MASTER OF BUSINESS & TECHNOLOGY PROGRAM http://www.mbt.unsw.edu.au Energy Management GBAT9109 Session 1 2004 5-Dec-03
Important Notice The material contained in this study guide is in the nature of general comment only and is not advice on any particular matter. No one should act on the basis of anything contained in this guide without taking appropriate professional advice upon the particular circumstances. The Publisher, the Editors, and the Authors do not accept responsibility for the consequences of any action taken or omitted to be taken by any person, whether a subscriber to this guide or not, as a consequences of anything contained in or omitted from this guide. 2004 The University of New South Wales Sydney 2052 Australia Master of Business and Technology Tel:61-2-9385 6660 Fax:61-2-9385 6661 The original material prepared for this guide is covered by copyright. Apart from fair dealing for the purposes of private study, research, criticism or review, as permitted under the Copyright Act, no part may be reproduced by any process without written permission. Enquiries should be addressed to Master of Business & Technology, UNSW. ii
Energy Management Course Contents Course Overview Assessment Details Unit 1 Unit 2 Unit 3 Unit 4 Unit 5 Unit 6 Unit 7 Unit 8 Unit 9 Unit 10 Unit 11 Unit 12 Managing Energy in Organisations Energy in Society World Energy Sources Energy Resources Energy Technology Fuels and Transportation Electricity Generation and Use Energy from Renewable Sources Energy Use in the Built Environment Energy and the Natural Environment Climate Change: Implications for Energy Markets Energy Management Systems iii
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Energy Management GBAT9109 Course Overview Session 1 2004 5-Dec-03
2 Course Overview
Contents About the author... 5 Introduction... 6 About the course... 9 Components of the study package... 10 Textbook... 10 Assessment general... 12 Learning outcomes... 12 Criteria for assessment... 12 Self assessment... 13 Further advice on assessment... 13 Coversheets... 13 Your assessment tasks... 14 Reference... 14 Energy Management 3
4 Course Overview
About the author Dr Ian Lavering Course Coordinator Ian is a graduate of UNSW with BSc (Hons) and PhD awards in Applied Geology and Palaeo-ecology, as well as an MA (Hons) in economics and management at University College, UNSW ADFA. He holds Graduate Diploma awards in Management (University of Central Queensland) and Administration (University of Canberra) and a Graduate Certificate in Restoration Ecology from Charles Sturt University. He has worked with the Western Australian Department of Minerals and Energy, the South Australian Oil and Gas Corporation and Esso Australia Ltd. Since 1983 Ian has worked with the Federal Resources and Energy portfolios as a scientific adviser and research scientist for Geoscience Australia and its organisational predecessors. Ian has consulted to the Asia-Pacific Economic Commission, Australian Mineral Foundation and Environment Australia on minerals, energy, resources and the environmental impacts of resource exploration, production and utilisation. He is a member of the Commonwealth Marine Protected Areas Committee where he assists in the assessment of offshore areas for nomination as marine parks. Ian is a Fellow of the Geological Society of London, and the Australasian Institute of Mining and Metallurgy. The AusIMM has accredited him as a Certified Professional (Environmental). He is also a member of the Environment Institute of Australia and Petroleum Exploration Society of Australia, a Fellow of the Australian Institute of Energy and an Associate Fellow of the Australian Institute of Management. Energy Management was written by a team of specialists led by Course Coordinator, Ian Lavering, who is available to the MBT courtesy of the Commonwealth Department of Industry Tourism and Resources, and Geoscience Australia. Academic reviewers for the course were Peter Rogers, Professor, Department of Biotechnology, UNSW and Tony Owen, Associate Professor, Faculty of Economics and Commerce, UNSW. Energy Management 5
Introduction "Everything that happens in both the living and the nonliving world is due to the flow and transformation of energy. Energy drives the economy.there can be no more fundamental question fuelling our existence" (Bent, Lloyd & Baker, 2002) Since the beginning of human existence our predecessors have been engaged in the pursuit and use of natural resources. With the coming of the industrial revolution over two hundred years ago, a range of nonrenewable resources were harnessed as basic fuel sources. Since then the diversity and complexity of technology and industrial systems has vastly increased as a consequence. Now, with the impacts of fuel use becoming a major source of environmental concern, more than ever before the sustainability of energy use and the management of these resources is a fundamental core issue for business enterprises, as well as for individuals. What are the prospects for energy supplies for the 21st century for our own nation, our major trading partners and for the rest of the world? Energy is, as we know only too well, essential for the functioning of most of the industrialised world and for progress in developing nations of the world. Yet at the same time energy production and consumption is the chief pressure causing degradation of the environment of the industrialised world and it looks like being a similar problem in developing countries. For managers who are involved in business in this changing age, energy management is one of the most critical issues for the future as so much of the world is dependent on it. Thus, more than ever before we need to understand the traditional sources of energy, their quality, availability and environmental effects, as well as understanding the potential alternatives for energy and the effects of these upon the natural environment and modern industrial economies. Over the past two hundred years the use of primary energy sources in manufacturing or processing has evolved from simply using locally available resources such as waterpower, firewood or coal to an issue of primary importance in business. The transition from coal to a petroleumbased fuel economy took place through the twentieth century. With daily changes to the global oil market commanding media attention around the world, there is growing interest in the potential transition to renewable energy sources. Managing energy is now a basic feature of business in a globally focused economy. Energy is a major business cost and a strategic component of how a business enterprise derives its competitive edge. 6 Course Overview
