Fuel Poverty in the UK

This time I would like to cover a very different aspect of energy and its usage in everyday life. So far there is  no apparent lack of energy, technically speaking. Energy is available in abundance, and the only restriction to using it is the price we are asked to pay for it. Thus big users will eventually find themselves paying a huge bill. But it´s not only big consumers who might face a hefty burden from their energy bill. More and more people are using a substantial amount of their available income in order to  buy the energy they need. In particular, this is true for heating which is also one of the biggest parts of private energy consumption.

The UK statistical office is collecting data on fuel poverty. The term refers essentially to energy needs for heating purposes and the relative amount of household income people have to spend in order to “maintain a satisfactory heating regime”, i.e. 21 °C in the main living area and 18 °C for other rooms. In particular, people are considered to suffer from fuel poverty if they have to spend more than 10% of the household income on fuel for heating.

The figure below gives a sketch of the situation in the recent past (2003 and 2009).

Number of fuel poor households in millions. Abbreviations: dc – dependent children, hh – household.

The first observation we make is that the number of fuel poor households has apparently dramatically increased between 2003 and 2009. During that period the number of households concerned has, on average, more than doubled. Thus, fuel poverty in the above sense is definitely increasing and showing a severe social impact. Energy is becoming a scarce and to some extent even luxurious commodity.

Another observation is that specific groups are particularly hit by this phenomenon. People without dependent children are more likely to suffer from fuel poverty than those having kids. Moreover, persons older than 60 years are also facing a greater risk of getting fuel poor. The same is true for single persons when compared to couples.

The causes for this are manifold. Energy prices are on the rise. They climb faster than the average income, especially for retired people. Another factor is certainly the economic crisis which hit a number of European countries in 2008. So far we are still far from a sustainable recovery. Therefore, we may well assume that the situation has aggravated in the meantime.

Yet another factor coming into play is related to economic circumstances: Many elderly people may not be able to afford refurbishing their houses such that they consume less energy, especially for heating. Renovating old houses is a costly undertaking which may simply go beyond many people´s financial capabilities.

Fuel poverty is a critical issue not only in the UK. Also other countries like Germany encounter the same problem. However, most of those countries do not collect the respective statistical data as is the case in the UK. Therefore, it is extremely difficult to assess the severity of fuel poverty for other countries. Taking into account that energy is of critical importance to the functioning of our societies, it would be highly desirable to collect those data in order to tackle the problem as soon as possible.

Energy and Transport

Transport is one of the big consumers of energy. As we have seen in some of my previous posts, there is a clear tendency to become more energy efficient. Does this also apply to energy used for transport purposes?

Eurostat provides a collection of data on this issue which may give us an answer.  Let us look at the transport energy per unit of GDP. This is certainly a sensible measure since we may consider a link between economic activity on the one hand and transport (of both people and goods) on the other. So whenever the economy is growing (or shrinking) transport is likely to follow suit.

We consider here the case of Germany, France and UK, i.e. the biggest economies of Europe. The figure below shows how energy demand for transport per unit of GDP has developed since 1995. The curves are indexed with 2005 = 100.

Energy demand for transport purposes per unit of GDP.

The message behind this figure seems to be obvious. Over the past 15 years there has been a certain decoupling of economic performance and energy demand for both passenger and goods transport. Thus per unit of GDP less energy is used for transport. We are becoming more energy efficient.

Having a closer look at the figure we may also observe that the downward trend is still unbroken, i.e. there is no flattening tendency. This leads us to the conclusion that there is room for further improvement of energy efficiency in the transport sector.

Nuclear power – a solution for a sustainable future?

I want to write about this subject because of a talk by a science professor that I heard a few weeks ago. He was talking about his vision for the future and how that future would look like concerning the CO2-problem and sustainability. According to him nuclear power should be used in order to be able to produce the electricity that will be demanded for in the future. Solar and wind options will not be able to succeed in producing enough energy for the future.

Solar based power and wind based power could never become a viable option to fulfill the world’s demand for energy. Their efficiency is limited, based on physical laws. I can partly agree with that. At the moment, the efficiency of commercial PV-panels is about 15%. At the other hand, the efficiency of PV-panels is increasing and a lot of research is done to improve the technology (see fig. 1).

Source: National Renewable Energy Laboratory

Fig. 1: Efficiency of PV-panels

The results of these tests have to be proven outside the laboratory, but the developments go fast. Another solar based option is to build large fields of PV-panels on empty fields, on empty land in industrial areas, on contaminated soil (examples of PV-fields in former coal-mining areas), floating on lakes or water reservoirs (e.g. at horticulture sites: http://www.valksolarsystems.nl/projecten). In this way, a sustainable option for electricity production is combined with other functions, a multi-functional approach; or contaminated areas can be of some use. We have to look for much more of those options to reach a sustainable future.

