Basic concepts of energy economics


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Basic concepts of energy economics

  1. 1. Basic concepts (I)How do you define energy?
  2. 2. Energy: definition related to physical forces• Definition of energy: in physics, energy is the work that a force can or could do.• Forces are: – gravitational (due to interaction between mass and energy concentrations) – electric (attraction and repulsion of charged particles) – magnetic (attraction and repulsion of magnetic objects) – chemical (driving chemical reactions: electro-magnetic) – nuclear (binding nuclei together or breaking unstable apart) – mechanic (impact of one moving object on another)
  3. 3. Force of Gravity• On earth, we are constantly under the force of gravity. What types of energy does gravity produce? – Acceleration of falling objects – Altitude and depth pressure gradients of the atmosphere and the seas – Part of the fusion of the earth’s core F
  4. 4. Mechanical Force• Mechanic forces are when one object hits another. What type of energy does this produce? – Acceleration / deceleration of interacting objects – Heat dissipation within the objects – Change of shape of objects v v v v
  5. 5. Electric & magnetic forces• Cause electrons to be attracted to nuclei in atoms -> basis for chemistry• Cause charges (electric current) to flow in electric circuits -> basis for energy used in electronics, lights, appliances• Cause needle of compass to point north
  6. 6. Energy: definition, continued• Energy is can also be inherent in a system, without any forces acting on it.• Types of inherent energy are: – In a steadily moving particle: ½ mass x velocity2 – In a mass: mass x (speed of light)2 = mc2 – In a body at a certain temperature: (heat capacity of body) x temperature for water, heat capacity is, 1 calorie per gram per degree Celsius or Kelvin – In a chemical compound: 2 H2 + O2 -> 2 H2O ,   Enthalpy released = -571.6 kJ/mol
  7. 7. Forms of energy• Energy can take many forms – kinetic (movement of a mass) – electric, magnetic (movement of charges or electromagnetic fields radiating) • Electricity • Radiation (light) – chemical (molecules with internal energy) – heat (thermal) (statistical expression of kinetic energy of many objects in a gas, liquid or solid - or even radiation) – potential (water above a dam, a charge in an electric potential or a battery)Other examples?
  8. 8. SI units for energy• The SI unit of energy is a Joule: 1 kg*m2/s2 = 1 Newton*m (Newton is the unit of Force) – mass * velocity 2 – mass * g * height (on earth, g = 9.81 m/s2 ) – for an ideal gas = cvkBT (cv =3/2 for a monatomic gas)• Power is energy per time: 1 Watt = 1 Joule/s = 1 kg*m2/s3 – most commonly used in electricity, but also for vehicles in horsepower (acceleration time)
  9. 9. Other common energy units conversion       Unit Quantity to Note 1 calorie = 4.1868000 Joule   1 kiloWatt hour = kWh = 3600000 Joule A power of 1 kW for a duration of 1 hour. It is a is a unit of energy used in North 1 British Thermal Unit = btu  1055.06 Joule America.  It is the rounded-off amount of energy that1 ton oil equivalent = 1 toe   4.19E+010 Joule would be produced by burning one metric ton of crude oil. 1 ton coal equivalent 2.93E+10 Joule   Barrel  1 ton oil equivalent = 1 toe 1 / 7.33 or 1 / 7.1 or 1 / 7.4 ... of oil1 cubic meter of natural gas  3.70E+07 Joule or roughly 1000 btu/ft3 1000 Watts for one year 3.16E+010 Joule for the 2000 Watt society 1000 Watts for one year 8.77E+006 kWh for the 2000 Watt society 1 horsepower 7.46E+002 Watts  
  10. 10. PrefixesOrders of magnitude Name Quantity Prefix thousand 1E+03 kilo million 1E+06 mega billion 1E+09 giga trillion 1E+12 tera quadrillion 1E+15 peta quintillion 1E+18 exa sextillion 1E+21 zetta septillion 1E+24 yotta
  11. 11. How to do energy conversions (quick reminder)• Given E = 5 kWh, what is value in MJ?• From table, 1 kWh = 3.6 MJ• 5 kWh x (3.6 MJ / kWh) = 18 MJ• In other direction: 5 MJ = ? kWh• 1 MJ = 0.28 kWh• 5 MJ x (0.28 kWh / MJ) = 1.4 kWh
  12. 12. Basic concepts (II)How do you use energy?
