4.3 - Energy demand, supply and the energy mix

Energy gaps and energy security

Energy demand is the energy people and organisations seek to use. Production is energy supplied from domestic resources; imports can fill the difference. An energy gap occurs when domestic supply does not meet demand. It does not necessarily mean consumers receive no electricity: a country can import fuels or electricity reliably.

A country importing most of its gas may meet demand in an ordinary year but be vulnerable to price changes, conflict or transport disruption. A country with domestic coal can still face unreliable electricity if power stations, transmission lines or fuel deliveries fail. Security depends on networks, storage, spare capacity, suppliers and affordability as well as resource ownership.

An energy mix is the combination of sources used. Diversifying can reduce dependence on one fuel or supplier. However, the number of sources alone does not guarantee security: several sources might rely on the same vulnerable transmission route. Demand reduction can improve security because less energy needs to be obtained.

When reading a mix, identify its denominator. Electricity is only part of energy use: fuels also heat buildings, power vehicles and supply industry. Capacity, measured in units such as megawatts, is a rate a plant can generate; actual generation over time is energy, for example megawatt-hours. A large installed solar capacity does not operate at full output throughout every night and day.

Why demand and production vary

Population growth usually increases total demand when other conditions are unchanged: more households need lighting, cooking and services. Increased wealth can raise demand per person through appliances, larger homes, manufactured goods and travel. Industrial growth also adds demand from machines, processing and construction.

Technology can push demand in different directions. More efficient motors and buildings reduce energy needed for a particular service; new data processing, air conditioning and electric transport add electricity demand. Electrification can replace petrol or direct fuel burning, so rising electricity use need not mean an equal rise in total energy use or emissions.

Production depends on resource endowments and the ability to develop them. Coal, oil, gas and uranium are unevenly distributed. Sunshine, wind, river flows and geothermal heat vary with physical geography. Capital, expertise, government policy, environmental constraints and grid connections determine how much potential becomes usable supply.

The country with the largest total demand need not have the largest demand per person. Compare both population and consumption rates, and check whether a graph measures energy, electricity, production or consumption. A surplus in annual generation also does not show whether supply is adequate at the evening peak.

Non-renewable sources and their trade-offs

Non-renewable sources are depleted faster than natural processes replace them on human timescales. Their common advantage is that stored fuel can be used when required, but extraction, pollution and dependence create costs.