The efficiency of wind turbines nowadays is much higher than those 15-20 years ago. More is known also about the problems concerning turbines and possible methods to tackle many of those problems (noise pollution is almost decreased to zero). Next to the turbines on land, the option for turbines at sea came into the picture. That seems a good development.

A sustainable energy system has to be based on multiple technologies: wind and solar power, biomass, hydropower, etc. We all know that the wind and sun cannot produce energy constantly. Therefore, there is need for back-up power or storage capacity. A viable option seems the combination with hydrogen production. A gas that can be stored and used in a later phase to produce electricity. Another option: a large lake in two levels, so water can be pumped up when there is excess of electricity. In moments that wind or sun cannot produce electricity, the water can run down via a turbine and produce electricity via that technology.

Going back to the nuclear power option. I tried to indicate that I believe the efficiency of wind and sun can be improved further. One thing I know about nuclear power is that there is a huge problem with nuclear waste after electricity production. If it is stated that, according to physics, PV-panels can never reach high efficiencies, for sure the physical laws have also to be taken into account when proposing a nuclear solution. We have to keep in mind the physical aspect of ‘half-life’ (fig. 2). The use of nuclear power produces nuclear waste that has a considerable half-life and we do not have a proper way to deal with that waste. The best option we came up with, at the moment, is underground storage. Thereby, hoping that the caverns can store the waste without leakages or other disasters. But, we do not know what will happen in so many years: does the underground storage last forever, do people in centuries or millennia from now recognize  the symbols we have used, can they tackle leakage or misuse?

Isotope Percent in natural uranium Half-Life (in years)
Uranium-238 99.284 4.46 billion
Uranium-235 0.711 704 million
Uranium-234 0.0055 245,000
Plutonium-239 24,110
Plutonium-240 6560

Source: Institute for Energy and Environmental Research, ‘Uranium, its uses and hazards’; Factsheets, posted on December, 2011; Last modified May, 2012 (http://ieer.org/resource/factsheets/uranium-its-uses-and-hazards/) + Wikipedia, ‘Radioactive waste’ (http://en.wikipedia.org/wiki/Radioactive_waste#Physics)

Fig. 2: Half-life of some uranium and plutonium isotopes

I would opt for a sustainable future in which I do not see a role for nuclear power. We have to focus on other sources and invest and research more in solar, wind, hydro, etc. I think our future will be a combination of centralized, sustainable solutions (wind turbine parks, hydro power plants, CSP/PV-fields, etc.) and decentralized sustainable solutions (local production with sun, wind, hydro, etc.). Sustainability deals with the here and now, but also with there and later. We have to keep in mind the generations that come after us.

The Oil Traders’ Word(S): Oil Trading Jargon

Stuck for words?

A book review by Nicholas Newman of Stefan van Woenzel new book ‘The Oil Traders’ Word(S): Oil Trading Jargon’.

Sometimes, you can be at a meeting and you have no idea what they are talking about. This is especially the case with the specialised technical business dialect used by oil traders. For instance, do you know what ‘AAA’, ‘going long’ or even ‘lay days’ means?


You will need to know at least some of these terms when you are involved in sending crude oil from Brazil to Germany via a large oil tanker across the Atlantic to Rotterdam, where it is refined and the resultant products are barged up the Rhine to a terminal in Frankfurt.

Well, AAA in this case does not stand for the American Automobile Association but Stefan van Woenzel defines ‘AAA’ as the American Arbitration Association, which provides recognised independent arbitration services between clients.

As for ‘going long’ it’s not some cricket term, but the purchase of a commodity like crude for storage, supplies or speculation.

However, ‘lay days’ means the period of time described in the charter party during which time the owner must tender his ship for loading.

I will leave you to read the book to find out what ‘charter parties’ mean.

This book includes various oil terms and definitions derived from day to day experience for general trading, paper trading, risk, logistics, refinery, oil documentation, HSE, oil traders words of wisdom and conversion formulas. Well, this book provides you with a good clearly written definition of what  are these terms and many others mean.

This new book “The Oil Traders’ Word(s): Oil Trading Jargon” by Stefan van Woenzel, Lead Negotiator Crude at Statoil ASA, provides you with more than 2000 most commonly used oil trading related definitions.

As for his‘old traders words of wisdom’, I especially liked ‘sell in May and stay away’. Since most traders decide to go away on holiday in May, leaving fewer trading opportunities to participate in. Whilst, ‘I am a student of the market and my job is to learn’ means that since the market is always evolving, you need to be constantly learning to keep ahead of the game.

Stefan van Woenzel, book is designed as a communication aid to allow people involved in the global oil trading world including oil traders, operators, contract personnel, claims departments, controllers, storage people, shipping agents, oil brokers, energy journalist’s, regulators and policy makers, et cetera to communicate clearly, effectively, efficiently and precisely.

Hopefully, this book should help avoid some of the recent notorious trading losses that some traders have experienced in the past few years.

