02 Measuring Energy
Václav Šebek
Measuring Energy
• Literature:
– Bhattacharyya, S.C., 2011. Energy Economics:
Concepts, Issues, Markets and Governance.
Springer London, London.
– Chapters 2 and 13
FROM DATA TO INFORMATION
Measuring energy
What is energy? recap
• A property of objects meaning capability of
doing work or being transferred elsewhere
• Most common heat, electricity, motive
• Units:
– Energy: 1 [Watt hour] = 3.600 [Joule]
– Power: 1 [Watt] = 1 [Joule per second]
• Power gives you what are you able to do
• Energy says what you have done already
What is energy? recap
• Footnote
– Ton of Oil Equivalent [toe] ≈ 42 GJ
– Ton of Coal Equivalent [tce] ≈ 29 GJ
• Czech lignite at 10 to 20 [GJ.t-1]
– British Thermal Unit [BTU] ≈ 1.05 kJ
– Quad ≈ 1,055 PJ
• US Dep. of Energy meaning quadrillion of BTU
• Czech republic TPES 2014 ≈ 1.7 PJ ≈ 1.6 Quads
• Heat, light, motive force, chemical transformation
etc.
• 2 thermodynamic laws
– Mass and energy cannot vanish but transform
– No 100% conversion – losses inevitable
• Primary x Secondary energy
– Primary – directly from nature (oil, coal, wind, sun,
nuclear…)
– Secondary – derived from Primaries (electricity,
gasoline…)
What is energy? recap
• Other divisions (boundaries change)
– Renewable x Non-Renewable
– Commercial x Non-Commercial
– Modern x Traditional
– Conventional x Non-Conventional
What is energy? recap
Energy System
• Supply – Conversion – Consumption
• Extraction  PES  Transport  Final Energy
 End use app  Useful energy
• Losses
• Energy corporations all through the system 
wide variety of companies
Energy Information
• Broadly required data:
– Energy use by various economic activities
– E production, transformation and delivery to
various users
– „Field“ technical and operating statistics
– Financial and cost information
– Macro-economic, social, political information
Energy Information
• Transform into information about energy…
– Pricing
– Investment
– Research & Development
– System Management
– Contingency Plan
– Long-term Planning
Energy Accounting Framework
• Comprehensive account of energy flows
including losses and any consumption
• See table
– Production – transformation – consumption
• Accounting units
– Commodity (physical, tones, barrels…)
– Overall Energy Balance (common unit, eg BTU, GJ,
TOE…) – easier comparison
Energy Accounting Framework
Supply-side
Production (+)
Trade (import/export) (+/-)
Bunkers (transport costs, e.g. Tankers) (-)
Stock change (+/-)
Primary energy requirement (PER)
Conversion
Statistical difference (+/-)
Transformation input (-)
Energy sectors‘ own use (-)
Transmission and Distribution losses (-)
Net supply available
Net domestic consumption
Final energy consumption
↘ Agriculture
↘ Industry
↘ Transport
↘ Residential
↘ Commercial
↘ Non-energy uses
• Total energy needed to satisfy
country’s demand and
transformation requirements
• Primary need (shown in TPES)
• Efficiency indicator
• Sectorial situation may be
analyzed
Energy Accounting Units - Example
Consumer TJ kt GJ/t
Share
TJ kt ktce ktoe
PP Chvaletice 16 631 978 17,00 32% 33% 567 397
Refinery Litvínov 7 072 530 13,35 14% 18% 241 169
HP Otrokovice 4 523 274 16,51 9% 9% 154 108
Paperworks Mondi Štětí 4 358 180 16,70 8% 6% 149 104
HP Strakonice, a.s. 1 754 112 15,66 3% 4% 60 42
HP Třinec 1 698 106 16,00 3% 4% 58 41
HP Poříčí 789 47 16,79 2% 2% 27 19
PP Hodonín 446 27 16,63 1% 1% 15 11
Export 6 640 332 20,00 13% 11% 227 159
Retail 8 360 418 20,00 16% 14% 285 200
Total/mean 52 271 3 004 17,40 100% 100% 1 784 1 248
Tab – A lignite surface mine yearly consumption decomposition
All units above are scientific – commercial units (eg TCE) might be not
Lignite Surface Mine
Useful Ratios
• Energy supply mix
– Share of various sources on primary supply
• Self-reliance
– What portion of energy is of domestic origin
• Share of renewables
• Power generation mix
• Efficiency
– Electricity production
– Refining
– Overall
• Per capita consumption (primary and final)
• Energy intensity
Some energy data issues
• Availability
– lags, various sources, imprecision, confidentiality
• Quality
– Different standards and methodologies, deliberate
changes, trade and balance discrepancies
• Cross border comparison
– Traditional fuels, terminologies, sectors definition,
accounting
• Common measurment
• Conversion factors
AT WHAT PRICE?
