To reduce the risk of energy supply security related to energy import dependence, Månsson et al. [5] listed solutions such as improving diversity, financial portfolios, and reliable supply and transit routes. Chalvatzis and Ioannidis [6] also focused on energy dependence and diversity as two main paradigms of energy supply security and insisted that energy dependence has raised the importance of diversity in energy security paradigms. They categorized the primary energy import dependence of different countries and analyzed their primary energy diversity to provide reference benchmarks among countries. Matsumoto et al. [7] also classified the overall improvement of primary energy diversity in EU countries using a clustering method.

Moreover, countries that are highly dependent on energy imports such as Singapore, Taiwan, Japan, and Korea have also put great effort into diversifying energy resources to reduce their energy security vulnerability. These countries have perceived the importance of energy diversification and formulated policy concepts in the direction of diversifying energy resources [8,9]. Chuang and Ma [10] evaluated the diversity of primary energy in the energy supply structure of Taiwan through the most commonly used diversification indices: the Shannon-Wiener Index (SWI) and the Herfindahl-Hirschman Index (HHI). In another case study, Matsumoto conducted a socioeconomic study of the primary energy security performance of Japan considering the diversity of primary energy based on the SWI [11]. These research works provided quantifiable indices and helped to compare the given values to that of other countries.

However, as the SWI and HHI only deal with the number and proportion of energy resources, there is no information on the origin of energy resources. The results have thus led to demonstrate the diversity of already available energy resources in the county. To express the diversity and other factors related to energy resources simultaneously, a few researchers have proposed a diversity index weighted by the dependence on energy suppliers and their political stability [5,7,10,11], the diversity and reliability index [10], and the diversity and reliability variance index [10] based on the SWI and the HHI. However, these indices mostly require more specific data that are not easily accessible, nor available to the public. In addition, there has been a lack of study on the direct relationship between energy dependence and diversity.

This study thus suggests modified indices of energy diversity based on the SWI and HHI, which are weighted by import dependence-related parameters, as supplementary data to assess the energy supply security of a country. As these indices basically stem from the preliminarily obtained import dependence and primary energy diversity, the results are relatively easily obtained and compared with the reference values. The suggested indices are applied to evaluate the energy supply security of any country. In order to validate the effectiveness of the indices, this study adapted the indices to the case of Korea, a country highly dependent on energy import and making an effort to ensure their energy supply security, and compared the results with that of the conventional metrics.

The main contributions of this study are summarized as follows:

• This study suggests modified indices of energy diversity considering a weighted factor stemming from energy import dependence. Most previous studies have analyzed energy dependence and diversity separately. These studies seem to lack a fundamental factor indicating the import dependence of the target energy source. Therefore, the modified indices of energy diversity weighted by import dependence-related parameters are proposed in this study. These indices reflect the correlation between a country’s energy diversity and energy import dependence to evaluate its energy supply security.
• This study performs a comprehensive case analysis of the energy supply security in Korea and introduces the energy transition of the country based on the proposed indices as well as conventional metrics of energy dependence and diversity, using a relevant historical dataset from 1991 to 2018. The proposed approach could be adapted in other countries to evaluate their energy supply security regarding energy diversity and energy import dependence as well as help them to make their energy policy and strategies.

The remainder of this paper is organized as follows: Section 2 introduces a literature review on global, regional, and national analysis of energy security. Section 3 presents the analysis methodology of energy supply security, including indices of energy dependence and energy diversity, proposed energy diversity indices, and data for evaluating the energy supply security of Korea. Section 4 describes the results and discussion on the case study of Korea. Section 5 provides the main conclusions and suggestions.

2. Literature Review

2.1. Global Level Analysis of Energy Supply Security

The main themes of energy supply security have changed slightly as the interests of society, technology trends, and geopolitical and economic situations change. The definition of energy supply security has been represented by a number of factors such as availability [12,13], infrastructure [13], energy price [12,14,15], environment [15,16,17], efficiency [15,18,19], social effects [17], and governance [19]. These definitions have even varied depending on the target application domains and their detailed subjects. While “reliable supplies of energy at reasonable prices to support the economy and industry” has been used broadly in the literature as the definition of energy supply security [14], other researchers have extended the definition to social welfare and socio-cultural effects [15,17]. Therefore, researchers, policymakers, and stakeholders have faced difficulty in establishing a global definition of energy security and its measuring method.

