I.C.E. director

March 1990

I.C.E. International Conseil Energie

20, rue La Rochefoucauld

75009 Partis, France

tel. 331-485973

fax. 331-45267240

Plan

1.ENERGY CONSUMPTION IN 1985 AND RELATED FEATURES

2.TWO FEASIBILITY STUDIES

3.STRATEGY SCHEMES

Annex 1: A realistic forecast for energy consumption in developing countries in the year 2020.

Annex 2: Energy conservation in developing countries

Annex 3: Decentralized electric power use. Photovoltaic energy

I. ENERGY CONSUMPTION IN 1985 AND RELATED FEATURES

In 1985, world population was estimated at 4.84 billion inhabitants, of which 1.18 billion in the industrialized countries and 3.66 billion in the developing countries (industrialized countries include the OECD nations, the USSR and Eastern European nations).

During the same year, the total world consumption of primary energy sources was, according to data bases of ENERDATA and IEPE, 7.6 billion tep (also known as gigatep or GTEP).

This total amount of world energy use may be broken down according to energy sources in the following manner:

* Fossil fuel :6.39 GTEP, i.e. 83%

of which 2.79 Gtep in petroleum

1.36 Gtep in natural gas

2.34 Gtep in coal

*Nuclear energy :0.36 Gtep, i.e. 5%

*Renewable energy :0.89 Gtep in hydraulic energy

of which :O.40 Gtep in biomass

(plus other sources of renewable energy, including geothermic, whose utilization is minimal; the extent of biomass (firewood in particular) being used appears to be greatly underestimated by ENERDATA: several sources show consumption to be in the GTEP range).

Fossil fuel is shown to be by far the most widely used source of energy.

The consumption of primary energy sources may be broken down as follows:

5.6 Gtep in industrialized countries, i.e. 4.7 tep pro capita per year.

2 Gtep in developing countries, i.e. 0.55 tep pro capita per year.

Thus the industrialized countries account for 77% of world energy consumption, of which 52% in western industrialized countries and 25% in the USSR and the countries of Eastern Europe.

The world average for yearly energy consumption per inhabitant may be estimated as 1.6 tep, although this figure is virtually meaningless due to sizable variations between countries and sets of countries, as pointed out in table 1:

Several countries, such as Southern Corea, Brasil, Mexico, Portugal and Greece account for between 1 and 1.5 tep pro capita/year, whereas the enormous Third World masses, especially in China and India, account for between O.3-O.5 tep pro capita per year.

It should be pointed out, moreover, that energy consumption in a good many Third World countries, relies on the use of firewood (as high as 80% in some), the increasing scarcity of which is causing a veritable energy crisis for millions of human beings. Conversely, nuclear energy, whose contribution to the overall world energy balance is very slight, plays a vital role in the energy system of a limited number of countries, including France.

Two basic trends are detectable over the last few decades in the consumption of primary world energy sources (chiefly in the industrialized countries):

* a trend of sharp growth up until 1973: the yearly growth rate average was 4.4% from 1950-1960 and 5.2% from 1960-1973.

* a subsequently abrupt decrease: the average yearly growth rate was 1.9% from 1973-1979, O% from 1979-1984 and 1.7% from 1984-1986.

The slowdown in the average world growth rate is due mainly to a levelling off in consumption by western industrialized countries,

who, for this reason, account for "only" 52% of the world total, compared to 63% in 1974. This trend does not emerge in the USSR until after 1983.

Energy comsumption in western industrialized countries shifted greatly following the petroleum shocks which occurred in 1973 and 1979.

When a comparison is made between the growth of Gross Domestic Product (GDP) in OECD countries and their trends in overall energy consumption between 1965 and 1985 (chart of table 2), two distinct periods are evident:

* 1965-1973, a trend detectable as early as the end of the Fifties, whereby energy consumption rises according to the rate of economic growth.

+ a great shift in 1973 and even greater in 1979: in 1985 total energy consumption is the same as in 1973, while the GDP has risen by 30%.

