How energy intensive is Nordic GDP?April 19th, 2013
Given an energy intensity of 0,15ktoe/GDP(mUSD) in the Nordic region, it takes 175 ml of oil-equivalent to earn one U.S. dollar of GDP. The 175 ml represents many diverse energy sources, as 35% of the Nordic energy supply is renewable.
Note: Oil-equivalent mass converted to volume as Brent Crude (835kg/m³).
How energy efficient are the Nordic economies?April 12th, 2013
Energy intensity is a measure of how energy efficient an economy is – it indicates how much energy it takes to create one unit of GDP. In the figure above, an energy intensity of one means that energy equivalent to one thousand tonnes of oil goes towards earning one million dollars in the economy.
Energy intensity reduces as energy efficiency in demand sectors like buildings and industry increases, but the overall structure economy also influences the ratio. Countries with significant heavy industries will typically have a higher energy intensity than countries earning GDP primarily from service sectors.
Denmark has the lowest ratio, reflecting energy efficiency measures and its lack of energy intensive industries. By comparison, Finland and Sweden have higher energy intensities due to industries like paper and pulp.
Iceland has always used its abundant geothermal energy for heating, with little need for energy efficiency measures. The country’s already high energy intensity has ballooned over recent decades due to the dominant role of energy intensive industries like aluminium smelting in its small economy. However, when considering that all of the country’s electricity and 81% of its energy supply is renewable, with no electricity cable connecting it to Europe, energy intensive industry is a smart method of exporting its plentiful clean energy resources.
Fossil-fuel intensity, a measure of how much fossil-fuel energy it takes to create one unit of GDP, paints a different picture. Iceland has a significantly lower fossil-fuel intensity than energy intensity, reflecting its abundant renewable energy sources. Conversely, China and the US are relatively fossil fuel intensive.
In this measure, the Nordic countries are well ahead of the other economies in their fossil fuel efficiency due to their high utilisation of renewable energy.
Increasingly energy efficient economiesApril 12th, 2013
Over the last 20 years, the major economies have gradually reduced their energy intensities. That is to say that they now use less energy to produce one unit of GDP than they did before. The only exception in the figure above is the specific case of Iceland.
The trend towards efficiency is most evident in China. As its economy has increased productivity and moved towards higher value products, GDP has increased much faster than energy consumption.
The trend also reflects China’s policy to decrease energy intensity – their current goal is a 16% reduction in the five years to 2015. On the other hand, Iceland has expanded its (often foreign-owned) energy-intensive aluminium industries at a faster rate than it has grown its economy.
To examine other countries more closely, the figure above excludes China and Iceland. Now the gradual effect of expanded tertiary (services) sectors and outsourced secondary (industrial) sectors become visible.
Economies previously dominated by primary and secondary sectors, such as Germany and Denmark, have steadily decreased their energy intensities since 1990. Sweden and Finland also follows this trend, but with an increase in energy intensity in the early 1990s due to economic recession.
Although energy intensity is a helpful measure of how efficient an economy is, the ratio does have its limitations. Fossil fuel intensity for example is a more useful measure of climate impact.
In a globalised economy with significant trade of goods, workforce, energy and capital, the connection between a country’s economy and energy system weakens, making energy intensity less relevant as a nation specific parameter. Globally, energy intensity has increased since 2009.
GDP is measured in constant US $, with 2005 as the base year. (OECD, 2013)
Energy consumption by sectorJanuary 9th, 2013
The total energy consumption in the Nordic countries was 4 237 PJ in 2010, which is equal to about 8% of energy consumption in the EU-27.
Industry accounts for about a third of energy use in the Nordic countries on average, considerably higher than most other developing countries. Large hydroelectric potential and a rich endowment of raw materials such as wood and minerals have played an important role in the development of energy-intensive industry in the region.
In Finland and Sweden, forest-based industries like paper, pulp and timber are especially important. Iceland and Norway on the other hand have significant metal manufacturing based on historically cheap and plentiful hydroelectricity.