  13. 13. What is energy for?How do you use energy? Examples of: • Kinetic • Electro-magnetic – Electricity – Radiation (light) • Chemical • Potential • Heat (thermal) ?
  14. 14. Practical energy: what is it for?Energy in daily life: we use it to ... – stay alive (food, oxygen: chemical) – move faster (transportation fuel: chemical) – keep warm (heating fuel: chemical) – almost everything else (keep cold, preserve food, light and ventilate spaces, cook, run machines, communicate, measure, store data, compute,...): electricityIn industrial processes: we use it to … – Extract (mechanical), refine (chemical), synthesize (chemical), shape (heat, mechanical), assemble (mechanical): produce
  15. 15. Properties of energy• In any process, energy can be transformed but is always conserved –Fuel + oxygen: heat, light + new compounds –Moving objects collide: heat + work on objects –Falling water+turbine: electricity + heat
  16. 16. Basic concepts (III)Energy conversion, conversion efficiency
  17. 17. Energy conversion• Energy conversion: from one type to another• Examples: – Chemical to kinetic – Chemical to electric – Potential to electric – Thermal to electric – Chemical to thermal – Radiation to chemical – Radiation to electric – Radiation to thermal – Electric to thermal – Electric to chemical
  18. 18. Why is this important? Efficiency • What is efficiency?Output / InputEnergy out / energy in for an energyconversion process?Energy out = energy in , so not veryusefulUseful energy out / energy inPhysical work / Heat content of fuelElectricity / physical workFood / Inputs to agriculture
  19. 19. Efficiencies (2)Source: Smil 1999
  20. 20. Efficiencies (3)Source: Smil 1999
  21. 21. More than one conversion process• The total efficiency is the product of all conversion efficiencies: Etotal = E1 x E2 x E3 x E4 x E5 x E6 x …• Total losses can be (and are) tremendous• Most losses are in the form of radiated heat, heat exhaust• But can also be non-edible biomass or non- work bodily functions (depending on final goal of energy)
  22. 22. Chain of conversion efficiencies: Light bulb t r t c e e rEtotal = E1 x E2 x E3  = 35% x 90% x 5% = 1.6%Source: Tester et al 2005
  23. 23. Example 2: diesel irrigationLosses: t     t    t,r   t,m
  24. 24. Example 3: Drive power
  25. 25. Example 4: living and eating• Need 2500 kcal/day = 10 MJ/day or 2kcal/min.• 2200 for a woman, not pregnant or lactating, 2800 for a man (FAO). EU: 3200 kcal/day.• Equivalent to 4.75 GJ/year vegetable calories in a vegetarian diet (including 1/3 loss of food between field and stomach)• Equivalent to 26.12 GJ/year vegetable calories in a carnivorous diet (1/2 calories from meat)• Vegetarians are 5.5 times more efficient in terms of vegetable calories.
  26. 26. Efficiency of human-powered motion kcal/mile
  27. 27. EU Energy Label• A, B, C … ratings for many common appliances• Based on EU standard metrics for each appliance – kWh / kg for laundry – % of reference appliance for refrigerators
  28. 28. Importance of consumer behavior/lifestyle• EU energy label vs. temperature of washingkWh per cycle/Energy  Rating A B C D E F 90°C wash 1.22 1.46 1.59 1.72 1.85 1.98 60°C wash 0.94 1.12 1.23 1.34 1.47 1.6 40°C wash 0.56 0.67 0.74 0.79 0.85 0.91
  29. 29. USA EnergyGuide label• EnergyStar ratings exist, but are not A,B,C grades• Instead, appliances have EnergyGuide labels (usually without EnergyStar ratings)
  30. 30. Basic concepts (IV)Thermodynamics and entropy
  31. 31. Conservation, but …• Energy is ALWAYS conserved• However, energy is not always useful: dissipated heat is usually not recoverable.• Useful energy is an anthropocentric concept in physics: from study of thermodynamics• Thermodynamics investigates statistical phenomena (many particles, Avogadro’s number = 6×1023): energy conversion involving heat.