A number of studies have tried to integrate these concepts of energy supply security. Winzer [20] listed the definition of energy supply security by reviewing papers published in different domains in order to map the conceptual boundaries of energy security. Kruyt et al. [19] classified energy security indicators incorporating regionalization, globalization, economic efficiency, and environmental acceptability. Based on these factors, several frameworks for defining and methodologies for evaluating energy security have been suggested at the international, regional, and national levels. The analyses at the international level have provided the position, direction, and strengths and weaknesses of energy security in different countries [9,21,22,23]. These investigations have recommended policy prescriptions based on the evaluation results of energy security and have served as a reference for energy security among countries with differing conditions.

2.2. Regional and National Level Analysis of Energy Supply Security

From a more specific and comparative perspective, many studies have been conducted at regional and national levels [13,24,25,26,27,28,29,30]. Le et al. [24] reported the different levels of energy insecurity in Asia, focusing on 12 variables such as CO₂ emissions, CO₂ intensity, energy imports, energy intensity, energy use, fossil fuel energy consumption, and renewable energy consumption. Erahman et al. [25] presented the energy situation of Indonesia and 14 indicators for measuring energy security in the five dimensions of availability, affordability, accessibility, acceptability, and efficiency. Glynn et al. [26] provided a method to assess energy security considering sovereignty, infrastructural robustness, and market resilience for a future Irish energy system. Geng and Ji [27] presented China’s energy supply security and its evolutionary characteristics by analyzing external availability, affordability, technologies, efficiency, and resource reserves. Narula et al. [28] introduced India’s multi-dimensional sustainable energy security using 23 metrics considering availability, affordability, efficiency, and acceptability. Zhao and Yang [13] introduced a regional energy security assessment focusing on integrated systems with renewables in China. Malik et al. [29] analyzed Pakistan’s energy security under the 4-A framework, namely availability, applicability, acceptability, and affordability over the six years. Gopal et al. [30] examined the energy security of the Indian electricity sector over a decade. They suggested 11 indicators representing economic, environmental, and social dimensions for their analysis. These researchers have attempted to determine commonly-used indicators assessing the energy supply security of each country and identified its unique characteristics for addressing the appropriate energy security of the target countries.

2.3. Energy Supply Security Analysis: Korea Case Study

Several research works on the evaluation of the energy supply security of Korea have also been conducted during the past decade. Their purpose is to understand the position and characteristics of energy supply security in Korea and to suggest energy policy prescriptions. Due to insufficient natural resources alongside economic and geopolitical uncertainty, the accessibility and availability of energy have been concerns for Korea. The top priority in energy supply security has thus been to avoid any disruption of the energy supply [9]. Jun et al. [23] presented the energy security costs for energy sources contained within the Korean electricity market. The minimum cost of ensuring energy supply security was measured as a supply disruption in the case of electricity generation and an energy portfolio with the lowest cost is suggested. Ryu et al. [31] investigated three scenarios with different levels of carbon emission, energy security, and electricity generation costs in Korea. Through these scenarios, the appropriate portions of specific energy resources for electricity generation were given for executing national energy policy strategies. Ahn et al. [32] also suggested the optimal allocation of energy resources for electricity generation by scenario-based analysis for sustainable development and lessened external risks to energy security in Korea. These studies have mostly concentrated on the energy mix for electricity as a form of final energy. Although there have been many attempts to analyze secure electricity generation in the country, there is a lack of research that investigates the primary energy supply. As energy resources have recently become more diverse than ever before with the development of energy conversion technologies and applications, this study includes various resources, including fossil fuels, nuclear, and renewable energy.

3. Methodology

To evaluate energy supply security, different analytical approaches and indicators, such as energy resource reserves [19], cost of energy security [23], energy dependence [6], energy diversity [6,7,10,11,19], and energy market concentration [33] have been presented in the literature. Amongst them, energy dependence and diversity have been regarded as the two main paradigms for evaluating energy supply security [6]. This study applied these two indicators and proposed modified indices of energy diversity to quantitatively assess the energy supply security of Korea, a country highly dependent on energy imports.

