86025 Energy Systems AnalysisArnulf Grubler 86025_4 Energy Systems Determinants 1: Demand.

86025 Energy Systems Analysis Arnulf Grubler

86025_4

Energy Systems Determinants 1: Demand


Energy (services) are one of the fundamental requirements for social and economic develop-ment and not just their consequence

Former US DOE chair


Energy Services for:

• Survival and security (basic needs)

• Building and maintaining material environment

• Comfort (in using material env.)

• Social interactions (communication, self-actualization)


Energy Services

• Demand quantities: income, price, lifestyles, infrastructure,..

• Demand qualities: availability, income, price, comfort, “(in-)convenience”,…

• Quantities and qualities interact!

• “Modernization” indicator: quantity/quality of energy, e.g. non-commercial, traditional biomass use (cow-dung, residues, wood)


Traditional Fuel Use and Demographic Indicators

0

20

40

60

80

100

120

140

<20 20-40 40-60 60-80 >80percent non-commercial in total energy use

0

1

2

3

4

5

6

7

infant mortality, deaths per1000 life births

female life-expectancy,years

male-female lifeexpectancy gap, years

total fertility rate,children/woman

Source: WEA, 2000, p. 53Source: WEA 2001

(Primary) Energy Use per Capita

0 50 100 150 200 250 300

Europe 2050

USA 2000

Japan 1990

England 1880

Europe 1300

China 100 BC

Europe 10,000 BC

GJ per capita per year

food

household

production

transport

services

Europe 2050IIASA-WEC C1 Scenario

Source: Modified from V. Smil, 1991.


Mapping Energy AccessFinal Energy per Capita vs Population Density AD 2000

Source: Chirkov&Grubler, IIASA, 2007.

Energy Use Distribution of Indian Households 1998-99

Source: S. Pachauri, IIASA, 2006.


India – Per Capita HH (Direct) Energy Use vs. Income: Useful, Final and Hypothetical (with non-commercial fuel efficiencies)

Σ: Efficiency is biggest contributor to human welfare gains

0

5000

10000

15000

20000

25000

<500 500-1000 1000-1500 1500-3000 3000-4500 4500-6000 >6000

HH income Rupees per year

MJ

per

cap

ita

Useful energy

Final energy

Hypothetical final if used with non-commercial fuel efficiencies

Data: TERI, 1995.

India - Primary Direct and Indirect Household Energy Use Per Capita (1)

Average - All India

45%

7%19%

29%

Indirect foodIndirect non-foodDirect non-commercialDirect commercial

Average - Rural & Urban

0

4

8

12

16

20

RURAL URBANEn

erg

y in

GJ

pe

r c

ap

ita

Direct commercialDirect non-commercialIndirect non-foodIndirect food


0369

12151821242730333639

BottomRural

MiddleRural

TopRural

BottomUrban

MiddleUrban

TopUrban

En

erg

y in

GJ

per

cap

ita

Indirect food Indirect non-foodDirect non-commercial Direct commercial

India - Primary Direct and Indirect Household Energy Use Per Capita (2)



India – Fuel Use Structure of Urban and Rural Households vs. Income

0

20

40

60

80

100

<3000 >18000

Household income (rupees per year)

Pe

rce

nt

Dung Wastes Wood

Charcoal Soft coke Kerosene

LPG Electricity

Data Source: TERI, 1995.Rural Urban

3000 - 6000 6000 - 12000 12000 - 18000


Per Capita Energy & Services

Western Europe (average)• 13,000 $ PPP income• ~ 2.5 toe final energy• Floorspace: 40 m2

• Residential energy: .8 toe• Industry energy: 1 toe• Transport energy: .7 toe• Passenger-km (cars #):

10,700 (.74)• Ton-km (trucks #):

3,400 (.24)

Latin America (average)• ~5,000 $ PPP income• ~ 1 toe final energy• Floorspace: 10 m2

• Residential energy: .5 toe• Industry energy: .3 toe• Transport energy: .2 toe• Passenger-km (cars #):

4,700 (.21)• Ton-km (trucks #):

2,000 (.09)

Data characteristic for 1990s


Primary Energy Use and Income: Path Dependence

0

1

2

3

4

5

6

7

8

9

10

0 5000 10000 15000 20000 25000 30000

toe

per

cap

ita

USA1800-1998

Japan1900-1998

Austria1922-1995

UK1800-1998

1800185019001925195019751995

GDP (1990 US$) per capita

Data: Butschek, 1997; Fouquet & Pearson, 1998; Grubler, 1998; Martin, 1988 & JStO, 1998.


Energy Use & Wealth: OECD Past and IIASA-WEC and IPCC Scenarios for DCs

toe

per

cap

ita

USA1800-1998

Austria1922-1995

UK1800-1998

1800185019001925195019751995

GDP (1990 US$) per capita

0

1

2

3

4

5

6

7

8

9

10

0 5000 10000 15000 20000 25000 30000

Japan1900-1998

IIASA-WEC

SRES A1

A2 B1

B2

Energy Demand: The Economist’s Perspective

• Income growth, e.g. US real-term per capita income: +2%/yr (AFTER inflation) since 1900 = a Factor >7!

• Elasticity of demand with respect to:-- income-- energy prices (incl. taxes!)-- different for different income groups, fuel types, etc.

• Biggest impacts: Income growth, cost reductions, quality improvements

• Rate of time preference: consumption ”impatience” (discounting)

• Tradeoffs, e.g. transportation: income – price – time (air vs. car travel)

Reminder: elasticity: >0 = % change of A per % change of B,

0><1 called “inelastic”; >1 called “elastic”e.g. income elasticity: = +0.7 = 1% income growth +0.7% demand e.g. price elasticity: = -0.3 = 1% price growth –0.3% demand


Household Ownership (% of HH with) 1978 to 1985 (78-85 growth = colored)

TVRefrigerator

Washer

Vaccum cl.

