OECD: its energy system through an analysis. of the National Energy Balance

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1 OECD: its energy system through an analysis of the National Energy Balance In the edition of the course, I asked students to prepare "quantitative reports" on energy on environment. Since some wanted to see an example of what a "quantitative report" should be, I publish here a stylized version of such a report, concerning OECD. The structure of this report is no more than an example: the student may choose his/her prefererred structure, sequence of tables, choice of charts, comments, focus of presentation, with the objective of writing an interesting, consistent, meaningful report. Alessro Vaglio Foreword September 2016 This short essay represents nothing more than an example of the minimum required contents of an energy quantitative report. You can explore in more detail the data provided, looking for additional information (for instance: structure of final consumption by industrial branch, structure of the transport sector, efficiency of different branches of the energy industry). Moreover, OECD is not a country, but a relatively heterogeneous group of countries (Norway-Mexico, just to make an example): this means that interpreting data on total OECD is rather difficult; considering individual countries it might be easier to comment data in a meaningful way. 1.The structure of the TPES 1.1 Structure by sources The following chart depicts the structure of TPES in the OECD area as a whole (in the graph only the "true" primary sources are considered). The striking figure is the total of 91% of fossil +nuclear fuels vis-a-vis the bare 9% of renewable. Within these, the most important are biofuels waste.

2 Biofuel waste 5% Hydro Solar/wind/Oth 2% Geothermal er Nuclear 1% 1% Coal coal 9% 19% Peat peat 0% Crude NGL Feedstocks 38% Natural gas 25% Oil shale oil ss 0% 1.2 Dependence openness "True" TPES OECD 2012 As regards dependence (Imports/TPES) openness ((Imports+exports)/TPES) it is remarkable the high degree of dependence as regards crude natural gas, while dependence is lower for coal. Both openness dependence are small or nil in the case of peat, oil shale ss, waste/biofuels nuclear. Renewables other than waste/biofuels are closed independent by definition. 1 0,9 0,8 0,7 0,6 0,5 0,4 0,3 0,2 0,1 0 Dependence (Import/TPES) Openness (Imports+exports/TPES) 2. The structure of transformations The following table clearly identifies sources which give energy to other energy sectors (those with a negative value) sources which receive energy: the latter are Electricity, Heat Other Oil Products. These are secondary sources they

3 are the product of the transformation of the primary sources. The different primary sources are not energy-givers to the same extent. They range from total givers (Nuclear Hydro: all their TPES is transferred to other energy sectors), high-givers (Coal, Peat, Crude, Geothermal, Solar, Wind other) low-givers (Natural Gas Biofuel/waste). Since the most important alternative to transformations are final uses, one can guess Natural Gas Biofuel/waste end up in final consumption more than the other sources. We shall see that this is exactly the case, with an important qualification. Transformations OECD 2012 Absolute values % of TPES Coal coal ,361 0, Peat peat -2103,827 0, Oil shale oil ss -3735,334 0, Natural gas ,05 0, Crude NGL Feedstocks ,963 0, Other Oil ,591 Biofuel waste ,728 0, Nuclear ,614 1 Hydro ,746 1 Geothermal ,399 0, Solar/wind/Other ,414 0, Electricity ,084 Heat 73284,546 But where do transformations go? The following table distinguishes among four destinations: the electric sector, the production of heat, Oil refineries other, miscellaneous. For all except Crude Oil shale ss, at least 90% or so of transformations is directed to electricity production. Nuclear Hydro not only are entirely used for transformation, but all transformations go to electric power. Almost all transformations from crude go into oil refining. Heat production accounts for small percentages, with the exception of peat, where the share is around 10%. As regards Oil shale ss, apart from a large share going to electricity, 32%

