Session 4: Energy accounts

1 E-TRAINING ON THE COMPILATION ANDAPPLICATION OF ENVIRONMENTALLY EXTENDED SUPPLY-USE TABLES (EE-SUTS) IN AFRICA March-April 2018 Session 4: Energy accounts Dr. Michael Vardon Expert and Advisor michael.vardon@anu.edu.au Dr. Anand Sookun Expert and Advisor asookun@gmail.com

Outline of the Presentation A. Why energy accounts? B. Energy issues C. Overview of SEEA Energy D. The structure of the physical supply and use table E. Data sources and methods Mining, electricity, manufacturing, transport, and households F. Account presentation and communication G. Questions and homework

Why energy accounts? Better data. Energy accounts are an integrating framework allowing data from a wide range of sources to be combined. The combination of data can reveal data discrepancies and help to improve data quality and identify data gaps Relationship to SDG Goal 7 Ensure access to affordable, reliable, sustainable and modern energy for all. Inputs to modelling to help development, implement and assess public policy E.g. using generalized equilibrium modelling to test the effect of energy taxes on energy use and economic output.

Examples of energy issues Link to climate change and greenhouse gas emissions Energy demand and investment in energy supply Energy security and balance of payments energy often large component of imports Indicators of green growth http://www.oecd-ilibrary.org/environment/compiling-mineral-and-energy-resource-accounts-according-to-the-system-of-environmentaleconomic-accounting-seea-2012_3fcfcd7f-en

World Energy Outlook 2017 Growing energy demand average 3.4% per year Renewable energy supply growing faster than all supply types two-thirds (2/3) on new investment is in renewables Source: World Energy Outlook 2017 http://www.iea.org/weo2017/

Energy systems From example: Coal to electricity Crude oil to gasoline (petrol) Firewood

The System of Environmental-Economic Accounting (SEEA) Linking environmental and economic information related to energy Combines physical information of energy (e.g. fossil fuels, electricity) with economic information from the System of National Accounts (SNA) Extends the supply-use tables (SUT) in the System of National Accounts (SNA) which are in monetary measures and cover products, to include the: Flows of natural inputs and residuals between the economy and the environment Flow in physical measures. For energy these are usually in joules (but could be other, e.g. or tonne of oil equivalent, TOE )

SEEA Energy was prepared by United Nations Statistics Division The Final Draft was completed in 2015 It has seven (7) chapters Chapter five (5) is physical flow accounts Chapter six (6) is monetary and hybrid flow accounts SEEA Energy Only in English English: https://unstats.un.org/unsd/envaccounting/ seeae/

International Recommendations for Energy Statistics Classification of energy products Measurement units and conversion factors Energy flows Data items Data collection and compilation Energy balances Data quality Dissemination and uses https://unstats.un.org/unsd/ energy/ires/ires-web.pdf

Key difference between energy accounts and energy statistics and balances Residents Non-residents National territory Rest of the World Sold on territory to resident units Sold to residents operating abroad (tourists, transport companies, etc.) SEEA-E Sold on territory to nonresidents (foreign, tourists, transport companies, embassies) Source: SEEA Energy, Fig 2.1 Energy statistics and balances Energy accounts are based on residence Energy statistics and balances are based on territory See SEEA Energy or BPM6, chapter 4. http://www.imf.org/ext ernal/pubs/ft/bop/200 7/pdf/chap4.pdf

SEEA Energy Overview Stocks and flows Flows covered: Within the environment Between the economy and environment Within the economy Volume and values 11 Source, SEEA Energy, Figure 2.2

SEEA Energy tables 1. Physical supply and use table (Table 2.1) 2. Monetary supply use table (Table 2.2) 3. Supply of primary energy and imports (Table 3.6) 4. Transformation of energy (Table 3.7) 5. End use of energy (Table 3.8) 6. Use by purpose (Table 3.9) 7. Energy asset account (Table 2.3)

Classifications used in energy accounts Sector (Corporations, government, not-forprofit and households) International Standard Industry Classification (ISIC) Energy flows Natural resources Energy products Residuals

Key industries for energy accounting Mining Coal and lignite Extraction of crude petroleum and natural gas Uranium and thorium Manufacturing Coke Refined petroleum Electricity, gas, steam and air conditioning supply Electric power generation, transmission and distribution Manufacture of gas, distribution of gas through mains Steam and air condition supply (includes hot water) Transport Land (rail, urban, freight, etc.), air, water Industry classification should be by ISIC Revision 4 http://unstats.un.org/unsd/cr/registry/default.asp