Cost Declines in Refrigerator Costs in US

Source: OTA, 1991.

On example of cost declines + quality improvements (efficiency) see Bill Nordhaus example. of Lighthttps://classesv2.yale.edu/access/content/group/fes83026_f06/readings/nordhaus_lighting_1998.pdf

Consumption Impatience: Discounting

• Preference to consume nowrather than later

• Incentive to save (consumption deferral): interest rate

• A bet: I give you 1 $ today, or will put 2.3 Million $ in a trust fund to be paid out to your descendents in 300 years (a Yale story). What would you prefer?*

• Different discount rates:social < entrepreneurial (ROI) < < individual consumption

* If you prefer 1$ today then your rate of time preference >5% (often too high for climate cost benefit assessments)


Denmark – Distribution of Discount Rates

Source: Harrison, Lou& Williams AmEconRev., 2002


Implict Discount Rates vs. Income: Purchase of Air Conditioners in US

Source: Hausmann, 1979.

HH income,US$(1994)/yr

Implicit discount rate, %/yr

12,000

20,000

30,000

50,000

70,000100,000

89.0

39.0

27.0

17.0

8.9

5.1


Energy Demand: The Industrial Ecologist’s Perspective

• Product/service orientation

• “Cradle-to-grave” accounting: Net energy analysis (direct+indirect energy requirements)

• How to deal with structural change?

• How to deal with multi-factor productivity?


US- Energy per $ Value Added (TJ per Million $, energy embodiment, 1992 I-O data)

Source: Carnegie Mellon Univ. www.eiolca.net

Product On-site Energy Transport Other Totalsupply sectors

fertilizer 130.4 7.6 3.2 6.6 147.8passenger cars 1.2 3.7 1.4 6.4 12.6hotels 2.9 5.4 0.5 1.9 10.7semiconductors 0.9 3.3 0.5 2.7 7.4real estate agents 0.8 2.4 0.3 1.2 4.7computer&data services 0.2 1.2 0.3 1.1 3.0

Direct energy Indirect energy

Note product and value orientation:Energy embodied in car vs. total energy use over lifetime of carEnergy $ per VA $: industry vs. services (energy price differences)


Carbon Intensity of Products/Services (2 digit SIC level) Source: Marland&Pippin, 1990.


US - Time and Energy Use

Time

109 hrs

Energy(final)

109 kgoe kgoe/hr

At home 835.5* 236.6 0.28

At work 291.1 660.0 2.27

Services 183.5 152.0 0.83

Travel 107.6 279.0# 2.59

Total 1417.7 1328.4 0.94

* Excluding sleeping time #Passenger travel only, rest of transportation accounted for “at work”


US – Time –Energy-Diagram(cumulative percentage distribution)

Energy

Asphalt

Plastics

Chemical products

PaperIron & steel

Paints

Textiles

Shoes

Restaurants

Real estate

Communication

Drugs

Engines / turbines

FoodConstruction

Entertainment

Agriculturalservices

Pri

mar

y E

nerg

y =

0

Working time = 0

Information = 0

Metalproducts

broadcastingRadio/TV

Energy – Time – Information: Intensity of Products/Activities

Source: D. Spreng, 1993.


Economic Structural Change (based on Kuznets, 1971)


Energy Demand: Social Science Perspectives on Value and

Lifestyle Changes

• Given: Hierarchy of needs (Maslow)economists (actionrevealed preferences?)

• Constructed: Preferences “discovered” in process of establishing social relations (Mary Douglas) cultural theory (perceptionspreferencesactions?)

• Generational change: Succession of cohorts (e.g. Nathan Keyfitz)demographers, “cross-over” scientists


Consumer Expenditures Structure in US (based on: Lebergott, 1993)


Typology of “Value-ists”

Along 2 Dimensions of

Social Relations

& Associated

Myths of Nature

Source: M. Thompson based on M. Douglas and P. Timmerman

Keyfitz quote

N. Keyfitz, 1992.

N. Keyfitz, 1992.


Germany: Car Ownership by Gender and Age Cohorts Source: Buttner&Grubler, 1995.


Germany: Car Ownership of Female Age CohortsSource: Buttner&Grubler, 1995.


Scenarios of Car Diffusion for a United Germany: Greens are Outnumbered by Greys!!

3 Scenarios: Constant 1990 Rates, Trend, Green Generation

1990: 79 Million Germans 35 Million Cars (26% female owners)

2030: 77 Million Germans (70 by 2050) 30 Million cars (24% female owners) 38 Million cars (36% female owners) 33 Million cars (41% female)


“Take-back” Effects


Percent Change since 1970 in US Automobile CO2 Emissions and Driving Forces


IPAT• Impacts = Population x Affluence x Technology• Widely used decompositional technique*• Component growth rates additive:

e.g. POP 1%/yr, GDP 3%/yr, E/GDP -1%/yr= GDP/POP 2%/yr, Energy 2%/yr

• See previous car emissions exampleC (emissions) = gallons fuel usegal = gal/miles x miles/vehicle x vehicle/people (“empty seats”) x people x ε (adjustment for increasing SUV share), canceling out all elements: gal=gal = identity

• Assumes variables are independent!Beware of fallacy of spatial aggregation (POP growth in India, Car growth in US lumped together in global IPAT)!

*See e.g. Ausubel&Waggoner, 2002; and review of Chertow, JIE, 2001.

86025 Energy Systems AnalysisArnulf Grubler 86025_4 Energy Systems Determinants 1: Demand.

Documents

residential energy

quantityquality of energy

energy systems determinants

toe transport energy

toe industry energy

toe final energy floorspace

indirect household energy

hh direct energy use