In addition, I especially appreciated the practical career advice; Stefan provides in his foreword to the book, he advises traders who are seeking to be successful, to get out of the office. They need to promote themselves by networking, not only at stuffy business meetings, dinners and conferences, but by also getting out in the real world and participating in a sport like golf or sailing with colleagues, customers and rivals. As an energy journalist and consultant of some years’ experience, I have gained many opportunities from playing golf or sailing with industry clients.

This book is available in both hardback, paperback  and  e-book format. The author warns that this book is not meant to be used as legal documentation related to commercial or operational decisions.

Overall, I found this a very useful book, which I will recommend to my colleagues in the energy game, whether they are traders, academics or fellow energy journalists.

Price £24-95

  • · Paperback: 560 pages
  • · Publisher: AuthorHouseUK (29 Jun 2012)
  • · Language: English
  • · ISBN-10: 1468586041
  • · ISBN-13: 978-1468586046
  • · Product Dimensions: 15.2 x 3.1 x 22.9 cm
  • · http://www.oiljargon.com/index.html

Do Energy Saving Light Bulbs Really Save Energy?

Some considerations about the usefulness of energy saving light bulbs.

Conventional light bulbs which are now banned in the EU since 1st September 2012 are very inefficient when it comes to turning electrical energy into visible light. More than 90 % of the energy input are emitted in the form of heat. Thus with a less than 10 % efficiency in terms of light production the classical light bulb may indeed look a rather hopeless case and energy saving lamps appear to be the preferable choice.

However, a closer inspection shows that the odds are not at all so bad for the conventional lighting medium. During the cold season, i.e. whenever people feel the need of switching on their heating, the classical light bulb contributes to the heating effort. Thus whenever we count heading degree days the old fashioned light bulb lowers the need to switch on the heating. From a physical point of view during the heating period the energy saving light bulb does not save energy. That is a simple deduction from the law of energy conservation. On the contrary, if we turn to energy saving lamps, the work load of our heating systems gets higher.

On the other hand, it is true that during the warmer period energy saving light bulbs are the better choice because then we really do not need any extra heating. So in order to understand the energy balance of both lighting systems we developed a model which is based on the following assumptions:

Get-up time: 6:00

Leaving home in the morning: 8:00

Returning home in the evening: 17:00

Sleepy time:  24:00

In addition to that we assume an average performance of 200 W(el). Our model is then applied to two European cities, one in the northern (Stockholm) and the other in the southern part (Rome). From this model it follows that the maximum number of lighting hours per day is 9 which is reached during the dark winter months. On the other hand, during the long daylight hours in summer, it may be necessary to switch on the light for no more than 2 hours per day. Electricity consumption for light sources is thus fluctuating between those two extremes. Fig. 1 shows the distribution of lighting hours in both cities.

Fig. 1 Lighting hours in Rome and Stockholm.

How much artificial light we actually need is largely determined by the length of the daylight period which in turn is governed by sunrise and sunset.  The data for those astronomical observables are easily accessible, clearly highlighting the differences between northern and southern locations. Although these differences may be very large during certain periods of the year, their overall impact on our model is far less dramatic than expected. On an annual basis the number of lighting hours in Stockholm is not very much different from the one in Rome, 2160 vs. 2110, respectively, i.e. less than 3 percent difference. These lighting hours correspond to an average electricity consumption of 432 kWh and 423 kWh, respectively.

Lighting and heating

What is, however, different is the number of heating degree days between the two cities. Correspondingly, the number of lighting hours during the heating period is much larger in northern Europe than in the southern part. Our analysis shows that more than 80 % of lighting hours are consumed during the heating period in the case of Stockholm. This, in turn, means that during that period there is no gain from using energy saving light bulbs. The respective number for Rome is 62 %. Thus also in southern Europe a substantial amount of lighting is used when people are likely to put on their heating. The rest of Europe lies, in its vast majority, somewhere between these two extreme values. There are exceptions, but these are statistically insignificant.

From a physical point of view, energy saving lamps are only useful when it is warm outside, because then there is no need for excessive heat. During winter those lamps do not lead to an overall reduction of energy consumption. Let us look at the situation from the point of view of a classical light bulb. It wastes energy in summer, but not in winter. According to our model, the waste energy produced by a classical lighting system amounts to about 78 kWh (Stockholm) and 145 kWh (Rome), respectively, over the whole year. We may also ask how much heating energy we can save by using normal light bulbs. The figures are 311 kWh (S) and 235 kWh (R), respectively. Thus we may conclude that, physically speaking, the energy balance of classical light bulbs is clearly better than the one of their energy saving competitors. Their contribution to heating in winter outweighs their waste of energy in summer. Of course, the effect is much more pronounced in northern Europe than in the southern countries. But even in the latter ones, the result is undoubtedly in favour of normal light bulbs. Figs. 2 and 3 demonstrate the contribution to heating and the waste energy of conventional light bulbs for the two cities.

