The matrix of energy security vs energy transition 

When thinking about the matrix of energy security vs energy transition it is helpful to imagine a triangle whose points are denominated as ‘security’, ‘sustainability’ and ‘affordability’. Ideally the balance point of those three cardinal themes would land directly in the center of said triangle as each theme is of equal importance. These themes are of transversal significance in the sense that they are applicable at the local, country, regional and global level. Macro trends, either country specific or global, may pull any given country, or the global energy system for that matter, toward any one of the three poles at any given time.

Arguably the global energy system has been extremely focused on the ‘sustainability’ theme in a heavy way since 2015 and maybe even before that. As the balance point gets pulled closer to the ‘sustainability’ theme the triangle becomes unbalanced and both ‘security’ and ‘affordability’ are detrimentally affected. The movement of the balance point is different for each country and depends on their unique situation, but at the same time an aggregate view from a global perspective has shown an overall pull to the sustainability pole. It is also important to highlight that this balance point is never static and can be influenced by a variety of factors both endogenous and exogenous.

This triangle concept is known as the ‘energy trilemma’. Over the last few years, and specifically over the last few months, the unbalanced nature of the global triangle has been exposed by both the 2021 energy crunch which pulled the balance point toward its polarity, and finally the war in Ukraine, which is now exerting its magnetic pull. How the global balance point will react to these new pressures is yet to be seen, however at a country level, these new pressures are forcing renewed conversations around both affordability and more importantly security.

Tudo de bom,
Rio de Janeiro, Brazil
May 18, 2022

W. Schreiner Parker
Senior Vice President and 
Head of Latin America

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South American E&Ps face cost overruns with 2022 spending set to jump 27%

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For approved and to-be-approved projects from 2021 to 2025, Rystad Energy projects that Brazil will receive a total $36.7 billion in investments by 2025, representing 9% of worldwide estimated capital expenditure for new sanctioning in the same period.

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