  32. 32. 3+1 laws of thermodynamics• If systems A and B are in thermal equilibrium with system C, A and B are in thermal equilibrium with each other (definition of temperature).• Energy is always conserved.• The entropy of an isolated system not at equilibrium will tend to increase over time.• As temperature approaches absolute zero, the entropy of a system approaches a constant.
  33. 33. Paraphrases of 2 laws of thermodynamics• You can’t get something from nothing.• You can’t get something from something.1. You cant get anything without working for it.  The most you can accomplish is to break even. 2. You even cant break even. • (economics) There is no such thing as a free lunch.
  34. 34. History of thermodynamics (2nd law)Nicolas Léonard Sadi Carnot (1796-1832) – Theory of heat engines, “reversible” Carnot cycle: 2nd law of thermodynamics Ludwig Boltzmann (1844-1906) Kinetic theory of gases (atomic) – Mathematical expression of entropy as a function of probability
  35. 35. EntropyThe entropy function S is defined asS = kB log (W) – kB = Bolzmann’s constant = 1.38× 10 −23   =Joule/Kelvin – W=Wahrscheinlichkeit = Σ possible states – Increases with increasing disorderFor instance:• vapor, water, ice• expanding gas• burning fuel
  36. 36. 2nd law of thermodynamicsdS ≥ 0 entropy increases over time (definition of time)dtFor a system undergoing a change,∆S system ≥ 0 for an isolated system∆S system + ∆S environment ≥ 0 for an non - isolated system
  37. 37. 2nd law of thermodynamicsTotal entropy always increases with time.An isolated system can evolve, but only if its entropy doesn’t decrease.A subsystem’s entropy can increase or decrease, but the total entropy (including the subsystem’s environment) cannot decrease.R. Clausius (1865): “Die Energie der Welt ist konstant. Die Entropie der Welt strebt einem Maximum zu.”Notion of “heat death of the universe”
  38. 38. Basic concepts (V)Applications of thermodynamics: heat engines, Carnot cycle, maximum and real efficiencies.
  39. 39. Performance of energy conversion machines (Carnot cycle)• Heat engine (cycle) – Heat, cool engine fluid – Diesel, internal combustion• Reversible processes: – Entropy remains constant – ∆Sc = - ∆Sh• Irreversible processes – Real world – Heat losses, no perfect insulator – Heat leakage – Pressure losses, friction
  40. 40. The Carnot Cycle (the physics) Ideal cycle between  isotherms (T=constant)  and adiabats (S =  constant). dE = dW - dQ where  dW = PdV dQ = TdS Loop integral over dE = 0. The total work from one cycle of the engine isThe heat taken from the warm reservoir is The efficiency is  : theoretical maximal for heat engine.
  41. 41. Common types of heat engines• Rankine cycle: stationary power system (power plant for generating electricity from fossil fuels or nuclear fission), efficiency around 30%• Brayton cycle: improvement on Rankine to reduce degradation of materials at high temperature (natural gas and oil power plants), efficiencies of 28%• Combined Rankine-Brayton cycle: for natural gas only, efficiencies of 60%!• Otto cycle: internal combustion engine, electric spark ignition, efficiency around 30%• Diesel cycle: internal combustion engine, compression ignition (more efficient than Otto if compression ratio is higher), efficiency around 30%
  42. 42. Comparison of heat engines
  43. 43. Coal power plantTypical generating capacity: 500 MW250 tonnes of coal per hour
  44. 44. Other types of power generation• Not based on heat (fossil combustibles or nuclear)• Use various types of energy (guess which?) – Hydraulic power: gravitational energy of water – Wind power: kinetic energy of air – Solar power: radiation from sun
  45. 45. Wind power• Power = 0.47 x η x D2 x v3 Watts – η = efficiency ~ 30% (59% theoretical maximum) – D = Diameter (40 meters) – v = wind speed (13 m/s) – P = 500 kW
  46. 46. Hydroelectricity (hydro)Uses difference in potential gravitational energy of water above and below dam • E = m x g x ∆ h + m x ∆ v2 / 2 • P = η x ρ x g x ∆ h x (flow in m3/s) • ρ is the density of water = 1000 kg /m3 • Efficiency η can be close to 90% ∆ h
  47. 47. Power plant & fuel cell efficiencies% Efficiency Source: Miroslav Havranek, 2007
  48. 48. Energy, entropy and economy: some history• Austrian Eduard Sacher (1834-1903) Grundzüge einer Mechanik des Gesellschaft : economies try to win energy from nature, correlates stages of cultural progress with energy consumption.• Wilhelm Ostwald (1853-1932) “Vergeute keine Energie, verwerte Sie!” concerns due to rising fuel demands and realization of thermodynamic losses• Frederick Soddy (1877-1956) “how long the natural resources of energy of the globe will hold out”, distinguishes between energy flows in nature and fossil fuels (“spending interest” vs. “spending capital”)
  49. 49. Basic concepts (VI)Georgescu-Roegen and entropy applied to the economic system.
