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close this bookEnergy after Rio - Prospects and Challenges - Executive Summary (UNDP, 1997, 38 p.)
close this folder3. New Opportunities in Energy Demand, Supply and Systems
View the document3.1 Introduction
View the document3.2 Demand Side: Energy and Energy-Intensive Materials Efficiency
View the document3.3 Supply Side: Renewables and Clean Fossil Fuel Technologies
View the document3.4 Fuels and Stoves for Cooking

3.1 Introduction

only attention to demand side energy issues and the level of energy services delivered will lead to a sustainable approach to energy

The adverse impacts of energy consumption and production can be mitigated either by reducing consumption or shifting energy supplies to options better able to support sustainable development objectives. Of the various entry points for efforts to reduce energy demand, it is technological performance that yields the largest and most accessible opportunities. Technological change has, by far, greater potential than changes in the patterns of consumption of goods and services, but this assessment must not preclude attempts to shift away from irrational and wasteful patterns of consumption.

3.2 Demand Side: Energy and Energy-Intensive Materials Efficiency

There is growing recognition in industrialised countries that some of the greatest and most cost-effective opportunities for sustainable energy development involve improving end-use efficiency by providing the same energy service with less energy inputs or, to achieve more energy services for the same energy input. Over the last decade, much has been learned about these opportunities, about the institutional obstacles to their exploitation, and about how policies might be better shaped to capture these opportunities. These opportunities are not nearly so well understood in developing countries where the need for improved energy end-use efficiency is greatest.

Classification of Energy Efficiency Measures: There are two types of energy-efficiency measures: (1) more efficient end-use of energy in existing installations (efficiency retrofits) through improved operation and maintenance and/or replacement of some components; and (2) more efficient end-use of energy in new installations, equipment, etc. This can be achieved through systematic introduction of more energy efficient systems and technology introduced at the point of capital turnover and expansion.

the greatest and most cost-effective opportunities for sustainable energy development involve improving end-use efficiency

Specific energy consumption can typically be reduced by 20-50% in the case of efficiency improvements in existing energy-using installations and 50-90% in the case of new installations (with respect to the energy use levels of the present average stock of equipment in industrialised countries). These reductions can be achieved by using the most efficient technologies available today and are usually cheaper than increasing supply. In developing countries the potential for demand reduction is often even larger. The potential for further efficiency improvements through continued research and development is high, as the performance of current technologies are far from their fundamental physical limits.

Industry: Significant potential to improve energy efficiency exists in all industries, but particularly in five energy-intensive industries: iron and steel, chemicals, petroleum refining, pulp and paper, and cement, which account for roughly 45% of all industrial energy consumption. Energy typically accounts for a large proportion of production costs in these industries. The introduction of advanced technology to reduce costs, improve product quality, and/or facilitate environmental protection will usually reduce energy requirements as well. Thus, the promotion of technological innovation in these industries will typically lead to substantial gains in energy efficiency. These opportunities are especially important for developing countries where infrastructure-building activities are giving rise to rapid demand growth for basic materials.

Commercial and Residential Buildings: The buildings sector includes a wide variety of specific energy applications such as cooking, space heating and cooling, lighting, food refrigeration and freezing, office equipment and water heating.

Studies estimate the potential savings in energy use from 30-50% in residential buildings for various industrialised countries. In commercial buildings, estimates vary from 25-55% in industrial countries, to up to 50-60% in economies in transition and developing countries. A wide variety of demonstration projects show that even larger reductions in energy use are feasible by a successful combination of currently available technologies in the construction of new buildings.

