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    Intro To Energy Systems

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    Intro To Energy Systems

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    1. Intro to Energy Systems

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    [Ac Why Does Energy Matter? ee ea Sere ies 2 Steerer es Sao oe ee Sas 1L._Energy, Output, Income, and Welfare ‘One of the most telling aspects ofthe importance of energy is its centrality in our ‘economic and industrial consciousness despite not being inherently useful in is wn right. Unike other basic resources, such as food or water or sr, ener ie! {is almost never the goal but rather serves as an intermediate step in pursuit of some higher fulfilment that improves the ability, reach, or satisfaction of people. Enery expert Amory Lovins has written that “customers don’t want kilowatt-hours: the want services such as hot showers, cold beer it rooms, and spinning shafts” Ye Somehow, energy is atthe very center of human existence, and the continued pro ‘urement ofthese energy services it provides is vital to modern well-being. {cis this primacy that requires examining energy as the analytical point of depar {tre and treating it sits own field of study. However, such an examination quick) ‘Cveals that energy touches every aspect of the economy, the future, and so ur society, and prospects for linked to allo the inderstanding the role of energy requires understanding how it *8¢ aspects of the surrounding world, ‘Scanned with CamSeanner The Energy System 48) Growth in Energy Is (Approximately) Growth in Wealth and Welfare ‘To begin the study of energy, ts fist important to understand what energy i and it does. As mentioned, energy is fundamentally an enabler ofthe ability to accomplish other tasks, leveraging the human capabilities to heat, light, manipulate, and move things. From the davvn of humankind, traditional forms of enerzy—includ ing basic biomass combustion and animal power—have been used to provide these services much easier than if humans had to perform this work alone “This relationship is, infact, definitional. One physics definition of useful energy is often interpreted as “the ability to perform work" and deseribes an entre clas of physical phenomena, including light, heat, sound, motion, and electricity. These fre precisely the types of energy harnessed to achieve the outcomes desired, such as providing the ability to move machines, power vehicles, and perform work far beyond the basic endowments of humans. "This basic understanding of the energy system as the enabler of work links elegantly 10 the understanding of societies and economies through the mechanism Of gros product or, specially, gross domestic product (GDP) inthe case of 2 Specific country’s territory. GDP isa measure ofthe production ofa society, whic an be calculated by adding up all ofthe goods and services produced ina given period. (Eeonomic theory defines final output to be the same as the total income in the economy, and both terms wil be used interchangeably to describe the economic ‘product unless otherwise noted) ‘By extensional ofthe work that ets done in an economy is through the efforts cof humans amplified by the energy they can command to perform work on their total This implies that energy i the foundational concept of economic activity and economic activity eannot be divorced from the energy required to perform it thou ‘heothciency with which that conversion takes place must also be considered. “The highest corelation of energy ¥ economic activity i seen in the growth ofthe se of mde forms of energy. From the start ofthe Industri Revolution (ound 770), the word economy bas grown more than 100 times in ems of oP. oF vvork performed.” As show in Figure 1.1 for the US over that period and one Py other countries the amount of energy consumes has grown simialy amt Through the ae ofa progresin of fel surces—frst col then petolum, mA) im nyropower, nl cear—that have callectel enabled ths growah tab economic activi or tin about nergy and se ff pedtes the frmal ty of ery sat he tem energy bid orginally to Ars i the fo cent Thove not emer sete we nl the cry 180s an di not ener be PE atte Tater half Ft entry’ By then the foundation of he moder, vray ven economy ha alraly been deply estas vt humans have intel sought ont these forms of ene on ey made ie beter, Wealth and come, nt unlike ee, simply because hey actually desired which is wel Wellies dee jntermediate means ‘Scanned with CamSeanner (lobe! Energy Use (Quaditon Bs) 8 8 8 re 11 US Energy Use by Fuel ee 1775 zoe soy of Enegy Consumption inthe United Stes, 1775-2009" ean, hpi sew cin. govodayinenrey eal fid= by economists, refers to prosperity and living standards as measured by the notion ‘of “tility.” Merely being richer ot having more access to modern forms of enerey ‘does not necessarily make a person happier or better off. Even the originator ofthe ‘ealculus of GDP, Simon Kuznets, expressed concern over the imperfect relationship of wealth to welfare’ A complete calculus of the benefits, costs, risks, allocations ‘within a population (also called distribution), and prospects for society's future relationship to welfare and energy would be required to understand the welfare impacts of energy choice. However, over the last few centuries more access to modern forms of energy has strongly correlated with greater welfare in many observable ways. Besides GDP growth, many other indicators, suchas health tracy and other measures of satisfatio, have tended to rise across societies inthe last few centuries as access to energy grew” At the same time, other measures of welfare have diminished in line with rising energy use, including many forms of natural resource degradation ‘or pollution. A robust debate of these tradeoffs should be included for a complete ‘understanding of the relationship between society and energy. 