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Suggested Citation:"ENERGY." National Research Council. 1994. Industrial Ecology: U.S.-Japan Perspectives. Washington, DC: The National Academies Press. doi: 10.17226/9287.
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3

Energy

Nations, like ecosystems, tend toward complexity, which, at best, means efficiency in energy flows.

Frank Fraser Darling, Daedelus, Fall 1967

Energy use is at the center of the conundrum of economic growth and environmental sustainability. On the one hand, every measure of human well-being has been tremendously enhanced by growth in energy consumption. The benefits of the substitution of commercial energy forms and energy-intensive technologies for labor and primitive renewable energy forms since the beginning of the Industrial Revolution appear to have vastly outweighed the costs (Linden, 1991). Life expectancy has increased while infant mortality has decreased with the general improvements in public health in the industrialized world. Hunger has been virtually eliminated by energy-intensive agriculture, and wealth has been widely distributed by the explosive rise in labor and capital productivity (Commission on Energy for Tomorrow's World, 1992). The driver of this increased productivity is the growing use of energy. On the other hand, there are concerns that environmental emissions from energy use may undermine the sustainability of future economic growth and well-being (Watanabe, 1993).

Considering both the costs and the benefit of increasing energy use, workshop participants agreed that a primary goal of industrialized nations is to create global energy strategies to supply both primary energy and technologies to use energy in a cost-effective and environmentally acceptable manner. Japan and the United States, however, have developed their energy policies and programs in different ways and in response to distinct national forces. In Japan, high energy prices and the nation's lack of natural resources have driven long-standing interest in industrial practices that are energy efficient. The oil shocks of the 1970s played a pivotal role in Japan's development path and in its environmental and energy programs over the last two decades.

In the United States, where energy has been cheaper and natural resources more abundant, environmental gains have been driven less by conservation practices than by public opinion, economic forces, and government intervention. In energy use, the United States accounts for 24 percent of global consumption. However, energy efficiency comparisons with other nations are difficult. Such comparisons often do not take into account special factors such as greater distances traveled in the United States, larger homes (with almost universal central heating), greater use of appliances, and greater climate variables.

Workshop discussions relating to energy focused on Japan's approach to energy and environmental issues, Tokyo Electric Power Company's (TEPCO's) approach to meeting environmental goals as an example of Japanese utility best practice, examination of shifting trends in energy consumption and electrification and their implications for U.S. utilities, and voluntary programs of the U.S. Environmental Protection Agency (EPA) to promote energy efficiency.

PERSPECTIVES

Japan's Approach to Energy Issues

CHIHIRO WATANABE

Japan's current approach to its energy and environmental technology policy is based on the “industry-ecolo-

Suggested Citation:"ENERGY." National Research Council. 1994. Industrial Ecology: U.S.-Japan Perspectives. Washington, DC: The National Academies Press. doi: 10.17226/9287.
×

gy” principles defined by Japan's Ministry of International Trade and Industry (MITI) in the early 1970s and further developed during the 1973 and 1979 energy crises (see Chapter 2, p. 13). The first energy crisis prompted MITI to focus on securing an energy supply amidst dramatic increases in oil prices. One of the fundamental principles of industry-ecology suggests that under certain constraints, substitution among available production factors could promote sustainable development in a closed system. MITI's Sunshine Project, initiated in July 1974, draws on this principle. The project's aim was to identify solutions to the country's basic energy problems through R&D and new, clean energy technology. The underlying objective was to substitute alternative fuels for oil, which was limited by price increases during the energy crisis. Fuel sources of relatively unlimited potential (such as that provided by coal and nuclear power) were considered substitutes for limited energy sources (in this case, oil).

In addition to switching fuels, coal and nuclear technologies were to substitute for oil-burning technologies. Improvements in energy efficiency were also targeted through MITI's Moonlight Project (R &D on Energy Conservation Technology) in 1978. MITI's budget for the Sunshine Project and the Moonlight Project represented 14 percent of MITI's total R&D budget in 1979 and was increased to 29 percent in 1982. It was only 5 percent in 1974.

