Energy system inefficiencies

Most energy services have surprisingly low minimum energy input requirements. Figure 5.2 shows the average exergy² efficiency of electricity and total weighted average of selected energy services as a percentage of primary energy. The services considered are space heating, transportation, and lighting. There are many difficulties and definitional ambiguities involved in estimating the exergy efficiencies for comprehensive energy source-to-service chains or entire energy systems, and only few exergy efficiency estimates have been attempted to date. All estimates conclude that source-to-service exergy efficiencies are as low as a few percent. For example, Ayres (1988) calculates an overall source-to-service exergy efficiency of 2.5 per cent for the United States. Wall (1990) estimates a source-to-useful exergy³ efficiency in Japan of 21 per cent, and Wall et al. (1994) calculate a source-to-useful exergy efficiency of less than 15 per cent in Italy. Schaeffer and Wirtshafter (1992) estimate a primary-to-useful energy efficiency of 32 per cent and an exergy efficiency of 23 per cent for Brazil. Other estimates include Rosen (1992) for Canada and Özdocan and Arikol (1995) for Turkey. Estimates of global and regional primary-to-service exergy efficiencies vary from 10 per cent to as low as a few percent (Gill) et al. 1990, 1995; Nakicenovic et al. 1993).

- Fig. 5.2 Source-to-service energy efficiencies for a weighted basket of energy services (solid line) and exergy efficiency of electricity (dashed line) for the industrialized countries, 1990 (Source: adapted from Nakicenovic et al. 1993)

Figure 5.2 reveals that the present practice of energy service provision in the industrialized countries is quite inefficient when compared with the ideal exergy efficiencies. The large inefficiency of the system indicates that most services could be provided with considerably lower energy inputs than those represented by current practice. With the exception of the electricity source-to-service chain, the present energy systems exhibit lowest efficiencies at the interface between the traditional energy sector and the domain of energy services (the service technology component of fig. 5.1). In the case of electricity, the generating process provides the largest potential for efficiency improvement along the electricity source-to-service supply pathway. One should note, however, that electricity also has significant room for improvement at the useful-to-service interface.

Obviously, the opportunities for efficiency improvements suggested by figure 5.2, i.e. closing the gap to 100 per cent, are theoretical potentials that in real-life systems can never be fully exploited. Still, an overall exergy efficiency in the developed world of less than 10 per cent reflects a significant efficiency gap, a gap that represents opportunities for future innovation, policy incentives, and business development. Energy and environmental policy should encourage public and private sector investment towards the narrowing of this gap wherever this is techno-economically feasible, because more efficient provision of energy services not only reduces the amount of primary energy required but, in general, also reduces material requirements and emission releases to the environment. Although efficiency is an important performance parameter influencing investment or purchase decisions, it is not the only one. Other, and often more important, issues include investments, operating costs, lifetime, peak power, ease of installation and operation, plus many other technical, economic, and convenience factors. For entire energy systems, further consideration must be given to regional resource endowments, conversion technologies, geography, information, time, prices, investment finance, operating costs, age of infrastructures, and know-how.

In essence, figure 5.2 contains one answer to the question of which system links are likely to change. It identifies energy service technologies as the critical component for overall energy system performance improvements. Not only is the energy system driven by service requirements, but the end-use technologies (e.g. the furnace linking final energy and useful energy) and infrastructures (e.g. building codes and insulation standards, which determine the share of useful space heating energy that becomes available for providing these energy services) constitute the system component with the largest potential for narrowing of the efficiency gap. As already mentioned, service technologies are intimately tied to settlement patterns, as well as to housing, transportation, and industrial production infrastructures. These infrastructures are as much responsible for the current inefficiency of the energy system as are the numerous energy conversion technologies associated with these infrastructures.