The dark side of energy transition

In the quest for a sustainable energy transition, the debate is split between two main camps: technical innovation and behavioural change. What the both miss, argues Franco Ruzzenenti, is that increased efficiency can paradoxically lead to higher energy consumption. In this piece, Ruzzenenti puts forward a manifesto for the energy transition, arguing that efficiency is not the saviour we once thought.

In the quest to the energy transition there are two main parties who have monopolized the debate over the means and strategies to be pursued. One party believe the issue is mainly, if not solely, technological, a mere substitution process at the top of the pipeline (fossil free energy sources), or addition process at the bottom (carbon sequestration or compensation). Andrew Lo, MIT Sloan finance professor, argued that the word energy transition is misleading and we should use instead that of energy addition, hinting not only to the new, foreseeable technologies to be added (in his case, either fission or fusion power) to the incumbent ones, but also appealing to unconscious desire of portraying the transition as an expanding frontier rather than a contracting. The other party, on the

The common wisdom is that efficiency reduces the cost of energy use and thus, the demand will increase, offsetting partially or totally, the expected savings. Is it that simple? No. The problem is much more complex and nuanced.

This is not to say that this part ignores the fact the “the transition will entail a radical transformation of the panoply of technologies involved in production”, but maintains that a mere substitution of sources is not enough, if not unsustainable. Their favourite motto is “we must consume less” because renewable energy won’t sustain the current level of consumption. On this latter point, both parties agree and this is why, typically, both advocate for more energy efficiency, though one looks more to (the reduction of) denominator and the other to (the increase of) the numerator. Those who believe in frugality see in efficiency a precursor to sufficiency and those who cherish affluency and growth see in efficiency a solution to the conundrum of dwindling resources (or soaring environmental impact and climate forcing). But, with the words of Stanley Jevons, it is a wholly confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption.

The debate on whether efficiency does reduce energy consumption or not is not new, as the famous quote of Jevons proves and has surfaced periodically, like a Loch Ness monster. Nevertheless, today, few still argue that the Jevons’ paradox (or Rebound Effect) does not exist. Evidence of Jevon’s paradox is overwhelming and its detrimental effects are increasingly studied, taught and acknowledged in official documents. The common wisdom is that efficiency reduces the cost of energy use and thus, the demand will increase, offsetting partially or totally, the expected savings. Is it that simple? No. The problem is much more complex and nuanced. Demand could increase for other energy applications because of the savings or because of new cost structures of services, goods or factors. Beyond that, a new, higher energy efficient process can have long term structural effects in the system and create new demand for new goods, new services or change the (spatial) relationship among the existing ones (systemic effects or, as some says, frontiers effect).

An example of frontier effect is the chip, whose exponential growth in energy efficiency transformed from a massive object to a nano-technology, converting computers from oddities for the scientist and military to a mass consumer roduct. An example of structural effect is the Haber–Bosch process which allowed the economic fixation of atmospheric nitrogen into ammonia triggering the so-called green revolution. Since the dawn of the Neolithic age, about 90% of the population has been farmers, living in the countryside. Nowadays though, less than 5% work in the agriculture sector and between 10-20% live in rural areas. This major revolution in human history was enabled by mechanization and the resulting growth in labor productivity (driven by the efficiency of the internal combustion engine), on one side, and the dramatic increase in land productivity brought by synthetic fertilizers. The lingering question is, can we expect the awaited and wished for energy transition to be immune from the spell of the Jevons Paradox? Obviously not. The question is thus, which aspects are most vulnerable to this crisis.

Indeed, the concept of efficiency manifested itself thoroughly after exosomatic energy (say, the steam engine) as opposed to endosomatic energy (the human or animal power).

Although forecasting the Rebound Effect is an undertaking more suitable for astrologers than scientists, I will here venture some predictions.

There are two major uncertainties casting their shadow over the energy transition, that is: electrification and automation.

If you are now wondering what efficiency has to do with electrification or automation, it might be of some use to review its historical background. Efficiency is a relatively new concept to mankind. There have been many efforts to root its etymological lineage anterior to the mechanical revolution but to no avail. Prior to that, efficiens meant the capacity of an agent to change the state of an object. It is only when an ancillary source of energy -such as, for example, that of the wind or water, participates in this transformative process that the modern idea of efficiency takes shape. Indeed, the concept of efficiency manifested itself thoroughly after exosomatic energy (say, the steam engine) as opposed to endosomatic energy (the human or animal power). While endosomatic energy is bounded by the primary production of land, exosomatic energy is essentially unbounded or, we rather say, limited by the rate at which we are able to convert primary (fossil) energy sources into mechanical work. The pace of energy conversion in economic development was thus determined so far by the efficiency, on the one hand, and the extent and complexity of social and economic dissipative structures (or, we may metaphorically say, the sink of mechanical entropy), on the other hand.