Transport: Transport energy use can be reduced by: 1) improving the efficiency of transport technology (e.g., improving automobile fuel economy); 2) shifting to less energy-intensive transport modes to achieve the same or similar transport service (e.g., substituting passenger cars with mass transit); 3) changing the mix of fuels used in the transport system; and 4) improving the quality of transportation infrastructure (e.g., roads, railways). See pages 22-23 for a discussion of vehicle technology and fuels.

substantial reductions in energy consumption can be achieved using the most efficient technologies available today and are cheaper than increasing supply

Significant reductions in energy use can be achieved by encouraging shifts to less energy-intensive modes of transport as strong variations in intensities exist for various modes. Shifting commuting from passenger cars to buses can result in a relative intensity drop. This can be achieved through an improved transport infrastructure to increase availability and access and/or by reducing demand. Planners are beginning to examine methods to reduce the demand for transport vehicles, or to optimise the use of existing infrastructure. Policies that encourage large shifts to public transit systems in densely populated areas such as Singapore, Curitiba and Manila have been shown to reduce overall energy demand. The example of Curitiba shows that land-use planning is an important tool to encourage a shift to mass transit.

Agriculture: Energy consumption in agriculture is divided into direct (e.g., tractor fuel, energy for irrigation, crop drying, etc.) and indirect (e.g., fertilisers, pesticides) energy use. It is estimated that only 35% of the total commercial energy utilised in US food production is consumed on the farm. The rest is used in food processing, packaging, storage, transport and preparation.

Potential energy savings can be found through changes in the use and design of tractors, reduced tillage and improvements in irrigation, drying, livestock production, horticulture, and nutrient recycling. Renewable energy sources can also contribute to savings in fossil energy used in agriculture. Examples are solar and wind energy, energy from biomass residues or products from energy cropping for heat and power production, wind as a direct source for irrigation, and solar energy as a direct source for drying.

Material Efficiency Improvement: Decreased use of (primary) materials to manufacture products or perform services will reduce energy use. Reducing material inputs to production can be achieved through more efficient use of materials and closing material chains (i.e., recycling waste and by-products back into the production process). Good housekeeping, material-efficient product design, material substitution or use of materials with improved properties, product and material recycling and decreasing inputs of primary materials all improve material efficiency. Similarly, practices that promote non-recoverable use of materials should be reduced. Reducing material intensity will also have effects on other components in the material chain (e.g., energy savings in transport as well as reduced material demand in providing transport). Eventually such actions will reduce society’s demand for the materials, leading to a structural change within the economy to a lower share of energy/material intensive services.

basic materials production is the most energy intensive so efforts should be made to use these materials efficiently

Recycling material also reduces energy use in the energy-intensive materials industries. Aluminium from recycled scrap reduces specific energy inputs by 90-95%; for iron and steel, the reduction is 60-70%; and for paper, 30-55%.

Macro-economic Impact of Energy Efficiency Measures: A once commonly held, but mistaken, view is that a country’s energy demand is proportional to its gross domestic product (GDP). This is true if, and only if, the structure of the economy and the energy intensities are constant. Thus, the so-called energy-GDP correlation is valid only during periods when there are no changes in the economy’s technical energy efficiency and/or structure. If however, there are changes in energy intensity due to improved efficiency, process or product changes, and/or there are changes in the contributions of different activities to the GDP (e.g., the share of basic materials manufacturing decreases and the share of less-energy intensive activities increases), the proportionality breaks down.

There are three factors responsible for the observed decline of energy intensities in most economies. The first factor is the improved efficiency of production of energy carriers (e.g., an increased number of kilowatt hours of electricity (kWh) generated per tonne of coal burned). The second factor is the improvement of the efficiency of energy end-use technologies - the energy required to perform an energy service (e.g., kWhe to achieve a certain illumination) or produce a product (e.g., kWhe per tonne of aluminium) has decreased over the years. The third factor involves structural changes in the use of energy-intensive materials whereby economies become less materials-intensive at higher levels of economic activity, leading to a less energy-intensive economy as a whole. This arises when consumer preferences shift to more valuable, less-materials-intensive products and production shifts to better materials (e.g., through replacement of conventional steels with modern high-strength steels in construction). There have also been declines in energy intensity as a result of a shift from goods production to services production.

By shifting to high-quality energy carriers and by exploiting cost-effective, efficient end-use devices it would be possible to improve living standards without significantly increasing per capita energy use above the present level. For instance, the energy requirements for the West European standard of living of the mid-1970s could be as low as 1 kW/capita, only 20% higher than the 1986 level in developing countries, if state-of-the-art energy-efficient technologies were used.