Classification of energy from natural inputs Energy natural resource inputs Note plantation timber is excluded from timber Source: SEEA Energy, Table 2.5

Classification of physical energy products: Standard International Energy Product Classification (SIEC) In the SNA energy products are classified using the Central Product Classification (CPC) Concordance between CPC and SIEC is found in the International Recommendations for Energy Statistics (IRES) Note the correspondence is not always one-to-one Source: IRES Table 3.1

Energy residuals Residuals are flows of solid, liquid and gaseous materials and energy that are discarded, discharged or emitted by establishments and households through processes of production, consumption or accumulation. Energy residuals comprise energy losses and other energy residuals This primarily heat generated when end users use energy products for energy purposes). Classification of energy residuals is by the reason for loss rather than by a physical type of loss Source: SEEA Energy, Section 3.3.4

Energy losses Four (4) groups of energy losses 1. losses during extraction (e.g. gas flaring) 2. losses during distribution (e.g. electricity in powerlnes, an oil tanked being wrecked at sea) 3. Losses during storage (e.g. losses from tanks) 4. losses during transformation (e.g. burning coal to electricity) Source: SEEA Energy, Section 3.3.4

Special note on energy residuals and cleanup of spillages or contaminated sites In the case where there is a spillage in the the environment (e.g. of oil) and a cleanup/decontamination then this is a special case of an energy residual going from the environment to the economy.

SEEA Central Framework: physical energy supply table (part 1)

SEEA Central Framework: physical energy supply table (part 2)

SEEA Central Framework: physical energy use table (part 1)

SEEA Central Framework: physical energy use table (part 2)

SEEA Central Framework physical Comprehensive table supply and use table Columns showing industries, households and Rest of World, can be subdivided, e.g. Mining can be split (e.g. showing Mining of coal and lignite, Extraction of crude petroleum and natural, Mining of uranium and thorium ores Manufacturing can be split (e.g. showing Manufacture of coke and refined petroleum products, Manufacture of basic metals, Manufacture of fabricated metal products, etc.) Electricity can be split between coal, gas, nuclear, hydroelectric and other generation types Households can be split by urban and rural, by income level, number of members, etc.

SEEA Energy physical supply and use table The SEEA Central Framework and SEEA Energy physical supply and use table are similar but different The SEEA Energy separates mineral and energy resources into: oil, natural gas, coal, and uranium other nuclear fuels SEEA Energy separates own-account production and use of energy products Of which for own use

Simplified energy physical supply table (joules) Physical supply table Industry Mining Manufacturing Electricity, gas, steam, etc. Coal Hydro other Subtotal electricity, gas, steam Transportation and storage All other industries Subtotal industry Households Rest of World Environment TOTAL Energy from natural inputs Energy products Energy residuals Natural resource inputs Oil Natural gas Coal and peat Uranium and other nuclear Timber Subtotal natural resource inputs Renewabale energy sources Hydro Solar Wind Other Subtotal renewable energy sources Other natural inputs - - - - Cultivated biomass Subtotal other natural inputs - Total natural inputs - - Gasoline (petrol) Natural gas Coal Fuelwood - - - Electicity Other - - - Total energy products - - - Losses during extraction Losses during distribution Losses during storage - - - Loss during transformation Other energy residuals - - - Total energy residuals - - - TOTAL SUPPLY - - - - - - - - - Source: Michael Vardon, ANU

Simplified energy physical use table (joules) Physical use table Energy from natural inputs Energy products Energy residuals Natural resource inputs Oil Natural gas Coal and peat Uranium and other nuclear Timber Subtotal natural resource inputs Renewabale energy sources Hydro Solar Wind Other Subtotal renewable energy sources Other natural inputs Coal Hydro other Subtotal electricity, gas, steam - - - - Cultivated biomass Subtotal other natural inputs - Total natural inputs - - Gasoline (petrol) Natural gas Coal Fuelwood - - - Electicity Other - - - Total energy products - - - Losses during extraction Losses during distribution Losses during storage Mining Manufacturing Industry Electricity, gas, steam, etc. Transportation and storage All other industries Subtotal industry - - - Loss during transformation Other energy residuals - - - Total energy residuals - - - TOTAL USE - - - - - - - - - Households Rest of World Environment TOTAL Source: Michael Vardon, ANU

