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

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

1900 1920 1940 1960 1980 2000

year

%

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

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

1800

1807

1814

1821

1828

1835

1842

1849

1856

1863

1870

1877

1884

1891

1898

1905

1912

1919

1926

1933

1940

1947

1954

1961

1968

1975

1982

1989

1996

2003

Primary electricityGasOilCoalWoodWaterWindMuscle

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

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

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

1801

1807

1813

1819

1825

1831

1837

1843

1849

1855

1861

1867

1873

1879

1885

1891

1897

1903

1909

1915

1921

1927

1933

1939

1945

1951

1957

1963

1969

1975

1981

1987

1993

1999

Exergy input trends

exergy / cap [GJ/cap]

0

100

200

300

400

500

1900

1915

1930

1945

1960

1975

1990

2005

USA JapanUK Austria

growth of total exergy inputs [1900 = 1]

0

5

10

15

20

1900

1915

1930

1945

1960

1975

1990

2005

USA JapanUK Austria

Intensity Absolute increase

0

5

10

15

20

25

30

35

40

4518

20

1828

1836

1844

1852

1860

1868

1876

1884

1892

1900

1908

1916

1924

1932

1940

1948

1956

1964

1972

1980

1988

1996

2004

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)

0%

5%

10%

15%

20%

25%

30%

35%

40%

200519851965194519251905

Year

Effi

cien

cy (%

)

Electricity Generation

High Temperature Heat

Mid Temperature Heat

Mechanical Work

Low Temperature HeatMuscle Work

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?

0.0

20.0

40.0

60.0

80.0

100.0

120.0

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Services

Domestic 

Transport

Industry

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

0

0.2

0.4

0.6

0.8

1

1.2

1560

1569

1578

1587

1596

1605

1614

1623

1632

1641

1650

1659

1668

1677

1686

1695

1704

1713

1722

1731

1740

1749

1758

1767

1776

1785

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?