Conclusions: End-use energy efficiency improvement reduces global warming, air pollution (acid precipitation, smog in the urban and industrial environment), waste production (ash, slag), and water and thermal pollution. End-use efficiency improvement is a cheap energy “source” and, in many cases, far cheaper than new supply. Other economic benefits are reduced costs of energy transformation and generation, reduced fuel imports and increased energy security. Technology developments have neither reached their limits in the provision of continuing improvements to energy efficiency nor will they in the foreseeable future. Large potential exists for energy savings through end-use improved energy efficiency in the buildings, transport and industrial sectors.

The opportunities for improving energy efficiency are far greater with new investments than with retro-fitting existing equipment. These are especially interesting for developing countries because most investments in infrastructure and equipment aimed at economic growth are yet to be made.

3.3 Supply Side: Renewables and Clean Fossil Fuel Technologies

Energy supply options that increase efficiency (the energy efficiency of making energy carriers from primary energy sources), reduce pollutant emissions and reduce emissions of greenhouse gases can contribute to sustainable development objectives. The following are some of the opportunities: a growing role for natural gas, promising advanced fossil and renewable energy technologies for electric power generation, alternative electric-drive technologies for motor vehicles, alternative fuels for transportation, and expanding roles for fossil fuels in a greenhouse-gas-constrained world via fuel decarbonisation and storage of the separated CO2.

Natural Gas: The contribution of natural gas to the global energy economy has increased and the share of oil and coal has declined. This trend is projected to continue as: 1) ultimately recoverable conventional natural gas resources are expected to be at least as large as ultimately recoverable conventional oil resources and natural gas reserves are increasing faster through exploration than the reserves of oil; and 2) natural gas is currently consumed at approximately 58% of the rate for oil. The shift to natural gas is driven by its low cost in many parts of the world, its convenience for shipping as liquefied natural gas (LNG) and the environmental attractions of natural gas and LNG as a fuel. Natural gas has the lowest specific CO2 emission rate of all fossil fuels and can, in general, be used more efficiently than coal. Hence, as the role of natural gas expands at the expense of coal and oil, greenhouse gas emissions will be reduced. However, increasing natural gas consumption in many industrialised countries is currently the main source of their rising CO2 emissions.

as the role of natural gas expands at the expense of coal and oil, greenhouse gas emissions will be reduced

Advanced Technologies for Electric Power Generation: In fuel-based electric power generation there are good prospects for routinely achieving efficiencies of over 60-70% or more in the longer term, compared to the present 30% world average. Large efficiency gains can also be achieved by replacing the separate production of heat and power with combined heat and power (CHP) technologies. Moreover, rapid progress is being made in the use of renewable energy in power generation.

it is possible to raise the standard of living without significantly increasing energy use

Thermal Power Generation: The natural gas-fired gas turbine/steam turbine combined cycle has become the thermal power technology of choice in regions having ready access to natural gas and LNG. This is because of the low unit capital cost of the power plants, high thermodynamic efficiency (now in the range 50-52%, but expected to reach 56% by 2000), low air pollutant emissions (including nitrogen oxides) without the use of stack-gas controls and low CO emissions (almost two-thirds less than for modern coal steam-electric plants).

Since the feasibility of firing combined cycle power plants with coal via the use of closely coupled coal gasifiers was successfully demonstrated in the late 1980s, there has been much progress in commercialising the coal-integrated gasifier/combined cycle (CIG/CC). This technology makes it possible to adapt the continuing advances in gas turbine technology to coal with pollutant emissions as low as for natural gas combined cycles. Efficiencies of around 45% should be reached by 2000, at which time the technology is expected to be fully cost-competitive with conventional coal steam-electric power with flue gas desulphurisation.