3.1. Energy Dependence

3.1.1. Energy Import Ratio

Most countries are engaged in the import and export of resources and products. The energy import ratio can be used as a simple index to estimate the energy dependence of a country. It describes the ratio between energy imports and the total imports of the country established as follows:

$$D_1=\frac{E{I}_T}{A{I}_T}=\frac{{\displaystyle \sum _{i=1}^{N}E{I}_i}}{A{I}_T}$$

(1)

where D₁ is the energy import ratio, AI_T represents the total of all imports, and EI_T is the primary energy import total obtained by the sum of each energy import total. The value of i denotes the index of the types of energy sources, N is the number of the types of energy sources, and EI_i is the amount of the ith primary energy import.

3.1.2. Energy Import Dependence

Energy import dependence is one of the most used metrics for assessing energy supply security. It describes the percentage of total energy imports over the total energy supply of a country. Fossil fuels, such as oil, coal, gas, and uranium, are the energy sources that this index evaluates across different regions and countries [6,19]. It is expressed as follows:

$$D_2(\%)=\frac{E{I}_T}{E{S}_T}\times 100(\%)=\frac{{\displaystyle \sum _{i=1}^{N}E{I}_i}}{{\displaystyle \sum _{i=1}^{N}E{S}_i}}\times 100(\%)$$

(2)

where D₂ is the energy import dependence, and ES_T and ES_i represent the total amounts of all types of primary energy supply and the ith primary energy supply, respectively. In this term, EI_T and ES_T use the same monetary or physical unit.

3.2. Energy Diversity Indices

As one of the types of indices interrelated with energy dependence, the energy supply diversity indices have been quantified by several analytical approaches [34]. Stirling presented research focusing on diversity in the energy sector and suggested three important elements: variety, balance, and disparity [35,36]. As the disparity of energy options is not easily quantified, indices without consideration of disparity are widely applied in the measurement of diversity [6,10,34]. Hill identified an entire family of possible quantitative assessments of diversity in terms of proportional abundances of the species in a sample [37]. As the Hill index family, the SWI and HHI are the most commonly used indices in the energy sector. These two indices are applied in this study to evaluate energy diversity, especially the balance and variety of energy options in Korea.

3.2.1. The Shannon-Wiener Index (SWI)

The SWI is expressed by accounting for the share of each primary energy source as follows:

$$SWI=-{\displaystyle \sum _{i=1}^N{p}_i\ln p_i}$$

(3)

$$p_i=\frac{E{S}_i}{E{S}_T}$$

(4)

where p_i is the share of primary energy supply by the ith energy source ES_i in the total primary energy supply ES_T. The smallest value of the SWI is zero in the case where there is only one primary energy supply option in the country. It means the sole option takes 100% of the total primary energy supply. Then, the share of this energy source p_i becomes one. Consequently, ln (1) equals zero, and the SWI thus becomes zero. By contrast, the theoretical maximum value of the SWI may be obtained when the shares of primary energy sources are even, which means that p_i equals 1/N and that the number of types of energy sources becomes larger. If the share of each option is uneven, the value of the SWI is less than its theoretical maximum value, SWI_Max.

$$SW{I}_{Max}=-N\frac{1}{N}\ln \frac{1}{N}=\ln N$$

(5)

3.2.2. The Herfindahl-Hirschman Index (HHI)

The HHI shows the concentration of the individual share of energy options. It is expressed by the sum of the square of the proportion of each energy source as follows:

$$HHI={\displaystyle \sum _{i=1}^N{P}_i^2={\displaystyle \sum _{i=1}^N{\left(p_i\times 100\right)}^2}}$$

(6)

where P_i is the percentage of the primary energy supply by the ith energy source ES_i in the total primary energy supply ES_T. As this index uses the square of the percentage of each energy source, the index highlights quantitatively bigger energy resources rather than smaller ones in whole options. This means that the HHI emphasizes abundant energy resources. Opposite to the SWI, the lower the value of the HHI, the higher the diversity. The theoretical minimum value of HHI is expressed as follows:

$$HH{I}_{\min }=N{\left(\frac{1}{N}\times 100\right)}^2=\frac{1}{N}\times 10000$$

(7)

