Sustainable EnergyIndicators and Opportunities;

from One Big World and 3 Small Islands

University of OtagoEnergy Management Programme

Robert TromopManager Monitoring and Research

• Economies and trade groups are setting targets for energy intensity improvements.

• Monitoring of energy trends internationally and domestically shows valuable energy intensity and efficiency improvements are occurring. But it is early days.

• Many challenges remain – particularly in addressing population driven energy growth and personal consumption.

• If the world is to realise the potential of sustainable energy we need to start thinking beyond the technological approaches currently utilised around the world and start looking for new paradigms.

• What might it take to develop significant improvement?

We’ll cover;

A. International changes and driversB. New Zealand’s progress C. What is energy efficiency?D. Challenges

Energy Indicators: Capacity Development and

Application in APEC Economies

A report to APEC Energy Working Group, EWG35, summarising the work and findings of EWG Project; EWG

03/07 ‘Application of Energy Indicators in APEC Economies.Shigeru Kimura EGEDARobert Tromop EGEE&C

Is global energy consumption increasing?

Fig 1: World Marketed Energy Consumption, 1980 - 2030

283 309347 366 400

447511

559607

654702

0

200

400

600

800

1980 1985 1990 1995 2000 2004 2010 2015 2020 2025 2030

Qua

rdri

llion

Btu

History

Projections

Is APEC energy primary energy supply

requirement increasing?

Fig 3A: Fig: APEC Economies Energy Growth, 1990 to 2005

4000

4500

5000

5500

6000

6500

700019

90

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Mto

e

How significant is APEC primary energy supply

internationally?Fig 3B: APEC economies share in world primary energy supply,

1995 to 2005

55

56

57

58

59

60

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

%

What factors drive primary energy supply

growth?

Fig 3C: APEC economies share in world TPES, CO2 emissions, population and GDP, 1995 to 2005

40

45

50

55

60

65

70

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

%

TPES CO2 Population GDP

How does the demand for energy from APEC economies’ contribute to APEC’s total energy demand?

Fig 5: Total primary energy supply across APEC economies, 1995 to 2005

USA

ChinaRussia

JapanCanadaKoreaIndonesia

MexicoAustralia

Chinese,Taipei

ThailandMalaysia VietnamPhillippines

SingaporeChile

Hong KongNew Zealand PeruBrunei

0

1000

2000

3000

4000

5000

6000

7000

8000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Mto

e

How does the demand for energy from APEC economies contribute to APEC’s total energy

demand?Fig 6:Total primary energy supply across APEC economies in 2005

0

500

1000

1500

2000

2500

USA

Chi

na

Rus

sia

Japa

n

Can

ada

Kor

ea

Indo

nesia

Mex

ico

Aus

tral

iaC

hine

se,T

aipe

i

Tha

iland

Mal

aysia

Vie

tnam

Phill

ippi

nes

Sing

apor

e

Chi

le

Hon

g K

ong

New

Zea

land

Peru

Bru

nei

Mto

e

APEC economies self sufficiency

Fig 8A: APEC economies' energy self sufficiency ratio, 2005

0

200

400

600

800

1000H

ong

Kon

g

Chi

nese

, Tai

pie

Japa

n

Kor

ea

Chi

le

Tha

iland

Phill

ippi

nes

USA

New

Zea

land

Peru

Chi

na

Vie

tnam

Indo

nesia

Mex

ico

Can

ada

Mal

aysia

Rus

sia

Aus

tral

ia

Bru

nei

APE

C

%

Have APEC economies become more or less self sufficient with that growth?

Fig 8B: APEC economies energy self-sufficiency dynamics, 1995 to 2005

-30

-20

-10

0

10

20

30

New

Zea

land

Chi

le

USA

Hon

g K

ong

Japa

n

Bru

nei

Chi

na

Can

ada

Aus

tral

ia

Indo

nesia

Mex

ico

Chi

nese

, Tai

pie

Tha

iland

Peru

Mal

aysia

Vie

tnam

Phill

ippi

nes

Rus

sia

Kor

ea

APE

C

% c

hang

e

Change: 1995 to 2001 Change: 2001 to 2005

How has the value (GDPppp) that APEC

economies derive from energy changed?

