Irish 2009 Oil Consumption: Off a Cliff

Inscrutable

I came across the provisional 2009 Irish energy balance on the SEAI website.

Overall, Irish energy consumption was down 12% over 2008. Coal was down 15%, natural gas down 4%, renewables up 10%. Oil consumption was down a whopping 18%, and accounted for the bulk (85%) of the decrease in primary energy consumption.

Electricity demand was down 10%. How much of that was due to reduced economic activity and how much was down to unemployed people switching off lights? The answer to this question would be pertinent to the plan to install smart meters and whether people will respond to price signals.

Figure 1 shows the change in oil consumption. You can see that we're back to 1998 levels of oil consumption.



SEAI don't have the sectoral breakdown of the oil reduction yet. Figure 2 shows the sectoral oil consumption up to 2008 from a previous thread.



Do you think the reduction was broad-based, ie the oil consumption breakdown is the same as in Figure 2? International flights is an obvious one. I'm sure road freight was down also. Car travel; how much oil does it take to collect the dole?

If you are from CERA, you will call this 'peak oil demand'. Nothing like a good recession to reduce oil consumption. This reduction has a silver lining, though, since it means we're using less oil. I wonder will Ireland ever get back to the 2005-2008 oil consumption levels?

If anyone could point me towards a time series for Irish GDP or GNP back to 1990, that would be great, because I'd like to estimate Irish oil demand elasticity.

pumpkinsoup

Inscrutable wrote: »

Do you think the reduction was broad-based, ie the oil consumption breakdown is the same as in Figure 2?

I'd expect that industry would account for a large amount of the reduction, in particular indigenous industry and companies involved in producing building materials.

If you are from CERA, you will call this 'peak oil demand'.

I don't think we've reached "peak oil demand". It's simply the recession effect. When (/if) this recession ends demand will pick up again.

I wonder will Ireland ever get back to the 2005-2008 oil consumption levels?

It will, within four years according to this forecast.

If anyone could point me towards a time series for Irish GDP or GNP back to 1990, that would be great, because I'd like to estimate Irish oil demand elasticity.

Here. You'll notice that the economy grows much faster than its oil use historically. However, to measure elasticity you would also need to consider oil prices here and up north, availability of alternative fuels, emissions trading, etc.. In other words, economic growth is just one driver. The elasticity figure will also vary depending on fuel application, e.g. private car use, industry oil use, aviation, etc.. In reality there are probably two elasticity figures for each; one in a growing economy and another in a contracting one. Using just one year's statistics for a reduction in oil demand will not give you a satisfactory measure of elasticity in an economy in decline.

I think you can put most of the reduction down to the recession, as some of the other consequences include a significant depopulation of the country.

A lot of commercial premesis were/are very wasteful with electricity, lights left on etc.
The improvements in the road network have had a considerable affect on fuel consumption. Another major consumer of energy would have been the construction industry, concrete for example. Even if we have major growth in the next decade, construction is unlikely to play a big part in it as there is a lot of slack in the system.

Any future growth will have to be based on lower (oil based) energy use. With "peak oil" on the horizon,when the growth does come the extra oil won't be there! As it is the Chinese are buying up all the slack and having rapid economic growth.

preacherman

Hello, first post in this section for me, apologies in advance if I go off on one

Inscrutable wrote: »

Electricity demand was down 10%. How much of that was due to reduced economic activity and how much was down to unemployed people switching off lights? The answer to this question would be pertinent to the plan to install smart meters and whether people will respond to price signals.

I would think it is a combination of industry reacting to the huge energy price increases in 2007 by implementing some level of energy management to counteract the increased operating costs which is now showing up on recent figures and also the downturn. I have been involved with energy management in the hospitality industry for a good few years and have seen a huge increase in the amount of properties making good reductions in energy through investment and good work practices in recent years. Reducing energy is now mainstream in the hospitality industry, mostly to ensure sustainability of their business rather than sustainabilty as we would talk about. I would imagine that it is the same across all of industry.

As for the unemployed switching off the lights I think there could be an arguement to say that they probably have increased their personal energy consumption because they are at home more so heating and lighting is on for longer. The oil decrease could definitely be attributed to those same people not having to drive to work anymore.

As for smart metering now is the time for it as long as people are educated in how they can use the data for their own personal gain. Once this gets rolled out it will need to be kept as simple and consumer friendly as possible. I am aware of people that thought they were saving themselves money by putting dishwashers etc on at night because it was cheaper. I saw their bills and showed them that they were actually on a standard day rate tariff. They were amazed, they really thought that electricity was cheaper at night time.

While it is in the energy suppliers interest to get people to move their loads away from peak times they are in business to make money and smart metering may only benefit them so the CER will have to ensure that the consumer gets a good deal on this.

I dont think you even need to install smart meters to get people to move loads to night time. Every household is looking for ways to reduce their costs at the moment and if a night rate was mainstream I would imagine that you would see an immediate shift in consumer energy consumption patterns.


Andrew

Capt'n Midnight

Don't forget the incandescent light bulb ban :pac:


Fuel prices have gone up so it's natural for discretionary journeys to be fewer. Also less traffic on the roads too because of the recession so less fuel wasted in traffic jams.