Fig. 2 Heating potential vs waste energy of conventional light bulbs in Stockholm.

Fig. 3 Heating potential vs. waste energy of conventional light bulbs in Rome.

It is, of course, conceivable that under certain circumstances energy saving light bulbs live up to their expectations. Our model indicates that this may be the case in tropical areas where heating is hardly ever needed.

In any case, energy-saving lighting systems are not reducing energy consumption at the level of private consumption which we have considered inour model. This is even less so at a more general level, when taking into account the energy effort for producing and disposing of light bulbs. The recycling of energy saving systems is putting an extra burden on their overall energy balance, therby seriously questioning their high expectations.

A crisis in leadership in Japan’s nuclear industry.

By: Nicholas Newman

Failing to make the right decision is easy to do. Regrettably, despite years of technological progress and experience, governments and energy companies continue to make such mistakes. Nevertheless, due to the increasing scale of investment and environmental hazards that the industry faces, the world energy leadership needs to do better than it has in the past.

It is clear those events at Japan’s Fukushima Daiichi nuclear plant have as much to do with bad decision-making by the country’s energy leadership as it has to do with the massive sea quake that caused a tidal wave to hit the doomed nuclear power station. Examining the factors that contributed to the poor decision-making that led to disaster in Japan last year, one comes to the conclusion that the events transpired could have been substantially mitigated or even avoided by the country’s energy leadership.

Here are some of the reasons that contributed to Japan’s unpreparedness for such a nuclear crisis and surprising negligence of nuclear power plant safety standards. These factors that contributed to the Fukushima incident range from internee sign fighting between the country’s government agencies (Ministry of Environment and its two regulatory agencies the Nuclear Safety Commission and Nuclear and Industrial Safety Agency) as well as the plant’s owners Tokyo Electric Power Co. Nor did it help that the power plant’s operator had been found to have ignored safety advice on several occasion from both domestic and international nuclear professionals such as the International Atomic Energy Agency (IAEA).

It is clear from government reports that the leaderships of various stakeholders in the industry, including Japan’s regulatory agencies and nuclear power station operator TEPCO made serious errors which would have been avoided if the organisational culture was more accountable and open to inspection to not only Japan’s voters, but also the international community at large.

For instance, there are several documented examples of the national regulatory agencies ignoring the advice of such world agencies such as the IAEA. Reports suggest that the regulatory system was suffering from turf wars and intra-agency rivalries between regulatory agencies and departments of government ministries.

Nor did it help that TEPCO falsified safety records and ignored the advice given to it by both the domestic regulators and the International energy agency revealed in a report by Japan’s Independent Investigation Commission. In this report, it was revealed that Japanese electric power companies had since 1980, been unwilling to cooperate with the IAEA ‘s operational safety review of the country’s power plants. This review known as the Operational Safety Review Team (OSART), is where a team of experts conduct an in-depth review of operational safety performance at a nuclear power plant by checking the factors affecting safety management and personal performance.

In 1992, this operational safety review of Fukushima made a number of recommendations which Tokyo Electric Power Co, subsequently dismissed. In 2002, it was revealed that TEPCO had falsified 29 cases of safety repair records regarding cracks found at several of its nuclear reactors, including those at Fukushima Daiichi in the late 1980s and 90s. Despite this, the power company declined the offer by the IAEA to institute a fact-finding process to improve safety at the plant concerned. It was announced by the Chief Executive at TEPCO, that the proposed regulations were unrealistically strict and not in accordance with actual operational requirements.

Nor did it help that the entire nuclear community of the country was suffering from isolationist and secrecy tendencies, which were not helped by delusions that the country’s nuclear power sector was the best regulated, most advanced and managed industry in the world. The perception amongst many Japanese nuclear professionals was there was no need for Japan to learn from the rest of the world. In a sense Japan’s nuclear community was suffering from classic Galapagos Island syndrome symptoms.

Much to the surprise of these professionals the events at Fukushima were a wake-up call; it became clear from various investigations that Japan’s nuclear power sector was rotten to the core. It became clear that the industry was totally unprepared for the crisis when it occurred and was not able to provide solutions to such a crisis. It did not help that many of those civil servants working in nuclear regulation and safety management, did not have the opportunity to develop long-term expertise in the subject, because of the practice of regularly rotating civil servants to other government ministries. In addition, it did not help that findings found that the regulators were not truly independent of the power companies they were supervising.

Unfortunately, breaking out of the Galapagos syndrome for Japan’s nuclear sector is going to prove a hard task. Japan will need the help of the international community to create a new decision making energy leadership culture so that it equips it with the tools to avoid such complacency and a repeat of such disastrous mistakes. There are plans to establish a new, powerful nuclear safety agency this summer that will replace the old agencies and ministerial departments. Unfortunately, many of the new staff for this new agency will come from the failed organisations that contributed to Japan’s nuclear disaster.