Fig 11: TPES to GDP (PPP) ratio by APEC economies in 2001 and 2005

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Hon

g K

ong

Peru

Phill

ippi

nes

Japa

n

Mex

ico

Chi

le

Chi

nese

, Tai

pie

Thai

land

Aus

tral

ia

Chi

na

New

Zea

land USA

Vie

tnam

Kor

ea

Sing

apor

e

Indo

nesia

Mal

aysia

Can

ada

Brun

ei

Rus

sia

Wor

ld T

otal

APE

C

Non

-APE

C

toe

per

thou

sand

200

0US$

PPP

2001 2005

How has the value (GDPppp) that APEC economies derive from energy changed?

Fig 12: TPES to GDP (US $ PPP) intensity change by APEC economies, 2001 and 2005

-25

-20

-15

-10

-5

0

5

10

Rus

sia

New

Zea

land

Phill

ippi

nes

Hon

g K

ong

Mal

aysi

a

Kor

ea

Indo

nesi

a

USA

Peru

Japa

n

Vie

tnam

Chi

le

Can

ada

Aus

tral

ia

Chi

nese

, Tai

pie

Bru

nei

Tha

iland

Sing

apor

e

Mex

ico

Chi

na

Wor

ld T

otal

APE

C

% c

hang

e in

TPE

S to

GD

P ra

tio

How has energy-population intensity changed?

Fig 13: TPES per Capita across APEC economies in 2001 and 2005

0

2

4

6

8

10Pe

ruV

ietn

amPh

illip

pine

sIn

done

sia

Chi

naT

haila

ndM

exic

oC

hile

Mal

aysi

aH

ong

Kon

gC

hine

se, T

aipi

eK

orea

Japa

nR

ussi

aN

ew Z

eala

ndA

ustr

alia

Sing

apor

eB

rune

iU

SAC

anad

aW

orld

Tot

alA

PEC

Non

-APE

C

toe

ener

gy p

er c

apita 2001 2005

Have APEC economies CO2 emission

intensities (tCO2/GDPppp) improved?Fig 17: CO2 to GDP (PPP) Ratio across APEC Economies in 2001 and 2005

0.0

0.3

0.6

0.9

1.2

1.5Pe

ruH

ong

Kon

gPh

illip

pine

sV

ietn

amC

hile

Japa

nM

exic

oN

ew Z

eala

ndSi

ngap

ore

Tha

iland

Chi

nese

, Tai

pie

Indo

nesia

Kor

eaU

SAC

hina

Can

ada

Mal

aysia

Bru

nei

Aus

tral

iaR

ussia

Wor

ld T

otal

APE

CN

on-A

PEC

CO

2/G

DP:

(kg

CO

2 pe

r 20

00 U

S$ P

PP)

Have APEC economies CO2 emission intensities (tCO2/GDPppp) improved?

Fig 18: Change in CO2 to GDP (PPP) Ratio across APEC Economies in 2001 to 2005

-25

-20

-15

-10

-5

0

5

10

15

20

25

Rus

sia

Hon

g K

ong

Kor

ea

Phill

ippi

nes

New

Zea

land

Sing

apor

e

USA

Can

ada

Mal

aysia

Peru

Chi

le

Aus

tral

ia

Indo

nesia

Japa

n

Chi

nese

, Tai

pie

Mex

ico

Tha

iland

Bru

nei

Chi

na

Vie

tnam

Wor

ld T

otal

APE

C

Non

-APE

C

% C

hang

e in

CO

2 to

GD

P ra

ti o

Fig 7.2: Percentage Renewables of TPES, 2005

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Wor

ldO

ECD

Tanz

ania

Ken

yaH

aiti

Cam

bodi

aIc

elan

dN

orw

ayIn

dia NZ

Chi

leC

anad

aSw

itzer

land

Chi

naJa

mai

caEs

toni

aM

exic

oLi

thua

nia

Arg

entin

aA

ustr

alia

Pola

ndG

erm

any US

Japa

nR

ussia

Net

herl

ands

Cyp

rus

Belg

ium U

KSi

ngap

ore

Has the fuel efficiency of our existing fleet of cars improved?