There were also major shifts in the nature of industrial activities (less heavy industry and an upsurge in the service sector), a saturation of certain energy sources and above all the rise in energy conservation, which is tantamount to a decrease in energy use for manufacturing, services or any given commodity.

The separation of energy use and economic growth came about as a result of many factors: the introduction and widespread use of energy-efficient equipment and techniques, energy regulations built into civil engineering codes; institutional guidelines and the setting up of ad hoc facilities; government appropriations and new financial schemes; the dissemination of information and awareness campaigns for users, technicians and management.

2. TWO FEASIBILITY STUDIES

Over the last ten years a number of feasibility studies have been devoted to world energy consumption by the year 2020-2030.

Mention should be made of the studies by IIasa (1973-1979), MIT (1983), A. Lovins (1981), ATRE (Uneasiness about energy resources), the World Energy Conference (1981-1983), and the study by Goldemberg et al. in 1985, entitled "Energie pour un monde vivable" ("Energy in a liveable world").

The latter two studies seem most noteworthy for the purpose of studying and comparing at once method, results and objectives.

A comparative study is to be found in the paper "Two feasibility studies on World Energy Consumption by the year 2020", read by B. Laponche at a workshop held on January 17 1989 by the "Centre de Prospective et d'évaluation" (CPE).

We will use three tables from this comparative study:

* table 3, which provides the main concepts used in the ATRE method.

* table 4, which provides some striking examples of progress to be expected from the upgrading of energy conservation through a number of techniques supporting the "Goldberg" (GOLD) study.

* table 5 compares the results of the two studies on pro capita consumption and total consumption relative to the same level of population in the year 2020, i.e. 8 billion inhabitants.

For the developing countries, these two studies show a level of 1 tep pro capita per year. But this result represents very different economic and social conditions.

In the ATRE study, and according to the "high" scenario (II), the total Gross Domestic Profit in developing countries is multiplied by 4.2 between 1985 and 2020, which represents a 2.4% pro capita increase in GDP.

On the other hand, the GOLD study forecasts that by 2020, developing countries will reach a standard of living comparable to that of European countries in the Seventies. This is indicative of a much higher growth rate.

For the industrialized countries, the difference between the two countries is considerable. Starting with a consumption value of 4.7 tep pro capita per year in 1985, the GOLD study arrives at a consumption average cut in half by 2020, i.e. 2.3 Ttep pro capita and the ATRE at a crossroads of 6.3 or 7.5, according to the type of scenario.

In terms of magnitude this means that according to the ATRE study, pro capita energy consumption for the entirety of the industrialized countries would be the same in 2020 as that of the USA in 1985, whereas in the GOLD study, consumption would be estimated as 2/3 that of Japan in 1985.

For the total world consumption, this level would increase from 7.6 Gtep in 1985 to:

15-20 Gtep in 2020 according to ATRE

10 GTEP IN 2020 according to GOLD

ATRE forecasts a growing gap between industrialized and developing countries, (60% of overall consumption from the former), whereas GOLD expects to see a reversal in trend (35% for industrialized countries).

It has been mentioned that the ATRE report was strongly influenced by the 1960-1978 frame of reference.

According to a revised ATRE forecast given at a CPE convention on January 17, 1989 by J.R. Frisch, the project coordinator, new figures, within the 12-14 Gtep range are provided for the 2020 economic growth scenario. The 12 Gtep scenario would be broken down tentatively into 6 Gtep for the industrialized countries (i.e. 4 tep pro capita) and 6 Gtep for the developing countries (i.e. 1 tep pro capita). This altered forecast comes through a new relative appraisal of energy use in the industrialized countries.

This envisaged trend is corroborated by the results from a study also presented at the January 17 convention by J.M. Martin (IEPE), entitled "A Survey of Energy Demand in Developed Capitalist Countries and Socialist Countries by the Year 2000".

This study analyzes the extent of energy consumed in economic activities (the relationship of energy consumption to GDP) by the year 2020 (see the chart to table 6).

