TOPIC 1 Flashcards
Energy
the ability to do work; best understood as a set of interconnected systems ; units: Joules (J); Watt-hours (Wh); tons of oil equivalent (t.o.e.), barrels of oil, British thermal units (Btu) or calories (cal)
Energy Services
what energy is used for upon reaching the final consumer; i.e. hot showers, cold beer, lit rooms
System
consist of stocks, flows, and feedback loops; a model with rules for integration that allow it to be consistent and useful. A basic open system will encompass inputs, internal transformations and processes, and outputs
Systems Thinking
distinct from marginal analysis, which simplifies relationships to a few variables, while holding all other variables constant. Systems thinking is dynamic, global, all variables can change, there are many actors and it is best used for complex interactions.
Root Cause
a part of system dynamics; deeper relations and motivations that cause certain observations to occur
Leverage point
a part of system dynamics; where small efforts in one part of the system can create major changes
Constraint
supply constraints could include scarcity, the simple lack of primary inputs or supply of resources (i.e. peak oil and resource depletion), but could also include a lack of capital and infrastructure; demand constraints include demand scarcity, which means that the resources and infrastructure may be available, but consumers simply fail to have the budgetary allocation to pull more throughputs through the system
Sustainability
the endurance of systems and processes; tries to reconcile innovation and depletion
Innovation
invention and creativity compelled by constraints that people use to create additional advantage for them in the form of reduced costs or increased profits
Depletion
an economic behavior whereby we minimize costs first, but that uses up a scarce opportunity (of resources, capacity or value) that may not necessarily be replaced or renewed
Power
the rate at which energy is physically transformed; relationship between energy & power -> E = P*t
First law of thermodynamics
all energy that enters a closed system must remain in that system as energy, heat or work produced; the energy input must create either the desired work (useful energy) or be wasted (energy loss), which is normally in the form of heat
Auction
rules by which trade or exchange happens within a market
Clearing price
The most common form of auction is the one where bidders continue to bid prices until they are no longer willing to go higher, and then the winner is the one who bid the highest price and that bid becomes the clearing price that they pay.
Energy transformations
energy transforms through the supply chain through exploration, production, preparation, further processing/purification/conversion, distribution, utilization, and recovery (destruction, decontamination);
Final energy service
toasted toast, chilled beer, etc. …about 90% of energy can be lost by this point
Intellectual capital
knowledge, experience, science, technology – i.e. trade skills or intellectual property – expect to receive a fair return on their contributions to enabling the transformations of energy
Physical capital
includes all of the infrastructure items and any other hard assets that are necessary for the procurement, transformation, or disposition of energy as it moves through the supply chain - i.e. engineering and logistics, concrete pilings, computer banks, etc.
Political capital
having rules in place to permit or encourage certain energy transformations, as well as the ability to protect those authorities from interference by others - i.e. politics, policymaking, regulation, law, and litigation
Transformations
a system dynamic; changes that happen within a system structure that occur as time passes or elements change. The strength in these relationships and the direction in which they flow can explain dynamic behaviors. Thus, systems are best understood through these transformations – in how they change, not simply how they are.
Second law of thermodynamics
in most transformations of energy from one type to another, the heat by-product is lost
Energy Productivity
GDP/E -> GDP as a function of energy, used as comparative measure across countries.
Value metric
a metric is a quantifiable and standard unit of measure. Being standardized in a commonly used way, a metric represents a benchmark, a standard of measure that enables easy comparison across different items that can be defined using the same metric.
Value
the amount of benefit that the customer receives from the purchase or use of the good or service. Like costs, the value is highest at the final consumer or end-user, but unlike costs, the primary determination of value starts with the end customer and works backwards through the intermediate suppliers to the raw materials.
Cost
all of the expenses that a producer has to pay in order to deliver they’re good or service end of the market
Price
the amount of money expected, required, or given in payment for something determined by consumer demand and value and quantity and cost of supply
Fungible Good
to be fungible, and therefore comparable, two things must share identical characteristics of what they are, where they are available, when they are available, and the certainty of each of those other characteristics.
Lifecycle analysis (LCA)
a method of returns analysis, a technique to assess environmental impacts associated with all the stages of a product’s life from-cradle-to-grave (i.e., from raw material extraction through materials processing, manufacture, distribution, use, repair and maintenance, and disposal or recycling)
Value added
form arbitrage – taking a raw material or collection of materials and reforming them or repackaging them into a form more suitable for customers, should be thus compensated.
Value at risk
risk arbitrage – taking advantage of different risk perception and risk tolerance between sellers and buyers may allow for someone to benefit from the cost and value differential
Dependence
where the benefits that someone receives initially may be thought of as incentives but may evolve into expectations, rights, or endowments that are difficult or costly to remove. Fossil fuel subsidies, farm subsidies, and trade protections are
Natural Capital
These include water availability, raw materials like metals and elements, land for growing crops, etc. As long as these are available, transformations can continue. However, constraints on cost or availability of this natural capital can have spillover effects on energy availability. Conversely, tapping into vast new sources of natural capital has the potential to create profound economic and welfare opportunities.
