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Copyright © 2013 Jonathan M. Harris
Environmental and Natural Resource Economics 3rd ed. Jonathan M. Harris and Brian Roach Chapter 12 – Energy: The Great Transition Copyright © 2013 Jonathan M. Harris
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Figure 12.1a: Global Energy Consumption 2010, by Source
Global energy consumption is primarily fossil fuels, with renewables supplying only a small percentage. Biomass is a source of energy in many developing nations, but it is often not sustainably managed. Source: International Energy Agency, 2011b
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Figure 12.1b: United States Energy Consumption 2010, by Source
U.S. energy consumption is primarily based on fossil fuels, with only a small percentage from renewables. The proportion of renewables has been increasing in recent years, but from a very small base. Source: U.S. Energy Information Administration, 2011a.
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Table 12.1 : Net Energy Ratios for Various Energy Sources
Oil (global) 35 Natural gas 10 Coal 80 Shale oil 5 Nuclear 5–15 Hydropower >100 Wind 18 Photovoltaic cells 6.8 Ethanol (sugarcane) 0.8–10 Ethanol (corn-based) 0.8–1.6 Biodiesel 1.3 Oil, coal, and hydropower have the highest net energy ratios, while ethanol has a very low energy ratio. Wind, photovoltaics, and nuclear have intermediate net energy ratios. Source: Murphy and Hall, 2010.
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Residential and commercial
Table 12.2 : Energy Consumption by Sector in the United States, 2010 Sector Transportation Industrial Residential and commercial Electricity Percent of total energy consumption 28% 20% 11% 40% Primary fuel source Oil (94%) Natural gas (41%) Natural gas (76%) Coal (48%) Secondary fuel source Biomass (4%) Oil (40%) Oil (18%) Nuclear (21%) Tertiary fuel source Natural gas (2%) Biomass (11%) Biomass (5%) Natural gas (19%) Transportation in the U.S. is heavily dependent on oil, although the use of natural gas has been increasing. Electricity production comes primarily from coal, as well as nuclear and natural gas. Residential, commercial, and industrial sectors use mainly oil and natural gas. Source: U.S. Energy Information Administration, 2011a.
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Figure 12.2: World Energy Consumption, by Source, 1965-2011
Since 1965, world energy use has grown dramatically, with the overwhelming majority of energy use drawn from fossil fuels. The trend has continued into the twenty-first century, with a recent upsurge in both coal and oil consumption. Source: British Petroleum, 2012.
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Aggressive Climate Change
Policy Scenario Total Demand: 14,920 Mtoe “Business as Usual” projections show world total energy consumption continuing to rise through The increase is much less with an aggressive conservation/efficiency scenario, allowing a greater percentage to be supplied by renewables.
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Million BTUs per person
Table 12.3: Energy Consumption per Capita, 2009, Selected Countries Country Million BTUs per person United Arab Emirates 679 Canada 389 United States 308 Sweden 230 Russia 191 France 169 Germany 163 United Kingdom 143 Italy 126 China 68 Thailand 60 Brazil 52 India 19 Nigeria 5 Ethiopia 2 Energy consumption per capita varies widely, with U.S. per capita consumption about 15 times that of India, and 60 times that of Nigeria. China’s per capita energy consumption has risen rapidly; it is now at about half of European levels, though still less than a quarter of U.S. levels. Source: U.S. Energy Information Administration, International Energy Statistics online database
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Figure 12. 4: Past and Projected Energy Consumption, OCED vs
Figure 12.4: Past and Projected Energy Consumption, OCED vs. Non-OCED Nations Although current per capita consumption of energy in the developed countries (OECD, or Organization for Economic Cooperation and Development) is much higher than per capita consumption in the developing world, future growth in consumption will be primarily in non-OECD nations. Source: U.S. Energy Information Administration, International Energy Statistics online database. Note: OECD = Organization for Economic Cooperation and Development.
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Figure 12.5: Oil Prices in Constant Dollars, 1970-2012
Oil prices have recently risen to levels equaling those of the “oil crisis” of the late 1970s in constant dollar terms. Sources: U.S. Energy Information Administration, and
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Figure 12.6: United States Domestic Oil Production and Consumption
U.S. Consumption U.S. Production The trend of declining U.S. crude oil production continued through 2008, with an uptick in resulting from increased production of “unconventional” sources such as deep offshore oil and shale oil. After declining during the recession of , oil consumption is once again on the increase. Source: U.S. Energy Information Administration, Annual Energy Outlook online database.
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Table 12.4: Global Oil Reserves, Consumption, and Resource Lifetime, 1980-2011
Year Proven reserves (billion barrels) Annual consumption (billion barrels) Resource lifetime (years) 1980 683 22 31 1981 696 32 1982 726 21 34 1983 737 35 1984 774 36 1985 803 37 1986 908 41 1987 939 23 1988 1,027 44 1989 24 43 1990 1,028 42 1991 1,033 1992 1,039 25 1993 1,041 1994 1,056 1995 1,066 26 1996 1,089 1997 1,107 27 1998 1,093 40 1999 1,238 28 45 2000 1,258 2001 1,267 2002 1,322 29 46 2003 1,340 2004 1,346 30 2005 1,357 2006 1,365 2007 1,405 2008 1,475 47 2009 1,518 49 2010 1,622 51 2011 1,653 Despite increasing production, the estimated lifetime of global oil reserves has actually increased due to new discoveries. Source: British Petrolem, 2012
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Figure 12.7: Past and Projected Oil Production, 1990-2035
Estimates of ultimately recoverable global oil vary widely, and the year of projected “peak oil” production depends on these estimates. The study shown above indicates a peak in conventional production by 2010, with production from current fields falling off rapidly thereafter. Future oil production depends on discovery of new fields, natural gas liquids, and “unconventional” sources such as shale oil. Environmental costs of unconventional sources tend to be high due to their dispersed nature: large volumes of water, wastes, and CO2 emissions are involved in their production. Source: International Energy Agency, 2010.
