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Summary International Exergy Economics Workshop University of Sussex 13-15 July 2016

Summary International Exergy Economics Workshop University of Sussex 13-15 July 2016. Strengths of Exergy Economics Research. Exergy Analysis reveals the location of exergy losses and improvement potential. Strengths of Exergy Economics Research.

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Summary International Exergy Economics Workshop University of Sussex 13-15 July 2016

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  1. SummaryInternational Exergy Economics WorkshopUniversity of Sussex 13-15 July 2016

  2. Strengths of Exergy Economics Research • Exergy Analysis reveals the location of exergy losses and improvement potential

  3. Strengths of Exergy Economics Research • Exergy Analysis reveals the location of exergy losses and improvement potential • It consistently adds different types of energy and materials

  4. Strengths of Exergy Economics Research • Exergy Analysis reveals the location of exergy losses and improvement potential • It consistently adds different types of energy and materials • Useful exergy has a strong link with economic processes

  5. Weaknesses of Exergy Economics Research 18 Wh 18 Wh • Exergy is a difficult concept A hot cup of tea Use a labtop for an hour

  6. Weaknesses of Exergy Economics Research • Exergy is a difficult concept • Lack or methodological issues in data: • Between final and useful stage of exergy use (efficiencies and allocations) • On embodied exergy in materials (available data is average data) • Methodological issues in data in LCA (allocation in the case of subproducts) Extraction of rare elements from coal waste

  7. Weaknesses of Exergy Economics Research • Exergy is a difficult concept • Lack or methodological issues in data: • Between final and useful stage of exergy use (efficiencies and allocations) • On embodied exergy in materials (available data is average data) • Methodological issues in data in LCA (allocation in the case of subproducts) • Exergy does not measure everything • Other properties are important in materials • Other properties are important in energy carriers (e.g. technology – substitutability) • Uses where oil is difficult to replace currently (internal combustion engine) • Abundant wood would have caused growth stagnation in Sweden

  8. Issue 1: Why to include materials at macro and micro scales? • Trade-offs between embodied exergy and exergy dissipation • Recycling (trade-offs between inputs) • Insulation (trade-offs between inputs and better boundaries)

  9. Issue 1: Why to include materials at macro and micro scales? • Trade-offs between embodied exergy and exergy dissipation • Recycling (trade-offs between inputs) • Insulation (trade-offs between inputs and better boundaries) • Material services are distinct from other Energy Services: • In material production exergy is not all dissipated - part is embedded in the materials (intrinsic exergy) • A fraction of materials is used to make more capital which will provide services for a long timespan • Rare materials • Higher amounts of exergy will be needed in the future to extract them

  10. Issue 2: Relationship between useful exergy and GDP • There is no decoupling between useful exergy and GDP in the past • Focus should be on the efficiency avoiding rebound and efficiency dilutions effects

  11. Issue 2: Relationship between useful exergy and GDP • There is no decoupling between useful exergy and GDP in the past • Focus should be on the efficiency avoiding rebound and efficiency dilutions effects • Additional tests for the robustness of this relationship • Correct for embodied exergy in trade with input-output analysis • Correct for material services (mostly HTH) • World relationship for a longer timescale

  12. Issue 2: Relationship between useful exergy and GDP • Is it possible to decouple useful exergy from GDP? • If not, why not? – • there seems to be a huge potential for efficiency improvements between useful exergy and energy services • If possible, how and why did we not observe that for the past?

  13. Issue 3: Environmental Impacts & Sustainable Growth • Can we replace high with low environmental impact useful exergy? • Exergy required to extract rare minerals/materials required to produce the technologies that are more sustainable and will lead to green growth (e.g. copper needed to run the windmills

  14. Issue 4: Modelling relationship exergy vs. economy • Strictly conventional Cobb-Douglas Production Functions =f(K*,L*) with observed cost shares are able to account for almost all of economic growth if capital services are estimated with exergy and labour

  15. Issue 4: Modelling relationship exergy vs. economy • Strictly conventional Cobb-Douglas Production Functions =f(K*,L*) with observed cost shares are able to account for almost all of economic growth if capital services are estimated with exergy and labour • Insights: Capital has to be there for the economy to use it in the first place – but it is how many hours and how productively it is used that counts for growth (capital is inert) – exergy and labour are the best indicators for this • Test this insight with other production function (CES and LINEX)

  16. Issue 4: Modelling relationship exergy vs. economy • LINEX production function is able to explain growth using capital, labour, energy and technology or capital, labour and useful exergy • Insights: • Cost shares are not obeyed because of technological contraints (capital cannot use more useful exergy to produce output than the maximum value it was designed for) • Technology as an explanatory factor is related only with exergy efficiency

  17. Issue 4: Modelling relationship exergy vs. economy • Should we correct GDP when we add exergy as an extra production factor? • What is the role of “directed technological change” motivated by energy prices and quantities in these conditions (mix is irrelevant and technological change is efficiency)? • How do we take rebound effect into account? • Price of final energy carriers (scarcity & technology & taxes) • Efficiency (technology & matching)

  18. Issue 4: Modelling relationship exergy vs. economy • Links between useful exergy and energy services • Energy services contribute heterogeneously to: • economic growth because they have different roles (the impact of each is dependent on the time period) • human well-being • environmental impact

  19. Issue 5: Forecast Scenarios • Useful exergy (aggregate and per type of use) is easier to predict than final or primary energy • Material and Energy services have saturation limits • Scenarios of evolution of exergy efficiencies (with practical limits to exergy efficiencies) • Scenarios of energy mix

  20. Issue 6: How to focus attention on exergy? • Direct Approach: for engineering students increase exergy literacy by teaching it in undergraduate or graduate courses • Indirect Approach: • For mainstream energy-economic modelers focus on supplying energy services efficiently • In general: use mainstream language (modeling, economic) and make use of exergy as a tool along with the established mainstream methodologies. Emphasize the relevance of this new tool.

  21. Potential Policy Implications of this analysis • Legislation for industrial (and other sectors) energy use based on exergy or resource based efficiency • Legislation that taxes the use of rare materials ????? • Policies related with climate change: • Based on better exergy based scenarios • Focus on increasing global exergy efficiency: developed countries should export sustainable technologies to developing countries

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