Nick Eyre explores a new way of thinking about the energy transition, as well as showing how it will lead to major opportunities for energy efficiency.
“By investing in clean technologies – wind, carbon capture, hydrogen and many others – Britain will lead the world into a new Green Industrial Revolution”. Bold words from the introduction of the UK Government’s Ten Point Plan, but not much about energy demand or energy use.
Is such a supply side focus essential? Have opportunities to improve energy efficiency largely been exploited? The answer is no. In fact, the energy transition offers opportunities to improve energy efficiency much faster than we have achieved for decades. Recent analysis by the IEA shows explicitly that energy efficiency has a central role in delivering net zero globally, and both Committee on Climate Change work and forthcoming CREDS analysis find the same for the UK. Indeed, every plausible scenario for delivering climate targets depends critically on delivering these improvements; it is rarely the headline finding, but always a major component.
Understanding why depends on thinking about the energy transition from the perspective of energy use. Outside the ‘energy demand community’, most people think of the energy transition as simply a shift in energy supply from fossil fuels to zero carbon energy sources, or more specifically to renewables. In the energy demand community, we have always argued that reducing demand will also be important, as a means to reducing the amount of energy that needs to be decarbonised, and therefore the cost of the transition.
But the two processes – decarbonisation and demand reduction – are usually treated as separable. In a recent paper published in Energy Efficiency, I argue that this is a such a seriously incomplete analysis as to be misleading. Energy efficiency improvement and renewable deployment are synergistic.
The argument starts from the, now familiar, insight that energy systems compatible with net zero require decarbonisation of much more than the current electricity system. They will require much higher levels of electrification. Most mainstream analyses, such as by the IEA or the CCC, now see the transition as a multi-stage process:
- use low carbon energy sources to replace fossil fuels in electricity generation. These will be mainly renewable energy sources, notably wind and solar.
- where possible, convert end uses to electricity, e.g. using electric vehicles and heat pumps.
- where electrification is not feasible, substitute fossil fuels with some other zero-carbon final fuel, e.g. hydrogen.
- In essence, zero carbon electricity (whether directly or via green hydrogen) ends up replacing fossil fuels to power the world.
An additional scientific insight comes from thinking about the thermodynamics of this change and of energy transitions more generally. Before the industrial revolution, there was no unified energy system. If you wanted energy for ‘heat’, you burnt something – usually wood. If you wanted energy for ‘work’, you did it yourself or got a strong animal to do it for you (or, in special cases used early wind or hydro technology). The industrial revolution delivered a fossil fuel takeover, with both ‘heat’ and ‘work’ supplied by fossil fuels, the latter through the new-fangled technologies of heat engines. The whole sub-discipline of thermodynamics was developed in the 19th century to provide an understanding of these changes, and in particular the rules governing the conversion of heat into work and vice versa.
The post-carbon transition looks likely to be as fundamental a change to energy systems as the industrial revolution. Renewables are already substituting for heat in electricity generation. We are beginning to see heat engines being replaced in transport. And the next step seems likely to be replacing combustion in heating by using ‘heat engines in reverse’ (heat pumps).
In essence, after the post-carbon transition most energy services will be provided from sources of work rather than, as now, from sources of heat. And it is one of the most basic predictions of thermodynamics (its 2nd Law) that work can be converted into heat more efficiently than heat can be converted into work. So, in principle, an energy system run off renewable work can be more efficient than one run by burning fuels.
As it is proving in practice. Electric vehicles typically require less than one-third of the energy as internal combustion engine vehicles. And heat pumps require less than one-third of the energy of boilers. These are the paradigm examples, but a similar effect is seen across a range of final energy conversion technologies from steelworks to cookers. Most of the effect is linked to electrification, but hydrogen can also contribute, as it can be converted directly into work without combustion using fuels cells.
The paper goes through the global energy system, energy service by energy service, to quantify the scale of the effect of changing their final energy conversion devices to those needed in a decarbonised world. The overall effect is a potential 40% improvement in energy efficiency, and therefore, other things being equal, a 40% reduction in energy use. As shown in the Figure below the effect is bigger in buildings and transport than in industry.
All this is before we take into account the potential of other energy efficiency options that we know are also large, such as building insulation, modal switching in transport and materials efficiency.
So this potential improvement in final energy conversion efficiency, driven by the energy transition, is a very large effect. It seems very likely to be a critical part of carbon emissions mitigation. It means there are major synergies between renewables and energy efficiency. It is well-known that energy efficiency can help renewables by reducing the amount of energy that needs to be decarbonised. But (work producing) renewables will also help efficiency by enabling the use of more efficient end-use conversion technologies.
Far from its potential being largely ‘used up’, a whole new generation of energy efficiency improvement is about to be enabled. Lobbyists who expect demand to rise are likely to be disappointed. As always, policymakers need to think more about how we use energy, not just where it comes from.
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