3.3. Energy Diversity Weighted by Energy Import Dependence

The presented diversity indices, such as the SWI and HHI, only depend on the quantity and the proportion of each energy resource, considering the proportion of each energy resource is effective when energy resources are less dependent on other countries in the energy supply security of a country. However, its effectiveness could be reduced in a country highly dependent on energy imports. This country could not be evaluated as a secure country in terms of energy supply security, even though the country obtains a higher value of the SWI and a lower value of the HHI. In other words, these indices seem to lack a fundamental factor indicating the dependence of the target energy source on imports. Therefore, this study proposed modified indices of energy diversity by weighting the import dependence-related parameters. The main concept of these indices is to imply energy import dependence into the diversity indices. Weighted factors stemming from the import dependence of each energy type are multiplied into the energy diversity indices, the SWI and HHI. The proposed indices are expressed below:

$$D\_SWI=-{\displaystyle \sum _{i=1}^N\left(1-\frac{E{I}_i}{E{S}_i}\right)}{p}_i\ln p_i$$

(8)

$$D\_HHI={\displaystyle \sum _{i=1}^N\left(1+\frac{E{I}_i}{E{S}_i}\right)}{P}_i^2$$

(9)

where the D_SWI and the D_HHI demonstrate the modified SWI and HHI, which imply energy import dependence. In the case of the D_SWI, (1 − EI_i/ES_i) is the inverse weight obtained by the share of ith energy source imports in supply. Its range is from 0 to 1 and reflects how much the ith energy type is self-sufficiently supplied to the country. The theoretical maximum value of the D_SWI may be obtained when the number of types of energy sources is higher and that the quantity of each source is even. In addition, all the considered energy sources should be self-sufficient which means (1 − EI_i/ES_i) equals 1. By contrast, the D_SWI becomes smaller when the share of energy imports increases (EI_i/ES_i > 0), even though the value of the SWI is the SWI_Max. In the case of D_HHI, however, its theoretical minimum value could be obtained when the share of ith energy source imports in supply EI_i/ES_i is zero and the HHI reaches the HHI_min simultaneously. As the weighting is a process to assign a relatively important factor in each index [38,39], these proposed indices can be effective, especially to evaluate the primary energy supply security of the countries highly dependent on energy imports such as Singapore, Taiwan, Japan, and Korea.

3.4. Data for Evaluation

In this study, time series data were obtained from a dataset from the Korea Energy Economics Institute [40]. The assessment was conducted with 10 primary energy sources, including anthracite coal, bituminous coal, petroleum for energy use, LPG, petroleum for non-energy use, LNG, general and micro-hydro, pumped hydro, nuclear, and renewables for the period from 1991 to 2018. The data were used for measuring four indices which are the import ratio of energy, energy import dependence, energy diversity represented by the SWI and HHI, and the mixed indices of energy import dependence and energy diversity.

4. Results and Discussion

4.1. Energy Dependence

Korea’s energy dependence was first evaluated by quantitatively measuring the energy import ratio and energy import dependence. Figure 1 shows the trend of Korea’s energy import ratio, as expressed in Equation (1). The units of EI_T and AI_T are both USD. Korea’s energy imports account for over 14% of total imports during the period between 1991 and 2018. From 1991 to 2012, the energy import ratio increased globally by 35.6% with fluctuations. From 2013 to 2016, the ratio decreased significantly by 19.9%. Then the value rebounded, respectively, to 22.9% and 27.3% in 2017, 2018. Slight increases and decreases in the import ratio appeared in the periods 1999–2000, 2004–2005, 2007–2008, 2008–2009, 2010–2011, 2014–2016, and 2016–2018.

It is worth noting that these trends match well enough to the oil price fluctuations in Korea as shown in Figure 2. As oil imports are a large share of Korea’s total energy imports, it is reasonable that the energy import ratio in monetary terms is significantly influenced by the oil price. The ratio drops with a decrease in oil prices after 2013, even though the amount of oil imports increases in this period [41]. As this situation may not be stable, Korea needs a buffer system against the surge of oil prices to ensure its energy supply security and a stable domestic economy.