Figure 4 shows Japan's manufacturing output and energy consumption patterns from 1955 to 1990. This graph shows a decrease in energy use per unit of manufacturing output beginning in 1973 and a distinct structural change in production and in energy dependency since 1973. Japan maintained a sustained level of development despite increasing constraints on the supply of energy. This feat is attributed to the effects of the Sunshine Project, the Moonlight Project, and the Global Environmental Technology Program. 1

FIGURE 4 Trends in manufacturing output and energy consumption in the Japanese manufacturing industry (1955–1990).

FIGURE 5 Basic components of the New Sunshine Program.

In 1993 MITI integrated these three energy R&D programs into the New Sunshine Program in response to concerns over the consequences of energy use for the global environment. The integration of these R&D activities is expected to accelerate innovation of energy and environmental technologies, particularly in key technologies such as catalysts, hydrogen conversion, energy conservation, environmental protection, and high-temperature materials and sensors that have wide application in new energy sources.

The growth of Japan's economy amidst sharp energy constraints is attributed to the substitution of technology for energy. Since this substitution also improved Japan 's technological level as a whole, similar results are anticipated from the New Sunshine Program. This program consists of three energy and environmental technology R&D programs as illustrated in Figure 5.

  • The Innovative R&D Program is intended to accelerate R&D on innovative technology essential to achieving the goal of “The Action Program to Arrest Global Warming,” i.e., stabilize per capita CO2 emissions at 1990 levels by the year 2000.

  • The International Collaboration Program for Large-Scale R&D Projects is intended to initiate large international R&D projects that will contribute significantly to achieving the goal of “New Earth 21,” i.e., restore the Earth over future decades by reducing greenhouse gases.

  • The Cooperative R&D Program on Appropriate Technologies is intended to develop and diffuse appropriate technologies needed in neighboring developing countries through cooperative R&D on technologies originating from the Sunshine Project and the Moonlight Project.

The New Sunshine Program has two types of projects:

Suggested Citation:"ENERGY." National Research Council. 1994. Industrial Ecology: U.S.-Japan Perspectives. Washington, DC: The National Academies Press. doi: 10.17226/9287.
×
  • Accelerated projects on technologies expected to be used in the near future—accelerating R&D in technologies such as photovoltaic power generation and fuel cell power generation are expected to trigger a virtual spiral cycle (technological improvement will decrease cost, which leads to increase in demand, which leads to mass production and further cost reduction).

  • Innovative synthetic system projects—development and application of systems-wide technologies. Examples include a range of technologies for improving energy distribution and use and international initiatives for developing hydrogen-based energy systems.

Japanese Electric Utilities

TSUNEO MITSUI

The effect of Japan's energy and environmental strategies on Japanese utility practices is illustrated by practices at Tokyo Electric Power Company. TEPCO is the largest of nine utilities in Japan and provides approximately one-third of the nation's electric power.

Consensus is the basis of operation for Japanese utilities. In the 1960s, Japanese electric utilities established a basic management policy for siting plants by obtaining community acceptance at the site. The practice involved introducing green engineering, specifically to control sulfur dioxide (SOx) and nitrogen oxide (NOx) emissions. Water quality control, noise control, and waste treatment are also part of this green engineering effort.

Japanese utilities also use architectural considerations to harmonize their generation and substation facilities with the surrounding environment. For example, substation facilities in urban areas have been constructed underground beneath public parks or office buildings. Population densities in Japan and community relations practices of Japanese utilities prompt such measures.

To control SOx and NOx emissions, Japanese utilities focused on reducing sulfur content of the fuel and on improving combustion methods. In 1970, for example, TEPCO introduced natural gas that did not contain sulfur. To reduce sulfur content in its heavy oil fuels, TEPCO introduced Minas Oil, which has a sulfur content of 0.1 percent. To reduce NOx emissions from burning fossil fuels, Japanese utilities have developed and applied certain combustion technologies, such as the two-stage combustion denitrification process, flue gas recirculation, low-NO x burners, and in-furnace reduction.

