the scope for energy conservation in the eec

The scope for energy conservation in the EEC

Fred Roberts

No one can know how the total demand for energy by the European Economic Community (EEC) will grow over the next twenty years or so. However, we can form some idea of the impact which energy conservat ion technology, vigorously applied, could have on energy demand growth over this timescale. This paper is an attempt at doing this. After describing the present pattern of energy flows through the EEC as a whole, an examination is presented of the potential for conservation in each area by the use of appropriate technology. The results are then aggregated to see the possible effect on total energy demand growth up to the year 2000.

Fred Roberts is an energy consultant. He is based at Summerf ie ld House, Bainbridge, Leyburn, North Yorkshire, UK and was former ly Head of the C o n s e r v a t i o n Group , Ene rgy Technology Support Unit, Harwel l ,

UK.

The author acknowledges the assistance he has received from W. Van Gool, B. Wahl, M. Allion. A. Williams, S. Johnson, G. Leach and the staff of the ETSU information office. Thanks are also due to Environmental Resources Ltd, for permission to publish this paper which is based on a report first commissioned by them in 1977 as part of a major study on energy carried out for the EEC.

1Report on the Achievement of the Community Energy Policy Objectives for 1985, COM (76)9, European Economic Commission, Brussels, 16 January 1976, p2.

The role of conservation in the energy policy of the European Economic Community (EEC) has been stated as follows:

The reduction of energy consumption growth is an essential long term objective which must be striven for ceaselessly, namely without being influenced by the inevitable changes in situation. This objective will, in effect, help to reduce Community dependence on the exterior, in line with the generally expressed concern for a better management of the world's resources.'

The main object of this paper is to examine the potential for reducing the EEC's energy demand by the end of the century using currently available technical options for improving efficiency in the use of fuels.

Quantifying the effects of energy saving measures is fraught with difficulty. The potential energy savings resulting from specific conservation measures are difficult to calculate. Estimates of the conservation effect of government measures call for judgements about the response of industries and households to such measures. Because conservation is often statistically unobservable and behaviour in response to higher prices or mandated conservation measures is not well understood, our findings are necessarily speculative.

Present patterns of EEC energy use

Before examining conservation possibilities we consider EEC energy flows. Figure 1 is an energy flowchart for 1975 indicating the amounts of energy lost or rejected at each stage, from extraction through to useful energy attributable to each consumer. 2 In arriving at this chart, some arbitrary assumptions have been made about the efficiency of various stages, particularly concerning the ways in which the heat supplied to industry, transport and 'other' consuming sectors is currently used. Although these efficiency factors could be challenged, the degree to which they might be altered is too small to affect the overall picture. Also, the chart does not show all the energy cross-flows and interactions; to have done so would have made the diagram too complex. Inaccuracies in the available statistics in any case prevent the compilation of an exact chart.

Moving from the left to right of Figure 1, we start with the four main primary energy inputs to the nine EEC member countries. Coal includes both 'hard' coal and the 'brown' and lignite varieties. The hydro and nuclear inputs going to the electrical generating industry come next, followed by natural gas (town gas is subsumed in this

O301-421 5/79/O201 17-14 $O2.00 © 1979 IPC Business Press 1 1 7


[03 Hard

Coal

318 125 &Orq

Hydro and nucleo~

Tot a I I primary Gas (includes -~_.J__.__._L.__L energy [ town gas) 150 input 212 (1300 mice) 1~2 ,,)/ /

~.7 /

] Oil -- ~ -

i --S ,~Non-energyuses • 70

56 Figure 1. Energy flowsheet for EEC in 1 975. All figures are mtce. Source." Eurostat, Energy Statistics Yearbook, 1970-75, Office for Official Publications of the European Communities, Luxembourg, updated December 1 976; Quarterly Bulletin of Energy Statistics, Office for Official Publications of the European Communities, Luxembourg, No 4, 1976; Energy Statistics 1973-75, OECD, Paris, 1 976; and OECD, World Energy Outlook, OECD, Paris, 1977.

Table 1. Energy efficiency factors for major fuels (%)

Coal 97 G as 94 Oil 92 Coke 78 Electricity 32

2The main statistical sources used are: Eurostat, Energy Statistics Yearbook, 1970-75, Office for Official Publications of the European Communities, Luxembourg, updated December 1976; Quarterly Bulletin of Energy Statistics, Office for Official Publications of the European Communities, Luxembourg, No

continued on p 119

2:38

23

Electricity Industry RC~ :389

214 (Useful)

OIl

~1~5 ~ Hausehalds, 70 comm#rrp public ogricu 519

185 I 185 Transport

175

144 (Useful)

!75

37(Useful)

Total useful energy ( :395 mice )

• - Lasses 148

input but it is now very small) and finally petroleum. The widths of the various bands in the diagram are in approximate proportion to the amount of contained energy. The fuels are processed into marketable forms, ie 'delivered energy'.

In order to arrive at values for the energy lost or rejected in processing primary fuels to delivered energy (shown by solid arrows in Figure I) energy conversion efficiency factors were determined. These are listed in Table I. The efficiency factors, which were derived from the available statistical data, also take into account distribution losses, so far as the data can be interpreted.

The delivered energy flows into the three main consuming sectors, 'industry' (minus the energy industries), 'households, commerce, public buildings and agriculture' and 'transport'. Each of these sectors converts delivered energy into 'useful energy'. We can postulate an overall efficiency of energy use for each of the three sectors, for the conversion of the 'delivered energy' to 'useful energy'. Some of these overall efficiencies are presented in Table 2.