However, perhaps the best way to revolutionise Japan’s nuclear community is if it imports new leadership and experts from abroad, until Japan has trained up the necessary recruits in the standards of the world nuclear community. Unfortunately, foreign CEO’s leading Japanese companies are rare and tend only to stay a short time due to inherent organisational resistance to change. In addition, Japan, the country finds very difficult to change its organisational culture, given the extremely conservative, traditional nature of its society. This is despite its appearance as one of the world’s most technologically advanced nations. This can be seen by its failure to implement the radical changes required to break the country out of economic stagnation in recent years.

Japan’s government wants to restart two nuclear plants to avert summer power shortages this summer, but public skepticism of nuclear safety and the industry remains high. Before March 2011, Japan depended for 30% of its power from nuclear power plants. Unless Japan can make the necessary changes it is unlikely there will be public support for the country’s nuclear power stations to start operating again. Instead the country’s energy leadership will have to continue to depend on expensive renewables and imports of gas from Australia to fuel its power sector in order to maintain energy security.

Is Britain’s energy leadership failing?

“National energy leadership requires clear policy around investment to manage risk and investment, and a healthy balance between the market, and the consumer (taxpayer)?”

By: Nicholas Newman

National energy leadership requires clear policy around encouraging investment to manage risk and development, and a healthy balance between the market, and the consumer (taxpayer)?

The question of energy and especially its price has always been a politically sensitive issue. The question, is whether Britain’s energy policy is failing? Many would suggest that significant parts of it already have. In fact, until recently, the United Kingdom did not enjoy an overarching energy policy framework; instead it depended on guidance from European energy policies for much of the day-to-day implementation of operational issues. In a sense, what there was of a discernible British energy policy was merely an incomplete jigsaw. What is certainly clear is that successive British governments have failed to demonstrate “responsible” energy leadership.

Some successes

Britain can certainly be proud of its successes largely due to the result of responsible leadership back in Brussels and not here in the UK. Such successes include the ban on old-style light bulbs, the backing of the use of biofuels in petrol, the introduction of carbon trading, the scrapping of ageing coal power stations, together with the introduction of smart meters in homes and energy-efficiency labels on domestic electrical goods. In addition, the introduction of more energy efficient domestic goods has certainly benefited the consumer’s pocket and in the case of cars, has reduced pollution in our cities.

Some disappointments

However, despite these advances there are still grumbles, not only from consumers, but major players in the energy market. From an energy security perspective, the actions taken to encourage investment in renewables, has only had a marginal impact on slowing down the UK’s reliance on imported fossil fuels such as coal, oil and gas . [1] [i] In 2010, the cost of energy imports contributed to around 15% of the UK’s then trade deficit. University of Lancaster’s environmental researcher Oluwabamise Afolabi, reports that the DTI in 2007 projected that UK natural gas imports will increase to 70% by 2017 and imported coal could be meeting up to 75% of the UK coal needs by 2020.

Certainly part of the reason is that the EU energy policies have not gone far enough in the implementation of its ambitions for a single energy market for the continent, whilst we do have a single market for bananas! A single market for energy would certainly help meet many of Europe’s energy security concerns and hopefully facilitate greater competition Europe-wide. In the UK, there is a serious need for more energy suppliers actively competing in the market. At present, for instance the gas and electricity market is dominated by six major players, so it is not surprising we suffer high power prices.

Lack of leadership?

Nevertheless, the current government has preserved the vacuum in clear policy ownership and focused leadership left by its Labour government predecessor. This is demonstrated by the recent fiasco of the U-turn over feed-in tariffs [1] [ii] for solar power [1] [iii] and the failure to encourage investment in insulation for buildings with solid walls. The government’s decisions over feed-in tariffs plunged the rapidly growing job-creating solar power installation industry into crisis at a time of high unemployment. It is clear that senior policymakers made a decision without clearly understanding the full impact it would have on Britain’s solar power sector.

There seems to be a lack of leadership being exhibited by ministers on energy policy by many in the governing coalition. We are seeing, increasing opposition in Parliament by Conservative MPs, but also by members of the public towards the government’s ambitious support for new wind power projects throughout the country. In January, 101 Tory MPs wrote to Mr Cameron, calling for onshore wind farms subsidies to be “dramatically cut” – well beyond the 10 per cent reductions already in the pipeline. In addition, there have been protests about new renewable energy projects across the UK, together with concerns about the increasing number of people being plunged into energy poverty due to the shambolic energy taxes and subsidy system. Overall, current subsidies paid out to renewable energy producer’s amounted to some £1.5 billion a year, of which £400 million was given to companies operating onshore wind farms, reports the Telegraph in June 2012. However, DECC reports that renewable energy subsidies are costing each British household around £103 per year and between 2004 and 2010 electricity prices rose by 60% and gas bills by 90%, noted DECC.

