Saturday, August 1, 2009

Capital in narrow and broad uses
In classical economics, capital is one of three (or four, in some formulations) factors of production. The others are land, labor and (in some versions) organization, entrepreneurship, or management. Goods with the following features are capital:
It can be used in the production of other goods (this is what makes it a factor of production). It was produced, in contrast to "land," which refers to naturally occurring resources such as geographical locations and minerals. It is not used up immediately in the process of production unlike raw materials or intermediate goods. (The significant exception to this is depreciation allowance, which like intermediate goods, is treated as a business expense.) These distinctions of convenience carried over to neoclassical economics with little change in formal analysis for an extended period. There was the further clarification that capital is a stock. As such, its value can be estimated at a point in time, say December 31. By contrast, investment, as production to be added to the capital stock, is described as taking place over time ("per year"), thus a flow.
Earlier illustrations often described capital as physical items, such as tools, buildings, and vehicles that are used in the production process. Since at least the 1960s economists have increasingly focused on broader forms of capital. For example, investment in skills and education can be viewed as building up human capital or knowledge capital, and investments in intellectual property can be viewed as building up intellectual capital. These terms lead to certain questions and controversies discussed in those articles. Human development theory describes human capital as being composed of distinct social, imitative and creative elements:
Social capital is the value of network trusting relationships between individuals in an economy. Individual capital which is inherent in persons, protected by societies, and trades labor for trust or money. Close parallel concepts are "talent", "ingenuity", "leadership", "trained bodies", or "innate skills" that cannot reliably be reproduced by using any combination of any of the others above. In traditional economic analysis individual capital is more usually called labour. Further classifications of capital that have been used in various theoretical or applied uses include:
Financial capital which represents obligations, and is liquidated as money for trade, and owned by legal entities. It is in the form of capital assets, traded in financial markets. Its market value is not based on the historical accumulation of money invested but on the perception by the market of its expected revenues and of the risk entailed. Natural capital which is inherent in ecologies and protected by communities to support life, e.g. a river which provides farms with water. Infrastructural capital is non-natural support systems (e.g. clothing, shelter, roads, personal computers) that minimize need for new social trust, instruction, and natural resources. (Almost all of this is manufactured, leading to the older term manufactured capital, but some arises from interactions with natural capital, and so it makes more sense to describe it in terms of its appreciation/depreciation process, rather than its origin: much of natural capital grows back, infrastructural capital must be built and installed.) In part as a result, separate literatures have developed to describe both natural capital and social capital. Such terms reflect a wide consensus that nature and society both function in such a similar manner as traditional industrial infrastructural capital, that it is entirely appropriate to refer to them as different types of capital in themselves. In particular, they can be used in the production of other goods, are not used up immediately in the process of production, and can be enhanced (if not created) by human effort.
There is also a literature of intellectual capital and intellectual property law. However, this increasingly distinguishes means of capital investment, and collection of potential rewards for patent, copyright (creative or individual capital), and trademark (social trust or social capital) instruments.the word capital is what you have as a wealth.
Capital in classical economics and beyond
Within classical economics, Adam Smith (Wealth of Nations, Book II, Chapter 1) distinguished fixed capital from circulating capital, including raw materials and intermediate products. For an enterprise, both were kinds of capital.
Karl Marx adds a distinction that is often confused with David Ricardo's. In Marxian theory, variable capital refers to a capitalist's investment in labor-power, seen as the only source of surplus-value. It is called "variable" since the amount of value it can produce varies from the amount it consumes, i.e., it creates new value. On the other hand, constant capital refers to investment in non-human factors of production, such as plant and machinery, which Marx takes to contribute only its own replacement value to the commodities it is used to produce. It is constant, in that the amount of value committed in the original investment, and the amount retrieved in the form of commodities produced, remains constant.
Investment or capital accumulation in classical economic theory is the production of increased capital. In order to invest, goods must be produced which are not to be immediately consumed, but instead used to produce other goods as a means of production. Investment is closely related to saving, though it is not the same. As Keynes pointed out, saving involves not spending all of one's income on current goods or services, while investment refers to spending on a specific type of goods, i.e., capital goods.