Fuel Cells: Fuel cells, devices that convert fuel directly into electricity without first burning it to produce heat, are now beginning to enter CHP markets. Offering high thermodynamic efficiency, quiet operation, zero or near-zero pollutant emissions and low maintenance requirements, they will often be economically viable even in small-scale (100 kWe or less) CHP installations sited unobtrusively close to end-users, e.g., in residential and commercial buildings. The technology will also facilitate decentralised rural electrification.

Wind Power: A wind power industry was launched in the early 1980s, largely as a result of government incentives to stimulate its development. Costs have fallen dramatically. In the US, the cost of electricity from wind in areas with good wind resources is about the same as for electricity generated from coal. Globally, installed capacity continues to rise rapidly - from 3,100 MWe in 1993 to 4,800 MWe in 1995. While deployed initially in industrialised countries wind power is now growing rapidly in some developing countries (e.g., wind capacity in India reached 650 MWe in early 1996). While there are sometimes institutional barriers to its deployment in some areas (and some concerns about visual intrusion), wind power is technologically ready to be deployed as a major option for providing electricity.

wind power is technologically ready to be deployed as a major option for providing electricity

Biomass: Biomass is used as fuel for steam turbine-based CHP generation in the forest-product and agricultural industries of several countries. The biomass used as fuel consists mainly of the residues of the primary products of these industries. There is also a growing trend to co-firing coal-fired power plants with supplemental biomass inputs. In developing countries, there is large scope for efficiency improvements in the use of biomass for energy in industry and growing interest in introducing modern steam-turbine CHP technology (e.g., in the cane sugar industry).

An advanced technology that could make it possible for electricity derived from plantation biomass to compete with coal in power generation is the biomass integrated gasifier/combined cycle (BIG/CC). In addition to plantation biomass, less costly biomass residues can be used. Although BIG/CC technology is not as advanced as coal integrated gasifier/combined cycle (CIG/CC) technology, several demonstration projects are under way. Catching up might not take long because: 1) much of what has been learned in developing the CIG/CC is readily transferable to BIG/CC technology; 2) biomass is in some ways a more promising feedstock than coal for gasification (e.g., it contains very little sulphur and is much more reactive than coal); and 3) BIG/CC would facilitate decentralised rural electrification and industrialisation and thereby promote rural development (a potentially powerful market driver). Moreover, the modest scale of BIG/CC power plants relative to conventional fossil fuel and nuclear plants facilitate financing and cost-cutting as a result of “learning-by-doing.”

advanced technology in bioenergy would facilitate decentralised rural electrification and thereby promote rural development

Large scale biomass development also poses challenges to biodiversity, land availability, water resources and local pollution which need to be carefully addressed.

Photovoltaic Power: Worldwide sales of photovoltaic (PV) modules have increased from 35 peak megawatts/year (35 MWp/year) in 1988, to 83 MWp/year in 1995, with production expected to be 91-93 MWp/year in 1996. So far, most applications have been for a variety of consumer electronic and other niche markets, but both stand-alone and grid-connected electric-power applications are becoming increasingly important applications of PV technology.

PV technology is now cost-effective in small, stand alone and some grid-connected applications

PV technology is being successfully deployed in small-scale, stand-alone power applications remote from utility grids. Decentralised rural-electric applications, largely for domestic lighting, refrigeration and educational purposes, make it possible to serve modest household lighting and other rural electric needs while avoiding the economic inefficiencies of bringing centralised power supplies to these customers in remote areas. However, stand-alone PV systems have to compete in biomass-rich regions with biomass-based community-scale electricity generation serving households.

PV technology is now also cost-effective in some high-value, grid-connected applications where PV units are sited near users.

Central station PV power plants, which offer opportunities for bringing costs down quickly, are currently being planned in Hawaii and India.

Solar Thermal Electric Power: High-temperature solar thermal-electric technologies use mirrors or lenses to concentrate the sun’s rays onto a receiver where the solar heat is transferred to a working fluid that drives a conventional electric power-conversion system. This technology is rapidly becoming cost-effective, first in hybrid power plants integrating solar thermal and fossil-fuel fired power generation.

