World energy sources: 1) oil (32 percent); 2) natural gas (22 percent); 3) coal (21 percent); 4) biomass such as firewood, charcoal, crop waste, animal dung, etc. (14 percent); 5) nuclear (6 percent); 6) alternative energies such as wind power, solar energy, geothermal and hydroelectric (4 percent).

“Total global energy consumption is around 16 terawatts (16 trillion watts) a year. The figure is expected to rise to 20 terawatts in 2020. Fossil fuels supply 80 percent of the world’s energy. They are also the biggest source of carbon dioxide emissions.

According to the Department of Energy (DOE), fossil fuels (including coal, oil and natural gas) makes up more than 85 percent of the energy consumed in the U.S. as of 2008. Oil supplies 40 percent of U.S. energy needs.

The current cost to generate nuclear power is 6 cents to 7 cents per kilowatt-hour while thermal power costs 8 cents to 10 cents per kilowatt-hour. The purchase price of surplus electricity generated by solar power is significantly higher at around 60 cents.

The outlook is for human to consume more energy not less, by some estimates three times as much. Between 1950 and 200 the world’s population grew by around 140 percent. In the same period fossil fuel consumption increased by around 400 percent, fueled for the most part by growth in the West. It is estimate that global energy needs will rise 51 percent between 2010 and 2030 because of industrialization and population growth.

International Energy Agency, Department of Energy

Energy Consumption and Rising Out of Poverty

Catherine Wolfram, a professor at Berkeley, wrote for Bloomberg: “Energy consumption and the energy needed to manufacture goods increases sharply when households move out of poverty into the middle class. This is true in every country we analyzed. On the other hand, when households move from extreme poverty to just being poor, energy use doesn’t increase by much, because these households typically use their growing incomes to consume more calories or higher quality food. Similarly, when households move from the middle to upper-middle class, their energy use doesn’t change much. [Source: Catherine Wolfram, Bloomberg, January 17, 2012. Wolfram is associate professor of business administration at the Haas School of Business at the University of California, Berkeley, where she is co-director of the Energy Institute]

“Our research also showed that in countries that improved the living standards of the poor, a 1 percent increase in gross domestic product leads to a 1 percent or higher increase in total energy consumption. Conversely, in countries where the upper-middle class or the wealthy benefit the most from growth, a 1 percent increase in GDP increases energy consumption by only about half as much. This suggests that $1 of GDP growth will have very different implications for energy use depending on what type of household consumes it. When a country’s economic growth elevates many people into the middle class, its energy consumption grows quickly.

“In China, we see that the share of Chinese families living in poverty has declined dramatically, while sales of air conditioners have skyrocketed. For example, in urban China in 1995, there were eight air-conditioning units for every 100 households; by 2009, there were 106 units for every 100 households.

“This mirrors trends in the rest of the world. As households come out of poverty and join the middle class, the share of their budget devoted to food declines and the share of their budget devoted to modern conveniences such as refrigerators, fans, water heaters, washing machines, motor scooters, cars and air conditioners goes up. Many of the goods the rising middle class purchases require energy to use and to manufacture. Consider the case of Brazil, where the government embarked on an aggressive and hugely successful anti-poverty program called “Bolsa Familia.” Among Brazilian households in the lowest 25 percent of the income distribution, only half owned refrigerators in 1999. By 2009, that number increased to 85 percent.

Impact of Rising Energy Consumption as People Rise Out of Poverty

Catherine Wolfram wrote for Bloomberg: “The arrival of all these new energy users will have profound implications for the price of oil, coal and other fuels, as well as for concentrations of greenhouse-gas emissions in the atmosphere and the resulting climate change. A poor Brazilian family’s decision to buy a refrigerator or a Chinese family’s decision to buy an air conditioner may seem remote and inconsequential. Yet, when millions of other families around the world buy refrigerators and air conditioners simultaneously, there will be real impacts on prices at the local gas station and on our prospects for controlling climate change. [Source: Catherine Wolfram, Bloomberg, January 17, 2012]

“Unfortunately, this pattern indentified in our research isn’t captured well by the most prominent energy forecasts. For example, in the case of China, the Energy Information Administration’s five-year forecast for energy consumption in 2005 fell short by almost 25 percent. These forecasts probably underpredict future medium-run growth in energy demand, as well. To develop more accurate forecasts, we need to account for growth driven by the rising middle class.