Under these conditions, the oil stock levels of net imports in Korea have consistently been recorded above 180 days since September 2009. This is double the value of the IEA 90-day requirements. According to historical data, the oil stock levels of Korea hit 309 days in March 2016. Figure 3 shows the oil stock levels in days of net imports given by the International Energy Agency [42].

Compared with the average value of total IEA countries, including net exporters such as Canada, Denmark, and Norway, Korea reserved more oil than other IEA countries until 2015. This indicator shows Korea’s awareness of the importance of both the accessibility and availability of energy. However, the oil stock levels of Korea decreased by 184 days in 2018. This value is lower than that of the average value of total IEA net importers in the same period.

Figure 4 illustrates Korea’s energy import dependence. A physical term of primary energy imports rather than a monetary term was used to remove the influence of oil price on the dependence as shown in Figure 1. The value of energy import dependence has been greater than 90% since 1991. From 1991 to 1997, energy dependence increased from 91.20% to 97.79% with the economic development of the country. After the liquidity crisis in 1997, the dependence moderately decreased because of the drop in domestic consumption. After 2012, the value decreased more visibly to 94.5%.

Amongst the primary energy sources supplied to Korea, almost all fuels have been imported from foreign countries. For example, the entire quantities of bituminous coal, crude oil, and uranium are imported from outside of the country. Energy resources such as anthracite coal and LNG are partially produced in Korea, but the quantity is very small. In the case of anthracite coal, its import dependence was approximately 10% in the early 1990s. However, because of anthracite coal reserve limits, the import dependence gradually increases, reaching 89.19% in 2018. Besides, although the Korea Gas Corporation produced LNG, the amount of LNG is less than 2% of the total supply in the country. To lower energy import dependence, the proportion of energy produced in Korea should be increased. This does not only mean the use of reserved fossil fuel but also the gradual increase of renewable energy such as hydro energy, solar energy, wind energy, and bioenergy, among others. In line with this, Korea is planning a scenario 2030, aiming to achieve 20% of the total amount of electricity generation from renewables by 2030 [43,44].

4.2. Energy Diversity

The energy diversity of Korea was quantitatively evaluated by using the SWI and the HHI. The considered primary energy sources were anthracite, bituminous coal, petroleum for energy use, LPG, petroleum for non-energy use, LNG, general hydro, pumped hydro, nuclear, and renewables. There are ten primary energy sources (n = 10). Figure 5 shows the Korean Total Primary Energy Supply (TPES) and its composition during the period between 1991 and 2018 [40]. Except in the years 1998 and 2009 when the economic crises occurred, primary energy supply increases continuously, reaching 307.5 million tons of oil equivalent (Mtoe) in 2018, and energy shares are more balanced.

Figure 6and Figure 7 show the overall energy diversity of Korea represented by the SWI and HHI during the period between 1991 and 2018. From the calculation results of the SWI, the SWI gradually decreases from 1991 to 1995, as shown in Figure 6. The lowering of this value during this period is due to the more unbalanced composition of primary energy. Korean economic growth was promoted in the 1990s before the economic crisis occurred in 1997. During this period, energy consumption, especially driven by oil consumption, increases. Simultaneously, the consumption of imported bituminous coal increases, whereas the anthracite coal reserve reduces. Hence, the energy supply structure is concentrated in petroleum, and bituminous coal accounts for 74.7% in 1995. In consequence, the minimum value of the SWI is obtained as 1.629 in 1995. The lowest value means the lowest energy diversity because of the unevenness of energy shares of the year. Later, the value follows an increasing trend with small fluctuations from 1996 to 2018. In this period, there is a significant increase in the SWI in 1998. This globally increasing trend is explained first by the decrease in oil consumption due to the economic crisis in Korea. Second, there was a structural transition of energy supply from crude oil to nuclear energy, LNG, and renewables. The share of nuclear energy increases by 125%, whereas the portion of petroleum for energy use decreases by 79% in 1998. Third, the national energy policy has promoted the use of other types of primary energy rather than oil. After 2004, the SWI reaches a value higher than 81% of the theoretical maximum value of the SWI, which is about 2.302 as obtained by Equation (5). In 2016, the highest diversity is obtained as 1.877, whereas the value drops again in 2017 to 1.862. Thereafter, the value reaches 1.864 in 2018.