Both for OECD countries and those of Eastern Europe, the study points to the likelihood of industrialized countries energy consumption at around 4 tep pro capita in 2020, for an overall consumption of 6 Gtep, provided that concerted efforts are pursued to ensure energy conservation.

This downward trend in energy demand in the long term is also illustrated in forecasts by the "Observatoire de l'Energie pour la France" for the year 2000. If ongoing efforts for the conservation of energy proceed beyond the present rate, (an upbeat scenario), then the final energy consumption for 2020 would be at the 1973 level and the amount of energy used would drop by 40% between these two dates. Thus, although the levelling off in final energy consumption for a country like France is not certain, it does by no means appear to be unlikely. The results of the IEPE study suggest that in the industrialized countries, a similar decrease in energy demand may be expected, i.e. from 40-50% between 1985 and 2020.

The scheme suggested in the GOLD study goes even further because for the industrialized countries, it would entail a 60-70% decrease in energy use between 1985 and 2020. The authors of this theory show how this is technically feasible and economically interesting (in terms of supply strategies).

The main moot question in the energy consumption of industrial countries concerns the USSR (which consumed 1336 Mtep in 1985) and East European countries.

The long term energy plan published in USSR in 1984 sets the objective of a 40% decrease in energy demand by the year 2000. This figure does not seem unreasonable given the tremendous opportunities for energy conservation in the USSR, although a similar shift in trend would be directly contingent upon the success of ongoing economic reforms. At any rate, a drop in energy use represents the sole path, for the USSR and East Europe, compatible with sustained economic growth, as may be estimated for most of these nations.

As regards the developing countries, their situation is even further juxtaposed to the recently developed countries who follow western standards, at least insofar as their urban and industrial areas are concerned. The same holds true for the predominantly rural countries, whose mainstay remains to be firewood.

J.J. Martin recently published a study for ISMEA which deals with variations in energy consumption for a number of currently industrialized nations (Great Britain, US, Germany, France and Japan), from 1850-1985. The author concludes that energy consumption has not dropped off over the course of time in these countries, given the extensive use of firewood. The only exception is the very short period from 1958-1973 since all "new arrivals" in the process of industrialization (the example of Japan is striking) start from a level of energy use well below that of "older" countries at the same level of development.

This does mean, however, that developing countries will be compelled to adopt in 1990 the 1950 techniques of industrialized countries. They will benefit from technological progress in their bid to obtain the most widespread and efficient pace of economic and social development. It also means, following the imagery used by N. Berrah and reiterated by J.Ch. Hourcade, during the January 17 convention, that these countries may bring into play the "tunnel effect" or "technical leap-frogging" to avoid both the waste and learning process which the industrialized countries had to experience.

It may finally be concluded that the developing countries must not be satisfied with merely reproducing techniques worked out in the North, for northern needs, but rather that they develop systems of energy consumption best suited to their own situation. This concept may well pave the way for a vast field of innovation as well as scientific and technical cooperation.

3.STRATEGY SCHEMES

So far we have analysed and compared the ATRE and the GOLD studies in terms of methods and results.

In the case of ATRE, a comparative study of results shows a slowdown in current trends, while glossing over the issue of long-term and persisting North-South imbalance.

On the other hand, the study performed by Goldemberg and his associates reveals a radically different relationship in the field of energy consumption and this lays the groundwork for a far more "liveable" situation throughout the 21st century.

These differences are not only a result of differing methods and results: they are due to the focus of each study.

The focus of the ATRE project is that of providing reasonable forecasts for energy consumption by the year 2020, and to compare these forecasts to planet-wide resources, according to current assessments, in order to single out the tensions which may arise over the course of time between the exigencies of demand and the extent of supply.

In its unrevised edition, the ATRE study suggests large restrictions (on resources, capital, the environment etc.) thereby reaching a tentative conclusion that the scenarios, as thus set out, are highly "unadvisable".