In sup p o rt o f th e G 8 P lan o f Ac tion

E n ergy U sein th e N ewM illenn iu m

Trends in IE A C ountries

E N E R G YIN D IC A T O R S

© O EC D /IE A 2007

A verag e F u e l In ten s ity o f th e C ar S tock

6

7

8

9

10

11

12

13

1990 1992 1994 1996 1998 2000 2002 2004

Litr

es o

f gas

olin

e eq

uiva

lent

per

100

veh

icle

-km U nited S tates

C anadaAustraliaJapanN ew ZealandS wedenG erm anyIrelandN orwayN etherlandsU nited KingdomF ranceD enm arkF inlandItaly

Are our news cars any more efficient?Fig 23B: Trends in New Car Fuel Intensity, 1990 to 2004

6

7

8

9

10

11

12

1990 1992 1994 1996 1998 2000 2002 2004

Litr

es

of

ga

so

line

equ

iva

len

t pe

r 10

0 v

ehic

le-k

m United States Australia Canada Japan

How efficient is our passenger transport system?

Fig 23 C: Energy per Passenger-kilometre Aggregated for All Modes

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

1990 1992 1994 1996 1998 2000 2002 2004

MJ

per

pk

m

United States Canada Australia IEA17 New Zealand Japan

How intensive is our car ownership?

Fig 23D: Car Ownership per Capita, in 1990 and 2004

0

0.2

0.4

0.6

0.8

Australia Canada Japan New Zealand United States IEA17

Car

Per

cap

ita

1990 2004

Can we afford it?

0

5

10

15

20

25

10 12 14 16 18 20 22 24 26 28

Personal consumption expenditures per capita (000 USD PPP 2000 per capita)

Tho

usan

d ca

r-km

per

cap

ita

United States

IEA17

New Zealand

Canada

Australia

Italy

France

Finland

Denmark

Norway

United Kingdom

Sweden

Germany

Austria

Ireland

Netherlands

Greece

Japan

How energy intensive are our freight systems?

Fig 24A: Freight Transport Energy Use per Tonne-kilometre by Country, 1990 to 2004

0

1

2

3

4

1990 1992 1994 1996 1998 2000 2002 2004

MJ

per

tkm

Japan New Zealand IEA17

Canada United States Australia

How efficient are our trucks?

Fig 24B: Truck Energy Intensity trends, 1990 to 2004

0

2

4

6

8

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

MJ

per

t-km

Japan Canada New ZealandIEA17 United States Australia

How much energy is used in households and how is it used?

Fig 25: Household Energy Use Per Capita in Selected Countries, 1990 and 2004

0

10

20

30

40

50

601

99

0

Ca

na

da

20

04

19

90

Ja

pa

n 2

00

4

19

90

Ne

w Z

ea

lan

d2

00

4 19

90

Un

ite

d S

tate

s2

00

4

GJ

pe

r c

ap

ita

(n

orm

alis

ed

to

27

00

HD

D)

Appliances LightingCooking Water heatingSpace heating Total (not normalised)

Energy Efficiency and Renewable Energy Review: Year Five Report to 2006

EE&C Act 2000 [Clause 21 (1) (f)] mandates EECA to monitor and review three aspects of energy use:•Energy efficiency•Energy conservation, and•Use of renewable sources of energy

Energy efficiency is one a number of factors that impact energy use.