On the basis of the figures in Table 2, it was decided to use 45% for 'households etc', 55% for 'industry' and 20% for 'transport', thus arriving at the useful energy estimates shown in Figure 1. 3

If we now sum up the losses from the whole system shown in Figure 1, they account for 70% of the total energy present in the primary fuel inputs to the EEC. Thus, only 30% of the primary inputs finish up as 'useful energy'. This would seem to indicate much scope for improving the overall efficiency of energy use throughout the Community. If, for instance, we were able to raise the overall efficiency from 30% to 60%, we would halve our need for primary energy.

118 ENERGY POLICY June 1979

Sources: Economic Commission for Europe, Increased Energy Economy and Efficiency in the ECE Region, E/ECE/883/REV1, United Nations, New York, 1976, p42; Saving Europe's Energy, European Communi t ies Commission background note, 9 January 1975; and German Energy Research Programme 1974-77, English translation, Nation31 Coal Board, UK, 8 January 1974.

continued from p 118 4, 1976; Energy Statistics 1973-75, OECD, Paris, 1976; and OECD, World Energy Outlook, OECD, Paris, 1977. 3 Overall efficiencies do, of course, vary somewhat between countries. 4 Economic Commission for Europe, Changing Pattern of Energy Use in the Iron and Steel Industry, Report ECE/STEEL/12, United Nations, New York, 1976, p 78. s H.M. Finniston, 'The Steel Industry in Japan and Great Britain', paper BISI 14387, The Metals Society, London, 1976.


Table 2. Overall efficiency of energy use I%)

Country or region Sector

Households Industry Transport

Western Europe 42 44 22 EEC 45 55 17 Federal Republic of Germany 45 55 20

We now examine energy conservation options in the EEC in four broad sectors: industry; households, commerce, public buildings and agriculture; transport; and the energy industries taken together as a group.

Energy conservation in the EEC industrial sector

It can be seen from Figure 1 that industry is the largest consuming sector, accounting for 389 mtce per year of the delivered energy in EEC countries. In primary energy terms, this is equivalent to 550 mtce, or 42% of the total energy input to the EEC. Industry also uses most of the non-fuels output from the oil industry, mainly as feedstocks for the organic chemicals and plastics industries. If we add on the energy content of these, we find that industry uses about 47% of the primary energy input to the Community.

Nearly 50% of the total demand is generated by three highly energy-intensive industries - iron and steel, chemicals, and aluminium. We shall examine each of these in turn. The other 50% is accounted for by some smaller energy-intensive industries such as cement and glass, and the non-energy-intensive industries.

Iron and steel industry This is by far the largest single industrial consumer of energy, accounting for something like 25% of the industrial sector demand. While results obviously differ from country to country, on average the overall energy content of a ton of steel has been falling slightly during the last decade; but the composition of the energy input has undergone considerable alteration?

The savings potential in this industry will depend upon the development and introduction of iron and steel making technologies, the availability of scrap and the degree to which waste heat and low grade heat can be recovered and used. Given an identical amount of waste heat, fuel savings depend upon the purpose for which the secondary energy is used. There may be a problem for the steel industry in finding an adequate use for all the waste heat streams; it may well be necessary to find uses outside the steelworks. Sir Monty Finniston, ex-chairman of the British Steel Corporation, has pointed out that careful attention will have to be paid, in the long term, to the proper siting of steelworks so that markets can be available for the excess low grade waste heat. One solution proposed by Finniston, which would yield a large net saving of energy, would be to site steelworks close to chemical works)

How much energy saving is technically possible in the iron and steel industry, given adequate lead time? In an unpublished study, I estimated that a net energy saving of 28% was possible for the UK iron and steel industry, if the best energy conservation practice were

ENERGY POLICY June 1979 119


to be adopted over the next 20 years. It has been said that the French iron and steel industry could improve its efficiency so that a saving of 20°/6 in energy per unit of output could be achieved as early as 1985. 6 Taking into account all likely future trends in this industry in the long term, according to a recent Economic Commission for Europe (ECE) Report, a 20-25% improvement in efficiency is not only technically possible, but also practically possible. 7

For the present purpose, we will assume that a 20-25% saving of energy per unit of finished steel output could be achieved by the Community, given 20 to 25 years.

OECD, World Energy Outlook, op cit, Ref 2, p 66. z Economic Commission for Europe, Increased Energy Economy and Efficiency in the ECE Region, E/ECE/B83/REV1, United Nations, New York, 1976, p 67. e At a meeting of the European Federation of Chemical Engineering, organized by the UK Institution of Chemical Engineers, UK, 1977. 9 Ibid. lo UK Department of Energy, Energy Savings: The Fuel Industries and Some Larger Firms, Energy Paper 5, HMSO, London, 1975. 11j. Over and A. Sjoerdsma, Energy Conservation-Ways and Means, Future Shape of Technology Foundation, The Hague, 1974. This report was presented at the 9th World Energy Conference, Detroit, 1974. 12 Shell, The National Energy Problem: Potential Energy Savings, Houston, Texas, 1973.

Chemical industry This is the second largest industrial group in terms of energy consumption, accounting for about 15% of energy demand in the industrial sector. This share can be expected to increase in the future as a result of the good growth prospects for this industry. The structure of energy consumption in the chemical industry is complicated since energy is consumed both as a fuel and as a raw material (feedstocks to organics).