The Austrian economist Eugen von Böhm-Bawerk maintained that capital intensity was measured by the roundaboutness of production processes. Since capital is defined by him as being goods of higher-order, or goods used to produce consumer goods, and derived their value from them, being future goods.
Capital Controversy
The Cambridge capital controversy was a 1960s debate in economics concerning the nature and role of capital goods.The debate was largely between economists such as Joan Robinson and Piero Sraffa at the University of Cambridge in England and economists such as Paul Samuelson and Robert Solow at the Massachusetts Institute of Technology, in Cambridge, Massachusetts. The two schools are often labeled "neo-Ricardian" (or "Sraffian") and neoclassical, respectively.
In neoclassical economics capitalist income is the rate of profit multiplied by the amount of capital, but the measurement of the "amount of capital" involves adding up quite incompatible physical objects, for example, adding trucks to lasers. Neoclassical economists assumed that there was no real problem here — just add up the money value of all these different capital items to get an aggregate amount of capital. But Sraffa (and Joan Robinson before him) pointed out that this financial measurement of the amount of capital depended partly on the rate of profit. There was thus a circularity in the argument. To date most economists continue to measure capital in the traditional neoclassical sense, but the controversy continues even if under the radar of most in the economics profesion.

Capital asset pricing model
An estimation of the CAPM and the Security Market Line (purple) for the Dow Jones Industrial Average over the last 3 years for monthly data.In finance, the capital asset pricing model (CAPM) is used to determine a theoretically appropriate required rate of return of an asset, if that asset is to be added to an already well-diversified portfolio, given that asset's non-diversifiable risk. The model takes into account the asset's sensitivity to non-diversifiable risk (also known as systematic risk or market risk), often represented by the quantity beta (β) in the financial industry, as well as the expected return of the market and the expected return of a theoretical risk-free asset.
The model was introduced by Jack Treynor (1961, 1962)[1], William Sharpe (1964), John Lintner (1965a,b) and Jan Mossin (1966) independently, building on the earlier work of Harry Markowitz on diversification and modern portfolio theory. Sharpe, Markowitz and Merton Miller jointly received the Nobel Memorial Prize in Economics for this contribution to the field of financial economics.

The formula The Security Market Line, seen here in a graph, describes a relation between the beta and the asset's expected rate of return. The CAPM is a model for pricing an individual security or a portfolio. For individual securities, we made use of the security market line (SML) and its relation to expected return and systematic risk (beta) to show how the market must price individual securities in relation to their security risk class. The SML enables us to calculate the reward-to-risk ratio for any security in relation to that of the overall market. Therefore, when the expected rate of return for any security is deflated by its beta coefficient, the reward-to-risk ratio for any individual security in the market is equal to the market reward-to-risk ratio, thus:
The market reward-to-risk ratio is effectively the market risk premium and by rearranging the above equation and solving for E(Ri), we obtain the Capital Asset Pricing Model (CAPM).
where:
is the expected return on the capital asset is the risk-free rate of interest such as interest arising from government bonds (the beta coefficient) is the sensitivity of the asset returns to market returns, or also , is the expected return of the market is sometimes known as the market premium or risk premium (the difference between the expected market rate of return and the risk-free rate of return).
Restated, in terms of risk premium, we find that:
which states that the individual risk premium equals the market premium times β.
Note 1: the expected market rate of return is usually estimated by measuring the Geometric Average of the historical returns on a market portfolio (i.e. S&P 500).
Note 2: the risk free rate of return used for determining the risk premium is usually the arithmetic average of historical risk free rates of return and not the current risk free rate of return.
For the full derivation see Modern portfolio theory.
Asset pricing
Once the expected return, E(Ri), is calculated using CAPM, the future cash flows of the asset can be discounted to their present value using this rate (E(Ri)), to establish the correct price for the asset.
In theory, therefore, an asset is correctly priced when its observed price is the same as its value calculated using the CAPM derived discount rate. If the observed price is higher than the valuation, then the asset is overvalued (and undervalued when the observed price is below the CAPM valuation).
Alternatively, one can "solve for the discount rate" for the observed price given a particular valuation model and compare that discount rate with the CAPM rate. If the discount rate in the model is lower than the CAPM rate then the asset is overvalued (and undervalued for a too high discount rate).