Due in part to electricity consumption by the aluminium industry, Iceland and Norway have the world’s highest electricity consumption per-capita. Denmark has not had the same access to energy resources as the other Nordic countries, a fact evident in the small share of industrial energy use and their low per-capita energy consumption.
Note: Other category is mostly ‘non-energy use’, which covers use of other petroleum products such as white spirit, paraffin waxes, lubricants, bitumen and other products. Data source: IEA
Greenhouse gas emissions per capitaDecember 7th, 2012
Despite having a relatively decarbonised electricity supply, the Nordic region has slightly higher per capita Greenhouse Gas (GHG) emissions than other industrialised countries in Europe and Asia. This is due in part to the cold climate and prevalence of energy-intensive industry. The Nordic countries have set ambitious targets for emissions reductions by 2050.
Danish emissions are influenced by its relatively carbon-intensive electricity production compared to other countries, but counteracted by its lack of energy-intensive industry. Denmark has been among the most successful countries at decoupling emissions and energy use from economic growth. The Danish economy has grown by 78% since 1980, while CO2 emissions have reduced. This development reflects an increase in energy efficiency, and increased use of wind and biomass in electricity and heat production (1).
Finnish per capita emissions are among the highest in the region, due to the use of fossil fuels in its electricity mix and its significant industrial activity. Industry is the largest energy end-use sector in Finland, with paper, pulp, metal and chemical being the main industrial energy consumers (2).
Iceland’s per capita emissions are the highest in the region, and have a unique composition. With no railways and a low population density, almost 80% of emissions stem from transport and fishing vessels. Process emissions from aluminium production plants have the most significant impact on emissions after transport. Emissions from generation of electricity and from heating are very low owing to the exclusive use of renewable energy sources (geothermal and hydropower).
Norway’s relatively high per capita energy consumption is offset by its renewable supply of electricity. However, significant petroleum extraction accounts for about 16% of the country’s emissions. The exported oil and gas are not counted as part of Norwegian emissions. If they were, total emissions would be more than ten times as high. On the other hand, if deforestation was included, Norway’s emissions would be halved, while Indonesia and Brazil become two of the world’s five largest emission countries (3). Should emissions associated with imported goods (from China for example) be included, the emissions from all Nordic countries would grow significantly.
Sweden’s per capita greenhouse gas emissions are the lowest in the Nordic region. They have been reduced significantly in the last decades, despite economic growth. The two most important factors in this reduction have been the introduction of nuclear power in the 1980s an a change-over from oil to biofuels in the production of district heat. While Swedish per capita emissions are low in comparison with other developed countries, they are significantly higher than most developing countries.
Notes: Figure shows metric tonnes of CO2 equivalent per capita. All numbers are from 2010, except for the US (2009).
Data sources: EEA, World Resource Institute, Greenhouse Gas Inventory Office of Japan, the Australian government.
Text sources: (1) The Danish Ministry of Climate and Environment , (2) Cordis, (3) The Norwegian Government.
How much energy does a Nordic citizen use?November 16th, 2012
There are considerable differences in energy use per capita in the Nordic region. While all five countries share a relatively cold climate, variation in industrial activity and energy resources result in significant differences in energy and electricity use per capita.
Both Iceland and Norway have electricity-intensive industries, taking advantage of abundant renewable sources of electricity in the two countries, such as geothermal and hydropower. Norway uses electricity in the heating of space and water to a much larger extent than the other Nordic countries, which have more developed district heating systems. District heating involves the distribution of heat though underground water pipes, and is much more widespread in the Nordic countries than other regions.
Iceland’s relatively high energy consumption per capita stems from its aluminium smelting plants, which contributed to an increase of 54% in total primary energy supply between 2005 and 2008. Iceland’s three plants consume more than five times as much electricity as all of the country’s inhabitants .