In 1977 two large international firms announced surprisingly high targets for energy saving in the short- to medium-term. 8 Monsanto expected that in 1980 their fuel consumption per unit of output would be 25% less than it was in 1972. By 1985 they anticipated a reduction of 35%. The countries covered are Canada, USA and certain European countries. A representative of ICI (USA) Inc has talked of similar energy-saving targets for his firm. 9

In the longer term, energy-saving possibilities in the chemical industry are likely to result not only from the introduction of new processes, or process stages, but also from what it terms 'debottlenecking' and 'rationalization'. Since this is a high growth industry, there will be opportunities to shut down smaller and less efficient plants, as the newer and larger capacity plants predominate. ICI in the UK plan to increase the capacity of a fibres-intermediates plant by 180% and at the same time reduce unit energy consumption by 35-40%, mainly because of these factors, l°

A Dutch report has postulated an overall scope for improvement in energy-use efficiency of 15-20% in the basic chemical products industry of the Netherlands, H and 10-15% for the industry as a whole has been suggested in a report by Shell. 12 The French chemical industry has signed an agreement with the Union des Industries Chemiques to reduce consumption in that industry by 12½% by 1980.

Taking these various forecasts into account, it seems reasonable to assume that a 15% saving of energy per unit of output in the EEC chemical industry should be attainable by the late 1980s, and then 20% within two decades.

The aluminium industry The aluminium industry probably accounts for 2-3% of demand by the industrial sector. Energy, both thermal and electric, but especially the latter, is required to refine bauxite ores to alumina and to reduce this material by an electrochemical process to the metal. The energy content of the product is very high indeed. Such material is called 'primary aluminium', to distinguish it from metal which has been produced from recycled scrap, in which case it is called 'secondary


13 OECD, World Energy Outlook, op cit, Ref2. 14 j . Over and A. Sjoerdsma, op cit, Ref 11.


aluminium'. The energy required to produce secondary metal from scrap is very small.

Thus, the major source of improvement in energy use in this industry would be to increase recycling of used aluminium scrap. At present, it is said that about 20% of aluminium scrap is recycled in the Netherlands, but only 4% in the USA, and the figure varies widely between member countries of the EEC. If it were possible to increase the scrap ratio from, say, 20% to 30%, this single factor would mean an improvement in the overall energy efficiency of the aluminium industry of about 12%. Clearly, governments would have to create incentives to increase the scrap collection and reprocessing rate if such a target were to be set.

It is likely that aluminium production will rise at rates above the average growth rate for industry as a whole. The efficiency of energy use in the aluminium industry has been rising over the last few decades and is now said to be around 30% for primary metal. The existing processes can now probably only marginally improve on this efficiency and major savings of energy will require the introduction of new technology, such as the new Alcoa process, said to have an overall efficiency of around 40%. Such developments are however unlikely to improve the overall performance of the aluminium industry inside a decade.

We may summarize the possibilities for conservation in aluminium production as being about a 10-12% saving by, say, 1985 and perhaps 25% later in the century (per unit of output). To achieve the latter figure, governments might have to ensure that adequate investment takes place in developing and introducing the new processes for primary metal production.

Other industries For the rest of EEC industry, what we might call 'general industry', the prevalent view over the last year or two, has been that a 15% saving of energy per unit of output is a worthwhile and achievable target by 1985. The OECD Secretary-General has said that 'net industrial savings of some 15-20% could be attainable in the OECD area by 1985, given appropriate government policies and a favourable investment climate'. ~3

The French Energy Conservation Agency announced in 1976 that it expected French industry, on average, to achieve energy savings of 15% by 1985, compared with 1973. Seventeen industries have concluded agreements with the French government to reduce energy consumption (per unit of output) by 13% by as early as 1980, using 1973 demand as baseline. A team of Dutch engineers has reported 15% energy saving to be feasible by 1985 for a large group of general industry in the Netherlands. They also implied that in the longer term much bigger savings were technically possible, because actual efficiencies of energy use were currently only about 40-50% whereas they could be 65-75%.~4

Although there seems to be a fair measure of agreement between experts as to a potential saving of 15% by 1985, there is little forecasting on potential savings by industry in the longer term. Opinions are difficult to obtain on what might be achieved in the general industrial sector by the end of the century. I have looked into the possibilities for the UK and have canvassed the views of various experts with experience of manufacturing industry. In general, a 25-



30% saving, given two decades of lead-time, was thought to be

v

u l

o to

~ 5

30 B

25 *

20 0 ,,

0 J I I I I 1976 80 84 88 92 96 2000

F igure 2. Forecasts f rom var ious

sources of potent ia l energy savings in UK 'general industry" (excluding metal industries). Each source is denoted by a di f ferent symbol . Bars indicate range of forecast.

technically feasible. It is useful to plot a graph showing how possible savings in general industry might accrue against time. Such a curve is shown in Figure 2 and represents the opinions of the various authorities consulted (who are not named). It must be stressed that this curve is for the UK. There is neverthelesss no reason not to assume a similar curve for those countries which consume the greatest amount of energy in the EEC: the Federal Republic of Germany, France, Italy and the Netherlands. The curve in Figure 2 rises steeply at first, due to the adoption of conservation measures which are relatively easy to introduce in the short term and give a good return for the effort and cash invested. After 20% saving by 1985, the rate of rise slackens as opportunities begin to decrease and savings are mainly obtained by heavy capital investment. The curve is becoming fairly flat as it approaches 30%, by the year 2000. Beyond that date, further saving may still be possible. The curve is limited by the technical vision of contemporary engineers and other specialists; as knowledge and technology advances, new horizons may open. If the price of energy became very high as we were approaching the end of this century there would be a great incentive to develop new energy-saving processes and devices unknown to the present generation of technical people.