Fossil fuels in the form of oil, natural gas and coal comprise approximately eighty percent of the world s energy use, and an even higher amount for major industrial countries such as the USA and parts of Europe. We now face a world where the environmental impacts of combusting fossil fuels such as coal and oil are identified as unsustainable in the long term. The need to turn to increasing the use of sustainable and renewable energy sources is clearly agreed. Much of the fossil fuels are used in western developed nations and the pattern of use of these fuels in such countries is determined by a combination of the number of people, the nature of the societies in which they live and the technology available to them. In this course we deal with energy resources, fuels and other sources, because they are fundamental to all major business activity in our modern developed and developing economies. Indeed, energy resources and sources form the very basis of our economic systems. They play an important role in almost every part of our daily lives. Increased interdependency in our business world creates greater reliance on the availability and low cost of efficient energy sources, and increasingly more clean and effective use of those resources both now and in the future. While the prospect of resource limits has greatly influenced research and discussion in the recent past about finite resources on planet earth, more comprehensive issues about their use have become the focus of present concerns. The effects of combusting fossil fuels and venting the products into the atmosphere are now the dominating issues of our increasingly environmentally focused world, in both our business and personal lives. We will start our analysis of energy in the corporate setting and then move on to see how important a role energy plays in the society in which we live. We will then look at the broader patterns of world energy use, evaluate major energy resources and technologies and examine the major applications of energy for fuel, transport and power generation. The policies of government and the role of markets in influencing the price and availability of energy fuels and sources are important elements in the topic. We round off the course looking at energy use and its impact on the natural environment, the changes to markets and international agreements aimed at facing the issue of climate change, finally applying energy management issues and strategies within the corporate setting. Some of the ways and means over overcoming barriers which limit present day energy efficiency are discussed. They include technical, human and market-based barriers. Energy Management 7
This course aims to: provide managers with an appreciation of the issues and implications in choosing particular energy sources and technologies develop an understanding and appreciation by managers of the innovations and policies related to energy usage at a societal level outline the very basic science of energy and the range of energy technologies enable managers to outline and discuss the effect of traditional energy use on the environment provide managers with the range of knowledge and skills to analyse and make recommendations about energy management in their own organisations 8 Course Overview
About the course Unit 1, Managing Energy in Organisations, is an introductory Unit and focuses on the importance of energy management and the basic elements required to develop an energy strategy for your organisation. Unit 2, Energy in Society, outlines broad issues of energy and links the corporate organisation to changes taking place within society and broader global issues. Unit 3, World Energy Sources, looks at the current pattern of world energy use and the ongoing transition to renewable energy sources. Unit 4, Energy Resources, discusses the major energy resources, their quality, limits and future availability to business users or producers. Unit 5, Energy Technology, will expose you to some of the major technologies associated with energy supply, generation and use, particularly the concepts applicable to business enterprises. Unit 6, Fuels and Transportation, examines the issues involved in managing major fuel usage technologies and operations. Unit 7, Electricity Generation and Use, looks at the management of electricity generation and use, and matching demand and supply patterns of business users. Unit 8, Energy from Renewable Sources, introduces the basic elements of energy generation by solar, biomass, wind, hydro, geothermal, ocean, tidal sources and hydrogen fuels. The pros and cons of their applicability to business enterprises are discussed. Unit 9, Energy Use in the Built Environment, looks at management and technology devoted to optimising the consumption and use of energy in habitable structures. Unit 10, Energy Use and the Natural Environment, examines atmospheric carbon dioxide build-up, global warming, fossil fuel use and energy use as a key impact on environmental quality. Unit 11, Climate Change: Implications for Energy Markets, outlines the features of energy markets which influence resource use, market and protocol-based measures formulated to meet them. Unit 12, Energy Management Systems, outlines how to place the issues outlined into an organisational context, how to deal with specialist reports and case studies. Energy Management 9
Components of the study package To successfully undertake this course you need: this study guide the prescribed textbook your MBT Student Information Guide Course Key Dates Sheet for this session contact details for your Class Facilitator Internet access so you can interact with your online class and access reference material located on the Internet access to further reading resources as required Textbook The prescribed textbook for this course is: Cassedy CS & Grossman PZ, 1998, Introduction to Energy, Resources, Technology and Society, 2 nd edn, Cambridge University Press. Many of the exercises in the study guide are based on information presented in the textbook and these in turn are used to illustrate the concepts important to understanding the management of energy. MBT online library tutorial To assist you in accessing the resources of the UNSW library, the MBT has developed an online library tutorial. The tutorial is an excellent tool to help you become familiar with how to access material held in either hard copy or electronic format. http://librarytutorial.mbt.unsw.edu.au/index.htm The UNSW Library has also developed a Master of Business and Technology Subject Guide which is linked from the library s home page http://www.library.unsw.edu.au/ Please ensure that you observe relevant copyright rules in your use of this or any other material used for private study or research purposes. 10 Course Overview