The relationship between carbon dioxide (CO2) emissions and global warming may be the most pressing issue to emerge over the last few years. The Japanese utility sector is one of the contributors to Japanese CO2 emissions. Efforts to control CO2 are therefore likely to have an impact on the utility industry. Yet CO2 emission levels have in fact decreased by 18 percent in the last decade through thermal efficiency improvement, as well as shifts from fossil fuel to nuclear power for electricity generation. To respond to concerns about global warming, TEPCO established its Global Environment Department under its Engineering Research Center in April 1990.

To cap and reduce CO2 emissions, TEPCO uses energy resources that do not generate CO2. Its power generation is diversified as follows: liquid natural gas (33%), oil (23%), coal (2%), nuclear (34%), and hydroelectric (8%). To achieve an ideal mixture of energy sources, the utility plans to increase the ratio of CO2-free power generation. For example, four nuclear units are now being built and TEPCO does not expect significant problems in siting the planned facility. Generally, while there is opposition to nuclear power plants in Japan, it is more moderate than in the United States. In part, this is due to a significantly more streamlined nuclear (as well as utility) regulatory structure. In Japan, the national government (MITI and the Science and Technology Agency) maintains full regulatory authority, ensuring consistency in regulation. Therefore, there are no state/federal conflicts over nuclear power plant siting and operation as may occur in the United States. To reduce CO2 emissions, TEPCO is focusing on the following technologies: advanced boiling water reactor (nuclear) development, large-scale hydro power generation, and fuel-cell and photovoltaic cell development.

In addition to these power generation measures, TEPCO also established in December 1991 a CO2 Removal Technology Laboratory at its Yokosuka Power Station to study CO2 removal from flue gases. Four removal technologies are being investigated:

  • Adsorption of CO2 by zeolites and subsequent desorption.

  • Absorption by a chemical substance such as monoethanolamine (MEA) and subsequent regeneration of the MEA with release of CO2.

  • Formation of artificial clathrates by pressurizing a water/CO2 mixture.

  • Assimilation of CO2 by microalgae and use of the algae as a biomass fuel source, thus closing the carbon loop.

In cases where CO2 is recovered, the possibility of injecting liquid CO2 into the deep ocean, which would presumably be a long-term sink, is also being explored.

Concurrent with its work substituting CO2-free fuels and investigating ways to capture CO2 from flue gases, TEPCO has been promoting energy efficiency improve-

Suggested Citation:"ENERGY." National Research Council. 1994. Industrial Ecology: U.S.-Japan Perspectives. Washington, DC: The National Academies Press. doi: 10.17226/9287.
×

ments in the supply and demand sides of energy. On the supply side, TEPCO's Futtsu Thermal Power Station operates at a thermal efficiency of 43 percent, using General Electric's combined cycle system. The thermal efficiency of a plant being planned is expected to be 48 percent. In 1989, Japan led the world with a thermal efficiency of 37.1 percent, compared with the United States' 33.1 percent, UK's 33.9 percent, and France's 35.7 percent.

On the demand side, TEPCO advises customers to use more efficient equipment or improve existing systems. Examples of such innovations include the development of heat-storage pumps and heat pump systems that use river water as a heat source.

U.S. Energy Research, Development, and Technology Transfer Initiatives

ALFRED W. LINDSEY

The U.S. Department of Energy (DOE) conducts a wide variety of environmentally beneficial R&D programs similar to those of MITI in Japan. As noted in Appendix C, these programs include R&D in energy conservation; renewable energy; environmental restoration and waste management technology; and coal, nuclear, and magnetic fusion energy. In addition to R&D, DOE is actively involved in technology transfer efforts to encourage the adoption of any new technologies developed as part of these programs.