Some 354 MWe of solar thermal capacity based on the use of parabolic trough collectors, supplemented by gas-fired auxiliary boilers, was built in California from 1984-91, during which time the unit capital cost was reduced by half. The company that built the plants went bankrupt in 1991, when government commercialisation incentives were suddenly withdrawn. Plans are now underway to revive the technology with hybrid solar thermal/gas turbine-steam turbine combined cycle technologies as a transitional strategy for advancing solar technology while fossil fuel prices are low.

Power Systems: Large-scale adoption of renewable electric technologies will require that they be connected to electric utility grids. Intermittent solar and wind power plants can be managed by a combination of new load-management techniques (e.g., using a time-varying electricity price to induce load shifting); backing up the intermittent renewables with an appropriate mix of dispatchable generating capacity; using interconnecting grid systems for transferring electricity over large distances to cope with some of the daily variations of wind and solar energy; and energy storage (mechanical, electrochemical, thermal or other).

Hydropower plants allow prompt regulation and can back up intermittent energy generators, as can some types of thermal power plants. The ideal thermal complements to intermittent renewable energy plants on grid systems are plants characterised by low unit capital cost (so they can be operated cost-effectively at low capacity factor) and fast response times (so they can adjust to rapid changes in intermittent supply output). Natural gas-fired gas turbines and combined cycles satisfy these criteria, but fossil and nuclear steam-electric plants do not. Thus, natural gas and renewable electric systems are complementary supply strategies, while nuclear and intermittent renewables are competitors where there is high grid-penetration level.

Electric-Drive Vehicles for Transportation: Electric-drive vehicles offer both the potential for dramatic reductions in air pollutant emissions and marked improvements in fuel economy. The common characteristic of these technologies is that they employ electric motors to drive the wheels and extract energy from the car’s motion via “regenerative braking” when the vehicle slows down.

alternative clean transport fuels are likely to be especially important in developing countries

Batery-powered electric vehicles are attractive options for short-range (e.g., commuter) applications. An option offering wider market potential is a hybrid electric drive vehicle that couples a small internal combustion engine and electric generator to provide “baseload electric power” with a small battery, ultracapacitor or flywheel, as a “peaking power” device. In automotive application, at least a two-fold gain in energy efficiency is feasible via the use of such hybrids.

Fuel cells are also attractive options for electric-drive vehicles. Current interest is focused on the proton exchange membrane fuel cells (PEMFCs). In mass production, vehicles powered by PEMFCs would have much lower costs and much longer ranges between refuelling than battery-powered electric vehicles. Potentially, the PEMFC can compete with the petroleum-fuelled internal combustion engine in automotive applications, while providing transport services at a two- to three-fold higher energy efficiency and emitting zero or near-zero local air pollution.

Before fuel cells are used in automobiles they will most likely be deployed in buses, trains and small utility vehicles such as “3-wheeler” taxis, common in many developing countries. In economies where new power stations would need to be built to provide extra capacity for high cost railway electrification, fuel-cell locomotives provide an attractive option.

Clean Fuels for Transportation: There is growing interest in alternative transportation fuels because of difficulties of meeting air quality goals with petroleum-derived fuels and the longer term need for alternatives to oil in transportation (perhaps before the end of the first quarter of the next century). Alternative clean transport fuels are likely to be especially important in developing countries. This assessment is based on the difficulties of meeting air quality goals with tailpipe emission control technologies installed on petroleum-fired internal combustion engine vehicles in the densely populated megacities of the developing world.

Some of the alternatives that merit consideration are reformulated gasoline, compressed natural gas, alcohols (methanol and ethanol), synthetic middle distillates, dimethyl ether and hydrogen.

Efforts to produce biofuels for transport have focused on ethanol from maize, wheat, sugar cane and vegetable oils such as rape-seed oil. All these traditional biomass-derived transport fuels are uneconomic at present. However, there are good prospects for making sugar-cane-derived ethanol competitive at the present low world oil price if electricity is cogenerated from cane residues using BIG/CC technology along with ethanol from cane juice. In contrast, prospects are poor for making ethanol economically from grain.