At a strategic level investors are increasingly concerned about the sense of drift on energy policy towards new investment by the current government towards various types of generating technology, many large-scale investors are complaining that they are not getting sufficient encouragement to move ahead on meeting the government’s ambitious programme to replace time-expired coal and nuclear power stations with new generating capacity from both traditional and new generating technologies.

Failing to identify risks

It also appears that the government appears to be failing to identify and manage risks and plan for such unforeseen events as natural disasters, supply disruptions and wars. There appears to be a lack of long term preparation against supply disruption, this can be seen from the following issues. At present, we have limited interconnector capacity amounting to just under 5% of UK generating capacity, is made up of high voltage undersea power cables linking Britain with France, Belgium and Holland. For energy security reasons the UK needs to double such capacity. Once completed Britain will be better able to balance shortfalls in renewable generation here with imports from elsewhere in Europe.

Then there is the question of gas security, Britain only has 3.3 bcm, equivant to 14 days of gas storage capacity available in theory, reports DECC, and much of that is reserved for storage capacity for other nations in Europe. Unfortunately, there are no reciprocity agreements to such storage capacity that is located in the UK with foreign owned companies at present; I was surprised to learn from an energy trader recently. Though there are ambitious proposals to increase gas storage capacity, given sufficient government support. Unlike France and Germany, which have at least one month gas storage capacity? Currently Britain imports 24% of its gas from Qatar. This apparent lack of direction and foresight can also be seen in the relatively low large-scale electricity storage capacity of only 20 GW hours: perhaps sufficient to replace current UK wind generating capacity for just two hours if the wind failed to blow.

In addition, unlike several other European countries Britain has failed to move ahead with pilot carbon capture projects. The realisation of carbon capture technology could aid Britain in its ambitions to further diversify its current sources energy, as coal is available worldwide in easy to reach commercial quantities including Poland, USA , South Africa and Australia.

There are increasing fears that Britain could face power shortages by end of the decade, unless urgent action is taken to construct sufficient new generating capacity to meet growing demand. I would hate to think Britain consumers will face in the future the prospect of regular power cuts, as is the case of Nigeria today.

We are also seeing a lack of realism, amongst policymakers into the impact of their policies. One of Europe’s and U.K.’s ambitions is to reduce reliance on gas imports. Unfortunately, the government’s neglect of creating a proper framework for reducing gas usage for power generation purposes is encouraging a reliance on this fuel source to back up for the variability of renewables. Which could raise interesting energy supply and security concerns for large scale consumers such as hospitals and railways that rely on 24/7 energy supplies.

Since 2004, the UK has been a net importer of gas, as domestic production has declined and the country’s power sector has switched to gas for power generation purposes [1] . Since the winter of 2009, the UK has depended for half its gas needs on imports. Current government policy neglect is encouraging reliance on imported gas to remain at present levels whether imported from Norway, Russia, Nigeria or Qatar. As Britain’s reliance on renewables increases we are going to see imported gas-for-power generation purposes providing a backup to wind energy projects when the wind fails to blow, because Britain has not invested enough in sufficient gas and electricity storage capacity and expansion of its interconnection links with the rest of Europe.

Danger of short term thinking

Overall, Britain’s energy policy is in danger of suffering from short term thinking, which might be building up new problems for the future that might prove expensive to solve. In other areas, there is much to be proud of, but it is clear much more needs to be done. In addition, there has to be greater dialogue between all stakeholders involved in energy policy so that Britain develops an affordable, reliable and secure energy sector that meets our economic ambitions for growth.

Conclusion

However, the government needs to demonstrate responsible energy leadership and move actively forward on implementing many of its ambitions quickly, such as starting construction on new nuclear power stations, stop dithering on proposed coal and carbon capture projects and encourage investment in new energy storage capacity. Nevertheless, the emphasis on energy policy should be rebalanced more in favour of the consumer and taxpayer, by enabling users near such projects to directly benefit from the profits of such schemes.

——————————————————————————–

[1] [i] DECC aims for at least 15% of UK energy mix to come from renewable sources by 2020 if current levels of investment are maintained.

[1] [ii] A feed-in tariff (FIT, standard offer contract or renewable energy payments) is a policy mechanism designed to accelerate investment in renewable energy technologies. It achieves this by offering long-term contracts to renewable energy producers, such as home owners, it is typically based on the cost of generation of each technology. Technologies such as wind power, for instance, are awarded a lower per-kWh price, while technologies such as solar PV and tidal power are offered a higher price, reflecting higher costs.

[1] [iii] Solar power is the conversion of sunlight into electricity, either directly using photovoltaic (PV), or indirectly using concentrated solar power (CSP).

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[1] In 2010, 34 per cent of natural gas demand (371 TWh) was for electricity generation reports the DTI.

Energy Efficiency in Austria

In a recent posting we had a closer look at the development of energy efficiency in the UK. Then we found that various sectors of the economy have been performing differently over the years. Some sectors managed to lower their energy hunger drastically, while others were much less successful.