Energy conservation in EEC 'households, commerce, public buildings and agriculture' We note from Figure 1 that the 'households etc' sector of the EEC currently accounts for 319 mtce of delivered energy per year. That is 455 mtce, primary energy equivalent.

The 'households etc' sector is dominated by direct residential consumption of energy. However it also includes all buildings which are not households or industrial buildings, ie public sector buildings such as central and local government offices and also buildings used by commerce, retail trades and services generally. Energy attributable to this sector also includes agricultural uses, excluding such inputs as fertilizers which are highly energy-intensive, but which have been counted in the industrial sector statistics. We therefore first look briefly at agriculture.

is If fertilizers and pesticides were included, which strictly speaking they should be, the percentage would be much higher. le Economic Commission for Europe; op cit, Ref 7, p 70.

Agriculture This is generally understood here to include horticulture, fisheries, forestry, but excludes food processing which comes under 'industry'. It is estimated that agriculture accounts for 3-4% of the total delivered energy in Western Europe./5 The percentage will of course vary between countries.

The main fuels used are petrol and diesel together with some electricity. Energy is used, in decreasing order of importance, for tractors, trucks and other farm machinery, irrigation, heating, lighting, ventilation and crop drying. The overall efficiency in energy use in agriculture is probably around 30%, being dominated by the efficiencies of combustion engines. The scope for improvement in efficiencies is possibly some 20%, by improved production structures, new techniques, especially the recycling of agricultural wastes, methane production from wastes, use of natural fertilizers and finally changes in product demand structures. ~6

122 ENERGY POLiCY June 1979

17A breakthrough in the conversion of agricultural wastes to hydrocarbons could raise the lower limit of this range. la F. Romig and G. Leach, Energy Conservation in UK Dwellings: Domestic Sector Survey, International Institute for Environment and Development, London, June 1977, p71. lg OECD, World Energy Outlook, op cit, Ref2, p 71. 2o Community Action Programme for the Rational Use of Energy - 2nd Series of Legislative Proposals, COM (77) 185 Final, European Economic Commission, Brussels, 25 May 1977. 21 There is also a need for a heat pump for small domestic dwellings, especially if a high proportion of electricity is likely to be used by the 'households etc' sector. zz Bundesministerium Kir Wirtschaft, Vorblatt zur Entwurf eines Gesetzes zur Einsparung von Energie in Gebauden.


Some of these innovations would involve the reversal of trends which are firmly based on social attitudes; in this respect agriculture is comparable with the transport sector, which we discuss below. Bearing this in mind, the probable yield of energy conservation measures in this sector would seem to lie nearer to 1 0 - 1 5 % 17 than 20%.

Households and other non-industrial buildings Although we are considering a conglomeration of types of buildings here, the sector is fairly homogeneous from the point of view of its energy consumption pattern and future trends because of the dominant role played by space-heating requirements.

By far the most effective way of reducing energy consumption for space heating is to improve insulation standards. A recent study carried out in the UK by Romig and Leach has demonstrated that if every dwelling in the UK were insulated to a high standard, the useful energy currently lost through walls and lofts would on average be reduced by 60%, provided that occupants lived at the same temperature before and afterJ 8 The internal temperature assumed for this exercise was 16°C, being the mean whole house temperature which presupposes that occupants live at 20°C in certain parts of the house, during certain periods of each 24 hours. Even if these internal temperatures were raised to 18°C after the insulation was completed, the savings would still be about 45% of the useful energy required for heating. These savings of 45-60% are much higher than was hitherto considered feasible by high insulation levels; a more commonly quoted figure in the past has been 15-20% for existing houses and 30-40% for new dwellings, though an OECD report did suggest 50%. ~9 The study by Romig and Leach was only concerned with the UK, but there is no reason to think that such levels of conservation are not feasible for other EEC member countries. There are also other measures which could save energy in space heating and water heating, such as improved effÉciency of burner design and maintenance of burner appliances. A much more widespread use of thermostats and reduction of draughts would also produce worthwhile savings.

Whilst concentrating on heating, national conservation programmes cannot afford to overlook appliance and lighting efficiency. There are substantial opportunities for improved design of new appliances.

Much could be done to accelerate the energy saving likely to accrue from all the foregoing measures. A move by the EEC towards fixing stricter regulations regarding insulation, heat metering, control of room temperatures, water temperatures and the design of more energy-efficient appliances could help in this direction. 2°

The widespread introduction of regenerative heat exchangers or heat pumps could save much energy by transferring heat between the incoming and outgoing ducts in the ventilation systems of large public buildings. 2~

What could all this lead to in terms of energy savings in residential and non-industrial buildings, in aggregate? In the case of the Federal Republic of Germany it has been stated that a saving of between 25 and 35% in residential/commercial sector energy consumption is 'technically possible and economically feasible at current prices by 1985'. 22 A Netherlands study considers 27% saving feasible on a



similar time scale. 23 We may conclude, therefore, that although potential savings in this sector for most EEC countries may be as high as 45%, it will take some years to achieve this target. It would perhaps be realistic to suggest 10% by 1980, 25% by 1985, 40% by about 1995 and 45% at around the year 2000.