Electrification is deemed to be expanding in almost all sectors, from heating to industry, and perhaps also that of high-temperature industrial applications, but it is in that of transport that the curse of Jevons casts its spell for the most.

It is obvious that electrification can be seen as just another chapter in the unlimited expansion of exosomatic energy. Nevertheless, ideally, it could also represent the gate, the locus, to reconnect the technosphere with land through renewable energy, thus bonding energy conversion again and dictating the pace of progress along a new solar circular pathway.

However, electrification could also tap into nuclear energy or be deployed with CCS (carbon capture and sequestration) technologies, unbinding development again and thereby resurrecting the ghost of Jevons. Electrification is deemed to be expanding in almost all sectors, from heating to industry, and perhaps also that of high-temperature industrial applications, but it is in that of transport that the curse of Jevons casts its spell for the most. Will electric vehicles cause a surge in energy demand? Interestingly, the energy efficiency of electric motors is already maximal (between 70% and 90%), leaving little room for an increase.

The mousetrap lies elsewhere, arguably, in Distance and Power Rebound Effects. What is the distance RE? As the price of electric vehicles is much higher with respect to equivalent ICV (internal combustion vehicles), but the cost of fuel is generally lower per unit distance (€/km), one would expect electric vehicle owners to be incentivized to drive more in order to payback the capital investment of the car faster. And yet, initial analysis in the US suggests that there is no or little increase in milage in EV drivers with respect to ICV ones.

The Power RE refers to a loss in efficiency gains due to an increase in the rated power of the vehicle. Often an increase in efficiency brings about an increase in power. Indeed you will see many commercials flagging up a “more efficient and more powerful car”, which would help you in saving both, fuel and time. Sadly, the efficiency gains -as measured in terms of fuel economy (liters per km) at constant speed, never fully materialize. That is to say that one can drive the same distance in a smooth acceleration and deceleration pattern or in a frantic sequence of speeds up and breakings, leading to two sharp, different energy bills. A more powerful engine would only amplify the gap. We have shown, in the domain of internal combustion, of that power RE curbs efficiency both in trucks and cars.

As I have already suggested, the second major source of uncertainty might be expected to be automation, or, as some says, the fourth industrial revolution. Interestingly, the birth of automation is deeply entwined with the advent of hydrocarbons. David Landes, in his famous book 14, explains, with the paradigmatic example of the fate of the train stoker, how the liquid state of oil, compared to the solid state of coal, enables the automatization of the combustion chain. It is not by chances that, in almost all languages, we call them automobiles. It was the foreboding of a new age which would find in electricity the final thrust to unleashing automation ubiquitously in our society. Electrification made it possible to severe the secular tie between source of energy and site of mechanical work, enabling the spreading and scaling up of manufacturing (as noticed by Smil, “despite the abundance of free slave labor, no ancient civilization took effective steps toward true mass manufacturing”). It also brought exosomatic energy in our houses: an installed power of 3 kW would require about 15 slaves to be matched with edosomatic energy. The result was the great acceleration of the decades after the Second World War and the new energy regime.

What is looming on the horizon is arguably a revolution of comparable strain and scope. Robots and AI will drive a new energy landslide in several domains of human labour, from manufacturing, to health care, from white collars, to military, shifting again an unforeseeable amount of energy from ensosomatic to exosomatic fields. Some estimate the energy consumption of blockchain amounted globally to

2.3x10^4 TWh in 2021 (more than ten times the primary energy consumption of Italy), only for the sake of getting rid of a notary and e-ledger. Arguably, the ensuing energy riptide will not only be brought about by substitution of endo-exosomatic energy, but also by the structural changes that automation will prompt in society and the economy. Once self-driving cars are widespread, will working while commuting become an habit? Will this lead to a further sprawl of cities or the revival of rural areas? Will it be the last nail in the coffin of public mobility? Will it be the demise of the circadian limit that has always constrained travelling? Whatever will it be, the global energy bill will surge.

The energy transition can’t live up its ambitious expectations without the aid of energy efficiency, but, at the same time, the ghost of Jevons should remind us the perils of the systemic, unpredictable and unintended effects. Here I listed two of the most likely dangers; an invitation to reflection, than a warning.

Franco Ruzzenenti

5th June 2024