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«IMAGINING AUSTRALIA’S ENERGY SERVICES FUTURE Alan K Pearsa a Adjunct Professor, RMIT University, GPO Box 2476V Melbourne 3001 Australia email ...»

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Alan K Pearsa


Adjunct Professor, RMIT University, GPO Box 2476V Melbourne 3001 Australia

email alan.pears@rmit.edu.au Tel +3 9925 2885 Fax +3 9925 1855


The ways Australians use energy have changed significantly over the past thirty years, for example the

low energy intensity services sector has grown its share of the economy. Over the next two hundred years

they will change far more, as factors such as climate change, an ageing population and changing cultures and technologies impact. Many consider that energy use is driven by economic and population growth.

While these are important, the nature of change in energy service requirements and the efficiency with which energy services are delivered are even more important. This paper discusses past and future trends in Australia’s energy service requirements, and assesses the implications for energy supply.

Changes in global and local energy service requirements mean that demand for Australian energy and resource exports may decline significantly in absolute terms, and the viability of conventional energy grids, even in cities, will be questionable. The actual outcome will be sensitive to decisions, both conscious and unconscious, made by individuals, business and governments.

Key words Energy efficiency, energy demand, energy trends, residential energy, commercial energy, industrial energy, transport energy, energy services 1 Introduction We don’t use energy for its own sake. We use it as an input to the delivery of services that we value or believe we need. As shown in Figure 1, our energy use occurs within a cultural and technological context.

While it is fashionable to describe energy as an essential service, the reality is that it is one of a number of essential inputs to the delivery of services. And what we define as a service is, in many cases, a cultural construct.

Figure 1. Energy’s role in delivery of services So when we imagine Australia’s energy future, we need to reflect upon the activities and services that will be needed or desired.

These, combined with the technologies available, will determine the requirements for energy.

2 What will we use energy for?

Traditionally, energy has been used as an input to the delivery of:

• Food and water

• Materials and the goods manufactured from them

• Shelter, including construction materials, light, food storage and preparation, maintenance of comfortable conditions, facilities for cleaning people and clothing

• Services, including maintenance of health, education, entertainment and recreation

• Access/mobility

• Generation of income for individuals, businesses and, through exports, for the whole economy Particularly over the past sixty years, we have seen expectations of the level of services as well as the range of services increase dramatically. Rapid technological development and declining costs of provision of services relative to income have underpinned trends towards larger homes, central heating and cooling, more and larger refrigerators, near universal car ownership, and so on. Australian national policies have encouraged expansion of production and exports of minerals and energy, as well as energy intensive materials such as aluminium. Population growth, combined with a decline in household size, has also been a driver of energy growth.

Within the Australian economy, the low energy intensity services sector has expanded relative to other activities, now comprising almost three-quarters of total economic activity, as shown in Figure 2. This sector is now also the dominant employer of Australians. This structural change has offset, to some extent, the energy growth from resource processing.

Figure 2. Trends in shares of Australia’s GDP [1]

In 200 years, our requirements may be very different, and there is great uncertainty. For example, while many now expect Australia’s population to stabilise at around 25 million within the next 50 years [2], the following 150 years could bring dramatic change. Climate change could drive climate refugees towards Australia, and parts of northern and central Australia could also become uninhabitable, due to extreme heat or frequent cyclones. The capacity of Australian agriculture to support population while sustainable ecosystems are established will change, but it is not clear in which direction. Trends in energy service requirements will be linked to these population trends.

Trends in energy service requirements will also be linked to the mix of types and the level of economic activity, as well as the actual level of energy intensity of each type of activity. While it is easy to say that, all things being equal, energy requirements increase with an increase in GDP, the future is potentially very different. First, ongoing restructuring from high energy intensity to low energy intensity activities (eg from metal production to services, as can be seen in Figure 2) means less energy is required for each unit of economic activity. Second, trends such as dematerialisation, shifts towards reuse and recycling of materials, switching to less energy intensive materials, ‘virtual’ replacements for previously physical activities (eg telecommunications replacing travel), and so on mean that the energy intensity of any given task can potentially fall. Lastly, it may be that a trend towards ‘enoughness’ instead of insatiable growth in demand may dominate. Or it may not.

With what is likely to be an older population, as well as the possibility of refugees, energy service requirements for health care and aged care are also likely to grow.

Some parts of Australia could be chronically short of water. Desalination, pumping and water treatment are therefore likely to grow in significance as energy-consuming activities. The nature and extent of agricultural activity, and its associated energy service requirements, will also be affected by climate change in Australia and other countries.

With climate change will come an increase in the need to cool buildings to maintain comfort and health.

Over the past few decades we have seen strong growth in international air travel to and from Australia, both for tourism and business. Freight volumes, dominated by raw materials, have also grown. If wealth continues to grow and international specialisation in manufacturing and resource production continues, the level of international travel and freight activity can also be expected to grow.

The future for exports of fossil fuels and raw materials is less certain. If response to climate change involves a shift towards energy efficiency and renewable energy, world demand for fossil fuel exports from Australia will decline. But if the mainstream energy solution is to capture carbon dioxide emissions from fossil fuels and store it underground (known as geosequestration), and/or growth in conventional nuclear energy production, then Australian energy exports could continue to be substantial.