Simplified diagram of physical energy flows (joules) Key Natural resource inputs Energy products (except electricity) Electricity Energy residuals Rest of the World Electricity (Coal fired) Mining Electricity (Hydro) Manufacturing Households Transport and storage All other Industries Natural resources inputs and renewable energy sources Source: Michael Vardon, ANU

Example simplified diagram of physical energy flows Key Natural resource inputs Energy products (except electricity) Electricity Energy residuals 1000 Rest of the World Electricity (Coal fired) 1300 1800 2700 Mining 1000 1200 600 1500 Electricity (Hydro) 1100 500 100 500 800 200 Manufacturing 1000 Households Transport and storage All other Industries 5000 0 500 2100 0 900 200 900 300 500 Natural resources inputs and renewable energy sources Source: Michael Vardon, ANU

Simplified energy physical supply table (joules) Physical supply table Industry Mining Manufacturing Electricity, gas, steam, etc. Coal Hydro other Subtotal electricity, gas, steam Transportation and storage All other industries Subtotal industry Households Rest of World Environment TOTAL Energy from natural inputs Energy products Energy residuals Natural resource inputs Oil 3,000.0 3,000.0 Natural gas - - Coal and peat 2,000.0 2,000.0 Uranium and other nuclear - Timber 500.0 500.0 Subtotal natural resource inputs 5,500.0 5,500.0 Renewabale energy sources - Hydro 1,000.0 1,000.0 Solar 200.0 200.0 Wind - - Other - - Subtotal renewable energy sources 1,200.0 1,200.0 Other natural inputs Cultivated biomass - - Subtotal other natural inputs - - Total natural inputs 6,700.0 6,700.0 Gasoline (petrol) 2,700.0-2,700.0-2,700.0 Natural gas - - - Coal 1,800.0-1,800.0 1,000.0 2,800.0 Fuelwood - - - Electicity 1,300.0 1,000.0 2,300.0 2,300.0 2,300.0 Other - - - - Total energy products 4,500.0-1,300.0 1,000.0-2,300.0 - - 6,800.0-1,000.0 7,800.0 Losses during extraction 500.0-500.0 500.0 Losses during distribution 100.0 1,000.0 1,000.0 1,100.0-1,100.0 Losses during storage - - - - - - Loss during transformation 200.0 500.0 500.0 700.0 700.0 Other energy residuals - 900.0 900.0 1,800.0 2,100.0-3,900.0 Total energy residuals 500.0 300.0 1,500.0 - - 1,500.0 900.0 900.0 4,100.0 2,100.0-6,200.0 TOTAL SUPPLY 5,000.0 300.0 2,800.0 1,000.0-3,800.0 900.0 900.0 10,900.0 2,100.0 1,000.0 6,700.0 20,700.0 Source: Michael Vardon, ANU

Simplified energy physical use table (joules) Physical use table Energy from natural inputs Energy products Energy residuals Natural resource inputs Coal Hydro other Subtotal electricity, gas, steam Oil 3,000.0-3,000-3,000.0 Natural gas - - - - Coal and peat 2,000.0-2,000 2,000.0 Uranium and other nuclear - - - Timber - - 500.0 500.0 Subtotal natural resource inputs 5,000.0 - - - - - - - 5,000.0 500.0-5,500.0 Renewabale energy sources Mining Manufacturing Industry Electricity, gas, steam, etc. Transportation and storage All other industries Subtotal industry Households Rest of World Environment TOTAL Hydro 1,000.0 1,000.0 1,000 1,000.0 Solar - 200.0 200 200.0 Wind - - - Other - - - Subtotal renewable energy sources - - - 1,000.0-1,000.0-200.0 1,200.0 - - 1,200.0 Other natural inputs Cultivated biomass - - Subtotal other natural inputs - - Total natural inputs 5,000.00 - - 1,000.00-1,000.00-200.00 6,200.00 500.00 - - 6,700.0 Gasoline (petrol) - 800.0 200.0 1,000.0 500.0 1,200.0 2,700.0 Natural gas - - - Coal 2,800.0 2,800.0 2,800.0 2,800.0 Fuelwood - - - Electicity 600.0-100.0 500.0 1,200.0 1,100 2,300.0 Other - - - - Total energy products - 600.0 2,800.0 - - 2,800.0 900.0 700.0 5,000.0 1,600.0 1,200.0 7,800.0 Losses during extraction 500.0 500.0 Losses during distribution - - 1,100.0 1,100.0 Losses during storage - - Loss during transformation 700.0 700.0 Other energy residuals - - 3,900.0 3,900.0 Total energy residuals - - 6,200.0 6,200.0 TOTAL USE 5,000.0 600.0 2,800.0 1,000.0-3,800.0 900.0 900.0 11,200.0 2,100.0 1,200.0 6,200.0 20,700.0 Source: Michael Vardon, ANU