23 j . Over and A. Sjoerdsma, op cit, Ref 1 1. 24 This low efficiency does not necessarily imply a cost efficiency judgement. The main reason is of course the widespread use of the petrol combustion engine vehicle, with a performance of 25% under best conditions and 15% or less for private cars operating in city traffic. Despite the cost of fuel, the social trend has historically been a shift away from public transport systems, which are generally much more efficient in the technical sense. =8 R.M. Jublot and E. Goulley, 'Emission control of motor vehicles in Europe', paper to 9th World Energy Conference, Detroit, 1 974. 2s Somewhere between a 6% and 10% fuel saving was thought to have already resulted from higher fuel prices and the introduction of new speed limits for motor vehicles. 27j. Over and A. Sjoerdsma, op cit, Ref 11. 2S A Recommendation for an Energy Stabilisation Policy for the Coming Decade, General Energy Council, Tokyo, August 1975. 29 This study is not generally available. 3o j . Over and A. Sjoerdsma, op cit, Ref 11.

Energy conservation in the EEC transport sector

Although this is the smallest of the four main sectors, accounting for 185 mtce of delivered energy per year, its energy resource base is virtually all oil. The input of oil products to the transport sector is greater than it is to either industry or the 'household etc' sector (see Figure 1). The flowchart also shows that the average efficiency of use of delivered energy in the transport sector is much lower than for the other two major end-use sectors, being only about 20%. 24 Thus, the amount of energy 'lost' from oil products in transport is currently 148 mtce per year, which, to put it into perspective, is equivalent to the present total input of oil to all industry throughout the Community.

There is a wide range of opportunities for saving energy in car propulsion but we must also consider the possible effect on fuel demand of introducing environmental protection measures for vehicle exhaust emissions. The permissible amount of lead in petrol will be reduced throughout the EEC which, in the absence of appropriate technology, could lead to higher fuel consumption. A recent review of the more likely form of emission controls of motor vehicles in Europe concluded however that there need be no modification of fuel consumption. 25 If extremely stringent rules were to be introduced in the very long term, then petrol demand might be increased by 10% as a result.

As regards predictions of net energy conservation potential for the transport sector, most available information is concerned with what might be achieved by 1985. The original EEC Community Action Programme on the Rational Use of Energy, which was issued in Brussels as long ago as 1974, foresaw that a saving of 16% was possible on this timescale. 26 The Netherlands energy report of 1974 estimated that a 9-14% saving had been achieved, and a further 15% was possible. 27 It is noteworthy that both the EEC and Netherlands estimates of future possible savings were mainly based on improved car efficiency. In 1975 an 18.5% saving was reported as possible for Japan by 1985, again mainly by improved vehicle efficiency. 28 The figures for Canada and the USA are in the region of 35-45% energy saving by 1985, but in view of the traditionally very low mpg figures for cars in these countries, we must not consider these large savings as being necessarily applicable to EEC member countries by the year 1985. The OECD Secretary-General's view is that there is a further 30% potential for saving in the transport sector between now and 1985 and that over half of this saving could come from the imposition of mandatory fuel economy standards and improved motor car efficiencies generally.

Turning to longer term possibilities, say to the year 2000, a UK Department of Industry commissioned study 29 leads to the conclusion that there is a potential for savings of 35% in the UK entirely by the development and introduction of very low mpg cars. Other savings in the transport sector might well raise this. Longer term savings of 40% have been suggested as a possibility for the Dutch transport sector. 3°


a The efficiency factor is simply the energy content of fuel as delivered to customers, divided by the energy content of the primary and other fuel inputs to that fuel industry. It does not, however, take into account the energy consumed in building new plant.

31 To put this figure into perspective, if our present efficiency-of-use factor is only 20% for the transport sector, it would mean that we would only reach an efficiency of about 33% by 2000. 32 They are not included in the 'industry' sector examined above. 33 F. Roberts, 'Analysis of selected energy systems', in I.M. Blair, B.D. Jones and A.J. Van Horn, eds, Aspects of Energy Conversion, Pergamon Press, Oxford, 1976, p 791.


Table 3. T.,otal energy losses from the EEC energy industries

Fuel industry Efficiency factor a Energy rejected (%) (mtce 13er annum)

Electricity 32 238 Petroleum 92 56 Coke 78 23 Gas 94 12 Coal (all types) 97 10

For our present purpose, we assume that on average:

• EEC countries may be already half way towards reducing their transport sector fuel intake by roughly 10%, with 1973 as base, because of higher fuel prices and measures already introduced;

• a further saving of, say, 15% is a possibility by 1985; and • this further saving might reach 30% by about the end of the

century. J~

It must be emphasized that these potential energy saving factors are surrounded by grave uncertainties because of the limited availability of data and analysis of conservation potential as well as the uncertain impact of future environmental protection requirements.

Scope for energy conservation in the EEC energy industries

The energy industries convert primary energy resources to marketable fuels and deliver them to the consumer. 32 In order to see these industries in perspective, we list, in Table 3, the efficiency factors and also the annual quantities of energy currently rejected to the atmosphere by these industries (including delivery, and internal consumption of energy) as given in Figure 1.

Coal and gas

It would not be worthwhile here to examine the gas and coal industries, which together only reject an amount of energy equal to about 1½% of the EEC's total energy input. Coke production involves the rejection of a similarly small amount of energy, although its efficiency is assessed at 78% and some improvement on this is technically possible.