Advanced biofuels derived from low-cost woody biomass could offer higher energy yields at lower cost and with lower environmental impacts than most traditional biofuels. The advanced biofuel that has received the most attention is ethanol derived from wood via enzymatic hydrolysis. Other options include methanol and hydrogen derived via thermochemical gasification of biomass. The potential for displacing gasoline used in internal combustion engine cars with biomass-derived fuels used in fuel cell cars is much higher than using wood-derived ethanol in internal combustion engine cars, as fuel cell cars are more energy-efficient.

advanced biofuels could offer higher energy yields at lower cost and with lower environmental impacts than most traditional biofuels

Hydrogen offers good prospects for simultaneously dealing with the multiple challenges facing the energy system in the 21st century. Hydrogen is a clean, versatile and easy-to-use energy carrier. It can be used safely if systems are designed to respect its unique physical and chemical properties, as is necessary in the use of any fuel. It can be derived from a variety of primary energy sources. Even if derived from fossil fuels, hydrogen used in fuel cell vehicles would emit significantly lower lifecycle CO2 than gasoline internal combustion vehicles, because fuel cell vehicles are much more fuel-efficient.

Decarbonisation of Fuels and CO2 Storage: It is feasible to remove CO2 from fossil fuel power plant stack gases. This brute force approach reduces the conversion efficiency and increases the cost of electricity substantially. The less costly approach involves introducing technologies that give a high value to hydrogen (e.g., low-temperature fuel cells used for transport and distributed CHP applications). The reason is that hydrogen production from coal, oil and gas involves generating a stream of relatively pure CO2 as a “free” byproduct (i.e., the cost of separating the CO2 from the hydrogen is part of the production cost, and not an added expense). The potential for storing this CO underground at low cost in depleted oil and gas fields and deep acquifers is large.

3.4 Fuels and Stoves for Cooking

The most important energy service today in many developing countries is cooking. Traditional fuels - fuelwood, crop residues and dung - are the main fuels used for cooking in rural areas of these countries. In many urban areas, charcoal and coal are also used. More than half of the world’s 2 billion poor people depend on these crude polluting fuels for their cooking and other heating needs.

more than half of the world’s 2 billion poor people depend on these crude polluting biomass fuels for their cooking and other heating needs

Higher incomes, and reliable access to fuel supplies, enable people to switch to modern stoves and cleaner fuels such as kerosene, LPG and electricity. This transition can be widely observed around the world in various cultural traditions. These technologies are preferred for their convenience, comfort, cleanliness, ease of operation, speed, efficiency and other attributes. The efficiency, cost and performance of stoves generally increase as consumers shift progressively from wood stoves to charcoal, kerosene, LPG or gas, and electric stoves.

There can be a substantial reduction in both operating costs and energy use in going from traditional stoves using commercially purchased fuelwood to improved biomass, gas or kerosene stoves. There are also opportunities to substitute high-performance biomass stoves for traditional ones or to substitute liquid or gas (fossil- or biomass-based) stoves for biomass stoves. Local variations in stove and fuel costs, availability, convenience and other attributes, and in consumer perceptions of stove performance, will then determine consumer choice.

In rural areas, biomass is likely to be the fuel for cooking for many years to come. Alternatively, particularly in urban areas, liquid- or gas-fueled stoves offer the consumer greater convenience and performance at a reasonable cost.

From a national perspective, public policy can help shift consumers toward the more economically and environmentally promising cooking technologies. In particular, improved biomass stoves are likely the most cost-effective option for the near- to mid-term, but require significant additional work to improve their performance.

In the long term, the transition to high quality liquid and gas fuels for cooking is inexorable. With this transition, substantial amounts of labour now expended to gather biomass fuels in rural areas could be freed; the time and attention needed to cook using biomass fuels could be substantially reduced; and household, local and regional air pollution from smoky biomass (or coal) fires could be largely eliminated. The use of biomass-derived liquid or gaseous fuels (e.g., ethanol, biogas, producer gas) for cooking and other advanced options are particularly relevant.