  50. 50. Implications of entropy for economics• Geogescu-Roegen (1906-1994), Romanian economist, wrote The Entropy Law and the Economic Process in 1971.• Points out that economic processes are not circular, but take low entropy (high quality resources) as inputs and produce high entropy emissions (degraded wastes).• Worries about CO2 emissions from fossil fuel burning• Concludes that current entropy production is too high, advocates solar input scale for global economy.
  51. 51. Georgescu-Roegen (1)« Le processus économique n’est qu’une extension de l’évolution biologique et, par conséquent, les problèmes les plus importants de l’économie doivent être envisagés sous cet angle » Vision G-R, reprise par H. Daly  et léconomie écologique Vision Brundtland 1987 du  développement durable Environment Society Econom Environ y ment Econo my Society
  52. 52. Georgescu-Roegen (2)« la thermodynamique et la biologie sont les flambeaux indispensables pour éclairer le processus économique (...) la thermodynamique parce qu’elle nous démontre que les ressources naturelles s’épuisent irrévocablement, la biologie parce qu’elle nous révèle la vraie nature du processus économique »2 concepts clefs: • les ressources naturelles s’épuisent irrévocablement  (thermodynamique)• la "vraie nature" du processus économique peut être comprise à travers la biologie (surtout lanalyse énergétique des écosystèmes)
  53. 53. Georgescu-Roegen (3)" Chaque fois que nous produisons une voiture, nous détruisons irrévocablement une quantité de basse entropie qui autrement, pourrait être utilisée pour fabriquer une charrue ou une bêche. Autrement dit, chaque fois que nous produisons une voiture, nous le faisons au prix dune baisse du nombre de vies à venir."concepts clefs: le patrimoine limité de lhumanité en ressources naturelleset donc la responsabilité envers les générations suivantesThe entropy law and the economic process
  54. 54. Georgescu-Roegen (1)“The economic process is nothing but an extension of biological evolution. Therefore the most important problems of the economy must be considered through this lens.” G-R’s vision, taken up by H. Daly  and ecological economics Brundtland’s 1987 vision of  sustainable development Environment Society Econo- Environ my ment Econo my Society
  55. 55. Georgescu-Roegen (2)“(…) our whole economic life feeds on low entropy, to wit,cloth, lumber, china, copper, etc., all of which are highlyordered structures. (…) production represents a deficit inentropy terms: it increases total entropy (…). (…) After thecopper sheet has entered into the consumption sector theautomatic shuffling takes over the job of gradually spreadingits molecules to the four winds. So the popular economicmaxim “you cannot get something for nothing” should bereplaced by “you cannot get anything but at a far greater costin low entropy”.” The entropy law and the economic process, p. 277-279key concepts:  Economic processes feed on low entropy, produce high entropy• Concentrated natural resources are gradually dispersed
  56. 56. “[…] It is not the sun’s finite stock of energy that sets a limit to how longthe human species may survive. Instead it is the meager stock of theearth’s resources that constitutes the crucial scarcity. […] First, thepopulation may increase. Second, for the same size of population wemay speed up the decumulation of natural resources for satisfyingman-made wants, usually extravagant wants. The conclusion isstraightforward. If we stampede over details, we can say that everybaby born now means one human life less in the future. But also everyCadillac produced at any time means fewer lives in the future. ”Key concepts: Solar energy will still be available in the future, howeverthe quantity (STOCK) of low entropy natural resources is limitedthus the responsibility to future generations. The entropy law and the economic process, p. 304
  57. 57. Global entropy – global population• Meadows (1971): There are limits to economic and physical growth of human societies.• Daly (1973): steady-state economy and population is a goal, but at levels supported by organic agriculture alone: population probably lower than today. Advocate of managed decline in population, economic growth.