“In the coming decades, a substantial fraction of the world population is poised to go through a Chinese and Brazilian-style transformation. As household incomes grow and programs to bring electricity to more homes succeed, the growth in energy demand over the next decade will be sizable -- perhaps startlingly so. There is no doubt that the rise of the global middle class is a positive development. Yet, if we don’t forecast and plan accordingly, it could lead to dire unexpected environmental consequences and cause dramatic increases in energy prices that ultimately diminish the very livelihoods we are trying to improve.


The world consumes 320 billion kilowatt hours of energy every day. This equals to 22 bulbs burning non stop for every person on the planet. One kilowatt hour of electricity is equal to the energy needed to light a 100-watt lightbulb for 10 hours.

Electricity generation costs (cheapest to costliest in U.S. cents per kilowatt hour): 1) nuclear power (5.3); 2) coal (5.7); 3) liquid natural gas (6.2); 4) waste (9 to 11); 5) oil (10.7); 6) hydro power (11.9); 7) wind power (10 to 14); 8) fuel cells (22); and solar power (45).

Aluminum, steel, cement, pulp, silicon, glass and chemicals are industries that require a lot of energy.

During off-peak hours, electric companies rely on the base load power generated in large part by carbon-neutral nuclear power plants; when demand rises during peak hours, they bring dirty, coal-fired plants online to meet increased need.

Homeowner Electricity Consumption Falling in the U.S.

Jonathan Fahey of AP wrote: “Over the next decade, experts expect residential power use in the U.S. to fall, reversing an upward trend that has been almost uninterrupted since Thomas Edison invented the modern light bulb. In part it’s because Edison’s light bulb is being replaced by more efficient types of lighting, and electric devices of all kinds are getting much more efficient. But there are other factors. [Source: Jonathan Fahey, AP, September 8, 2011]

“New homes are being built to use less juice, and government subsidies for home energy savings programs are helping older homes use less power. In the short term, the tough economy and a weak housing market are prompting people to cut their usage. As a result, many families can expect their monthly bills to remain in check, even if power prices rise. For utility executives, who can no longer bank on ever-growing demand, a major shift is under way: They’re finding ways to profit when people use less power. “It’s already having an impact and we may just be in the early innings of this,” says Michael Lapides, a utilities analyst at Goldman Sachs.

“From 1980 to 2000, residential power demand grew by about 2.5 percent a year. From 2000 to 2010, the growth rate slowed to 2 percent. Over the next 10 years, demand is expected to decline by about 0.5 percent a year, according to the Electric Power Research Institute, a nonprofit group funded by the utility industry.Overall demand, including from factories and businesses, is still expected to grow, but at only a 0.7 percent annual rate through 2035, the government says. That’s well below the average of 2.5 percent a year the past four decades.

“Utility executives have been aware that the rate of demand growth is slowing, but a more dramatic shift than they expected may be under way. Executives were particularly surprised by a dip during the first three months of this year, the most recent national quarterly numbers available. Adjusted for the effects of weather, residential power demand fell 1.3 percent nationwide, an unusually sharp drop.

“Executives and analysts are perplexed because residential demand doesn’t usually track economic ups and downs very closely. Even when the economy is stagnant, people still watch TV and keep their ice cream cold. “No one knows if it’s customer concern about the economy or a structural change,” says Bill Johnson, CEO of Progress Energy, which serves Florida and the Carolinas.

Why Homeowner Electricity Consumption Falling in the U.S .

“Some reasons why electricity consumption is falling in the U.S.: 1) Lighting, which accounts for 10 to 15 percent of a typical family’s power use, is much more efficient than it used to be. Americans are installing compact fluorescent bulbs and light emitting diodes, which are up to 80 percent more efficient than incandescent bulbs. Traditional incandescent bulbs will start disappearing from store shelves next year because they waste too much energy to meet federal standards crafted in 2007. [Source: Jonathan Fahey, AP, September 8, 2011]

“2) Federal and state efficiency programs have expanded rapidly. Twenty-eight states have passed laws that force utilities to help customers use less power. The federal stimulus program allocated $11 billion to local efficiency programs, including subsidies for home weatherization and the purchase of energy-efficient appliances.