Now we are going to look at the situation in Austria. There, too, has been much talk about the need to save energy. But how much of that has actually materialized into lower consumption or, to put if differently, higher efficiency? The Austrian statistical office, Statistik Austria, provides data on various sectors. We were particularly interested in the following areas: industry, domestic consumption and passenger transport.

Fig. 1 gives an overview of the energy efficiency of those sectors between 1990 and 2010. The figures are indexed with 1990=100, and the individual graphs refer to the following quantities: industry means industrial consumption per unit of output, domestic total refes to consumption per household, and passenger transport stands for energy use per passenger-km.

Fig. 1 Energy efficiency in Austria. For detailed explanations see text.

What do these graphs tell us? The clearest message stems from passenger transport showing a significant decrease since 1990 (83 index points in 2010). That is considerably more than what we have found in the UK. It seems that the Austrian car fleet is more modern than the one in UK.

Domestic consumption also tends to become less, though at a much more moderate pace (94 in 2010). It should be noted that those data have not been corrected for temperature effects which can lead to varying energy demand during the winter months. Industry consumption, too, tends to go down over the years, however, with strong fluctuations. During the economic crisis efficiency seemed to improve a lot (87 in 2008/09). Strangely, during the recovery in 2009 it appears to have become less important and its index rose to 1990 levels (101). After that production efficiency has improved again.

We may also have a closer look at domestic consumption. To that end we split up that sector into heating (including airconditioning) and other uses. The results are shown in Fig. 2.

Fig. 2 Domestic energy use per household. 1990=100.

This figure requires some detailed analysis. First, we note that the graphs for heating and total domestic use are roughly in line with each other. This does not come as a surprise since heating accounts for about 75% of total household energy demand. This dominance tends to cover the huge variations of other consumers of household energy (lighting, kitchen equipment etc.) which do not contribute to the overall trend. On the contrary, other domestic uses reached more than 123 index points in 2003 before a gradual downturn set in. At the end of our observation period we have reached the same levels as in the beginning. That is not what we call a success story.

Comparing efficiency figures between different countries is both interesting and enlightening. Nevertheless we should be cautious in interpreting the figures even if they are presented in an indexed form. If country A does very much better than country B it does not necessarily mean that at the end of the day A is more energy efficient than B. That would only be true if both countries started from the same or at least similar levels of absolute efficiency. However, if B was already more efficient than A in the beginning in absolute terms, then, clearly, B needs to make much more effort than A in order to come down by the same number of index points.

Now what do we mean by efficiency in absolute terms? It is not sufficient to consider energy consumption per output only, but one has to make sure to be talking about the same amount of output for each country. Thus, if we have GWh/EUR for one country and GWh/GBP for the other we have to make sure that the two currencies are put into relation. We first have to put both countries on the same footing and then are we in a position to analyse their relative performance. In that way, comparing energy efficiency between different countries can be put on a solid basis.

 

Efficiency vs. Effectiveness – towards sustainable cities

An important concept in this discussion is exergy, or the quality of energy. This follows from the ‘laws of thermodynamics’. The first law states that energy can never be lost, that it will remain. The second law introduces the notion of quality: although energy cannot be lost it loses quality and entropy is created when used (google for exergy and ‘laws of thermodynamics’ to learn more).

Using resources – energy, water, materials, etc. – in an efficient way means using these resources while trying to limit waste, trying to do things in the right manner. The concept of ‘Trias Energetica’ will be used to explain and some examples will be given. Trias Energetica was developed by Lysen and Duijvestein (1997). It consists of three, consecutive steps:

  1. Limit energy demand and energy use;
  2. Use renewable energy sources;
  3. Use fossil fuels as efficiently and cleanly as possible to fulfill remaining demand.

The first step is the most important, because each amount of energy that is saved does not have to be produced. An example of this first step is to insulate dwellings properly so less energy is needed to heat the dwellings. Remaining demand should be fulfilled by applying renewable energy sources, like solar or wind. The third step talks about the efficient use of fossil fuels. For example, the introduction of fuel-efficient cars or even hybrid cars. These cars still need fossil resources, but they use these resources more efficiently, see graph 1.

Graph 1: Fuel-efficiency of some car types, gasoline use

It is important when looking at efficiency and energy-saving measures that they do not result in a rebound effect. So, e.g., changing non-efficient light bulbs with efficient ones (LED, fluorescent light bulbs) is a good measure. The pitfall though is that people leave the lights on, because they know it is more efficient, so they think that it does not matter. This results in the end in more energy use anyway.

For a true sustainable system, the Trias Energetica should be adapted. Measures to save energy may not result in loss of comfort or health problems. A system can only be sustainable if it uses renewable resources. The rate in which we use fossil fuels, is not renewable. The resources of oil, coal and gas are not regrowing. Another point to consider: is it nowadays cheaper to invest in more insulation or to invest in renewable energy production systems? The importance of re-use, re-cycle and manufacturing, keeping the end of products in mind, is also growing. Therefore, a new concept has been developed ‘the New Stepped Strategy’ (Dobbelsteen and Tillie, 2009). In this strategy, the last step is replaced:

1.   Reduce consumption without loss of comfort and health;

2a.  Exchange and re-use waste energy systems;

2b.  Use renewable energy sources and ensure waste is re-used as food.