And in a certain way, the point of departure for the GOLD study merges with the conclusions of the ATRE study. Thus, does it not make sense that since the restrictions linked with long-term energy production are so great, that a scheme should be implemented to avoid these restrictions or at least curtail them to a large extent? The proposed scheme consists of systematically upgrading the effectiveness and utilization of energy in all fields. For this reason the GOLD study is far from crafting forecasts. The authors do not attempt to conceal the troubles involved in their design and devote several chapters of their book to suggesting dynamic monitoring policies in the field of energy consumption.

Consequently, our choice falls on this scheme which looks more cost-effective, less dangerous and far less risky in the long run than the way of increased energy production, which is still too often posited as the one and only energy strategy commensurate with the needs of humanity.

Thus from the foregoing analysis it may be concluded that this scheme is a "short-cut" whose credibility is assured if technologically feasible, if renewable energy sources are, in the long term to phase out fossil fuel and finally, if, in the short term, society is capable of becoming organized and making the proper decisions needed to change their customs, habits and energy consumption techniques.

ATRE

* Primary energy alone

* 10 regions

* Period dealt with: 1960-1978

* Growth of world GNP:

1980-200 200-2020

I: 3.6% 2.9%

II: 2.6% 2.0%

* Elasticity:

1960-1978 1978-2000 2000-2020

IC: 0.85 O.6 O.7-O.8

DC: 1.14 O.9 O.8-0.9

* Global Result: 1985 2020

Gtep 7.6 15-20

ATRE-GOLD

1985 2020

POP IC 1.18 1.5

(billions) DC 3.66 6.5

World 4.84 8.0

ATRE GOLD

I II

ECC/Y IC 4,7 6.3 7.5 2.3

(TEP/AN) DC O.55 0.9 1.3 1.0

ECC IC 5.6 9.5 11.3 3.5

(Gtep) DC 2.0 5.9 8.5 6.5

World 7.6 15.3 19.7 10.0

UPGRADING ENERGY EFFICIENCY

SOME SIGNIFICANT EXAMPLES

ACTIVITY INDICATOR CURRENT ENHANCED PROTOTYPES

OR AVERAGE COMMERCIAL

EQUIPMENT TECHNIQUE

AUTOMOBILE lt. gas/ 10-15 (1) 5(2) 2.3-3.6

100 km.

HEATING kJ of heat/ 120-160 (3) 50 (4) 15-18 (5)

m2 + j.degree

REFRIGERATOR kWh per liter 3.4 (6) 1.3 (7) O.7

FREEZER and per year

STEEL GJ per ton 22-27 (9) 15 (10) 9-12 (11)

PRODUCTION of raw steel(8)

(1) low value: European average; high value: US average (1980)

(2) 4-seat diesel Rabbit Volkswagen and gasoline City Car Honda

(3) average value for Swedish and US household

(4) average value for new selected Swedish or US household

(5) best Swedish or US household prototypes

(6) average US value

(7) Toshiba

(8) with 50% recycling of scrap metal

(9) Sweden

(10) Plasamelt and Eldred techniques (Sweden)

ANNEX 1

A REALISTIC FORECAST FOR ENERGY CONSUMPTION IN DEVELOPING COUNTRIES BY THE YEAR 2020.

In 1985, the average value of pro capita GDP in developing countries, purchasing power being equal, was estimated at

$1100 (1980) per year (1)

Let us assume that the overall economic growth rate for the developing countries averages 4% yearly between 1985 and 2020: in this case total GDP would be multiplied by a factor of 3.9.

The expected demographic growth in the countries over the same period is from 3.66-6.5 billion, i.e. a factor of 1.78.

This means that, according to our estimates, the pro capita GDP would be multiplied by a factor of 2.2 and that the pro capita GDP in the developing countries will be approximately $2,400 by 2020.

In order to calculate pro capita energy consumption by 2020, we shall use the energy rate (relationship of energy consumption to the gross national product).