“3) With the U.S. economy in the doldrums and gas prices high, families are trying to save money. It’s easier to turn off the air conditioner than shorten your commute, says John Caldwell, director of economics at the Edison Electric Institute, a trade group. 4) The weak housing market has kept people from moving into bigger homes. And high unemployment is forcing college graduates and other family members to live together.

“When Stephen Botelho, a software designer in Westwood, Mass., moved his family into a 2,000-square foot, 80-year-old ranch, he requested an energy audit from his utility, Nstar, to help cut his power use. Nstar installed what Botehlo estimates to be $200 worth of compact fluorescent bulbs. He replaced his electric dryer with a gas-powered one. And with the help of rebates from the state, he had insulation blown into his attic. Next up: replacing a 14-year-old electric water heater with a gas model, which he expects will cut his $950 annual water-heating bill in half.

“Suddenly faced with shrinking sales, some utilities are asking for regulatory changes so they can charge higher rates per kilowatt hour in exchange for helping customers further reduce consumption, reducing power demand and customers’ electric bills at the same time. In California, where utilities pioneered this approach in the early 1980s, residential power demand has grown at half the nationwide pace over the last 30 years, even though the state’s population grew at a faster rate than the nation’s.

“In general, it is now cheaper for utilities to help customers cut back than to build a power plant. In past decades, the reverse was true. That’s because the cost of materials and labor have risen faster than the price of power. There will continue to be a need for new plants, however, as existing facilities age. Residential power use has fallen even as the number of electronic devices has exploded because the devices themselves have gotten more efficient. In the 1970s, for example, refrigerators used 2,000 kilowatt-hours per year. Today, they use 500.

“IPads are everywhere and everyone seems to have a smartphone, but engineers have designed them to sip power because battery life is a major selling point. Also, these devices, as well as ever more powerful laptops, are cutting into the use of less efficient desktop computers. The first flat screen TVs used twice as much power as their widebodied ancestors, but they have been getting dramatically more efficient in recent years, according to Tom Reddoch, executive director of energy efficiency at EPRI. “The flat panel community heard they were energy hogs and they did something about it,” he says.

“Appliances are expected to get even more efficient over the next two decades. In April 2012, Netherlands-based Phillips announced that it had developed a LED lightbuld that lasts 20 years. An EPRI analysis predicts refrigeration will get 29 percent more efficient, space heating will get 24 percent more efficient and TVs and computers will get 22 percent more efficient. Energy needed for lighting will decline by half. Experts caution that home electricity demand could begin to grow again if power-hungry devices that have yet to be imagined catch on, or if a device already imagined — the electric car — goes mainstream.

Energy Conservation

Strategies household can employ to save energy include: 1) installing geothermal heat pumps that tap into unchanging temperature of the Earth to heat houses; 2) using compact fluorescent light bulbs and light-emitting diodes; 3) getting used to lower household temperatures in the winter and higher temperatures in the summer; 4) properly insulating one’s house; 5) driving less, using bicycles and public transportation more; 6) using solar water heaters and electricity-producing cells; and 7) recycling. Compact fluorescent lams (CFL) last longer and consume less power than a conventional bulbs.

“Energy conservation recommendations: 1) use electric fans instead of air conditioners, raise the temperature settings of air conditioners and block sunlight with window blinds; 2) turn off lights during the day and as much as possible at night; 3) reduce the brightness of the television screen, set the television on energy-saving mode and turn off when not in use; 4) turn off the main switch on electric devices not remote control and unplug appliances that are not used for long periods; and 5) lower the refrigerator settings from strong to medium.

Smart Grids

“Smart grid” power transmission technology relates to next-generation power networks that will optimize supply to residential and other properties. Smart girds are efficient power transmission networks that can handle fluctuating power generated by solar and wind power and other renewable sources. They are expected to encourage the use of renewable energy such as solar and wind because they give stability to the output of electricity supplied by such fluctuating natural power sources.