Applying those steps to a city or region towards sustainability can be seen as a sign of effectiveness. This means trying to use resources in the right way, trying to reach the result, to do the right things. Think with the result or purpose in mind and do not start from the means. For example, do you need your laundry cleaned or do we need the best, most energy-efficient laundry machine to clean our clothes? The question is ‘what is the most resource effective way to clean our clothes’ (we can come back to that another time)?

Reduce consumption still is the most important step. The New Stepped Strategy introduces also the importance of different scales, from dwelling level to neighborhood to city level. Before a decision is made, it has to be studied what is the most effective step to take at which level. Some things can be arranged very effectively at dwelling scale, like insulation, but others will be more effective at a larger scale, like cascading remaining qualities. An example is the remaining heat of a power plant or industry. Nowadays, it will be the remains after fossil fuel burning, but in the future it may well be the remains of renewable fuel burning or use. The idea is that the remaining heat of this industry is not a waste product, but can still be useful for another purpose. For example as processing heat for an industrial facility that needs only heat of lower temperatures. After use in this industry, it still has some heat quality remaining that can be used in, e.g. green houses. A last step can be heating of houses that needs only  a low energy (in the form of heat) quality, see graph 2.

Graph 2: Example of a heat cascade in an urban system

So, in order to reach sustainable cities, it is important to reduce energy consumption and to apply the local available renewable and residual resources in an effective way. The urban metabolism has to evolve to a circular metabolism in which any waste product is seen as a remaining quality that can be used by another function within the city. This will decrease dependency on foreign resources. It will increase the search for local potentials and characteristics. Cities are multi-functional entities. The different functions should and need to be connected and in close proximity to effectively use the local potentials towards sustainable cities.

Wouter Leduc

References:

Dobbelsteen, A., van den, Tillie, N., 2009. Towards CO2-neutral Urban Planning: Presenting the Rotterdam Energy Approach and Planning (REAP). Journal of Green Building, 4.

Duijvestein, C.A.J., 1997. Drie Stappen Strategie. In editors D.W., Dicke, E.M., Haas, Praktijkhandboek Duurzaam Bouwen. WEKA, Amsterdam, pp. (20) 1-10.

Energy Efficiency – A Sectorial Approach

Becoming more energy-efficient is one of the major challenges of our time. Modern societies are highly energy-dependent and thus all efforts to save this valuable resource are more than welcome. For many years, or rather decades, the responsible people, politicians and experts, have urged the importance of using less energy.

We may ask ourselves what has been achieved so far. We may equally ponder about future developments. How much more can we save?

In this posting we investigate the achievements of getting more energy-efficient in the UK from a sectorial point of view. The country can serve as a typical example of a European state trying to do both, using less energy for the same economic outcome and reinforcing its potential of renewable energies. The raw data for our analysis have been taken from UK National Statistics.

We consider the following sectors: Industry, domestic, services, passenger transport and freight transport. The energy consumption of the various sectors is measured as follows: industry (Mtoe/unit of output), domestic (Mtoe/household), services (Mtoe/unit of value added), passenger transport (Mtoe/person-km), freight transport (Mtoe/tonne-km). The transport sectors cover road transport only. In order to see how well each sector is doing compared to the others, we have indexed the quantities as 1980=100.  The results is given in the figure below.

Energy efficiency in the UK for various sectors.

This picture reveals immediately who the good and the bad guys are. Let´s start with the good ones. Both industry and services managed to reduced their energy use per unit of output considerably. In fact, in 2010 British industry was able to produce more than twice as many goods per unit of energy as in 1980. Within 30 years the index went down to less than 48. The services sector was even more successful. During the same period its specific consumption plummeted to an index value of 43 only.

The situation looks quite a bit different for the other sectors with passenger transport being the most successful among those. Since 1980 the use of energy per passenger-km has decreased by almost 20 % (index 81.9). Unfortunately, freight transport cannot compete with that value. Instead its energy consumption per tonne-km went up by almost 12 % during the reference period. This finding is both, surprising and disappointing at the same time. Surprising, because car producers make us believe that modern vehicles need less gasoline than older ones. Disappointing, because freight transport is the only sector showing a clear increase in its energy hunger.

When looking at the figures for household consumption we may equally feel disappointed. There is a slight tendency to use less energy per household, with the index being at 93 in 2010. This is a rather weak performance when compared to the other sectors with the notable exception of freight transport. Countless public campagnes have been run with the clear goal of getting more energy efficient. It is hard to imagine that millions of households have not got the message. However, the results are meagre. Why is that so? Is there too little incentive for households to save energy?