Energy Intensity and Electrification

Abstract

The greater the gross domestic product (GDP), the greater the energy and electricity consumption will be. However, the earth’s energy resources are limited. This is especially true for fossil fuels (coal, fossil oil, natural gas, etc.). These fuels release atmospheric pollutants like carbon dioxide, sulfur dioxide, and nitrous oxides during processing, conversion, and consumption. They can cause serious environmental pollution. This can have an adverse effect on our living environment. It can also bring great challenges to the sustainable development of our economies. Therefore, people have been exploring methods of how to meet their requirements for sustainable economic development which feature the lowest demands for energy and electricity. Energy intensity and electricity intensity are two important indicators on studying the problem above. It is clear that energy intensity will be lower and lower with technology innovation and improvement. It would be too for electricity intensity. However, we find that the electricity intensity is increasing in the past few decades. As we discussed in the previous chapter of this book, technology innovation and improvement will produce two forces in different directions. One will increase the average value added of electricity and marginal value added of electricity. Then, the electricity intensity will be decreased. Another one will make electricity replace other kind of energy. It is the rise of electrification. Then, the electricity intensity will be increased. Therefore, the electrification can be used to measure the two forces produced by technology innovation and improvement. We will discuss the relations between energy intensity, electricity intensity, and electrification with some case studies for China, Japan, and the United States in the following sections.