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Table 12.5: Availability of Global Renewable Energy
Energy source Total global availability (trillion watts) Availability in likely developable locations (trillion watts) Wind 1700 40–85 Wave > 2.7 0.5 Geothermal 45 0.07–0.14 Hydroelectric 1.9 1.6 Tidal 3.7 0.02 Solar photovoltaic 6500 340 Concentrated solar power 4600 240 Theoretical availability of renewable energy is very large, although much of this is not in easily developed locations. Nonetheless, the amount available in developable locations considerably exceeds total expected global demand for energy. Source: Jacobson and Delucchi, 2011a.
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Table 12.6: Infrastructure Requirements for Supplying All Global Energy in 2030 from Renewable Sources Energy source Percent of 2030 global power supply Number of plants/devices needed worldwide Wind turbines 50 3,800,000 Wave power plants 1 720,000 Geothermal plants 4 5,350 Hydroelectric plants 900 Tidal turbines 490,000 Rooftop solar photovoltaic systems 6 1.7 billion Solar photovoltaic power plants 14 40,000 Concentrated solar power plants 20 49,000 Total 100 To take advantage of renewable energy potential requires major investments in energy infrastructure. Source: Jacobson and Delucchi, 2011a.
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Dollars per kilowatt-hour
Figure 12.8: Levelized Cost of Different Energy Sources, United States (2016) and Europe (2015) United States (2016 estimates) European range (2015 estimates) Dollars per kilowatt-hour Wind and geothermal are nearly cost competitive with traditional power sources, as represented by conventional coal. Sources: Department of Energy and Climate Change, 2011; International Energy Agency et al., 2010; Parsons Brinckerhoff, 2010; U.S. Energy Information Administration, 2011c.
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Figure 12.9: Cost Comparison of Renewable Energy Sources to Fossil Fuel Electricity Costs
Wholesale power price Retail consumer power price Small hydro Solar photovoltaic Concentrating solar Biomass Geothermal Wind and geothermal are close to competitive with current wholesale prices of electricity. Solar photovoltaic is more costly, but since solar photovoltaics can be installed by individual consumers the price of PV only needs to fall to the retail power price to be competitive. Wind 10 20 30 40 50 Power generation costs in USD cents/kWh Source: International Energy Agency and Organization for Economic Cooperation and Development, 2007.
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Figure 12.10a: Declining Past and Future Price Range for Solar Energy
125 Photovoltaic 100 75 Cents/kWh (2005$) 50 25 Technology has driven down the price of renewable energy sources such as photovoltaics. This has led to an exponential increase in production and use, but (as noted in earlier slides on energy sources) starting from a very small base as a percentage of total energy production. 1980 1995 2010 2025 Source: National Renewable Energy Laboratory, Renewable Energy Cost Trends, renewable-energy-cost-trends/renewable-energy-cost_curves_2005.pdf. Note: kWh = kilowatt hours.
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Figure 12.10b: Declining Past and Future Price Range for Wind Energy
55 50 45 40 Wind 35 Cents/kWh (2005$) 30 25 20 Wind energy prices have declined to the point where wind is competitive in some markets, although it still requires subsidies to be competitive in others. 15 10 5 1980 1995 2010 2025 Source: National Renewable Energy Laboratory 2005.
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Figure 12.11: Past and Projected Price of Oil
High Price Scenario 200 150 Price per Barrel, 2010 Dollars Reference Scenario 100 50 Low Price Scenario The future price of oil is extremely uncertain. Higher price scenarios would make renewables more cost-competitive. Note that these price projections do not include any policies to internalize fossil fuel externalities. Year Source: U.S. Energy Information Administration, 2012.
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Eurocents per kilowatt-hour
Figure 12.12: Externality Cost of Various Electricity Generating Methods, European Union Externality costs are highest for coal, followed by oil and natural gas. Externality costs for renewables are generally low. Eurocents per kilowatt-hour Source: Owen, 2006.
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Figure 12.13: Cost of Electricity Generating Approaches, 2020
Cents per kilowatt-hour Adding in the costs of externalities changes the balance of cost competitiveness, making conventional source more expensive than renewables. Source: Jacobson and Delucchi, 2011b.
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Figure 12.14: Electricity Prices and Consumption Rates
Denmark USA Germany Sweden France Canada Spain Portugal Australia Greece UK New Zealand There is a general negative relationship between price and electricity use, with the U.S. and Canada having the lowest prices and high per-capita consumption, while Germany and Denmark have high prices and relatively low consumption. Sources: U.S. Energy Information Administration, International Energy Statistics database; International Energy Agency, Energy Prices and Statistics online database.
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Primary Energy Demand (EJ)
Figure 12.15: Global Potential for Energy Efficiency 700 Energy Use in 2003 Energy Efficiency Potential in 2050 Remaining Energy Use in 2050 600 500 Primary Energy Demand (EJ) 400 300 200 Under a BAU scenario, global energy demand is projected to nearly double between 2003 and However, based on the untapped potential for energy efficiency, global demand could be held steady during this time period or even see a slight decline. 100 Developed Countries Developing Countries World Source: Blok et al., 2008.
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