1) Risks in the Energy System Are (Precisely) Risks to Wealth and Welfare ‘Once the powerful relationship between energy and economic activity is revealed, it is easy to see why the energy system is considered a bedrock of modem economic activity. Consequently any treat to the continued functioning of the energy system constitutes a threat to moder economic activity and the welfare that it crates. While ‘more energy may not always improve welfure, less or riskier energy will almost certainly make it worse off, ‘Scanned with CamSeannes The Exergy Sytem act ts an cn om of yen ss nce api oh cin ny cain on gs ke» Rang wt of cay eneray wheter in he frm of fo ffl can compe peopl 1 for ier oder cena stv uni doa pry sup can Be band In long suply his pac eth os aetna boundries pen isruptions of supply ean he power pital everage tol nd can even compel Preemptive proetive thai y thane wo ate exposed Such sk ean also come fom dramatic changes nthe com to proce or the price 1 procure these energy resources (economic risks), Because of the fundamental nature of energy ava econoni inp, changes in the cost of production often are rsd to the consume either in stb of avaiable spending ot in rea tion in potential work oupatn places where impor of energy s eqired external events tat raise the impor price can have damaging economic effets. Conversely, ‘ations that ae significant energy exporters are constantly vulerble to a drop the pice they can obtain for thermal resource endowment. "The realization of any of these physical or economic isk as the potenti 10 be incredibly costly and istupve niet proportion to how dependent an economy ison thexe modern energies and how longi takes for the economy 10 make the recesary aepstions and investments 0 scommodate changing Gicumstances. ‘Due tothe potential impact ona nation’ income and iveiond, access 1 enerey is mong the most ercely protected and il interests for everyone rom bowshols to whole societies. B, How Much Energy Is Needed? ‘energy is positively related to welfare, then the quickest answer to “How much nergy i needed?” is simply “more” From the discussion above, with all ober things being equal—or ceteris paribus in economic tems—it seems obvious thot more energy ereates mote economic output, thereby increasing welfare while ko protecting from the sks of Jos of acess, However, tht anower is 100 vie, and the relationships among. enerey, income, and welfare are much more Rolex and fequte making important trades within scarce and constrained circumstances. seating point fr analysis ofthe energy system fo understand the components thar deterine how moch energy is actully wd, as wellas the metic of how eck arsine components i measured (ee the Mates Sista), Then, understanding aecregch of these components vais over diferent crcmsancs and changes vet mies a clear pathway to begin an analytical exploration. 1, Determining Energy Requirements Ie i ‘Scanned with CamSeanner haper 7 —— Metrics Sidebar: What Is Metric? ook, and how metrics are constructed is rma oe a ye won anaes : rent nn nt ie act cn mica i etic a ane sing the same mete Dollars perpound (Sb), pounds persquarinch ett Sr a loan ee tm en (ODE ad Son rb al OCDE Echt oe a no econ ap aes eng hry at cate tl dar erate hae Sa a naa re feb ates eas baa, sie red eran gene: pincaom a See enter secs amore Nee er ee ieee ee ee pra pallet Pope ere ‘ouput they each want to produce, or GDP as itis defined. Precisely, energy use (E) ‘can be factored into the number of people (or population, P) and the energy use per person (EMP). Ps(E/P) ‘Then, EP can be further factored into the amount of energy required to create each tunit of economic output (E/GDP) and how much economic output is produced by ‘och peron (GDP) on average. The point of his analysis is to dsagaregate energy ee component pars that canbe understood (and even potently frecas) = P+(E/GDP)»(GDP/P) This most basic definition becomes the f nn es the foundation of understanding the three frimary components of energy neded, each of which wil be discussed in et Bite em: ts not portant wha the metrics or units of measurement ae for By components (Btu, joules, or kWh) ofthe output ($ oF ¥ or €). It ‘merely important to understand the def = tand the definitional retationship among the component ‘Scanned with CamSeanner Population (Billion) The Energy System Population (P) ‘The population of people on the planet has grown from about | billion in 1800 to ‘over 7 billion today (Figure 1.2), Increased access to medicine, health-care services, ‘sanitation, and reliable supplies of food and clean water has enabled dramatic growth in population from preindustrial levels. This growth in global population has been 4 primary driver of increases in the energy required by the global economy, inde Pendent of the simultaneous increase in global living standards experienced over the same perio, ‘The direct relationship between population and energy needs begs the question of how much population growth ean oceur before the scarce energy resources of the planet are overwhelmed. The original economic formulation of this argument came from Thomas Malthus, considered to be one of the founders of modern econom- ies alongside Adam Smith, Malthus postulated in his An Essay on the Principle of Population (1798) that ising prosperity would lead to rising population growth until