Petroleum

Although the petroleum refining industry rejects the equivalent of 56 mtce of heat to the atmosphere each year, this industry is generally considered to be efficient from both the technical and economic standpoints. However, optimization of refinery operations from a business standpoint does not always coincide with optimum energy conservation. 3J

The energy consumption of the industry is very sensitive to the 'product slate', which is the mix of oil-based products required to satisfy the needs of the market. Clearly, the product slate will change over time and it is therefore very difficult to predict possible improvements in the efficiency of energy use in refining over a long time horizon. Increasing demand for motor spirit, in proportion to other refinery products, will not favour less internal energy consumption per unit of crude oil processed. However, in the medium term, it is possible that a 10-15% net saving of energy in the refining



3a UK Department of Energy, op cit, Ref 10. a s Some private industrial electrical plants in Europe, though smaller than those of the electrical industry proper, are located in factory sites where there is a local demand for steam or hot water which is co-generated in the power station. The net result is often a much higher overall efficiency of fuel use than generally occurs in those public utility thermal power stations which produce and market only electricity. 36 R. Baker, 'Energy Conversion', paper to 9th World Energy Conference, Detroit, 1974.

industry may be achieved, by proper investment in plant and equipment, according to the British Petroleum Company24 If such an improvement were to be adopted in the countries of the EEC, then reference to Figure l shows that an annual saving of 7 mtce of oil would be possible. This is equivalent to 1% of the Community's present input of petroleum.

The introduction of new equipment such as flare gas compressors, new processes such as fluidized bed combustion and the use of a greater proportion of the low grade heat rejected from refineries, perhaps using heat pumps, should enable an advance to be made on the 10-15% saving postulated by British Petroleum. R & D will, however, be required to firmly establish some of the newer technologies. In the very long term, the savings might reach 25% per tonne of oil processed compared with present practice, provided that the composition of the product slate does not change too much. But there must be a high degree of uncertainty about this figure, in the absence of a detailed study of European refinery practice and its internal energy use patterns and trends.

Electrici O, Table 3 shows that the energy rejected to atmosphere by the electricity industry is around 238 mtce per year for all EEC countries put together. It represents 18% of the Community's current total demand for all primary fuels and is the biggest single loss point on the flowchart of Figure I.

We have to bear in mind that certain firms produce their own electricity, and hence the electrical industry does not cover all electricity production in the EEC, but the greater part of it. We are only concerned here with electricity produced by the electricity industry. 35

Table 3 shows thgt the average overall efficiency for the electrical industries of the EEC is currently only around 32%. Obviously, any measures which can be taken to constrain demand growth, such as improving the efficiency of all electrical appliances, avoiding subsidies for electrical energy consumers and avoiding end-uses of electricity which are inefficient, are all well worth taking and could make a major contribution towards the more efficient use of our primary energy resources.

The efficiency of 32%, which we have quoted, is an average for the whole of the Community. Country efficiencies vary around this average figure. In 1970, the UK had the lowest figure, at 27%, and France came highest at 42%. The Federal Republic of Germany achieved 33%, and the figure for Belgium and the Netherlands was around 30%. The high efficiency for France stems from the large contribution made by hydroplants, which work at very high efficiencies and tend to distort comparisons between countries.

The more electricity produced from fossil and nuclear sources, ie the more thermally-generated electricity, the worse will be a country's overall energy efficiency. Thus, it is the thermal power stations we need to focus on. Historically, the efficiency of such installations has been increasing with time. It has been estimated that the figure for Western Europe was around 5% in 1900, 15% in 1922, 20% in 1937 and 30% in 1956. 36 The newest plants probably achieve nearly 40% and the maximum normally obtainable, using best practice and all the advantages of scale and modern technology, is around 42-43%. The

126 ENERGY POLiCY June 1979

35oo "2

--~ 50oo

v

2500

E

2000

1500

1000

2

5OO

0 I I I 1 i975 80 85 90 95 2000

F igure 3. T w o energy demand scenarios for the EEC.

37 The method adopted for doing this is not unlike that chosen by the work group of the International Federation of Institutes for Advanced Study (IFIAS) for a study of Denmark. See IFIAS, Energy in Denmark, 1990-2005 - A Case Study, Report No 7 of the IFIAS Energy Group in Denmark, The Niels Bohr Institute, University of Copenhagen, September 1976, p 11. 3s See Report on the Achievement o f the Community Energy Policy Objectives for 1985, op cit, Ref 1, Appendix 2, p 5.


efficiency of generation of electricity in 'conventional' thermal power stations is reaching its limit. So how can we achieve a breakthrough for energy conservation at this point of the energy system? The answer must lie in increased use of combined heat and power (CHP). A brief technical explanation of this system of energy supply is given in Appendix 1.

I have made a rough estimate of the potential savings of primary energy which could accrue for the nine member countries of the EEC by the growth of C HP fed district heating schemes throughout the highly urbanized areas of the Community (for the assumptions and calculations see Appendix 2). primary energy input per year primary input to the EEC. It achieve this level of saving.

New technologies in the

It is possible that around 68 mtce of could be saved, or 5% of present total might, however, take twenty years to

area of electricity generation might considerably improve conversion efficiencies in the long term. Magnetohydrodynamics is one possibility. However, no completely new technologies are likely to be introduced on any significant scale within our present time horizon. The fast breeder reactor would use uranium resources more efficiently (by a factor of about 50) than the established thermal reactor systems but the same limitations on steam turbine efficiencies apply as with any thermal power station, thus limiting overall efficiency to less than 40-45%.

