Fundamental aspects of energy conservation policy

Abstract

The formulation of a governmental energy conservation policy requires that the issues involved be fundamentally analyzed. Information transfer, more intensive use of data, and good housekeeping can all contribute to reduced energy use. Our major choice, however, is between producing the present mix of materials, commodities, and services more efficiently or decreasing demand for them. The first option is referred to as the “technical fix”, the second one as “change of lifestyle”. If the first option fails, changes in life-style might become mandatory. This paper deals with the technical fix approach. Higher capital investment can lead to a decrease in direct use of energy. Both the cost and the energy involved in these investments are analyzed along a conservation path, and a limited number of constants is used to describe the changes along this path. These constants can also be used to feed technological information into macroeconomic analysis. The time scales involved pose the major problem to achieving conservation by means of a technological fix. An increase in the price of energy will lead to higher capital investments in accordance with the economic lifecycles in the different sectors. For applications with a short life-time, such as in the transport sector, energy conservation will mainly take place through the construction of new equipment. In sectors with long lifetime investments (e.g. buildings), retrofitting will be important. Including the indirect energy requirements in the conservation study leads to some important conclusions. It can be demonstrated that the thermodynamic limit is not the ultimate limit for conservation. An energy minimum is obtained, which corresponds to a use of energy higher than the thermodynamic limit. It is also impossible to reduce or eliminate some components of the present energy supply system and at the same time to introduce a new decentralized supply system. A crucial aspect of the technological fix approach is that within the present rules, capital investments for saving direct energy can only be made after the increase in energy price has taken place or when it can be firmly anticipated on a short term. At this point, however, the time needed for making these capital investments is lacking and adverse economic consequences can be expected. It is therefore the major task of governmental policy to induce conservation before it is economically acceptable or possible. This requires some form of government interaction. The theory developed in this paper provides a method by which to rank the options according to the energy saved per dollar of public funds invested. This measures the difference between the objectives of the private sector and those of society. The longer this policy is postponed, the larger is the risk that conservation will have to be achieved in an emergency program. In that situation the indirect energy necessary for the capital construction might jeopardize the short-term goals.