Our first assumption will be that the energy rate in developing countries will be the same as the 1985 energy rate in France (or the west European average), i.e. 0.40 (tep/$1,000 US). In this case the pro capita energy consumption value for the developing countries in 2020 would be:

0,40 x 2.4 = 0.96 tep

If population at that time is 6.5 billion, then the total primary energy consumption for the developing countries would be:

0.96 x 6.5 = 6.2 billion tep (6.2 Gtep)

If greater efforts directed at energy conservation (especially as regards swifter use of cost-effective manufacturing equipment) are coupled with an increasingly fast pace of economic growth, then total energy consumption would be:

1,02 x 6.5 = 6.6 Gtep

From the foregoing analysis it may be concluded that if the developing countries combine an ongoing policy of rational energy conservation with sustained economic growth, (4-5% per year), that the pro capita energy consumption for these countries will average roughly 1 tep per year, while total energy consumption will be 6.5 billion tep (or 6.5 Gtep).

Note: The scenario described by Goldemberg et al. arrives at a pro capita energy consumption rate of 1 tep for the developing countries in 2020. He, however, associates a far higher degree of economic growth with this consumption rate than we do in our estimations. Since his values are taken from west European countries in 1970, the GDP is estimated at $6,400 pro capita, i.e. nearly twice as high as in our forecasts of 5% economic yearly growth average over the same period.

Thus our findings do not point towards optimized energy consumption policies, but rather the rational continuation of current trends, with no major shifts in the field of energy and without an overly forceful political drive (using all suitable means) in the framework of energy conservation. Our results, however, would be unquestionably better for world balance, not only in terms of energy resources but also for the environment.

(1) A calculation based on the world's most densely populated Developing Countries, accounting for 80% of total world population.

(2) Slightly below the level in France in 1950 ($2,700 in 1980).

(3) The GDP in France in 1956.

A REASONABLE FORECAST FOR ENERGY CONSUMPTION IN DEVELOPING COUNTRIES BY THENYEAR 2020

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pro capita GDP in France in 1985 (???): $1,100

Population (billions): 1985 2020

3.66 6.5 (1.78)

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I II

Growth of GDP 4% per year 5% per year

GDP factor 3.9 5.5

Pro capita GDP factor 2.2 3.1

Pro capita GDPin 2020 $2,400 $3,400

Energy rate in 2020 0.40 0.30

Pro capita primary 0.96 tep 1.02 tep

energy use in 2020

Total primary energy 6.2 Gtep 6.6 Gtep

consumption in 2020

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ANNEX 2

ENERGY CONSERVATION IN DEVELOPING COUNTRIES

1. Setting up an institution in charge of activities

* Example US (aprue, cenergia, etc.)

* Example China

2. Means of action

* Regulations

* Information, communication, training

* Planning and Programming action

* Energy auditing

* Demonstrations

* Investment incentives

3. Investment financing (EEC, World Bank etc.)

* Appropriations

* Revolving Funds for

- credit leasing

- direct payment by insurers

- loans at low (or 0%) interest rates on projects in compliance

with rationalized energy conservation regulations

ANNEX 3

DECENTRALIZED ELECTRIC POWER. PHOTOVOLTAIC ENERGY

* Southern countries: solar radiation 1300 kWh/m2/year

* Photovoltaic system output: 10%

* 1m2 photocell pro capita, i.e. 100 watt-peak and 130 at 230 kWh

per year.

* i.e. for a household of 3-5 persons, a supply ranging from

400-1100 kWh per year.

Example:

Refrigerator (200 litres - 4 kWh/litre/day) 800 Wh/day

Television (50 W - 3 hrs./day) 150 Wh/day

4 luminous fluocompact points (18 W-3 hrs./day)220 Wh/day

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total 1170 Wh/day

This allows for a total household energy consumption of less than 500 kWh/day.

Developing countries:

* Population in 2020 6.5 billion

* Population concerned with decentralized 2.6 billion

electrification

* Capacity installed 260 GW

* Electricity produced 450 GW

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