Aggregation of conservation options - effect on EEC energy demand

If we now aggregate the effects of the various conservation measures described above, we can see the total impact on future demand for energy in the Community. 37 In essence, we do this by describing and comparing two different scenarios of energy consumption for the EEC: 'traditional' growth in demand and 'reduced' growth. The starting date for both is 1975.

Historically, the demand elasticity, or the ratio between rate of growth of energy demand and the annual growth rate of Gross Domestic Product, is equal to l, on average. 3a Therefore in order to project 'traditional' future growth, we assume an elasticity of 1 and postulate some future rate of economic growth for the Community. I have arbitrarily chosen an economic growth rate of 4% per annum up to 1985, then 3¼% to the end of the century.

For the alternative, or 'reduced growth' scenario, it is assumed that the various conservation opportunities, quantified above, are implemented. The predicted energy saving for each sector is therefore subtracted from 'traditional' demand. We then add up the reduced sector demands to see what the total effect would be. This has been done for 1985 and 2000, and the results are presented in Table 4. The figures for projected 'traditional' future demand, and the 'reduced' demand due to conservation measures, for the EEC as a whole, have been extracted from Table 4 and used to draw the graphs shown in Figure 3.

It should be noted that no attempt has been made to predict actual future energy demand; two possible scenarios are described, but there can be only one future. One value in comparing scenarios is to see how much room there is for manoeuvre in energy policymaking. Since this manoeuvring room - the distance between the two curves -



Table 4. Future energy consumption possibilities for the EEC

Sector Primary energy consumption per year

1975 -1985

'Traditional' scenario "Reduced' scenario

Growth rate a Mtce b Savings c Mtce d 1975-85 (%/year) % Mtce

Industry f 412 3.5 582 13.5 79 503 Households, commerce public buildings and agriculture 319 4.25 483 24.5 118 365 Transport 185 4.5 288 20.0 58 230 Total delivered energy 916 4.0 (ave) 1353 19.0 255 1098 Non-energy uses 70 6.0 125 125 Oil refinery losses 56 4.5 87 27.0 h 23 64 Electricity industry losses 238 4.0 357 28.5 j 102 255 Coal and gas industry losses 22 4.0 33 33 Total 1302 4.0 1955 19.0 380 15751

2000

'Traditional' scenario

Growth rate e Mtce b 1985-2000 (%/year)

3.25 949

4.0 870 4.0 519

3.75 (ave) 2338 5.5g 275 4.0 157

3.75 618

3.75 57 4.0 g 3445

'Reduced' scenario

Savings c Mtce d

% Mtce

26.5 251 698

44.0 383 487 35.0 182 337

35.0 816 1522 275

48.0 i 75 82

41 .O k 254 364

57 33.0 1145 2300 m

a Assumes 4% per annum average between economic growth and energy between 1975 andS1985.

b Energy consumption based on 'traditional" elasticity of 1 (strong coupling between economic growth and energy demand growth).

c Based on savings estimates for each sector given in text.

d Calculated by subtracting energy savings (mtce) from 'tradit ional ' consumption.

e Assumes 3.75% per annum average economic growth for the Community between 1985 and 2000.

f Includes coke oven losses.

g Total demand is getting distorted by consumption of increasing proportion of primary fuel in non-energy uses (mainly petrochemicals).

h Demand for oil products is assumed to be about 20% lower than for 'traditional' scenario. In addition 10% savings are assumed for oil refineries.

i Demand for oil products is assumed to be 40% lower than for 'traditional' scenario. In addition 20% savings are assumed for oil refineries.

J Demand for electricity is about 20% lower than for 'traditional" growth, and we have also included here the savings due to carrying out the easiest part of the

C HP/d is t r ic t heat ing p rogramme (although this item should not strictly be placed against electricity industry). k Demand for electricity is about 35% less than in 'traditional' case. Also includes savings due to carrying out the balance of the CHP/district heating programme. I This demand figure represents 2% average annual growth in period 1975- 85. m This demand figure represents about 2.5% average annual growth in period 1985-2000, ie it is slightly higher than in period 1975-85. This is because there is declining scope for energy savings. If non- energy uses are disregarded growth over period 1975-2000 is only 2% per annum.

zs This point about the usefulness of the methodology was emphasized in the IFIAS study. See IFIAS, op cit, Ref 37. 4o It has, for example, been suggested that Denmark could get down to 1.5% per annum energy demand growth within 15 years by the introduction of extensive conservation measures, all of which would probably prove economic, see IFIAS, op cit, Ref 37. The elasticity of demand corresponding to this figure was 0.375. A study of the USA concluded that an average energy demand growth rate of 1.9% per annum, between now and the end of the century, was quite achievable

cont inued on p 129

is based predominantly upon technical evaluations, it is more realistic than the curves themselves, which both assume the same GDP growth. A somewhat lower growth rate for the economy would make the curves slightly less steep, but the difference between them would remain approximately the same. 39 The gap between the 'traditional' and 'reduced' scenarios is 380 mtce of primary energy in 1985, 'reduced' growth being 19.5% less than the upper or 'traditional' curve. By the year 2000, the gap is 1145 mtce per year, with 'reduced' growth running at 33% less than traditional growth.

What is the significance of the gap between the two scenarios in financial terms? Since we do not know future prices, it is impossible to say. If prices stayed constant, between now and the end of the century the fuel bill savings might amount to $64 400 million, if the reduced scenario was followed rather than the traditional one. To achieve the reduced scenario would obviously require the investment of a proportion of these savings, but there would be large savings in capital investment due to the energy supply industries growing more slowly.