The evolution of the HHI is shown in Figure 7. The HHI seems to be a scaled reflection of the SWI in the x-axis. This trend is explained by the fact that these two indicators oppositely represent energy diversity. As mentioned, the higher value of the SWI and the lower value of the HHI indicate the higher diversity. As inversely following the trend of the SWI, the HHI increases by 2710 in 1995 and decreases by 1736 in 2016. The value rebounded by 1787 in 2017 and decreased again by 1781 in 2018. These similar diversity trends between the SWI and HHI are shown from 1991 to 2010 and from 2013 to 2018.

However, the diversity trends obtained by the SWI and HHI for 2010–2011 and 2011–2012 are unmatched. In 2011, the diversity shown by the SWI increases, whereas the diversity given by the HHI decreases. Similarly, the diversity obtained by the SWI drops, whereas the diversity calculated by the HHI increases in 2012. These unmatched diversity trends, of which phenomena were similarly presented by Chuang and Ma [10], were led by the relative abundance perspective. The primary energy option which takes a smaller quantity is emphasized in the SWI, and the more abundant is underlined in the HHI. In 2011, the shares of rare resources and abundant resources increase simultaneously except for petroleum for energy use, LPG, and nuclear energy. This implies higher diversity through the increase in the shares of rare resources in the SWI and the lower diversity induced by the increase in the shares of abundant resources in the HHI. On the contrary, the shares of rare resources such as anthracite, LPG, petroleum for non-energy use, and general hydro decreases, whereas that of abundant resources like bituminous coal, petroleum for energy use, and nuclear energy increases in 2012. This shows the decreased diversity led by rare resources in the SWI and increased diversity caused by abundant resources in the HHI.

With the fixed number of the types of energy sources in this study, the proportion of each energy source only affects the SWI and HHI. The share of each energy resource is an effective factor to evaluate energy security when energy resources are less dependent on other countries. However, its effectiveness could not be ensured in a country highly dependent on energy imports such as Korea. It means that these indices overlook how safely the energy resources are supplied to the country. The energy import dependence-related index should thus be considered for the more accurate evaluation of energy supply security and policy suggestions in more detail.

4.3. Energy Diversity Weighted by Energy Import Dependence

The energy diversity of Korea was quantitatively evaluated by using the proposed energy dependence-related indices, the D_SWI and D_HHI. Figure 8 describes the D_SWI. The theoretical maximum value of the D_SWI is approximately 2.302. As expected, a different trend is shown in the D_SWI compared with that of the SWI. The maximum value of the D_SWI is found in 1991 when the import dependence reaches the lowest level. Then, the D_SWI drops continuously by 0.122 until 1997 when the country strongly relies on energy imports. The global trend of the D_SWI from 1998 to 2010 tends to recover with fluctuation. Then, the value continuously increases from 2011 and finally reaches 0.181 in 2018. This increasing trend is linked to the country’s energy dependence that has decreased since 2011 as shown in Figure 4.

However, this diversity index does not improve significantly compared with the past. The latest obtained value is even lower than that of the early 1990s (1991–1993) when the import dependence of the country was lower than 95%. This result shows the important role of the use of indigenous energy resources to improve energy supply security evaluated by the given index. This result implies the need to use indigenous energy resources and the challenges to promote self-sufficient energy such as anthracite coal and LNG. In addition, R&D on energy-efficient systems and energy systems driven by renewable energy should be supported to improve the energy supply security of the country in the long term.

Figure 9 illustrates the D_HHI. The theoretical minimum value of the D_HHI is 1000 when the energy import dependence is the minimum, which is zero. However, because the import dependence of Korea is far from zero, rather close to one, the D_HHI is nearly doubled by the HHI. This value follows the trend of HHI. As the share of oil imports has been over 40% for the period from 1991 to 1997, the effect of oil import on the D_HHI as well as on the HHI is comparatively high, whereas its effect on the SWI and the D_SWI is reduced. This means that the D_HHI and HHI still retain the importance of abundant resources despite the high weight of energy import dependence. It indicates that avoiding any abundant energy resources could lower the D_HHI more effectively than lowering their import dependence.

