Wednesday, May 28, 2014

Australian Energy Intensity Decomposition

This post is based on part of a presentation that I gave yesterday in a short course here in at ANU. Australia has improved its energy intensity over recent decades but the gains have been quite small. My research suggests that adjusted for industrial structure etc. Australia is relatively energy inefficient compared to other developing countries. The following graph removes all these other factors, resulting in a measure of "pure" energy efficiency:

A declining trend implies increasing energy efficiency. I advised Muhammad Shahiduzzaman on his PhD research at the University of Southern Queensland. Subsequently, he published a paper in Energy Policy on decomposing Australian energy intensity. The following graph from the paper shows the effects of structural change at two levels of aggregation on Australian energy intensity:

The shift between the larger sectors helped reduce energy intensity but the shifts between smaller categories of industries tended to increase energy intensity. Real intensity is the residual energy intensity once the structural effects are removed. The Australian Bureau of Resource and Energy Economics has also carried out research on energy intensity trends and decomposition. The following graph shows the decomposition for the transport sector in Petajoules:

The activity effect here is the energy use increase due to increased passenger and tonne kilometres for passenger and freight transport respectively. Structural change - shifts between road, rail, air etc. contributed very little. There was a substantial efficiency improvement but it was outweighed by the large increase in activity resulting in a substantial increase in energy use in the sector. The final graph in this post, shows the decomposition for the residential sector in Australia:

In this decomposition, the activity effect is the increase in energy use due to increased  population. The BREE researchers defined the structural effect as due to larger houses, smaller households etc. I think it is debateable as to whether this should be considered structural change rather than change in the level of activity. In any case the efficiency improvement is of the same order as either the activity or structural effect and so energy use increased here too.

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