Divisia decomposition used to separate out various driving factors

Energy consumption can rise while energy efficiency improves

In the analysis; energy efficiency = energy efficiency + energy conservation. We cannot separate these (yet).

Energy Efficiency and Renewable Energy Review: Year Five Report to 2006

• Measure energy efficiency5 Sector Level (not programme level) Split across electricity, oil and other fuels

• Renewable energyConsumer energy level (‘involves’ primary energy) Split across sourcesSplit across energy use formHydro is normalised for inflow variations

Fig 2.1: Economy Wide Energy Use Trend 1996 – 2006

0

100

200

300

400

500

60019

95

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

PJ p

er a

nnu m

Fig 2.5A: Energy to GDP Ratio Trends, 1996 to 2006

4.0

4.1

4.2

4.3

4.4

4.5

4.6

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

TJ/

$mill

ion

T d 0 8%

Trend:0.04 TJ per $ mill ion decrease

Fig 2.5B: Per Capita Energy Use Trends, 1996 to 2006

110

114

118

122

126

13019

96

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

GJ/

pers

on/y

ear

Trend = 1.6GJ per person per annum

Residential Sector

Fig 3.4: Residential Energy Use Drivers, 2001 to 2006

2.913.74

0.94 0.72-0.77 -1.56 -0.15

-3-2-1012345

Ene

rgy

Cha

nge

Popu

latio

n

Hou

seho

ldO

ccup

ants

Hou

seho

ldA

rea

Fuel

Switc

hing

Ene

rgy

Eff

icie

ncy

Wea

ther

PJ

Commercial SectorFactors Affecting Commercial Sector's Energy Use: 2001 to 2006

0.8

10.1

-6.0-2.9-0.4

-8

-4

0

4

8

12

En

erg

yC

ha

ng

e

Act

ivit

y

Str

uct

ure

En

erg

yQ

ua

lity

En

erg

yE

ffic

ien

cy

PJ

Industrial sectorIndustrial Energy Efficiency Estimate Under Mix Activity Matrix Model , 2001 to 2006

26.2

0.1

57.9

-3.0 -28.8

-40

-20

0

20

40

60

80

Tot

al

C

hang

e

Stru

ctur

alch

ange

Ene

rgy

Qua

lity

Cha

nge

Tec

hnic

alE

ffici

ency

chan

ge

Act

ivity

chan

ge

PJ/y

ear

Sources of industrial energy change by activity change matrix (PJ), 2001 to 2006Activity Matrix

Source GDP TWI PPP Mix*Structural change -3.0 -3.0 -3.0 -3.0Energy Quality Change 0.1 0.1 0.1 0.1Energy Efficiency Change 9.0 -51.1 10.1 -28.8Activity change 20.0 80.1 19.0 57.9Total 26.2 26.2 26.2 26.2* = output of wood, pulp and paper, meat, other foods, and basic metals represented by TWIGDP: all sectors represented by value added, except where physical output is availableTWI: all sectors represented by value added weighted by Trade Weighted indexPPP = all sectors represented by value added at Purchasing ParityMix: wood, pulp and paper, meat, other foods, and basic metals represented by TWI, others by price adjusted value adde

Conceptual definition of energy efficiency in modern exporting heterogeneous economy is critical to the answer you will get

Passenger Transport Factors Influencing Passenger Transport Energy, 2001 to 2006

14.512.7

7.7

-6.0

-10

-5

0

5

10

15

20

Tot

alC

hang

e

Stru

ctur

alC

hang

e

Ene

rgy

Eff

icie

ncy

Cha

nge

Act

ivity

Cha

nge

PJ

Passenger Transport: Further Split Factors Influencing Passenger Transport Energy Use, 2001 to 2006

12.2

8.3 7.9

3.5

11.4

4.2

-3.5-4.0

-12

-8

-4

0

4

8

12

16T

otal

Cha

nge

Stru

ctur

e:T

otal

Str

uctu

re:

Mod

eC

hang

e

Stru

ctur

e:C

ar S

ize

Effi

cien

cyC

hang

e

Act

ivity

(Tot

al)

