Colin J.

Axon, UK

Nigel H. Goddard, Scotland

The Energy-Economy System

- extending NEA to the policy-testing framework of 7see
(see www.arup.com/gdp for the Sankey diagram booklet)

Barney D. Foran, Australia

March 31st, 2015, Net Energy Analysis Workshop, Stanford

Simon H. Roberts
Foresight + Research + Innovation, Arup, London

Benjamin S. Warr, France

A slightly different way of looking at NEA: the 7see approach

Net Energy Analysis (NEA)

7see for direct energy

Direct Energy for UK oil & gas extraction: 2.8% rising to 5.5%

Direct Energy use for oil & gas

extraction
Direct energy to output energy (ratio)

0.06

0.05

0.04

0.03

0.02

historical

0.01

0.00
1990

2000

2010

year

2020

2030

Key aspects of the 7see approach

(references to the Sankey diagram booklet)
1.

Fixed Capital (FC) basis of

economy

4.

Source of Gross Fixed Capital

Formation (GFCF)

2.

Inputs and outputs for each FC

5.

Calibrate from historical data

3.

Supply shortfall feedback to FC

6.

Configure dynamical system

Vensim

1. The boxes:
Fixed Capital (FC) basis of economy (booklet page 10)

2. Boxes and their arrows:

inputs and output for each type of Fixed Capital (FC)
(Not using prices; only energy, jobs, and economic volume flows.)

3. Supply shortfall is the feedback (a dynamic system) via Fixed

Capital Formation (FCF) to FC, and thus supply

Vensim
7

4. Source of Gross Fixed Capital Formation (GFCF) and hence its

energy footprint (booklet page 17)

5. Calibrate relationships (time-dependent coefficients) according

to historical data: 1990-2012
Jobs in manufacturing

Volume output of manufacturing

Volume output (b[1990]/y at

basic prices)

140

4
3

Jobs per unit output

2
1
0
1990

historical
2000

2010

year

2020

2030

Jobs production coefficient

(jobs/m[1990] at basic prices)

Jobs (m)

50
45
40

100
80
60
40

historical

20
0
1990

35

2000

2010

year

30
25
20
15

historical

10

extrapolation

5
0
1990

120

asymptote
2000

2010

year

2020

2030

2020

2030

6. Configure dynamic system and run forward for BAU scenario

(business-as-usual; exploratory rather than normative)
1.
2.

Extrapolate all time-dependent coefficients.

Final demand for services adjusted for an unemployment level of 6%.
Growth in GDP

Unemployment
6

10

Rate (%)

historical
2

model - BAU
0
1990

2000

2010

year
10

2020

2030

Growth (proportion per year)

12

-2

historical

-4

model - BAU
-6
1990

2000

2010

year

2020

2030

Indirect Energy example: testing a policy of accelerated installation

of offshore wind over 2016-2035
Generating capacity of offshore wind
60

Generating capacity (TW)

50

40

model - policy
model - BAU
model - BAU

30

20

10

0
1990

2000

2010

2020

2030

year
3,000 MW/y in 2025 a highly feasible scenario
(Pyry Report)

11

Photo: Nysted Offshore Wind Farm

Accelerated installation requires more GFCF, which is diverted

from final consumption (booklet p17)
Investment (GFCF)

Annual economic volume flow

(1000m[1990]/y)

200
190
180
170
160
150
140
130

model - policy
model - BAU
model - BAU

120
110
100
1990

2000

2010

year

12

2020

2030

Indirect Energy example: consumed, output and payback period

100

1.6

80

1.2

60

0.8

40

0.4

20
0.0
0
-0.4
-20
-0.8

-40

output change (PJ/y)

-80

energy consumed (PJ/y) -1.6

payback period (y)

-100
1990

-2.0
2000

2010

year

13

-1.2

-60

2020

2030

Turquoise line annual increase in

output of offshore wind generation
Energy payback period (y)

Weighted energy (PJ/y or PJ/y)

Investment energy required for energy

output from offshore wind

Grey dashed line energy payback

Purple line - energy consumed in
construction (derived from tracing
GFCF back via intermediate
consumption to industries use of
energy)

Sub-year energy payback means total weighted energy is barely

changed, while CO2 emissions are reduced
CO2 emissions
600

10

500

model - BAU
model - policy

0
1990

2000

2010

year

14

2020

2030

CO2 emissions (MtCO2/y)

Weighted energy (EJ/y)

Total weighted energy

12

400

300

model - BAU
200

model - policy
100

0
1990

2000

2010

year

2020

2030

Messages

1.

For Indirect Energy, can use the (weighted) energy footprint of Gross Fixed
Capital Formation (GFCF).

2.

The 7see model enables proposals to be set in an economic context, familiar

to national policy and decision makers.

3.

Explore the 7see-GB model in Vensim by requesting a copy from

simon.roberts@arup.com, +44 (0)20 7755 2906.

Vensim

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