The CAPM returns the asset-appropriate required return or discount rate - i.e. the rate at which future cash flows produced by the asset should be discounted given that asset's relative riskiness. Betas exceeding one signify more than average "riskiness"; betas below one indicate lower than average. Thus a more risky stock will have a higher beta and will be discounted at a higher rate; less sensitive stocks will have lower betas and be discounted at a lower rate. Given the accepted concave utility function, the CAPM is consistent with intuition - investors (should) require a higher return for holding a more risky asset.
Since beta reflects asset-specific sensitivity to non-diversifiable, i.e. market risk, the market as a whole, by definition, has a beta of one. Stock market indices are frequently used as local proxies for the market - and in that case (by definition) have a beta of one. An investor in a large, diversified portfolio (such as a mutual fund) therefore expects performance in line with the market.
[edit] Risk and diversificationThe risk of a portfolio comprises systematic risk, also known as undiversifiable risk, and unsystematic risk which is also known as idiosyncratic risk or diversifiable risk. Systematic risk refers to the risk common to all securities - i.e. market risk. Unsystematic risk is the risk associated with individual assets. Unsystematic risk can be diversified away to smaller levels by including a greater number of assets in the portfolio (specific risks "average out"). The same is not possible for systematic risk within one market. Depending on the market, a portfolio of approximately 30-40 securities in developed markets such as UK or US will render the portfolio sufficiently diversified to limit exposure to systematic risk only. In developing markets a larger number is required, due to the higher asset volatilities.
A rational investor should not take on any diversifiable risk, as only non-diversifiable risks are rewarded within the scope of this model. Therefore, the required return on an asset, that is, the return that compensates for risk taken, must be linked to its riskiness in a portfolio context - i.e. its contribution to overall portfolio riskiness - as opposed to its "stand alone riskiness." In the CAPM context, portfolio risk is represented by higher variance i.e. less predictability. In other words the beta of the portfolio is the defining factor in rewarding the systematic exposure taken by an investor.
The efficient frontier
Main article: Efficient frontier The (Markowitz) efficient frontier. CAL stands for the capital allocation line.The CAPM assumes that the risk-return profile of a portfolio can be optimized - an optimal portfolio displays the lowest possible level of risk for its level of return. Additionally, since each additional asset introduced into a portfolio further diversifies the portfolio, the optimal portfolio must comprise every asset, (assuming no trading costs) with each asset value-weighted to achieve the above (assuming that any asset is infinitely divisible). All such optimal portfolios, i.e., one for each level of return, comprise the efficient frontier.
Because the unsystematic risk is diversifiable, the total risk of a portfolio can be viewed as beta.
The market portfolio
An investor might choose to invest a proportion of his or her wealth in a portfolio of risky assets with the remainder in cash - earning interest at the risk free rate (or indeed may borrow money to fund his or her purchase of risky assets in which case there is a negative cash weighting). Here, the ratio of risky assets to risk free asset does not determine overall return - this relationship is clearly linear. It is thus possible to achieve a particular return in one of two ways:
By investing all of one's wealth in a risky portfolio, or by investing a proportion in a risky portfolio and the remainder in cash (either borrowed or invested). For a given level of return, however, only one of these portfolios will be optimal (in the sense of lowest risk). Since the risk free asset is, by definition, uncorrelated with any other asset, option 2 will generally have the lower variance and hence be the more efficient of the two.
This relationship also holds for portfolios along the efficient frontier: a higher return portfolio plus cash is more efficient than a lower return portfolio alone for that lower level of return. For a given risk free rate, there is only one optimal portfolio which can be combined with cash to achieve the lowest level of risk for any possible return. This is the market portfolio.
Assumptions of CAPM
All Investors:
Aim to maximize economic utility. Are rational and risk-averse. Are price takers, i.e., they cannot influence prices. Can lend and borrow unlimited under the risk free rate of interest. Trade without transaction or taxation costs. Deal with securities that are all highly divisible into small parcels. Assume all information is at the same time available to all investors.
