**5. Conclusions and implications**

Japan as examples of countries that are not well endowed with vast oil reserves, but which have invested heavily in alternative energy

technologies especially in the transportation sector. These technologies include fuel cells and electric and hybrid vehicles that are increasingly being adopted as a response to the high gasoline prices. Lin and Chen [49]

developing renewable energy and promoting the transition to a low-carbon economy. Denholm and Hand [51] advance a similar argument and assert that increased grid flexibility and energy storage are critical innovations that are required to achieve high penetration of wind and solar energy. They further claim that in the United States, the limits of wind and solar

significantly greater than the total electric demand; and, that the primary technical challenge is the resource intermittency that can be addressed

The availability of vast supplies of fossil energy resources implies that their increased utilization is a viable strategy that can be used to meet the rising demand for energy and enhance energy security. This option is however not favoured by policy makers who claim that it is likely to increase emissions of carbon dioxide and undermine efforts to mitigate climate change [52]. Carbon capture and storage is a technological innovation that can permit an increase in the use of fossil fuels but curtail the release of stationary carbon dioxide emissions into the atmosphere [53]. According to the IEA [54], more investment needs to be made in carbon capture and storage that has been demonstrated to be a low-cost technological pathway that can help achieve deep decarbonization, promote greater energy security, support diversity of power generation and enhance economic prosperity and employment.

v. *Market and institutional reforms*: Several countries are currently reforming their energy markets to improve security of supply by incentivising investments in secure, low-carbon energy sources; improving efficiency and productivity; supporting cost-effective integration of renewable energy sources; and, improving affordability for consumers [55–57]. Some of the issues that these reforms aim to address are: inadequate electricity generation and distribution infrastructure when electricity demand is growing rapidly [55, 57]; underutilization of cheap resources and overutilization of expensive resources; unnecessary curtailment of renewable energy; existence of barriers to minimizing the cost of power due to inability of energy distribution companies to access all available power generation and the associated marginal costs; lack of flexibility in the energy system; heavy and restrictive regulations that impose costs and hinder innovation; and distortions in energy markets. Examples of reforms that various countries have implemented to address these issues include: liberalization of the downstream gas market in Egypt to end government monopoly, increase competition, and attract foreign direct investment to the energy sector [58]; deregulation of energy prices in China to optimize energy allocation, improve energy efficiency, promote the penetration of renewable energy, and induce energy-saving technologies and innovations [59]; and, expansion of cross-border electricity cooperation and trade through establishment of regional electricity grids in South Asia [60]. Where reforms have been properly designed and implemented, they have increased competition in energy markets, reduced energy prices to

**34**

*Energy Policy*

and Lin and Zhu [50] argue that technological innovation is key in

energy are not resource based; that wind and solar resources are

through technical innovations that enable energy storage.

Energy resources play a critical role in economic growth and human wellbeing and will continue to be a key concern to policy makers in both developed and developing countries. How energy is produced and used will also continue to be of national and global concern because greenhouse gas emissions from these processes are the primary cause of global warming and climate change. The rapid growth in the demand for energy in recent years due to robust economic expansion, population growth, and new uses of energy is a major challenge that requires policy actions to ensure that energy users have access to reliable, affordable, and secure energy supplies. It is a problematic situation to countries that are not endowed with abundant energy resources and must rely on energy imports. There are however several strategies that countries can implement individually or jointly to improve their energy security. First, agricultural by-products and crop residues such as maize stalks, rice straw, cattle dung, molasses and bagasse can be harnessed and used to produce energy products such as methane which can be used for cooking, heating and lighting [61]. These processes can also be used to produce alcohol which can be used to blend automotive fossil fuels. Energy security can be positively impacted by these measures because they expand the supplies of available energy resources and reduce the demand for conventional energy. Second, countries can increase their energy security by harnessing renewable energy such as wind, solar, and geothermal energy and integrating them into the energy system. This alternative holds considerable promise particularly in regions such as North Africa and the Middle East. Third, through investments in energy efficiency, countries can reduce their demand for energy and enhance their energy security. This can be accomplished through more stringent building codes, market penetration of hybrid and electric cars that have greater fuel economy, and real-time pricing of electricity. Fourth, energy security can be greatly enhanced by improving the performance of energy markets through deep reforms and institutional changes. If properly designed and implemented, the reforms can reduce wastage, incentivise private sector investment in energy generation, increase competition in energy markets reducing the prices to consumers, and improve overall efficiency. Fifth, global energy security can be enhanced through international cooperation on energy issues and the promotion of regional energy trade. Such trade will be a win-win outcome for both exporters and importers of energy.

*Energy Policy*
