Lec. 01: Organisation & Introduction Flashcards
What is missing?
There has been an extraordinary growth in primary energy consumption since “…”, much in “…”.
Compare slide 15
“1950s”
“oil, natural gas and coal”
(Reasons for growth: Post-World War II Economic Boom; Population Growth; Technological Advancements; Shift to Fossil Fuels; …)
True or false?
Share of electricity production by source worldwide.
Coal
- Still highest share (~ 35 % in 2021)
- Share is declining since 2014
Natural gas
- Second highest share (~23 % in 2021)
- Share is increasing since 1997
Hydropower
- Third highest share (~ 15 % in 2021)
- Share is declining since 1985
Nuclear
- Fourth highest share (~ 10 % in 2021)
- Share is declining since 2001
Wind
- Fifth highest share (~ 7 % in 2021)
- Share is increasing since 1996
Solar
- Sixth highest share (~4 % in 2021)
- Share is increasing since 2010
Other renewables
- Seventh highest share (~3 % in 2021)
- Share is increasing since 1985
Oil
- Eighth highest share (~3 % in 2021)
- Share is declining since 1989
True!
Compare slide 16
What is missing?
In OECD countries, coal is being pushed out of the electricity mix by “…”.
“a combination of natural gas and renewables”
True or false?
In 2021 wind and solar made up together 10 % of the total electricity generation worldwide.
True!
True or false?
See slide 16.
When analyzing the share of electricity production by source the continuously growing share of wind and solar is worth mentioning. It looks like the share of wind and solar has entered an exponential growth rate due to amongst other factors scaling effects and cost degradation/reductions (learning curve).
True!
What is missing?
Economic development and energy use
Empirically speaking there is a “…” between the GDP per capita and the “…” for many emerging and industrialized countries.
Compare slide 18
“positive almost linear correlation”
“primary energy demand per capita”
Economic development and energy use
See slide 18
Why does in the primary energy demand per capita in US and the UK remains more or less constant even though the GDP per capita generally increased over time?
- Companies are moving up the value chain
–> They are moving away from potentially basic energy-intensive operations, towards more complex high-tech operations which potentially require less energy and e.g. more knowledge
–> Growth in the service and IT sector - Deindustrialization
–> Energy-intensive heavy industries e.g. steel production are moving to other countries such as China and India due to lower energy and labor costs
What is missing?
Economic development and energy use
Empirically speaking there is a “…” between the human development index and the “…” for many emerging and industrialized countries.
Compare slide 19
“positive overproportional correlation”
“energy consumption per capita”
(Reason modern prosperity requires a ot of energy)
True or false?
Modern prosperity depends on a functioning energy supply for electricity, warmth/cooling, mobility and energy-intensive food and products.
True!
Compare slide 15
What is missing?
The fossil-fuel energy intensity [GJ/GDP] is “…” in all industrialized countries.
“generally decreasing”
Compare slide 20
(Caution! This does not automatically mean that the absolute amount of consumed fossil fuels has decreases. The absolute fossil fuel consumption is generally declining in the EU and the US but is remaining stable or even increasing in Asian countries.)
True or false?
The absolute fossil fuel consumption is generally declining in the EU and the US but is remaining stable or even increasing in Asian countries.
True!
What makes energy economics different from regular economics?
The unique features of energy are numerous:
- Energy is essential for modern life: For farming, cooking, lighting, comfort in buildings (heating and cooling), communication, mobility, production of most goods
- Energy is essential to all economic activity
- Reserves of fossil fuels and production capacity/minerals for renewables & storage are concentrated in a few countries. Geopolitics!
- Large externalities: most greenhouse gas emissions come from use of fossil fuels in energy, leads to climate breakdown; air pollution leads to widespread health impacts; for nuclear in meltdown and waste risk; for renewables in landscape impact.
- High potential for innovation and cost reduction: wind, solar, batteries, electrolysers.
- Energy is abundant in nature, but mostly not immediately available for doing useful work.
- Infrastructure (transmission, generators) requires long periods of planning, investment
and operation. Leads to slow change - inertia! - In many markets there are monopoly structures, which are resistant to market solutions and need regulation (e.g. transmission networks, but also vertically-integrated utilities in some regions).
- Infrastructure property rights (e.g. underground, hydro) are sometimes with public rather than private sector.
- Some risks are diffuse and widespread (nuclear, hydro, landscape impact of wind).
True!
True or false?
What questions does energy economics try to answer?
Here is a typical selection of energy economics questions:
- How do we allocate consumption and production of energy by existing assets in the short run?
- How should we investment in energy consumption and production assets in the long run?
- How can we most efficiently reduce greenhouse gas emissions and air pollution from the energy sector?
- Wind and solar power are low-cost, but how do we efficiently deal with their variability?
- How do we design markets for variable renewable energy?
- Is a decentral system design better than a centralised one? (E.g. electricity market before European liberalization)
- Can we protect vulnerable consumers from energy market volatility?
True!
Guidelines for Energy Policy
Explain the energy trilemma.
Energy trilemma
A well-functioning energy system should pursue the following three goals:
-
Sustainability
–> Respect environmental constraints (greenhouse gases, air quality, preservation of wildlife)
–> Respect social and political constraints (public acceptance of transmission lines, onshore wind, nuclear power) -
Reliability
–> Guarantee security of supply
–> Ensure energy services are delivered whenever needed, even when the wind isn’t blowing and the sun isn’t shining, and even when components fail -
Affordability
–> Deliver energy at a reasonable cost
Some of these policy targets can come into conflict - an energy trilemma
(Sustainability - Reliability: renewable electricity generation is fluctuating which leads to an increased need for flexibility-options in order to guarantee security of supply.
Sustainability - Affordability: The transformation to a more sustainable energy system costs money in the short run but saves money in the long run.
Reliability - Affordability: Guaranteeing security of supply costs money. )
What is missing?
1972 report “…”, commissioned by the Club of Rome, examined “…” with a computer simulation.
- Conclusion: the most probable result will be a rather sudden and uncontrollable “…”
- But ignores “…”.
- Growth versus limits versus progress: debate continues today.
“The Limits to Growth”
“consequences of exponential economic and population growth with a finite supply of resources”
“decline in both population and industrial capacity”
“role of technological progress”