4 goes to Gas works, Coal liquefaction plants coke ovens (engineers can probably give us an explanation for this). Transformations by destination (OECD 2012) Coal coal Peat peat Oil shale oil ss Natural gas Crude NGL Feedstocks Biofuel waste Nuclear Hydro Geothermal Solar/wind/Other Electricity 0, , , , , , , , Heat 0, , ,0014 0, ,79E-06 0, , , Refineries , Other 0, , , , , , The electric sector As we already understood, the electric sector receives flows of energy from a number of other sources, which means that many primary sources of energy can be transformed, using different technologies, into electric power. What is the structure of energy inflows to the electric sector? What is perhaps surprising in the following table is the very large share of coal (37%): together with natural gas nuclear, it represents 83% of energy inflows to the electric sector. Renewables, taken together account for a 13%, while the rest comes from the oil sectors. Energy flows to the electric power sector by source OECD 2012 From coal 0,37 From peat 0,00 From Oil shale 0,00 From natural gas 0,23 From Crude 0,01 From Oth Oil 0,03

5 From Biofuel 0,04 From Nuclear 0,23 From Hydro 0,06 From Geothermal 0,01 From Solar 0,02 The counterpart of the question Where do energy flows to the electric sectors come from? is Where does electric power go, after it is produced? The next table answers the question Sources uses of Electric power OECD 2012 Sources Uses TPES+Statistical correction 1554,192 Produced by transformation ,55 Energy Industry use 68736,704 Transformed by other sectors 380,464 Losses 59778,256 Total final consumption ,316 Total ,74 Total ,74 In words, the table can be summarized as follows. Practically all of the electric power available is produced in the OECD by transforming other sources, rather than importing it from outside. As regards uses, 86% of total goes to final consumption (non-energy firms households). Another 7.4% is consumed by energy firms. Transmission distribution losses amount to 6.4% of the total. Further transformations into other forms of energy are negligible. 4. The structure of final uses

6 Inspecting the (broad) structure of final uses one immediately finds some specificities worth commenting. First, some sources (mainly oil by) show some share of non-energy use: here is mainly the chemical industry which uses these energy as non-energy inputs to chemical production. Transportation is the main type of final use only for oil. Understably, biofuel also has a relevant share of uses in transport. Other final uses (we shall further disaggregate this item in the next few lines) are relevant especially as regards electricity, renewables natural gas. OECD Final Uses 2012 Coal Peat Oil Oil Biofuel waste Natural Gas Geothermal, solar, Wind Electricity Industry 0,78 0,06 0,34 0,35 0,07 0,32 Transport 0,00 0,65 0,04 0,23 0,00 0,01 Other 0,20 0,12 0,57 0,42 0,93 0,67 Nonenergy use 0,02 0,17 0,05 0,00 0,00 0,00 In more detail, we find that, among Other final uses, the residential sector represents almost always the most important component (except electricity). Other Final uses 2012 Coal Peat Oil Oil Natural Gas Biofuel waste Geothermal, solar, Wind Electricity Residential 0,66 0,47 0,62 0,88 0,79 0,47 Commercial public services 0,28 0,28 0,37 0,08 0,11 0,48 Agriculture/forestry 0,06 0,21 0,01 0,04 0,07 0,02 Fishing 0,00 0,02 0,00 0,00 0,01 0,00 Non-specified (other) 0,00 0,03 0,00 0,00 0,02 0,04

7 5. Relations with non-energy indicators Our first foremost indicator is the ratio between Total TPES GDP (2005 USD, in PPP) often defined as energy intensity OECD, Energy Intensity Energy Intensity The average exponential rate of decline of energy intensity is % per year between More stable is the ratio between TPES population, which only slightly oscillates, the same is true of percapita total final consumption Percapita TPES Total Final consumption per capita More interestingly, the per capita residential consumption of energy reaches a peak around 2006: since then it has decreased at an average rate of -0,7% per year, which came close to -1% in the last eight years.