Act

ivity

:Po

pula

tion

Act

ivity

:In

crea

sed

Tra

vel

PJ

Fig 6.2: Passenger Travel Energy Intensity by Mode, 1995 to 2006

0

1

2

3

4

519

95

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

MJ/

p-km

LV (Cars) Buses Rail Air Overall

Freight TransportFreight Transport Energy Use Drivers, 2001 to 2006

12.4

0.5 0.6

11.2

0

3

6

9

12

15

Ene

rgy

chan

ge

Stru

ctur

e

Effi

cien

cy

Act

ivity

PJ

Freight Transport: Further SplitFactors Influencing freight Transport Energy Use, 2001 to 2006

12.4

0.5 0.6

11.6 11.2

-0.4

-12

-8

-4

0

4

8

12

16T

otal

Cha

nge

Stru

ctur

alC

hang

e

Effi

cien

cyC

hang

e

Incr

ease

dV

alue

Add

ed

Incr

ease

dT

onne

-km

per

$V

.A.

Tot

alA

ctiv

ityC

hang

e

PJ

Economy-Wide Progress: 2001 and 2006

Sector Level Energy Efficiency Performance:. 2001-2006Energy Use (PJ) Energy Use Drivers (PJ) Energy Efficiency Uptake (%)

PJ 2001 2006 Total Change

Structural Change

Quality Change

Efficiency

Activity Change

Weather Change Total Average

pa Growth

/paIndustrial 160.3 186.6 26.2 -3.0 0.1 -28.8 57.9 - 17.96 3.59 3.36

Commercial48.4 49.2 0.8 -0.4 -2.9 -6.0 10.1 - 12.28 2.46 2.34

Passenger Transport

132.4 146.9 14.5 7.7 0.0 -6.0 12.7 - 4.50 0.90 0.88

Freight Transport 53.5 65.9 12.4 0.5 0.0 0.6 11.2 - -1.17 -0.23 -0.24

Residential 59.0 61.9 2.9 0.0 -0.8 -1.6 5.4 -0.1 2.65 0.53 0.52

Economy Wide453.8 510.5 56.8 4.8 -3.5 -41.6 97.3 -0.1 9.18 1.84 1.77

Economy-Wide Energy Efficiency Progress: 2001 and 2006

Factors Influencing Economy-Wide Energy Use Growth, 2001 to 2006

56.8

4.8

97.3

-0.1-41.6-3.5

-60

-30

0

30

60

90

120To

tal

Cha

nge

Stru

ctur

alC

hang

e

Ener

gyQ

ualit

yC

hang

e

Ener

gyEf

ficie

ncy

Cha

nge

Act

ivity

Cha

nge

Wea

ther

Cha

nge

PJ

Aggregation of Short-Term Change over Long-Term Energy Efficiency Trends, 1995 to 2006

Energy Efficiency = 0.8x + 1.3

-8

-4

0

4

8

12

1619

95-9

6

1996

-97

1997

-98

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

2003

-04

2004

-05

2005

-06

Per

Cen

t

Annual Change Cumulative Efficiency Linear (Cumulative Efficiency)

Economy-Wide Progress: 2001 and 2006Electricity End-Use Efficiency

Electricity Use Efficiency Drivers, 2001 tio 2006

3.6-0.1-3.2-3.9

18.114.6

-10

-5

0

5

10

15

20

Tota

lC

hang

e

Fuel

Switc

hing

Stru

ctur

alC

hang

e

Effic

ienc

yC

hang

e

Act

ivity

Cha

nge

Wea

ther

Cha

nge

PJ

Consumer Renewable Energy Trends, March 1998 to2006 Years

y = 2.6x + 128.0

0

50

100

150

200

1998

1999

2000

2001

2002

2003

2004

2005

2006

PJ/p

a

Total With Observed Hydro Total With Normalised HydroLinear (Total With Normalised Hydro)

