Second law efficiencies as low as in our stylized example are far from being unrealistic. The second law efficiency of overall electricity consumption, for example, is estimated by Gilli et al. to be lower than 6 per cent on a world-wide average.57 In contrast to low second law efficiencies, however, commonly high first law efficiencies support the impression that further efficiency improvements are hardly possible. Moreover, while our example merely focuses on the efficiency with which space heating is accomplished by final energy in the form of electricity, we have to take into account that electricity must be produced out of primary energy.
Figure A4.2 World-wide Averages of Second-law Efficiencies for the Generation and Transformation of Electricity into Energy Services
Production sphere Consumption sphere
Primary energy 72% Final energy 14% Useful energy Energy service
Source: Frondel and Rubbelke 2002.
In Figure A4.2, efficiency considerations are extended to the complete generation and transformation chain, starting with primary energy and ending with the supply of the desired energy service. Figure A4.2 displays world-wide averages of second law efficiencies appraised by Gilli et al.58 for each conversion step. While primary energy carriers like coal, gas, and oil are transformed into final energy in the shape of electricity with rather high second law efficiencies —£2 is about 72 per cent, including distribution losses, the least efficient part of the chain is the end use of electricity by consumers. Electricity is converted into useful energy, such as for instance for heating purposes, by consumption technologies, such as electric furnaces, with a second law efficiency whose world-wide average is estimated to be as low as 14 per cent.59
At a first glance, it looks like the final step. However, an energy service, such as heating a house, would require less useful energy if the house had better insulation. For such reasons, a final, artificial conversion step from useful energy to the ultimately desired energy service is introduced by Gilli et al.60 for which these authors appraise a second law efficiency of about 40 per cent. Hence, according to Gilli et al.61 the second law efficiency of electricity consumption is only about 5.6 per cent on an average, world-wide. This percentage suggests that there is a potential for efficiency improvements in the consumer's sphere that is much higher than the potential in the producer's sphere. Overall, the world-wide average of the entropy efficiency of all steps that are necessary to provide an energy service with the help of electricity is as low as 4 per cent. Low estimates of world-wide averages of second law efficiencies for the generation and transformation of electricity into energy services provided by Gilli et al.62 support our example, which indicates that much more efficient technologies than those currently applied might be available.
Above all, '(...) end-use devices are on average the least efficient components of the energy system'.63 This result promises a higher potential for efficiency improvements in electricity consumption than in electricity generation. But how can we explain that the most efficient technologies are not implemented? Economic reasons, such as high time preference rates of consumers still prevent highly efficient consumption technologies, such as power-saving light bulbs, from being the current technical standard, although these technologies offer long run economic advantages for consumers.64 Prohibitively high information costs for consumers, partially caused by the common impression of high first law efficiencies, are but one example of those reasons and market failures. These problems could be solved by information programmes, energy contracting and demand-side management.
58 Gilli et al. 1995.
63 Nakicenovic 1996, 18.
64 Ekins 1995.
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Renewable energy is energy that is generated from sunlight, rain, tides, geothermal heat and wind. These sources are naturally and constantly replenished, which is why they are deemed as renewable. The usage of renewable energy sources is very important when considering the sustainability of the existing energy usage of the world. While there is currently an abundance of non-renewable energy sources, such as nuclear fuels, these energy sources are depleting. In addition to being a non-renewable supply, the non-renewable energy sources release emissions into the air, which has an adverse effect on the environment.