Energy Risk Mitigation
Definition
Energy Risk Mitigation (also Energy Risk Elimination, Energy Risk Prevention) denotes any activities pursued for the purpose of reducing or eliminating perceived Energy Risk. It is the elimination, lessening or minimizing of the adverse impacts of a hazardous energy-related event.
The adverse impacts of energy events often cannot be prevented fully, but their scale or severity can be substantially lessened by various strategies and actions.
Energy risk mitigation measures include engineering techniques and hazard-resistant construction as well as improved environmental and social policies and public awareness. It should be noted that, in climate change policy, “mitigation” is defined differently, and is the term used for the reduction of greenhouse gas emissions that are the source of climate change.
Approaches
Implementation of measures to deter specific threats to the continuity of business operations, and/or respond to any occurrence of such threats in a timely and appropriate manner. Very broadly all strategies involve a combination of:
- Attempting to modify the stand-alone Energy Risk Profile of the entity:
- Diversification / Substitution of Energy Supplier, Energy Source
- Backup Energy Sources
- Improvement of Energy Use Intensity (achieving more with less Energy Consumption), Structurally lowering dependency on energy
- Obtaining some form of Insurance
- Collective actions together with upstream or downstream partners in the Supply Chain
Issues and Challenges
- Energy Risk Culture
- Cost considerations