Shortcomings of CAPM
The model assumes that asset returns are (jointly) normally distributed random variables. It is however frequently observed that returns in equity and other markets are not normally distributed. As a result, large swings (3 to 6 standard deviations from the mean) occur in the market more frequently than the normal distribution assumption would expect. The model assumes that the variance of returns is an adequate measurement of risk. This might be justified under the assumption of normally distributed returns, but for general return distributions other risk measures (like coherent risk measures) will likely reflect the investors' preferences more adequately. The model assumes that all investors have access to the same information and agree about the risk and expected return of all assets (homogeneous expectations assumption). The model assumes that the probability beliefs of investors match the true distribution of returns. A different possibility is that investors' expectations are biased, causing market prices to be informationally inefficient. This possibility is studied in the field of behavioral finance, which uses psychological assumptions to provide alternatives to the CAPM such as the overconfidence-based asset pricing model of Kent Daniel, David Hirshleifer, and Avanidhar Subrahmanyam (2001)[2]. The model does not appear to adequately explain the variation in stock returns. Empirical studies show that low beta stocks may offer higher returns than the model would predict. Some data to this effect was presented as early as a 1969 conference in Buffalo, New York in a paper by Fischer Black, Michael Jensen, and Myron Scholes. Either that fact is itself rational (which saves the efficient-market hypothesis but makes CAPM wrong), or it is irrational (which saves CAPM, but makes the EMH wrong – indeed, this possibility makes volatility arbitrage a strategy for reliably beating the market). The model assumes that given a certain expected return investors will prefer lower risk (lower variance) to higher risk and conversely given a certain level of risk will prefer higher returns to lower ones. It does not allow for investors who will accept lower returns for higher risk. Casino gamblers clearly pay for risk, and it is possible that some stock traders will pay for risk as well. The model assumes that there are no taxes or transaction costs, although this assumption may be relaxed with more complicated versions of the model. The market portfolio consists of all assets in all markets, where each asset is weighted by its market capitalization. This assumes no preference between markets and assets for individual investors, and that investors choose assets solely as a function of their risk-return profile. It also assumes that all assets are infinitely divisible as to the amount which may be held or transacted. The market portfolio should in theory include all types of assets that are held by anyone as an investment (including works of art, real estate, human capital...) In practice, such a market portfolio is unobservable and people usually substitute a stock index as a proxy for the true market portfolio. Unfortunately, it has been shown that this substitution is not innocuous and can lead to false inferences as to the validity of the CAPM, and it has been said that due to the inobservability of the true market portfolio, the CAPM might not be empirically testable. This was presented in greater depth in a paper by Richard Roll in 1977, and is generally referred to as Roll's critique. The model assumes just two dates, so that there is no opportunity to consume and rebalance portfolios repeatedly over time. The basic insights of the model are extended and generalized in the intertemporal CAPM (ICAPM) of Robert Merton, and the consumption CAPM (CCAPM) of Douglas Breeden and Mark Rubinstein.


Cash flow
Cash Flow (CNBC Asia). For the song, see Cash Flow (song). Accountancy Key concepts AccountantBookkeepingTrial balanceGeneral ledgerDebits and creditsCost of goods soldDouble-entry systemStandard practicesCash and accrual basisGAAP / IFRS Financial statements Balance sheetIncome statementCash flow statementOwnership equityRetained earnings
Auditing Financial auditGAASInternal auditSarbanes-Oxley ActBig Four auditors
Fields of accounting Cost • Financial • ForensicFund • Management • Tax This box: view • talk • edit Cash flow refers to the movement of cash into or out of a business, a project, or a financial product. It is usually measured during a specified, finite period of time. Measurement of cash flow can be used
to determine a project's rate of return or value. The time of cash flows into and out of projects are used as inputs in financial models such as internal rate of return, and net present value. to determine problems with a business's liquidity. Being profitable does not necessarily mean being liquid. A company can fail because of a shortage of cash, even while profitable. as an alternate measure of a business's profits when it is believed that accrual accounting concepts do not represent economic realities. For example, a company may be notionally profitable but generating little operational cash (as may be the case for a company that barters its products rather than selling for cash). In such a case, the company may be deriving additional operating cash by issuing shares, or raising additional debt finance. cash flow can be used to evaluate the 'quality' of Income generated by accrual accounting. When Net Income is composed of large non-cash items it is considered low quality. to evaluate the risks within a financial product. E.g. matching cash requirements, evaluating default risk, re-investment requirements, etc. Cash flow is a generic term used differently depending on the context. It may be defined by users for their own purposes. It can refer to actual past flows, or to projected future flows. It can refer to the total of all the flows involved or to only a subset of those flows. Subset terms include 'net cash flow', operating cash flow and free cash flow.