The future for materials is also unclear. Energy use for mining and processing of materials is a major part of Australian energy use at present. Dematerialisation, increased recycling and re-use, and shifts towards renewably-sourced materials could reduce demand for virgin materials sourced from places such as Australia. Competition from resource exports from developing countries is also likely to apply pressure to Australian exports. On the other hand, ongoing wasteful use of materials and lack of support for material recovery and recycling could lead to continuing growth in demand for virgin materials.

These possible futures for energy service requirements will not automatically flow on to increase demand for energy itself. There is scope for dramatic improvement in the efficiency with which energy is used, sufficient to offset most or all of the growth in demand for energy services, or even lead to an overall reduction in the amount of energy required.

Energy supply technologies are also likely to evolve away from large centralised technologies towards diversified local and regional solutions matched to the much more energy efficient end-use technologies that are emerging. Capture of economies of scale through replication of modular technologies, and improving intelligence of control systems, combined with increasing perceptions of financial risks for large centralised energy projects, are likely to be key drivers of this trend.

The remainder of this paper reviews the detail of these future possibilities. It looks at recent trends, then future possibilities. A fundamental issue is that past trends must be seen in their context: our energy future will be very different from the past, because the technologies, environmental pressures and cultural perspectives will be different.

3 Residential Energy Use and Supply

Energy is a relatively minor component of Australian household budgets. On average, non-transport energy comprises 2.6 percent of expenditure, while transport fuel is 3.8 percent [3]. Indeed, Australian households spend more on buying energy-consuming appliances than they do on the energy they use [3].

Australian residential energy use by activity is shown in Figure 3. Space conditioning (mainly heating) dominates energy use, with 45% of total energy. This is followed by water heating, at 25%. Electrical appliances and lighting comprise 27% of energy use, with cooking comprising 4%. Electricity provides 45% of total residential energy, and generates 83% of greenhouse gas emissions from residential energy use, due to the predominance of high greenhouse intensity coal-fired electricity generation [4]. Over a quarter of this electricity is believed to be used for heating water, and half for appliances – but data quality is poor, so there is substantial uncertainty due to lack of comprehensive field data.

More than 70% of present Australian residential energy use provides low grade heat for space and water heating and cooking. Looking into the future, this energy requirement can be expected to dramatically decline, despite population growth, decline in household size and increasing dwelling area.

Australia’s present housing stock is thermally poor, with less than two thirds of homes having ceiling insulation and less than a fifth having wall insulation [5]. Before 2003, only Victoria and the Australian Capital Territory (about a quarter of Australia’s population) had residential building energy regulations.

National regulations were introduced in 2003, and are being strengthened from 2006 [6]. These standards are relatively weak in comparison with parts of Europe and the USA such as the Netherlands, Germany and California. Developments in advanced glazing systems, heat recovery ventilation, heat storage materials and improved insulating materials, combined with increased utilisation of passive solar design and other forms of renewable energy mean that space heating service requirements in Australia’s generally mild climates should be minimal in the future. Present heating technologies are extremely inefficient, with relatively crudely designed wood heaters, non-condensing gas heaters, and poorly insulated ducting being standard practice. Where heating is required in future, much more efficient appliances will be available.

Figure 3 Australian residential sector energy and electricity use, 1999

One trend towards growth in space heating energy use is the recent enthusiasm for outdoor heating! As Australians embrace indoor-outdoor living, many have installed radiant gas heaters on outdoor decks.

These typically consume around 40 Megajoules per hour, more than is used to centrally heat most homes.

Alternative solutions are feasible, but have not been developed to a commercial form. This trend is an example of the kinds of new energy services people may desire, and it also reflects the significance of cultural norms and technologies in shaping future energy use patterns.

Water heating is another area where future conventional energy requirements can be expected to decline sharply. The drive towards improving water efficiency of showerheads, taps, clothes washers and dishwashers, as well as use of lower clothes and dishwashing temperatures due to improvements in detergents, will reduce demand for hot water. There is potential to halve hot water usage per person through these efficiency measures. Around a third of the energy used for water heating today is lost from storage tanks and fittings [4]: improved insulation and appliance design, optimisation of water pipe design and improved management of water usage should halve this waste. Solar and electric heat pump water heaters will further improve, and should replace up to 80% of the remaining energy requirement with renewable energy.

Developments in cooking energy use are more difficult to predict. Recent decades have seen a decline in household cooking energy use, as use of pre-prepared food and take-away food has increased. Australians also dine out much more often now. Ownership of microwave ovens is now almost universal, and they have replaced much use of conventional cooking equipment. It seems likely that trends towards centralised food preparation, balanced by ‘recreational cooking’ in homes, will further reduce cooking energy use. Innovative cooking technologies such as steam cooking also offer potential for faster, more efficient cooking. As the population ages and people seek greater convenience, services such as ‘meals on wheels’, the delivery of prepared meals to elderly and housebound people, may also expand.

There are complex energy trade-offs in provision of food to consumers. For example, centralised cooking can cut cooking and refrigeration energy use but increase transport energy use as people travel to restaurants or collect take-away food, or providers transport food to users. The actual net energy outcome is sensitive to the efficiencies of all the elements in the system.

The remaining 30% of household energy use (and half of residential sector energy-related greenhouse gas emissions) is electricity, mainly for appliances, with some usage for lighting and space cooling.

Household electricity consumption for these activities has been growing rapidly due to trends such as:

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