To diffuse energy-efficient innovation into the economy, the EPA has several ongoing voluntary programs. For example, the “Green Lights Program” encourages major U.S. corporations to install energy-efficient lighting wherever profitable. If fully implemented nationally, this program could cut electricity demand by 10 percent while reducing CO2 emissions by 232 million tons and sulfur oxides by 1.7 million tons. In addition to the “Green Lights Program,” the EPA has initiatives to encourage energy efficiency improvements in new refrigerators (Golden Carrot Program) and in the use of computers (Energy Star Program).

American Utilities and Energy Strategies

KURT YEAGER

The 1990s promises to be a period of profound change in the U.S. electric industry. A continuing trend toward substitution of electricity for other, less efficient or less productive forms of energy suggests that electrification is critical to resolving the interrelated economic, environmental, and energy security issues facing the world today. The reasons are clear. Of all energy forms, electricity has the advantages of greatest conversion efficiency, range of primary sources, and potential for serving as a vehicle for innovation.

The factors promoting continued electricity growth are economic development, electricity pricing, environmental requirements, and, most important, technological development. The key question is, what is the most effective industry structure to integrate and benefit from these factors. What are the trends that will form this new structure?

Cost and Efficiency Trends

The structural changes occuring in the industry today can be traced back to the thermodynamic limit associated with the conventional Rankine steam cycle for power generation. In effect, the industry seemed to reach the limit by about 1960. Opportunities to reduce the cost of electric power were limited and marginal. Power cycle changes that have emerged have challenged the efficiency and cost advantages of ever larger central stations and the justification for natural monopolies as essential to building and operating those plants.

This has led to a shift from economies of scale to economies of precision in technology. For example, it is no longer necessarily more cost-effective to construct large power plants on-site; it may be more economical to erect smaller plants quickly from factory-built modules developed to match growth in demand. Second, energy is now being marketed more as a service than as a commodity, because customers buy services, not electrons.

These changes have caused utilities to make major changes in their business operations. Utilities are no longer accepting electricity demand as fixed but are actively influencing demand through energy efficiency and load management programs, innovative rate design, and strategic load building. Customers are the new focus, and energy service, not kilowatt hours, is the product.

Technical Change Vectors

With improvements in the cost and efficiency of power generation, the technology vectors being pursued are shown in Table 1.

Over the next few years, U.S. utilities plan to spend about 25 percent more on transmission and distribution upgrades ($62 million) than on new generating capacity

Suggested Citation:"ENERGY." National Research Council. 1994. Industrial Ecology: U.S.-Japan Perspectives. Washington, DC: The National Academies Press. doi: 10.17226/9287.
×

TABLE 1 Changing Technology Vectors in Electric Power Generation

Function

Old Focus

New Focus

Generation

Custom/central station

Modular distributed

Transmission

Mechanical control

Electronic control

Environmental

End-of-pipe clean up

Prevention and remediation

Distribution

Reliable electrons

“Smart” services

Customer

Bulk power

Customer choice

($50 million). Utility expenditures on demand side management exceeded over $1 billion in 1990 and are expected to rise to $3–6 billion per year in 2000. Clearly, the new utility focus on the customer is changing the way utilities view their business and products and is reflected in their investment strategy.

Emerging R&D Priorities

The R&D implications of these changes are as follows:

  • Although cost control remains a fundamental goal, the development and exploitation of technology must consider not only cost relative to other energy forms but cost relative to competitive suppliers of services. Similarly, as utility business strategies shift from considering electricity as a commodity to being a provider of customer services, the technical emphasis expands from its historic emphasis on asset reliability to balancing all dimensions of asset productivity to best advantage.

  • The focus of power generation R&D has moved from central stations to a much more diversified technology development portfolio reflecting integrated resource management. Now, distributed power generation, storage, and efficiency are equal partners in meeting service demands and in improving asset use and productivity.

