Measuring the Security of External Supply in the EU

The security of energy supply is one of the main objectives of the common energy policy on the EU. In this paper, we provide an index that evaluates the risks associated with the external energy supply of the EU Member States. The index is designed to access the short-term risk to the supply security. The index combines measures of energy import diversi\u85cation, political risks of the supplying country, risk associated with energy transit, and the economic impact of a supply disruption for each energy type. We provide estimates for a sample of eighteen EU Member States and for three primary energy sources: oil, gas and coal. We construct a separate index for each energy type and demonstrate that Euro-pean countriesexposure to risks di¤ers across energies. Most other studies provide an aggregate index that combines di¤erent types of energy. Our results suggest that an aggregate approach might be misleading at least as regards the short-term response to risks. We also \u85nd that the relative contribution to the overall Euro-pean risk exposure di¤ers across EU Member States. We discuss the implications of our \u85ndings for the common energy policy