  58. 58. Basic concepts (VII) Origin of energyHow do we get energy?  Where does it all come from?  (not so simple...) Energy system (primary, final, useful, energy services)
  59. 59. Origin of energy on earth• Food? Solar (via photosynthesis)• Oxygen? Solar (via photosynthesis)• Wood for burning? Solar (via photosynthesis)• Fossil fuels? Solar (via photosynthesis and geological processes: geothermal heating, pressure)• Hydraulic or wind? Combination of solar and earths rotation (Coriolis effect)• Geothermal? Combination of nuclear fission and gravitation.• Nuclear fission? Fossil supernova explosion energy.How do we compare such different sources?
  60. 60. Energy chain
  61. 61. Origin of nuclear energy: supernovaNuclear fusion,powered bygravity, is the fuelof stars. Fusion isonly efficient up toiron creation(nothing heavier).Some heavy starsburn to iron, thenimplode under theforce of gravity.The shock wave isso strong it createsheavier atoms.
  62. 62. Comparing energy types• Primary energy: energy initially extracted from nature• Final energy: transported, transformed, converted, ready to use (electricity, gasoline, bioethanol)• Useful energy: used by final consumer (light, heat, motion)These concepts are mainly applicable to fossil energy systems.Three main types of primary energy: fossil, solar-based (renewable) and nuclear
  63. 63. Including biomass Source: Haberl 2001Also advocates an approach to energy accounting similar to material flow analysis:energy density of all materials (and wastes) should be included.
  64. 64. Emergy• H. T. Odum• Embodied (and/or Emergent) Energy• “Emergy is the available energy of one kind previously used up directly and indirectly to make a product or service.”• Solar emergy for ecological systems.
  65. 65. Exergy• Refers to a process analysis in which the material and energy flows are measured with respect to a “reference state”• Can be done at a large regional or global level, if “reference state” of materials is calculated relative to their earth averages.• Exergy studied and concept promoted by Robert and Leslie Ayres (many references).
  66. 66. Calorific content: gross & net• Gross calorific value: include heat from exhaust water (C + H both burn with O, creating CO2 + H2O)• Net calorific value: exclude latent heat of water vapor.• Difference: – Gross is 5-6% larger than net for solid + liquid fuels – Gross is 10% larger than net for natural gas. – Worse if fuel is damp (has water trapped inside it)
  67. 67. Traditional/commercial accounting• International Energy Agency compiles national statistics (since 1960s for OECD and 1970s non-OECD)• Available online at –
  68. 68. Source: Jochem et al 2000Energy Services
  69. 69. Energy system: services & scale Lifestyle But where does Building envelope infrastructure like rail/Technology  highway or urbansolutions at different  Shared heat/cold facilities density/diversitygeographic scales: belong? Topographythe larger the scale, the bigger the potential savings. of energy stream.
  70. 70. What is missing? Source: Tester et al. 2005
  71. 71. Example: Driving a car 1 km Smart Average JeepUseful energydisplacement 0.5 MJ 0.9 MJ 1.3 MJof car by 1 kmFinal EnergyGasoline/diesel 1.7 MJ 2.9 MJ 4.5 MJconsumed by carPrimary EnergyExtraction, 2.1 MJ 3.6 MJ 5.6 MJtransformation,transportation(assuming 32 MJ/liter gasoline, 41 MJ/litre diesel,engine 1/3 efficient, 25% losses primary => final)