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Energy Markets Outlook: Security Of Supply

• Energy markets outlook: chapter 3 - security of supply (155KB)

For the purposes of the Energy Markets Outlook, we focus on measures of the physical ability of supply and demand to meet provided the price is right. Indicators of physical security are likely to be correlated with price risk – hence, focusing on one will also provide insights into the other. Security of energy supply is not a simple binary issue (“are the lights on or not?”) but a matter of differing levels of risk (“how likely is it that some level of demand for energy will not be met in the future?”).

We introduce in this section the probability-based “expected energy unserved” concept and some insights into how it can be used to inform assessment of the adequacy of the UK’s energy supply to ensure an acceptable level of security.