By contrast, Sweden and Finland’s industrial sectors are made up by more heat intensive industries, such as the paper pulp industry. Denmark meanwhile, has relatively little energy-intensive industry.
One third renewable, but oil still the largest energy sourceOctober 12th, 2012
A third of the Nordic region’s energy supply comes from renewable sources. The largest of these is biomass and waste, which are used to generate electricity, heat and transport fuels in Sweden, Finland and Denmark.
Renewable electricity in the region is also generated from hydropower in Norway, as well as growing share of wind power. Geothermal heat and power production is the most important energy source in Iceland.
With nuclear power in Sweden and Finland, Almost half of the region’s energy is CO2-free. Oil is still the largest single energy source, due to its central role as a transport fuel.
The 1970s oil crises resulted in a move away from oil and towards alternative energy sources in power generation. This is evident in an increase in the use of nuclear energy in Sweden and Finland, as well as in a rise in the use of coal in Finland and Denmark. As a result, oil today is used predominantly in the transport sector.
In the past forty years, we have seen a steady growth in renewable energy sources like biomass and wind, as well as geothermal energy in Iceland. The amount of hydroelectric power produced in the Nordic region has only seen minor growth since 1971.
Despite the increase in renewable and nuclear energy, the absolute demand for fossil fuels is roughly the same as it was 1971. This is due to an increase in the demand for energy in all Nordic countries except for Denmark. The growth has been especially strong in Norway, Finland and Iceland. Population growth, a higher share of single person households and economic growth can help explain this development. In short, we see that the higher generation of low-carbon energy has come in addition to, not instead of, fossil fuels.
Looking ahead another four decades to the year 2050, Nordic demand must drop in order to meet the national climate targets, as outlined by the IEA and Nordic Energy Research in Nordic Energy Technology Perspectives.
Fossil fuels, which today make up 49% of total primary energy supply, will have to be reduced to account for only 16%, with a corresponding increase in the shares of nuclear and renewable energy.
Note: Graphs exclude trade in heat and electricity.
Data source: IEA.
Major net exporter of fossil fuelsJuly 6th, 2012
The Nordic region is a significant net energy exporter. This is due to considerable oil and natural gas extraction in Norway, almost all of which is exported.
Norway is the world’s 5th largest oil exporter and 3rd largest natural gas exporter. Domestic demand for oil and gas in Norway is limited by the population of only 5 million, as well as high taxes on oil products and a moratorium on new natural gas power plants without CCS technology.
Finland, Sweden and Iceland are net importers of oil, while Denmark is a net exporter due to limited offshore extraction.
Two-thirds renewableJuly 5th, 2012
Nordic electricity production is two thirds renewable. This is due to the large amount of hydropower in Norway, and Sweden, but also to growing sources of other renewables.
Biomass is burned in Combined Heat and Power plants across Finland and Sweden, while Denmark has the highest share of wind power in the world. Iceland generates significant electricity from geothermal sources.
In addition to renewables, nuclear power in Sweden and Finland means that the region’s electricity if 85% CO2-free.
Individually, the Nordic countries have very different, but complementary electricity mixes. This is made possible by the common Nordic grid connecting Norway, Sweden, Finland and Denmark.
Data source: IEA
Decoupling economic growthMay 5th, 2012
The Nordic region has successfully decoupled growth in GDP from greenhouse gas emissions in the last decade. Decoupling economic growth from environmental damage has been widely advocated as a key step towards sustainability. This can also be described as a reduction in the energy intensity of the Nordic economies, a measure of the energy used to create one unit of GDP.
It is important however, to consider the effect of ‘carbon leakage’ – where carbon-intensive industry moves outside the region. This is prevalent in much of western Europe, with growth in low-carbon sectors such as services, corresponding is growth in imports of carbon-intensive goods from Asia.
The region has also seen a gradual decoupling of energy use from greenhouse gas emissions, due to a decarbonisation of energy production and efficiency improvements.
Note: calculations are made using 1990 as the base year.