Lecture 3

Issues related to energy

usage

KQK7012
Dr. Muhammad Khairi Faiz
1) Energy is Critical for Growth
There is no economic growth
without energy

Continued growth in energy

demand per capita is critical for
improving quality of life in
emerging economies

In this sense, expanded energy

access is not only desirable, but
also fundamentally imperative and
inevitable.

Source: World Bank

2) Energy Access is a Major Problem
Per capita energy consumption in
developing economies remains
significantly lower than developed
world levels.

According to IEA, nearly 1.2bil

people lack access to reliable
electricity globally

It takes 131 kWh to use a 60W light

bulb for 6 hours per day for a full
year

Source: IEA
2) Energy Access is a Major Problem (cont.)
3) Demand Will Grow Rapidly in Developing Countries

Global energy demand is set to

grow by 1/3 between now and
2035.

Fully 100% growth are expected to

occur in emerging market
economies, especially Asian.

China and India are expected to

account for more than half of the
global energy demand growth
between today and 2035 based on
business as usual (BAU).
Source: BP Energy Outlook
3) Demand Will Grow Rapidly in Developing Countries (cont.)

Source: BP Energy Outlook

 4) From (3), Fossil Fuels will Meet Much of this Growth

Based on committed policies at the

end of 2015, the IEA expects FF to
supply 75% of the world primary
energy in 2040, compared to 81%
in 2013.

Renewables are the fastest growing

resources.

Coal, oil and NG together account

for more than half of all growth
through 2040.
Source: IEA
 4) Fossil Fuels will Meet Much of this Growth (cont.)

Why? à FF are inexpensive…

Conventional fuels and

technologies are the most cost-
effective sources of energy today
and continue to attract significant
investment as a result.

Challenges in transportation sector

are even greater.

Source: DOE
Why? à FF are inexpensive… and
abundant

The world has consistently held

approximately 50 years' worth of
NG reserves for the past 30 years,
meaning annual reserve additions
have roughly equaled production.

Oil reserves have grown

significantly over the same period
and are also now equal to 50 years
of current production.

Coal reserves equal to 110 years of

consumption – down significantly
but still ample.
4) Fossil Fuels will Meet Much of this Growth (cont.)
FF remains less expensive (Ignoring externalities)
5) Fossil Fuels are causing Climate Change
 • Since 1900, sea levels have
The Greatest risen by on average about 19cm
globally
Threat • An area of sea ice roughly 10
times the size of the UK has
been lost when the current day is
compared with the early 1980s.

Source: National
Snow and Ice
Data Center

“Global warming is a brutal and urgent reality. The greatest

Magazine covers
threat hanging over the future of mankind”
courtesy of Chris Jacques Chirac, Former French President
12
Rose
6) Climate Talks / Agreements are projected to contribute

Policymakers around the world

have made ambitious
commitments to reduce GHG
emissions in advance of the
December 2015 Paris Climate
Negotiations via INDC and Two-
Degree Target.

These commitments, however, are

not adequate to mitigate the
serious damages over the coming
century.
7) Energy is Mispriced

Repayment rates are low in

developing countries, limiting
supply.
7) Energy is Mispriced (cont.)

Energy consumption remains

heavily subsidized
7) Energy is Mispriced (cont.)

Presenting energy costs in strictly

private terms à heavily favors
conventional fossil fuels.
7) Energy is Mispriced (cont.)

Presenting energy costs in strictly

private terms à heavily favors
conventional fossil fuels…

However, if we begin to include

external costs (climate impacts,
health impacts) à different
scenario is formed..
 8) Critical to Test Energy Related Policies

Moving forward, the governing bodies

and other global policy entities are
counting on energy efficiency to play a
critical role in reducing GHG emission.

By 2035, IEA expects efficiency to

account for 44 percent of global
emissions abatement in its 450 PPM
Scenario.

Source: IEA
8) Critical to Test Energy Related Policies – Case Study

The U.S. Department of Energy's (DOE) - Weatherization

Assistance Program (WAP)
https://www.energy.gov/eere/wap/whole-house-weatherization
8) Critical to Test Energy Related Policies – Case Study (cont.)

A survey was conducted by Energy

Policy Institute, Univ of Chicago (EPIC) of
nearly 30,000 homes in the US who
opted for the WAP.

The final analysis found that the

weatherization investments produced
only 39% percent of the expected
energy savings.

The program’s costs significantly

exceeded its benefits.
Source: Greenstone et. al.
9) Innovation is Causing Rapid Change in Energy
Shale oil à A game changer

US shale oil production has risen

to around 4.5 million barrels a day
from almost nothing in 2010.

Oil shale can be used to make

diesel fuel, gasoline, and liquid
petroleum gas.

Oil shale (rock) is

first extracted from
the earth by surface
or underground
mining.

The rock is crushed, and then retorted

(heated) to release the shale oil
Bbo - Billions of stock tank barrels of oil
TCF - Trillion standard cubic feet of gas
9) Innovation is Causing Rapid Change in Energy (cont.)
Remarkable Reductions in Clean Energy’s Costs
9) Innovation is Causing Rapid Change in Energy (cont.)
9) Innovation is Causing Rapid Change in Energy (cont.)

Source:
Nature Climate Change
10) Fossil Fuels Release Harmful Contaminants
10) Fossil Fuels Release Harmful Contaminants – Case Study
China’s Huai River Winter
Heating Policy

1) Established in the 1950-80

period.

2) Provides free coal to run

small boilers from Nov 15 to
March 15 to keep households
warm

3) Due to budget limitations,

the heating system only exists
North of the line.
Is renewable energy really sustainable?
https://www.youtube.com/watch?v=q0V8-0wqLjg&ab_channel=InterestingEngineering
 Assignment 1
• Choose one fact from this lecture slide (from 1 to 10)
• Find relatable real-word issue (Case study)
• Prepare 1 page report (using MS Word)
• Submit as .pdf in Spectrum

• Deadline: 8th April 2023

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