physical limits or resource availability were reached and then would collapse through disease or a self-inflicted famine While Malthus's conclusions are hotly debated and are still foundational to some schools of economic thought, the efficiency of resource use has also improved over time and has, thus far, largely limited the Jmpacts of resource constraints on population and economic growth, Historical Estimates + United Nations - High Scenario United Nations - Medium Scenario 12] e+e: United Nations - Low Scenario sn em 10 PraaseTe eitstr P igure 12 Fup pts 318 Reisen” UN Deiat Ecc ad Source Soa: tl gison Dnt, ps on.rppdpyGenogmptiTofle ‘Scanned with CamSeanner chaser 1 growth cones tobe amor determinant of We ener Regardless, population tory is necessary 10 Project soc. ng ne fr poplin a wnt poe 1 pee re ca rl resrap aeens the possible fUUFE Snes of the world. Thee a ay ie and then falling, one stabilizing vrestno peaking by midcentury a8 billion people soon adie toy the end of the century at 10 billion, and the third eee cane ta Obviously, each of these re er cere (and oe resource) requirements cas Rossa and uch of Europe have seen population growth rats fll 0 oe Comer, ter counts, ncuding much of Afica and Southeast Seine tose high population grovih rates." In aggregate, global population ‘poh ates have slowed in the last few decades but still remain high in some of the poorest areas of the word “Pied concept that cane used t analyze the trends in population growth isthe tetlity rate This calculation of tive births per female can explain the rate tr poplition replacement ina country oregon, The replacement fertility rate. Sccvumtng for child and premature alt morality, is usually benchmarked at 2.1 Ive binhs per female in industrialized countries and higher in developing countries ‘The replacement rate globally is curently estimated fo be around 2.33 and drop- ping." The historical figures from Figure 1.2 reflect a substantial fall inthe actual obal ely rate from 4.97 inthe early 1950s to about 2.53 through 2010." “The change in these developing countries’ population growth rates will therefore <éetrmine the overall growth rate of the global population, but they will be further alee by a materi phenomenon known as the population momentum effect.” Tis eect causes the age distibution in a curently fast-growing populs son be dsgropoiantely young, sch sin many por and developing nations. is means that hese younger populations continue to reproduce faster than older ‘populations, growing until the natural death rate equals the fertility rate, thereby ‘ulbrating younger and older members of the society. This effet can also occur in the opposite direction with declinia tc ing population anda dispropotionately elderty population suation in Japan, for ins for instance, and in an inereasing nu . ean countries, aieeehetants ‘cenarios would result ina Very eet eg engin monensin gh ndenndig goal opto nets mut es etn sow sal cans in te eye hve mati impac en loa olen in un fs While tet atria ohne ney saan pgs nt gb option may beeing nr ‘She pt ry ei en ne i i how te li. ng hw o pve vil ew sen ode nnn function ofthe ‘quality of life they can e “ can provide hy °F life they can expect and the efficiency with which energy ‘Scanned with CamSeanner u Energy Use per Capita (kg oll equivalent) The Exergy System 3. Per Capita Income (GDP/P) Im addition to knowing the level and growth rates of population, iti important to Understand how much economic output each of those people creates, and expects ‘o.consume, on average, This measure of output pe capita i calculated by dividing ‘GDP by the population, or GDP. Macroeconomists rely heavily on this statistic to evaluate the relative economic activity level atoss countries, or some subset of the Population within counties, As described above it is important to ote that GDP is ota precise measure of welfare, though i is often conflated with it by economists and financial theorist ‘The complete relationship of energy and the macrosconomy is explored in Chapter 19. For now, itis enough to note thatthe relationship between GDP per capita and both welfare and energy use though corelatd. is very noisy and impre- cise, Figure 1.23 shows the relationship of energy use to GDP across a number of economies, and the fied line suggests & postive relationship, even if individual points vary wildly from the average. This suggests that if society intends to continue increasing its growth in economic income (GDPIP), then more energy inputs—t0 greater or lesser extent, depending on other varables—will be needed to support that growth 4. Energy Intensity (ESGDP) Finally, the amount of energy needed is also determined by how much output ca bye ereated with each unit of that energy, Te thied factor ofthe energy calculus 93.000 8.000 7000 a (© saudi Arabia 5000) russia ‘*uspan Wan eee 3.0005 eee Shialaysie 20004ihyna «Mexico 1000 4, © Egypt Migena —_—_— — Sigg elas id sls win tao wlohe ‘aor pur Capa 2008S) sry yr Cap GDP pe Capit rere 13, Ener Yr Cut Oy ig Oo Keep Cox in The de ner Soe, za: Chon Hos 20138 ‘Scanned with CamSeanner 2 Energy Intensity (Lo.e/Thousand USS) Ohms Figure 1.4, average egy inet has Been Fine OOF all mes. Counties undereoing rapid ou Senne es = Sacer em a en ima a secerence pti of neeBSiNB EMTEY We pr emma maga il eo my fcr i met erin ee Soot i ee ay oe ed = qty ime fan ming ch Cr : fe required. This correlates with the idea dese ently in terms ofthe volume of TRY west mve eficen in energy use overtime, a Feast i terms of ability 1 ined through the concept of technology improvement

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