By using a network utilizing information technology, the amount of residential and corporate electricity consumed can easily be checked and more efficiently managed. The government is also considering developing an energy storage system and expanding the use of light-emitting diode equipment.

Japan is a leader in “smart grid” power transmission, technology. A bill submitted to the Diet in 2011 for a special measures law on renewable energy sources includes a system that obliges power firms to purchase electricity generated from clean energy sources such as solar and wind power. The renewable energy special measures bill is intended to promote the use of electricity generated from renewable energy sources, by obliging utility firms to purchase electricity from such sources. The envisaged law would make it easier for individuals and corporations to make back the initial investment of installing power-generation facilities that use renewable energy. [Source: Yomiuri Shimbun, July 15, 2011]

“Under the proposed system power firms are obliged to purchase all electricity generated from solar, wind, geothermal and biomass facilities that have been constructed by businesses and other organizations. The power firms are obliged to purchase surplus electricity generated by private households that have their own solar power generators. The obligation on utilities to purchase renewable energy-derived electricity from companies will remain in effect for 15 to 20 years, and for 10 years for solar-generated electricity from private households. Power firms already purchase surplus electricity from private households with solar panels. But under the new system, the government-set purchase price will initially be raised to a much higher level, before being gradually lowered over time.

“The increased costs imposed on power firms will be passed on to their customers in the form of higher bills for electricity consumption. According to government calculations, an average household's monthly electricity bill be $2 to $3 yen higher for 10 years following the new system's introduction.

Smart Cities

Smart Cities are being promoted as the way of the future to reduce energy use and carbon emissions. Leslie R. Norton wrote in Barron’s: “Technology researchers at IDC [International Data Corporation] estimate the size of the smart-city information-technology market is now $34 billion annually and will gain 18 percent-plus a year to $57 billion by 2014. The market has broadened to include items like broadband connectivity, green belts, renewable energy, green buildings and other intelligent-city systems. [Source: Leslie R. Norton, Barron’s October 3, 2011]

“One glimpse of the future occurred in London in 2003. The city began charging a stiff fee to drivers who ventured into congested business districts during high-traffic hours. The system uses an automatic number-plate system for billing and enforces the measure with intelligent transponders and cameras. There are heavy fines for those who don't pay. After the system, which is now run by IBM, was installed, the city found congestion dropped by 30 percent, traffic speed increased by 37 percent, and particulate matter and nitrogen oxides fell by 12 percent. The money raised provided funds for public transportation. Already under way elsewhere are intelligent parking systems that allow drivers to find spaces via their smartphones.

“Similarly, intelligent power use around peak loads could help cities delay investment in new power generation for decades. City hospitals will get better at automating and managing data to save time and money. John Tolva, a former IBM executive who's now chief technology officer to Rahm Emanuel, Chicago's new mayor, explains that cities will increasingly make their databases available to the public, letting "civic nerds" dream up new businesses that can use the information. "The tangible benefits are economic development," says Tolva. The information can also be used by city agencies to become more efficient. "At the moment, none [of the systems] are integrated, which is why a street is ripped up three times by different departments" trying to solve different problems. In the future, the work could be coordinated so it's all done at once.

In February 2012 Discover reported: “Wind and solar power are clean but inconveniently intermittent. To keep the power flowing, MIT materials scientist Donald Sadoway proposes building storage batteries large enough to power whole neighborhoods. Inside his prototype are three layers of molten fluid: magnesium, antimony, and an electrolyte solution that transfers magnesium ions (charged atoms) to the antimony, producing an electric current. Compared with other batteries, this design is relatively cheap, and it can be scaled up to hold enough surplus electricity for a subdivision or a hospital, releasing it when needed. “After dark or when the wind isn’t blowing, you’ll still have uninterrupted power,” Sadoway says. [Source: Discover, February 16, 2012]

Image Sources: U.S. Department of Energy; Wikimedia Commons

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, The Guardian, National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Global Viewpoint (Christian Science Monitor), Foreign Policy, U.S. Department of Energy, Wikipedia, BBC, CNN, NBC News, Fox News and various books and other publications.

Last updated August 2012

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