The 'reduced' scenario implies that energy demand growth would average about 2% per annum to 1985, and a slightly higher level to


continued from p 128 by introducing conservation measures - this has been called the 'technical fix' scenario. See A Time to Choose - America's Energy Future, final report by the Energy Policy Project of the Ford Foundation, Ballinger Publishing Co, Cambridge, Mass, 1974, p46. All conservation measures specified were considered to be economically feasible or publicly acceptable, given adequate government exp lanat ion and encouragement. Demand elasticity was estimated to be about 0.5 on average. A 'technical fix" scenario has also been derived for the UK, see P.F. Chapman, Fuel's Paradise - Energy Options for Britain, Penguin, Harmondsworth, 1975, p 173. This envisages a 35% overall saving in energy by 2000, compared with pro jected ' t radi t ional" demand. Chapman's starting point was 1975 and the average annual energy demand growth rate for the 25 year period was around 2%.


the end of the century. This might seem unrealistically low, corresponding to an elasticity of only 0.5, but other workers have postulated low energy growth figures as being consistent with economic growth. 4°

Conclusions

T h e key o p p o r t u n i t i e s for s av ing e n e r g y in the E E C fall u n d e r fou r

b r o a d h e a d i n g s :

• be t t e r i n su la t ion o f bu i ld ings ; • i m p r o v e d ef f ic iency o f e n e r g y use in i n d u s t r y ; • ex tens ive use o f c o m b i n e d hea t a n d p o w e r s y s t e m s in c o n j u n c t i o n

wi th d i s t r i c t hea t i ng ; a n d • ex tens ive i m p r o v e m e n t in m o t o r veh ic le ef f ic iency.

V i g o r o u s i m p l e m e n t a t i o n o f all the t e c h n i c a l o p t i o n s d i s c u s s e d a b o v e cou ld , b y the tu rn o f the c e n t u r y , r e d u c e the d e m a n d for e n e r g y in the E E C b y 3 3%. T h e s e s av ings need no t en ta i l a n y r e s t r a in t in e c o n o m i c

g rowth .

Appendix 1: A note on combined heat and power and energy conservation

In a thermal power station the heat of combustion of fossil fuels or nuclear generated heat is used to boil water and raise steam at high pressure and temperature. This steam is expanded through a steam turbine and some of its energy is converted into mechanical energy which is used to drive an electrical generator. But a fundamental aspect of any process of converting fuel energy to mechanical energy is that only a portion of the heat can be so converted - the rest must be rejected at a lower temperature. A modern electric generating station is designed to convert the maximum economical fraction of fuel energy into electricity by expanding steam in the turbine to as low a temperature and pressure as possible. The steam is then condensed and typically over half the initial energy in the fuel supplied to the power station

might be rejected as heat to the cooling water. The temperature to which this water is thereby raised may only be about 25°C or even less. It is very difficult indeed to find a use for this low grade heat. Horticulture and fish farming are being seriously considered, but opportunities must be limited. Such tepid water is useless for space heating or industrial processes. It cannot be used for district heating networks, which require water in the temperature range of 80-120°C, or even higher. Combined heat and power generation (CHP) means designing a station to reject the heat at a sufficiently high temperature for such markets to be possible. This necessarily reduces the electrical output. However, provided the reject heat from the turbine can lind a useful outlet, then the net thermal efficiency of the station is raised

considerably, perhaps to over 60%. In a country like the UK, about 32% of the total fuel consumed is used for space and water heating in domestic, commercial and public service buildings. Obviously there is potentially a considerable demand for the heat which could be co- generated with electricity in thermal stations. But there are problems - technical, social and economic - which have so far limited the extension of combined heat and power systems in the EEC. 41

41 A valuable review of the whole subject of district heating combined with electricity generation in the UK is presented in UK Department of Energy, District Heating Combined with Electricity Generation in the UK, Energy Paper No 20, HMSO, London, 1977.



Appendix 2: Estimation of EEC potential for energy saving by CHP/distriet heating

We assume that:

• CHP/district heating is introduced to supply the space heating and hot water demands of 25% of the population of the Federal Republic of G e r m a n y (FRG) , UK, Nether lands , Belgium, Luxembourg. 42

• CHP/district heating is introduced to supply the space heating and hot water demands of 20% of the population of Denmark, France, Italy and Ireland. 42

• To supply 14 million people with CHP/district heating yields a net saving in primary energy of 18 mtce.

• Present population supplied by

CHP/district heating in EEC countries is only 0.5 million in Denmark and 3.7 million in the Federal Republic, total 4.2 million.

Calculation of annual fuel saving potential of CHP/district heating is as follows:

Total population of FRG, UK, Netherlands, Belgium and Luxembourg = 140million. 25% = 35 million.

Total population of Denmark, France, Italy and Ireland = 110 million. 20% -- 22 million.

Hence population which could be supplied by CHP in the EEC = 35 + 22 = 57 million. But in FRG and in

Denmark, 4.2 million people are supplied already. Therefore number to be supplied is 52.8 million.

If 52.8 million received CHP/district heating for space heating and hot water, then annual saving to the EEC would be:

52.8 x 18 = 68 mtce 14

This is 5¼% of total primary energy demand.

42These percentages are based on an estimate of the proportion of population in these countries living in areas of sufficient population density to make district heating realistic.

130 ENERGY P O L I C Y J u n e 1 9 7 9

the scope for energy conservation in the eec

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