Introduction to data sources and methods Data sources Mining Electricity Manufacturing Transport Households

Data sources Electricity industry reporting /statistics/surveys Mining industry reporting /statistics/surveys Transport reporting /statistics/surveys Administrative information Household survey or census International statistics (International Energy Agency) Balance of payments

Mining industry Often the largest supplier of primary energy Extraction of oil, gas, coal Usually few mining operations Liaise closely with government water department to obtain all available information. Licensing information is sometimes available The water supply industry will likely know how much water they abstract from the environment, how much is supplied to customers and how much is unaccounted (including losses in distribution meter errors and water theft) The customer lists can usually be split between households and everything else For everything else you can code to industry In this, start with the big users (agriculture, food and beverage manufacturing, recreation (e.g. football pitches, golf courses) Note: the natural gas extraction and production is not in the mining industry

Electricity industry Liaise closely with government electricity regulators and policy departments to obtain all available information Electricity suppliers are likely to be few in number and also likely to already report to government Electricity industry will usually: Know how much is electricity is generated and lost in distribution Have information on the inputs (e.g. amount of coal). Have customer lists which will show households ( residential ) and commercial or similar. The commercial can be coded to ISIC (code the largest users and a sample of the small users) Losses in transformation will usually have to be calculate E.g. = volume of coal x energy content energy generated Electricity from hydroelectricity is recorded as a use of natural resource input and there are no losses in extraction Data on electricity production is available from International Energy Agency http://www.iea.org/about/

Manufacturing industry Manufacturing transforms the primary energy into secondary energy products E.g. crude oil transformed in refined oil products (gasoline/petrol) There are losses in transformation Calculated by the subtracting the energy content of the secondary product produced from the primary product used in production Manufacturing industry can create energy products from non-energy inputs E.g. biofuels from sugar cane or corn (from the agricultural industry) Administrative data may be a good source of data most countries have taxes or levies on fuel consumption

Transport industry Land (cars, trucks, trains), air and water transport are large users of energy Care needs to be take when using and interpreting some transport data as it based on the concept of transport as an activity not as an industry. E.g. The energy used by cars driven by households are part of households use not the transport industry. Similarly trucks used by the mining industry is a use by the mining industry

Households The amount of electricity used by households connected to electricity network will usually be known from the electricity supplier Use of fossil fuels energy by households is by cars (e.g. gasoline/petrol) and for cooking (gas) Information on household use of energy by cars and cooking may be included in household expenditure surveys (and the expenditure information with price information can be used to make an estimate of use) Transport surveys may have information on distance travels by cars owned by households (and the distance traveled and average fuel use per kilometer can be used to make an estimate of use) Other household surveys may have information on type of fuel used for cooking and ownership of cars Use of renewable energy by households may be available from administrative (e.g. licenses to install solar energy) Number of households using wood for cooking may be known from household surveys

Examples of energy accounts Botswana and South Africa Botswana published in 2016 South Africa in 2015 http://www.statssa.gov.za/publications/report- 04-05-20/Report-04-05-202015.pdf https://www.wavespartnership.or g/sites/waves/files/kc/botswana %20Energy%20Accounts%20Te chnical%20report_final.pdf

Communication of accounts Tables are not enough Figures and graphics Explanatory text highlighting key figures and trends Presentations and meetings with key stakeholders WAVES Briefing: Focusing on energy and climate change https://www.wavespartnership.org/sites/waves/files/kc/energy%20thematic% 20doc_FINAL.pdf

Uses of energy accounting Input-output modelling Computable general equilibrium modelling Energy pricing Demand management Investment in energy supply infrastructure Calculation of CO 2 emisssions https://www.wavespartnership.org/en/knowledge-center/forum-natural-capitalaccounting-better-policy-decisions-taking-stock-and-moving Countries with energy examples: Costa Rica Guatemala Netherlands https://www.wavespartnership.org/sites/waves/file s/kc/pbl-2017-the-application-of-natural-capitalaccounting-2559.pdf

Questions?

Homework After reading Chapter 2 of SEEA Energy please complete the worksheet provided Please follow the instructions provided on the worksheet 43

THANKS / MERCI