  • In the environmental arena, technology development is in transition from its historic emphasis on relatively inefficient, end-of-pipe controls to systematically preventing or eliminating the formation of pollutants. An extension of this logic is the growing realization that environmental and related social demands are relative business opportunities for electricity, not threats. New electrotechnologies to exploit these opportunities, from electric vehicles to the disposal of medical wastes, are receiving high priority.

  • The underlying theme in transmission and delivery is expansion of capacity and flexibility through development and systematic assimilation of electronic control. This theme contrasts with present and historic mechanical switching constraints and promises to be a profound technical change for the industry. The implications transcend power delivery itself and trigger unbundled, power-related, service capabilities meeting diversified customer demands on a value-priced basis.

These technological changes are creating a fundamental restructuring of the electric power industry. The industry has historically been a geographical array of vertically integrated, cost-plus, regulated monopolies. The structure that is evolving is less homogeneous.

The Future

Even optimistic conservation scenarios conclude that for at least the next half century, the world must realistically continue to depend on a fossil-fuel-based energy economy. The limited availability of oil and gas is expected to cause coal, which represents over 80 percent of the world's fossil energy resource, to become the predominant fuel during this time period. The issue then, is not whether coal will be increasingly used but rather how efficient the technology for its use will be and how rapidly the global energy economy can increase its reliance on alternative energy sources.

A global technological goal during this next 50-year period should be to achieve the practical capability to move beyond fossil fuel to a new energy foundation that depends on more sustainable energy sources, such as, nuclear and renewable energy sources. Experience suggests that it will take roughly a half century of commitment for both refining the technological base to the commercial and public acceptance level required and deploying the results on the scale now provided by fossil fuels. To shape this future, a global program to use more efficient energy systems and to stimulate development and use of nonfossil energy sources, primarily through electricity, should be organized now.

NOTE

1. In 1989, as international oil prices decreased and Japan's bubble economy grew, MITI's energy R&D efforts were shifted to a Global Environmental Technology Program.

REFERENCES

Commission on Energy for Tomorrow's World . 1992 . Draft Summary Global Report (Presented at 15th WEC Congress, Madrid, Spain, September 1992) . London : World Energy Council .

Suggested Citation:"ENERGY." National Research Council. 1994. Industrial Ecology: U.S.-Japan Perspectives. Washington, DC: The National Academies Press. doi: 10.17226/9287.
×

Linden, H. R. 1991 . Energy, economic, and social progress and the environment: Inseparable issues of resource allocation . International Journal of Energy, Environment, Economics 1(1) : 1–12 .

Watanabe, C. 1993 . Energy and environmental technologies in sustainable development: A view from Japan . Paper presented at the U.S.-Japan Workshop on Industrial Ecology, National Academy of Engineering, March 1992 . The Bridge 23(Summer) : 8–15 .

Suggested Citation:"ENERGY." National Research Council. 1994. Industrial Ecology: U.S.-Japan Perspectives. Washington, DC: The National Academies Press. doi: 10.17226/9287.
×
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Suggested Citation:"ENERGY." National Research Council. 1994. Industrial Ecology: U.S.-Japan Perspectives. Washington, DC: The National Academies Press. doi: 10.17226/9287.
×
Page 18
Suggested Citation:"ENERGY." National Research Council. 1994. Industrial Ecology: U.S.-Japan Perspectives. Washington, DC: The National Academies Press. doi: 10.17226/9287.
×
Page 19
Suggested Citation:"ENERGY." National Research Council. 1994. Industrial Ecology: U.S.-Japan Perspectives. Washington, DC: The National Academies Press. doi: 10.17226/9287.
×
Page 20
Suggested Citation:"ENERGY." National Research Council. 1994. Industrial Ecology: U.S.-Japan Perspectives. Washington, DC: The National Academies Press. doi: 10.17226/9287.
×
Page 21
Suggested Citation:"ENERGY." National Research Council. 1994. Industrial Ecology: U.S.-Japan Perspectives. Washington, DC: The National Academies Press. doi: 10.17226/9287.
×
Page 22
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