Energy Demand And Economic Growth

Measurement And Conceptual Issues In Policy Analysis

Corazon M Siddayao

• Publisher: Routledge
• Year: 2021
• eBook ISBN: 9780429711954
• Edition: 1
• Topic: Social Sciences
• Subtopic: Sociology
• Index: Social Sciences

The author examines the measurement and conceptual issues that complicate analytical work in the energy demand field. Successful policy decisions depend on the use of appropriate data and analytic methods; because the demand side of the energy-economy interaction is highly complex, this study focuses on the more basic economic and energy concepts and methods in demand analyses. He critiques measures used to analyze the relationship of energy to economic growth and summarizes the various demand estimation methods and their results. Highlighting the problems faced by analysts in developing countries who often have limited time and inadequate data, she discusses the serious implications of basing policy decisions on questionable analytic methods and data.

1 Understanding the Concept of Energy

DOI: 10.4324/9780429038563-2

Energy is a derived demand. Users desire energy services (power, heat), and energy products are merely the means of obtaining those services. Understanding the demand for energy requires understanding both the technical aspects of energy as a concept and the technical aspects of energy as an input in the process of improving a community's national income or levels of satisfaction. A first step is to understand exactly what is meant by the words energy and demand. Although the specialist may assume that the concept of energy demand is clearly understood, applied work in the field demonstrates that this is not necessarily so.

A major problem in energy use analysis arises from what may be termed a definitional problem. Related to this is what might be referred to as an "indexing" problem. The two problems are not identical. The first refers to the boundaries or limits of the concept under consideration. The second refers to the means or method of signifying such limits as well as of aggregating energy forms of different qualities within any specified limits. It could also be called a "common unit" problem. Both give rise to measurement problems.

Defining Energy

In most contemporary literature, the term energy has been defined as the ability to do work or to produce heat.¹ In fact, the term was intended to take account of the fact that heat and work are interchangeable. Although they are interchangeable, however, a given quantity of heat does not always yield the same quantity of work. Definitional problems thus arise principally because various energy forms have different capacities to do work. Several terms have been used to describe this condition; one of them is thermal efficiency. One might also refer to the problem as that of defining the level of effective energy. In addition, intertemporal considerations and interdependence within a system require recognition of the concept of embodied energy. These and other basic issues are summarized in this section.

The most important definitional question concerning energy arises from the vagueness with which the term is used. In most current discussions on the "energy problem," the principal focus tends to be on the heat quality of energy. However, energy is also stored work. The heat it produces may be intense enough to emit light. Heat, light, motive force, and chemical change induced by, or resulting in, electricity are all manifestations of energy. The combustible sources of energy may be transformed into electricity. Mechanical energy and electricity may also be derived from the kinetic energy of a mass of water that moves from one level to another (e.g., a dam, river falls, tides, waves) or from a mass of air that moves from a higher to a lower pressure area. Heat may be produced through combustion or fission of a suitable fuel, compression of a suitable liquid or gaseous medium, from the capture of the sun's rays, from hot rocks below the surface of the earth, from the passage of electricity through an appropriate material, or from certain exothermic chemical processes.²

Enthalpy, the heat content of a substance, H, is a thermodynamic property defined as the internal energy, E, plus the product of the pressure, P, multiplied by the volume, V, of that substance:

H = E + PV

It contains the units of energy and is usually expressed in calories (or kilocalories) or in British thermal units (Btus).³ (See Appendix 1.1) The joule is the only energy unit recognized by the SystSme International d'Unites (SI). It was first promulgated as the SI unit of energy in 1946 and then as the SI unit of heat in 1948 by the General Conference on Weights and Measures. It was introduced by members of the European Economic Community in 1978. The continued use of alternative units persists, however.

Not all units of heat are used effectively in performing work because losses occur in the conversion of the substance from one form to another. Energy stored in fossil fuels, for example, may be measured at the gross heat contents of the fuels (sometimes referred to as their gross calorific value) or at their net heat values. The gross heat content of the fuel is the total amount of heat that will be produced by combustion. Part of this is the latent heat that is lost in combustion when the water in the fuel evaporates or condenses. The difference between gross and net heat ranges from 2.5 percent in anthracite to 9-10 percent in lignite and from 7-9 percent in liquid hydrocarbons to about 10 percent in natural gas.

It is well known that different ...

Table of contents

• Cover Page
• Half Title Page
• Title Page
• Copyright Page
• Dedication Page
• Contents Page
• List of Tables and Figures Page
• Preface Page
• Introduction
• 1 Understanding the Concept of Energy
• 2 Understanding the Demand for Energy
• 3 The Energy/GDP Ratio as a Measure of Energy Demand: Shortcomings
• 4 Estimation Problems: Income and Price Elasticities of Energy
• 5 Estimation Problems: The Complementarity/Substitution Issue
• Conclusion
• Acronyms and Abbreviations
• Bibliography
• Index