*4.2. Energy Diversity*

The energy diversity of Korea was quantitatively evaluated by using the *SWI* and the *HHI*. The considered primary energy sources were anthracite, bituminous coal, petroleum for energy use, LPG, petroleum for non-energy use, LNG, general hydro, pumped hydro, nuclear, and renewables. There are ten primary energy sources (*n* = 10). Figure 5 shows the Korean Total Primary Energy Supply (TPES) and its composition during the period between 1991 and 2018 [40]. Except in the years 1998 and 2009 when the economic crises occurred, primary energy supply increases continuously, reaching 307.5 million tons of oil equivalent (Mtoe) in 2018, and energy shares are more balanced.

**Figure 5.** Korean total primary energy supply and its composition.

Figure 6and Figure 7 show the overall energy diversity of Korea represented by the *SWI* and *HHI* during the period between 1991 and 2018. From the calculation results of the *SWI*, the *SWI* gradually decreases from 1991 to 1995, as shown in Figure 6. The lowering of this value during this period is due to the more unbalanced composition of primary energy. Korean economic growth was promoted in the 1990s before the economic crisis occurred in 1997. During this period, energy consumption, especially driven by oil consumption, increases. Simultaneously, the consumption of imported bituminous coal increases, whereas the anthracite coal reserve reduces. Hence, the energy supply structure is concentrated in petroleum, and bituminous coal accounts for 74.7% in 1995. In consequence, the minimum value of the *SWI* is obtained as 1.629 in 1995. The lowest value means the lowest energy diversity because of the unevenness of energy shares of the year. Later, the value follows an increasing trend with small fluctuations from 1996 to 2018. In this period, there is a significant increase in the *SWI* in 1998. This globally increasing trend is explained first by the decrease in oil consumption due to the economic crisis in Korea. Second, there was a structural transition of energy supply from crude oil to nuclear energy, LNG, and renewables. The share of nuclear energy increases by 125%, whereas the portion of petroleum for energy use decreases by 79% in 1998. Third, the national energy policy has promoted the use of other types of primary energy rather than oil. After 2004, the *SWI* reaches a value higher than 81% of the theoretical maximum value of the *SWI*, which is

about 2.302 as obtained by Equation (5). In 2016, the highest diversity is obtained as 1.877, whereas the value drops again in 2017 to 1.862. Thereafter, the value reaches 1.864 in 2018.

**Figure 6.** The *SWI* (Shannon-Wiener Index) of Korea from 1991 to 2018.

**Figure 7.** The *HHI* (Herfindahl-Hirschman Index) of Korea from 1991 to 2018.

The evolution of the *HHI* is shown in Figure 7. The *HHI* seems to be a scaled reflection of the *SWI* in the x-axis. This trend is explained by the fact that these two indicators oppositely represent energy diversity. As mentioned, the higher value of the *SWI* and the lower value of the *HHI* indicate the higher diversity. As inversely following the trend of the *SWI*, the *HHI* increases by 2710 in 1995 and decreases by 1736 in 2016. The value rebounded by 1787 in 2017 and decreased again by 1781 in 2018. These similar diversity trends between the *SWI* and *HHI* are shown from 1991 to 2010 and from 2013 to 2018.

However, the diversity trends obtained by the *SWI* and *HHI* for 2010–2011 and 2011– 2012 are unmatched. In 2011, the diversity shown by the *SWI* increases, whereas the diversity given by the *HHI* decreases. Similarly, the diversity obtained by the *SWI* drops, whereas the diversity calculated by the *HHI* increases in 2012. These unmatched diversity trends, of which phenomena were similarly presented by Chuang and Ma [10], were led by the relative abundance perspective. The primary energy option which takes a smaller quantity is emphasized in the *SWI*, and the more abundant is underlined in the *HHI*. In 2011, the shares of rare resources and abundant resources increase simultaneously except for petroleum for energy use, LPG, and nuclear energy. This implies higher diversity through the increase in the shares of rare resources in the *SWI* and the lower diversity

induced by the increase in the shares of abundant resources in the *HHI*. On the contrary, the shares of rare resources such as anthracite, LPG, petroleum for non-energy use, and general hydro decreases, whereas that of abundant resources like bituminous coal, petroleum for energy use, and nuclear energy increases in 2012. This shows the decreased diversity led by rare resources in the *SWI* and increased diversity caused by abundant resources in the *HHI*.

With the fixed number of the types of energy sources in this study, the proportion of each energy source only affects the *SWI* and *HHI*. The share of each energy resource is an effective factor to evaluate energy security when energy resources are less dependent on other countries. However, its effectiveness could not be ensured in a country highly dependent on energy imports such as Korea. It means that these indices overlook how safely the energy resources are supplied to the country. The energy import dependencerelated index should thus be considered for the more accurate evaluation of energy supply security and policy suggestions in more detail.