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9 6. The evolution since The structure of the TPES As regards the TPES structure by sources, the first thing one notices is an overall stability over twenty years. Fossil fuels nuclear account for a 93% while renewable total the remaining 7%. More interesting is the redistribution of weights among fossil fuels, where natural gas goes from 19% to 25%, while both oil coal Heat production from non specified 0% Biofuel waste 4% Solar/wind/Oth Hydro 2% Geothermal 1% er 0% Heat 0% Nuclear 10% Crude NGL Feedstocks 42% Coal coal 22% Natural gas 19% Peat peat 0% Oil shale oil ss 0% lose weight. True TPES 1992 With the exception of shale ss oil, dependence has not decreased over time, increased in many cases.

10 0,9 0,8 0,7 0,6 0,5 0,4 0,3 0,2 0,1 0 Dependence (imports/tpes) 1992 Openness (import+exports/tpes) 6.2 Transformations As regards the weight of transformations, the main changes occurred in Solar/wind/other renewable in Natural gases, while minor changes occurred in other sources (or almost no change as in the case of Crude oil). As we shall see, both variation reflect a change in the choice of fuels for the production of electric power. Transformations OECD 1992 Sources % TPES Coal coal 0, Peat peat 0, Oil shale oil ss 0, Natural gas 0, Crude NGL Feedstocks 0, Biofuel waste 0, Nuclear 1 Hydro 1 Geothermal 0, Solar/wind/Other 0,286104

11 Transformations OECD 1992 Sources % TPES Coal coal 0, Peat peat 0, Oil shale oil ss 0, Natural gas 0, Crude NGL Feedstocks 0, Biofuel waste 0, Nuclear 1 Hydro 1 Geothermal 0, Solar/wind/Other 0, The electric sector If one looks at the structure of energy inflows to the electric sector, one finds that the share of nuclear + fossil fuels in electricity production is 90% (87% in 2012), but the most relevant change occurred within the nuclear + fossil fuels basket: natural gas more than doubled its share (11% to 23%) while the combination nuclear+coal+oil went from 79% in 1992 to the 64% of 2012 (the most stable being nuclear). Renewables rose to the % from a 10% in 1992, mainly thanks to an increase in young renewables (wind-solar). Energy flows to the electric power sector by source OECD 1992 From coal 0,43 From peat 0,00 From Oil shale 0,00

12 From natural gas 0,11 From Crude 0,01 From Oth Oil 0,08 From Biofuel 0,03 From Nuclear 0,27 From Hydro 0,06 From Geothermal 0,01 From Solar/wind 0,00 As regards the sources uses of electric power in 1992, one finds only negligible changes in the overall structure. Just to point out a change, in 1992 OECD was (by a relatively small amount) a net electricity exporter. Sources uses of Electric power OECD 1992 Sources Uses TPES+Statistical Correction -180,772 Produce by transformation ,32 Energy industry own use 57368,62 Transformed by other sectors 780,278 Losses 45339,63 Total final consumption The structure of final uses The structure of final uses has undergone significant changes only in Oil-oil /Biofuel waste, on the one h, in Electricity on the other h. In the former case, the share of transportation has increased (oil as fuel for heating has

13 strongly decreased). As regards Electricity, the relative growth of the tertiary sector probably largely explains the shift from Industry to Others (this should be further investigated). Final uses OECD 1992 Coal Oil Oil Natural Biofuel Geothermal, Peat Gas waste solar, Wind Electricity Industry 0, ,0996 0, , , , Transport 0, , , , , Other 0, , , , , , Nonenergy use 0, , , When looking inside the Other aggregate, one finds a mixed overall picture, although one thing looks rather clear: the share of non-residential uses increases as regards all energy sources, except oil oil where the weight of residential remains constant. Again, this might in general be a consequence of the relatively fast expansion in the tertiary sector. Other uses 1992 Coal Peat Oil Oil Natural Gas Biofuel waste Geothermal, solar, Wind Electricity Residential 0, , , , , , Commercial public services 0, , , , , , Agriculture/forestry 0, , , , , , Fishing 0, , , ,27E-05 Non-specified (other) 0, , , , , ,001241