Measuring energy
Price - recap
• Price x value
• Price
– Objective measurable figure
– Result of supply/demand
– Denotes relative scarcity of a good
• Value
– Subjective, individual, not measurable
– Depends on time, place and people
• Value of price is priceless
Energy Pricing
a) Self-sufficient country
• Price set domestically
between export and
import parity price
Q
P
S
D
Q
P
S
D
p* = pm
Max domestic
production below
world price
p*
Realized consumption
Import+ = domestic consumption
b) Importing country
• Import (world) price
pm
q* q’ q*
px
Energy Pricing
Q
P
S
D
Max domestic
consumption
Export+ = Total domestic production
c) Net exporter
• Domestic demand
satisfied below world
price
• Equilibrium price should
be that of world price
• In reality domestic prices
of oil exporters
significantly lower due
subsidies
p* = px
Peak and Off-Peak Pricing
[MW]
Daytime
0
1
2
3
4
5
6
7
8
9
10
7 10 12 14 17 19 22 24 2 5 7 10 12 14 17 19 22 24 2 5 7 10 12 14 17 19 22 24
Daily consumption of Electricity
Peak and Off-Peak Pricing
0
1
2
3
4
5
6
7
8
9
10
7 10 12 14 17 19 22 24 2 5 7 10 12 14 17 19 22 24 2 5 7 10 12 14 17 19 22 24
Decomposition of electricity consumption by origin[MW]
Daytime
Nuclear (yellow) – Renewables (green) – Coal (brown) – Peak gas (blue)
Peak and Off-Peak Pricing
0
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Electricity Exchange Pricing
Nuclear Lignite Hard Coal Gas Peak
[Kč/KWh]
D
Price
Renewables and Electricity Pricing
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Electricity Exchange Pricing
Nuclear Lignite Hard Coal Gas Peak
[Kč/KWh]
Demand
Price
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Renewables incoming
Renewables Nuclear Lignite Hard Coal Gas Peak
Renewables and Electricity Pricing
[Kč/KWh]
Demand
Price
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Renewables out…
Renewables Nuclear Lignite Hard Coal Gas Peak
Renewables and Electricity Pricing
[Kč/KWh]
Demand
Price
50
0
100
10/2010 10/201210/2011 10/2013 10/2014
€/MWh
170 € daily mean, 250 € daily max 10.2.2012
0 € daily mean, -450 € daily min 25.12.2012
Zdroj: https://www.epexspot.com/
Daily electricity price
at European Power
Exchange Leipzig
Merit order application - Oil
See: http://www.economist.com/blogs/graphicdetail/2016/01/daily-chart-6
Price is vital piece of information
HOW TO REGULATE?
Measuring energy
Allowances v Taxes
• Government aims to decrease CO2 emissions
• Two ways of achieving that:
– Tax – payment for each ton of CO2 emitted
– Tradable allowances – permission to emit
particular volume of CO2
• Different parameters
– Tax – maximum price for decarbonisation is set
– Allowances – maximum volume is set
Example 1
• Two types of PP in a Country – A and B
• Both emit 40t CO2 per year = total 80t/y
• Different emission reduction costs per 10t
– A = $2,000; B = $4,000
• Government’ objective is 60t CO2 per year
– Regulation
– Tax
– Allowances
Example 1
1. Regulation
– Each PP must decrease emissions by 10t/y
– Costs = 2,000 + 4,000 = $6,000
2. Allowances
– 60t allowances issued, both A and B get 30t
– B buys 10t allowances from A and emits 40t
– A emit 20t … total emissions 60t
– Costs = 2 * 2,000 = $4,000
– Price of allowance between $2k and $4k
3. Taxation
– T < $2k … no emission reduction & C+T = $0 + $0…16k
– $2k < T < $4k … 40t of A reduced & C+T = $8k + $8k…16k
– $4k < T … all emissions reduced & C+T = $16k + $0
Example 2
Company Emissions [t] Costs reducing 1 t
A 70 20
B 80 25
C 50 10
Total 200
• Government objective: 120 t
• Method: Allowances
• Who will sell at what price?
• What will be final cost of reducing emissions?
Example 2
0
5
10
15
20
25
30
10 20 30 40 50 60 70 80 90 100 110 120
Company Emissions [t] Costs reducing 1 t
A 70 $20
B 80 $25
C 50 $10
Total 200 (120 allowances issued)
S
D
• C sells 40t allowances
to B at price of $20
• Total costs = $1,100
• A reduces 30t at
$20
• B doesn’t reduce
• C reduces 50 at
$10
• Costs w/o trade
• $1,700