Uses by sectors


While most of us probably take it for granted, energy does indeed play an integral role in our daily lives – in our homes, our cars, our places of work and our industries. Of course, we use different kinds of energy for different purposes. Most of the petroleum we consume is used in the transportation sector, including fuel for our cars but also planes, commercial trucks and mass transit. Heating, cooling and electricity for our homes come mostly from natural gas and coal; the same goes for businesses, too. Industry and manufacturing consume close to one-third of the nation’s total energy supply, mostly derived from fossil fuels.



World energy demand

According to the Energy Information Administration, world energy consumption is projected to expand by 50 percent from 2005 to 2030. The EIA attributes much of this rise to the rapidly developing economies of China and India, based on the fact that their combined share of energy consumption grew from less than 8 percent of total energy use in 1980 to roughly 18 percent. That increase in demand is only going to swell further with time. And while demand for energy in the United States is certainly on the rise as well, our percentage of global consumption, according to the EIA, is projected to decrease by 2030.


World energy demand by source

When we talk about projected increases in energy demand, the U.S. Energy Information Administration estimates that fossil fuels will be a major part of such a significant rise. Fossil fuels are widely available and we know how to use them, so developing countries are expected to turn to those sources first, unless alternatives become more accessible and affordable.


Energy management system

An energy management system (EMS) is a system of computer-aided tools used by operators of electric utility grids to monitor, control, and optimize the performance of the generation and/or transmission system. The monitor and control functions are known as SCADA; the optimization packages are often referred to as "advanced applications".

The computer technology is also referred to as SCADA/EMS or EMS/SCADA. In these respects, the terminology EMS then excludes the monitoring and control functions, but more specifically refers to the collective suite of power network applications and to the generation control and scheduling applications.

Manufacturers of EMS also commonly supply a corresponding dispatcher training simulator (DTS). This related technology makes use of components of SCADA and EMS as a training tool for control centre operators. It is also possible to acquire an independent DTS from a non-EMS source such as EPRI.

Energy demand management

Energy demand management, also known as demand side management (DSM), entails actions that influence the quantity or patterns of use of energy consumed by end users, such as actions targeting reduction of peak demand during periods when energy-supply systems are constrained. Peak demand management does not necessarily decrease total energy consumption but could be expected to reduce the need for investments in networks and/or power plants.

The term DSM was coined during the time of the the 1973 energy crisis and 1979 energy crisis.

How it works

Ideally, energy use would be optimised by supply and demand interactions in the market. For electricity use in particular, the price paid on the market is often regulated or fixed, and in many cases does not reflect the full cost of production. Electricity use can vary dramatically on short and medium time frames, and the pricing system may not reflect the instantaneous cost as additional higher-cost ("peaking") sources are brought on-line. In addition, the capacity or willingness of electricity consumers to adjust to prices by altering demand (elasticity of demand) may be low, particularly over short time frames. In many markets, consumers (particularly retail customers) do not face real-time pricing at all, but pay rates based on average annual costs or other constructed prices.

Various market failures rule out an ideal result. One is that suppliers' costs do not include all damages and risks of their activities. External costs are incurred by others directly or by damage to the environment, and are known as externalities. Theoretically the best approach would be to add external costs to the direct costs of the supplier as a tax (internalisation of external costs). Another possibility (referred to as the second-best approach in the theory of taxation) is to intervene on the demand side by some kind of rebate.

Energy demand management activities should bring the demand and supply closer to a perceived optimum.


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