Unit readings A number of readings are provided in the study guide. They are intended as a source to guide your learning with specific information from the latest or some of the most significant literature related to your studies. The most critical information contained in these readings are those points which relate to the questions posed in exercises provided immediately after each reading is to be undertaken. You will not be required to reproduce the copious detail contained in each reading for examination or other purposes. You will however find it useful to become familiar with general issues in the readings to broaden the knowledge you will gain in undertaking the course. The core information in each reading is usually contained in the abstract, introduction and conclusion of each reading. Students not familiar with geographic references used in the readings and subsequent exercises in the study guide should consult their Class Facilitator for clarification of any terms used. All journal readings listed are accessible via the e-journal databases available through the UNSW library. You will need your student number and Unipass to access this facility. Unit exercises These are essential to your learning process and form a critical element that will assist in building your knowledge of the subject matter. Exercise questions and tasks will guide and direct your learning and assist understanding of the readings and other material provided. It is not required that you reproduce extensive or complex mathematical formulae from the reading material for the exercises or other assessment tasks. You are however expected to be familiar with the existence of methods in the course material and to describe and comment upon their relevance and application in managing energy resource use. As this course provides an insight into the management of complex technologies in business, it is to be expected that you will have exposure to the complexities of the real world and the use of such technologies in solving practical and plausible situations. The exercises are aimed at providing some of that credible and real experience in a practical manner. Energy Management 11
Assessment general The assessment for the course is designed to measure your achievement of the following learning outcomes: Learning outcomes At the conclusion of the course you should be able to: discuss trends, innovations and policies related to energy usage at a business and societal level outline key market and resource issues related to energy use explain the basic features of energy and a range of energy technologies explain the basic effects of energy use on the environment analyse and make recommendations about energy management in your own organisational context Criteria for assessment Unless otherwise specified, the following criteria will be applied in assessing your written work: evidence of understanding of the concepts, theories and ideas developed in the course ability to apply these concepts to examples from your own experience clarity of description, explanation and attention to the focus of the assignment capacity to structure an assignment logically and limit it to the length required degree to which the material submitted for assessment addresses the specified or negotiated assignment requirements 12 Course Overview
Self assessment Throughout the Units you ll find exercises to complete as you study. These exercises aim to help you: actively make sense of what you are reading, and apply what you are reading to your own working context and experience Without stopping every so often to process what you are reading it s easy to lose concentration and miss the key learning points of the text. You ll find your own best approach to the exercises jotting down notes, discussing with fellow students and colleagues or maybe writing complete answers for later reference and revision. You ll soon find the exercises a valuable way of assessing whether you re understanding and developing the concepts and theories presented in the Units. Further advice on assessment Please refer to your Student Information Guide and the MBT Learning Guide Studying Successfully in the MBT to find out about: learning resources and support services how to prepare for and write your assignments presentation, format and referencing guidelines how to submit your assignments what to do if your assignment may be late examinations Both these guides are available for downloading from the MBT student website: http://www.student.mbt.unsw.edu.au. Coversheets Please attach one of the coversheets provided at the end of this Course Overview to the front of each of your assignments. Remember to keep a copy of your assignment in case your work is lost or mislaid. Copies of the assignment coversheets can also be downloaded at: http://www.student.mbt.unsw.edu.au/forms.html. Energy Management 13
Your assessment tasks There are two assignments and an examination for this course. Participation Throughout 10% Assignment 1 due Week 6* (Week 3 in Summer Session) 20% Assignment 2 due Week 12* (Week 6 in Summer Session) 30% Examination** 40% (Note that Summer Session is compressed into six weeks) * The Assessment Details section of the study guide and Course Key Dates Sheets (CKDS) list exact dates for lodgement of all assignments as well as the examination date. Download the CKDS for this session for this course from the MBT student website http://www.student.mbt.unsw.edu.au. ** Examination There will be a supervised open-book examination held after completion of the Units in this course. The examination date is fixed and cannot be varied. As this course is running in distance mode only in Session 1 2004 all students are required to nominate an examination supervisor and fax a completed Examination Supervisor Form to the MBT office no later than the end of Week 6. Any student electing to sit the examination on campus at Kensington is still required to submit the above form, noting campus as the venue. Those students will be notified of the exact examination time and location via email. You may take into the examination room your study guide, textbook, selfmade notes, pens, pencils and erasers. The examination will be of 2 hours duration plus 15 minutes reading time. Reference Bent R, Lloyd O & Baker R (eds), 2002, Energy - Science, Policy and the Pursuit of Sustainability, Island Press. 14 Course Overview