Consumer Renewable Energy Sources

Consumer renewable energy performance by source to March 2006 year

Hydro Observed

Hydro Normalised

Geothermal Biogas Wood Wind SolarTotal With Observed

Hydro

Total With Normalised

Hydro1998 75.2 72.3 25.3 1.7 28.4 0.1 0.18 130.9 128.01999 80.0 72.1 27.4 1.7 31.3 0.1 0.18 140.8 132.82000 76.2 77.0 28.3 1.5 32.0 0.2 0.18 138.4 139.22001 79.9 76.8 23.4 1.5 36.3 0.5 0.19 141.8 138.72002 73.4 82.4 22.7 1.6 36.3 0.5 0.19 134.6 143.72003 81.9 83.5 20.1 1.7 38.4 0.6 0.20 142.8 144.52004 81.0 81.8 18.8 1.9 40.2 0.6 0.22 142.6 143.42005 86.8 83.5 19.0 1.4 40.3 1.7 0.25 149.4 146.12006 72.6 84.4 21.1 2.7 43.2 2.2 0.24 142.0 153.8

2001 to 2006 (PJ) Change -7.3 7.6 -2.4 1.2 6.9 1.7 0.05 0.2 15.1

2001 to 2006 (%) Change -9.1 9.9 -10.0 84.1 18.9 322.2 28.6 0.1 10.9

Limits of Energy Balance Analysis for Energy Efficiency Indicators

“From Macro to Micro Energy Indicators”Data and Methodology Training SessionHow and why to get the big picture right

IEA 28 April 2006 Robert Tromop

Manager Monitoring and Technical

Introduction

• NZ’s methodology• What are we trying to do? • What we know we don’t know• Methodological limits - Can indices

adequately explain comfort, activity, structure or productivity?

• Energy services way of thinking• Where to from here

NZ methodology – a Suite of Indicators

• Compare energy use change in PJ• Compare energy intensity indicators at

homogeneous service levels• Isolate change components by Divisia

decomposition • Integrate with micro indicators.

Energy Efficiency

• Politicians want it…• Experts argue about it…• Stakeholders doubt it …• Ordinary folk just don’t get it at all…

• Our key challenges are about defining and communicating what we analyse

What is Energy Efficiency?

• Energy Intensity is not Energy Efficiency• but intensity indicators are used to define EE• Physical output indicators ignore wealth effects• but may be the best indicator for sectoral EE given

reasonable sectoral homogeneity• Macroeconomic EE is very difficult:• modern economies are very heterogeneous• output/benefit definition and measurement is very

difficult

What is Energy EfficiencyIncrease in benefits from energy use

Decrease in benefits from energy use

Decreasing energy use

Increasing energy use

Increasing Energy Efficiency

Energy Conservation Declining Energy

Efficiency

No change in energy efficiency

Can measure energy change

Stru

ggle

to m

easu

re b

enef

its

Its like trying to measure God!No one can see EE, but its everywhere

Everyone has their own sense of what EE is,

- but most people can’t explain exactly what it is

Plenty of agnostics and athiests

Many claim to have ‘seen‘ it or what it does

- but who can measure it?

Its like trying to weigh frogs!

• Easy to understand at a micro level – engineering definitions work well – can’t define macro level?

• (micro; can dissect a frog – macro; live frog) • Energy data problematic, but measures of outputs or

benefits worse – measures for comfort? mobility?• Takeback & rebound means that EE interventions give

more service and minimal demand reduction• Should we account for under-heated homes? sub-

optimal production?

DecompositionFig 3: Economy-Wide Energy Change Components, 2001-2004

47.53

4.601.35

45.99

0.21-4.62

-10

0

10

20

30

40

50

60T

otal

Cha

nge

Stru

ctur

alch

ange

Ene

rgy

qual

itych

ange

Tec

hnic

alef

ficie

ncy

chan

ge

Act

ivity

chan

ge

Wea

ther

PJ/y

ear

= + + + +

How much EE effect is still absorbed in

Activity?

