the evolving history of energy use - institute of · pdf fileindustrial sector (with some...

The evolving history of energy use

Dr Paul Warde

The Uses of History:

Evidence of behaviour in non-simulated setting

Identification of trajectory: ‘path dependency’

Examine energy consumption in relation to other variables: eg. economy and demography

The ‘Organic Economy’

Per capita energy consumption 10-20 GJ/per year

The Industrial Economy

Per capita energy consumption20-200+ GJ/per year

The return of the ‘areal’ energy economy?

Dave MacKay’sScenario No.6.

Modern Energy History:A battle between the energy expanding and

energy saving properties of new technologies

Figure 9. Aggregate efficiency of fuel exergy conversion to useful work , UK 1900 to 2000

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20% energy efficiency gain by 2020?

Good news: not so far off 20th century trendBad news: didn’t stop energy consumption rising

Rain, Steam and Speed:The Great Western Railway (Turner, 1844)

Key to previous transitions:Get your energy carrier to do the work of transporting itself

The future?Decentralised and/or more efficient networks

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Primary electricityGasOilCoalWoodWaterWindMuscle

Aggregate energy consumption, England & Wales, 1800-2005 (PJ)

Per capita energy consumption, England & Wales, 1800-2000 (GJ)

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Exergy input trends

exergy / cap [GJ/cap]

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growth of total exergy inputs [1900 = 1]

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An economic measure of efficiency: Energy Intensity (MJ/£)

The good news: consistent fall since 1870sThe ‘bad’ news: income grew faster than EI fell

Energy Intensity of Great Britain, 1800-2005

Energy = Population * Income * EnergyPopulation Income

In 1900:4900 PJ = 32 million people * $ 5169 * 29.4 MJ per 1990 $

In 2000:10860 PJ = 52 million people * $ 20 559 * 10.1 MJ per 1990 $

change:2.27 = 1.62 * 3.99 * 0.34

Does a ‘service economy’ = dematerialization?

No:Largely an illusion created by relative price shifts

Source: Kander & Henriques, 2009

What causes shifts in energy efficiency at the aggregate scale?

1. ‘Within branch’ change (technical)2. ‘Within sector’ change (e.g.changes in industrial structure)3. ‘Between sector’ change (structural)

Industry has been a driving force in improvements in energy efficiency: subject to international competitive pressures in a way that the service, transport and domestic sector are not (these are all difficult to trade internationally).Assisted by move towards higher quality carriers (electricity, oil, gas) providing strong incentives for switch (flexibility)

Convergence in energy intensity: Europe, 1860-2005

Data from Warde, Kander, Gales, Warde, Malanima, Henriques.

Convergence in energy intensity: emerging economies, 1971-2006

Source: Henriques and Kander (2009)

Source: IEA Report 2008

Why convergence? Electrification explains a little, but not a lot…

Main causes of energy intensity convergence:

In the Developed World, the main driver of change has been improvements in efficiency within the Industrial sector (with some structural shrinkage balanced by rise in transportation use). Competitive pressures within the north, and globalisation…

In the developing world (India, Brazil, Mexico), the main factor has been household consumption not rising as we would expect as the economies grow. A delayed environmental problem?

POLICY IMPLICATION? The most important area to achieve savings are in residential consumption, especially space heating or cooling

Conversion efficiencies for different technologies (useful work / exergy)

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Electricity Generation

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Source: Ayres & Warr (2009)

From a purely technical point of view… aside from electricity generation, fairly steady long-term improvement in energy efficiency. Yes we can!

Uh-oh…

“[It] is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption. The very contrary is true.”

William Stanley Jevons, The Coal Question (1865)

Raising the efficiency of energy use lowers the price of energy services and thus encourages demand and an

expansion of energy use: the ‘rebound effect’.Efficiency savings and economic growth may be linked…

A change in energy efficiency denoted by:. .ε

= ρ

+ E

Where ε

denotes energy services, ρ

the rate of change in efficiency, E physical energy inputs, and P denotes price.

Pε

= PE - ρ

Source: Hanley, McGregor, Swales, Turner (2009)

For future investments, what matters is the relative price of factor inputs. Falls in energy price thus

encourage economizing on labour, which has become relatively more expensive, stimulating paths towards

relatively energy intense development.

English Civil War

Second World War

Industrial Revolution and cheap coal…

Source: Officer (2006), Warde (various)

The key story of the modern world?

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UK Petroleum consumption (million toe equivalent)

But: all energy consumption is not equal… at least in quality and economic terms: transport only weakly price- sensitive. ‘Rebound’, efficiency savings and price effects

depend on substitution possibilities.

Source: BERR (2006)

Implications for policy?

1. Rebound effects have to be mitigated by pricing (tax?)

2. Strong inertia in transport consumption has tended to be resistant to price hikes.

3. Transport consumption has had strong multiplier effects on growth. Relative falls in price likely to have wider economic impact.

4. Should capping or taxation be differentiated according to likely welfare impact? (i.e. not a flat carbon tax)

Source: ONS (2001)

1. Heating: efficiency savings least likely to stimulate growth in consumption…?

2. But… large efficiency savings since 1970 counter-acted by increased space heating (central heating) and household structure of population.

3. Turnover in housing stock very slow: 40%+ pre-WWII, and inertia very strong (high rates of house ownership)

4. Key savings likely to come in adapting existing stock…

The 'organ ic econom y': ratio o f labour to energy costs, 1560-1784

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Sources: Officer (2006), Phelps-Brown & Hopkins (1980)

Back to a more labour-intensive economy?10 000 years of virtually zero per capita income growth…?

Dave MacKay’s consumption plan in historical perspective:

Efficiency gains: quite plausible but require strong long-term price signals or regulatory intervention

Consumption falls: without historical precedent… what context is needed to make efficiency stick?