In summary, the SWI and HHI showed a similar trend of energy diversity of the country as referring to other research on energy supply security [6,7,10,11,45]. In more detail, the SWI focuses on rare energy resources, while the HHI highlights the abundance of any energy resources. However, these two indices overlooked the energy import dependence of the target country. As introducing the energy import dependence as a weighting factor in the D_SWI and D_HHI, the correlation between the country’s energy diversity and energy import dependence could be accounted for in the evaluation of energy supply security. Based on the import ratio of each energy source, the SWI is scaled from 0 to 1 for the D_SWI, whereas the HHI is multiplied by the value from 1 to 2 for the D_HHI.

Moreover, the overall evaluation of the energy supply security of Korea infers that the country should attempt to balance the use of different types of primary energy resources because they cannot liberalize its energy imports. To reduce the concentration of abundant import resources such as oil and coal, and increase the use of rare resources, electrification in the energy sector and a higher proportion of renewable energy in electricity generation could be alternative solutions to improve its energy supply security regarding the scenario 2030. Green financing and investment in renewable energy projects are recommended as practical solutions to promote a higher proportion of renewable energy and sustainable technologies, including hydrogen and electric vehicles [46,47]. Besides, the energy policy focusing on demand-side management should strongly be applied to the country for effective and efficient use of limited resources [24].

5. Conclusions

This study presented a methodology to evaluate the energy supply security of a country by using different indices of energy dependence and energy diversity. The considered indicators were energy import ratio and energy import dependence as the indices of energy dependence and the SWI and HHI as those of energy diversity. This study also proposed two indices, the D_SWI and D_HHI, that reflect the correlation between a country’s energy diversity and energy import dependence.

The presented methodology and indices were applied to quantitatively assess Korea’s energy supply security. Korea’s energy imports were over 14% of total imports during the period between 1991 and 2018. The energy import dependence increased from 91.20% to 97.79% with the economic development of the country for the period from 1991 to 1997. After the liquidity crisis in 1997, the dependence gradually decreased and reached 94.49% in 2018. The energy diversity of Korea in terms of the SWI and HHI was also measured. The primary energy sources considered were anthracite, bituminous, petroleum, LPG, LNG, general hydro, pumped hydro, nuclear, and renewables. From the measurement of energy diversity, it was found that the energy transition from petroleum to nuclear and renewable energy contributed to increasing the diversity of primary energy.

From the calculation results of the SWI and HHI, similar diversity trends were obtained in the given periods from 1991 to 2010 and from 2013 to 2017. Diversity gradually decreased because of the concentration of oil consumption until 1995. Since then, diversity has globally improved with fluctuations. In addition, unmatched trends between the SWI and HHI appeared for 2010–2011 and 2011–2012 because of the emphasis of the SWI on rare resources and the HHI on abundant resources in the shares of energy.

However, a country highly dependent on energy imports cannot be evaluated as a secure country in terms of energy supply security, even if it obtains higher energy diversity. As Korea is highly dependent on energy imports because of its high energy consumption and insufficient energy resources, the analysis of the energy supply security of Korea should consider the types and the proportion of available energy resources and their import dependence. By focusing on the correlation between Korea’s energy diversity and import dependence, this study also suggested modified indices of energy diversity based on the SWI and HHI, which are weighted by import dependence-related parameters. As a result, the D_SWI showed lower values of energy diversity, even in recent years, because of higher energy import dependence. The D_HHI almost doubled compared with the value of the HHI because of the higher energy import dependence of the country and followed the trend of the HHI which emphasizes abundant resources. This result implies that the correlation of energy dependence and energy diversity of a country should also be considered as an important factor to evaluate energy supply security and to make energy policy strategies.

In focusing on the correlation between energy diversity and import dependence, the national energy policy should promote renewable energy because its use could mitigate the environmental effects and energy dependence. It might permit more diversified energy options in the transition of electricity-driven transport and industry. In practice, the automotive industry and R&D of electric vehicles and renewable hydrogen vehicles could be boosted from several perspectives. Policy-supported R&D investment and infrastructure in renewable energy and energy-efficient technologies with demand-side management should be implemented to stabilize the energy supply security of the country in the long term. Comparative study on energy dependence and diversity at the international level should be conducted to further analyze the characteristics of energy security of each country and classify them to suggest referable policies as well.