Energy Services Required-Spaceheating NZ homes

35Heat energy projected with all pre-1978 housing stock upgraded & new stock 50% of NZBC 2000 energy needs and 1 million heat pumps.

45Heat energy projected with all pre-1978 housing stock upgraded & new stock 50% of NZBC 2000 energy needs

57Heat energy projected with growth to 1.82m homes and no change to housing stock energy (frozen efficiency)

20Supplied consumer heat energy

43Required end-use heat energy for 18C20172001All figures PJ.

Takeback &Rebound

• Takeback - potential savings applied to improved service resulting in reduced energy savings

• Rebound – new consumption from savings• 5 yr NZ insulation/health study; $1200 insulation retrofit

provides $2300NPV. 70% of value is health/productivity improvements, 30% energy savings.

• Benchmarks for takeback and rebound? Is this normal? • Relationship between takeback and sub-optimal service? –

less developed counties, full takeback?

Energy Services

Table 3: Appliance proliferation in New Zealand households

Appliance % Change2001 2004 2001 2004 2001 2004

Oven 2,698,000 2,891,700 7% 709 731 1.88 1.93Washing Machine 1,392,400 1,451,500 4% 366 367 0.97 0.97Dryer 916,000 910,800 -1% 241 230 0.64 0.61Refrigerator 2,306,800 2,402,700 4% 606 607 1.61 1.61Dishwasher 564,600 657,600 16% 148 166 0.39 0.44Television 1,410,000 1,466,600 4% 371 371 0.98 0.98Computer 675,300 928,900 38% 178 235 0.47 0.62Heater 4794400 5017800 5% 1260 1268 3.35 3.36

Total Per 1000 people Household

Time to have a cup of tea and rethink some fundamentals

Energy is a derived demand• Energy only purchased for service

benefits(No one purchases energy for the sheer

pleasure of paying utility bills).• Benefits sought are ultimately welfare

benefits (production driven by welfare)• We are all trying to maximise welfare

A service perspective

• All energy consumption delivers either welfare services or technical and behavioural losses.

• Takeback is not regressive (bad) it’s a simply a quite natural (but poorly framed) allocation of theoretical ‘savings’ across different services

• Users inherently maximise welfare by balancing the range of service value from an efficiency improvement

• (they take welfare gains from EE until the marginal value of their welfare service mix is equal to the value of reduced energy demand)

What might this all mean?

Should we expect all energy reductions from energy efficiency to be either directly or indirectly applied to increased welfare?

• seems likely for a developed economy like NZ?

• essential for any developing economy

What is Energy Conservation?Increase in benefits from energy use

Decrease in benefits from energy use

Decreasing energy use

Increasing energy use

Increasing Energy Efficiency

Energy Conservation Declining Energy

Efficiency

No change in energy efficiency

Reducing waste (loss of service per unit energy)

Reducing service and energy, regardless of welfare

But we want to reduce energy demand

• To minimise; costs to society, perverse impacts, delay resource depletion…

• Could be quite a different objective from EE & EC? (demand is derived)

• Drivers for demand reduction need ‘authority’- the capacity to alter a system regardless of system endogenous features

• E.g. price, regulation, VA’s, taxes, treaties…

ValuesValues drive attitudes,Attitudes drive behaviours,Behaviours drive change.• Preference for democracy• Citizens not consumers• Attitudes informed by knowledge • Acceptance of knowledge driven by

values

• Economies and trade groups are setting targets for energy intensity improvements.

• Monitoring of energy trends internationally and domestically shows valuable energy intensity and efficiency improvements are occurring. But it is early days.

• Many challenges remain – particularly in addressing population driven energy growth and personal consumption.

• If the world is to realise the potential of sustainable energy we need to start thinking beyond the technological approaches currently utilised around the world and start looking for new paradigms.

• What might it take to develop significant improvement?