Statement of Cash Flow in a Business's FinancialsCash flows are classified into:
Operational cash flows: Cash received or expended as a result of the company's internal business activities. It includes cash earnings plus changes to working capital. Over the medium term this must be net positive if the company is to remain solvent. Investment cash flows: Cash received from the sale of long-life assets, or spent on capital expenditure (investments, acquisitions and long-life assets). Financing cash flows: Cash received from the issue of debt and equity, or paid out as dividends, share repurchases or debt repayments All three together - the net cash flow - are necessary to reconcile the beginning cash balance to the ending cash balance.
[edit] Ways Companies Can Augment Reported Cash FlowCommon methods include:
Sales - Sell the receivables to a factor for instant cash. (leading) Inventory - Don't pay your suppliers for an additional few weeks at period end. (lagging) Sales Commissions - Management can form a separate (but unrelated) company act as its agent. The book of business can then be purchased quarterly as an investment. Wages - Remunerate with stock options. Maintenance - Contract with the predecessor company that you prepay five years worth for them to continue doing the work Equipment Leases - Buy it Rent - Buy the property (sale and lease back, for example). Oil Exploration costs - Replace reserves by buying another company's. Research & Development - Wait for the product to be proven by a start-up lab; then buy the lab. Consulting Fees - Pay in shares from treasury since usually to related parties Interest - Issue convertible debt where the conversion rate changes with the unpaid interest. Taxes - Buy shelf companies with TaxLossCarryForward's. Or gussy up the purchase by buying a lab or O&G explore co. with the same TLCF.[1]
[edit] Example of a positive $40 cash flowTransaction In (Debit) Out (Credit) Incoming Loan +$50.00 Sales (which were paid for in cash) +$30.00 Materials -$10.00 Labor -$10.00 Purchased Capital -$10.00 Loan Repayment -$5.00 Taxes -$5.00 Total.......................................... .......+$40.00.......
In this example the following types of flows are included:
Incoming loan: financial flow Sales: operational flow Materials: operational flow Labor: operational flow Purchased Capital: Investment flow Loan Repayment: financial flow Taxes: financial flow Let us, for example, compare two companies using only total cash flow and then separate cash flow streams. The last three years show the following total cash flows:
Company A:Year 1: cash flow of +10MYear 2: cash flow of +11MYear 3: cash flow of +12M
Company B:Year 1: cash flow of +15MYear 2: cash flow of +16MYear 3: cash flow of +17M
Company B has a higher yearly cash flow and looks like a better one in which to invest. Now let us see how their cash flows are made up:
Company A:
Year 1: OC: +20M FC: +5M IC: -15M, total = +10MYear 2: OC: +21M FC: +5M IC: -15M, total = +11MYear 3: OC: +22M FC: +5M IC: -15M, total = +12M
Company B:
Year 1: OC: +10M FC: +5M IC: 0, total = +15MYear 2: OC: +11M FC: +5M IC: 0, total = +16MYear 3: OC: +12M FC: +5M IC: 0, total = +17M
OC = Operational Cash, FC = Financial Cash, IC = Investment Cash Now it shows that Company A is actually earning more cash by its core activities and has already spent 45M in long term investments, of which the revenues will only show up after three years. When comparing investments using cash flows always make sure to use the same cash flow layout.

Saturday, July 4, 2009

This article is about decreasing energy consumption. For the law of conservation of energy in physics, see Conservation of energy.Energy conservation is the practice of decreasing the quantity of energy used. It may be achieved through efficient energy use, in which case energy use is decreased while achieving a similar outcome, or by reduced consumption of energy services. Energy conservation may result in increase of financial capital, environmental value, national security, personal security, and human comfort. Individuals and organizations that are direct consumers of energy may want to conserve energy in order to reduce energy costs and promote economic security. Industrial and commercial users may want to increase efficiency and thus maximize profit.

IntroductionElectrical energy conservation is an important element of energy policy. Energy conservation reduces the energy consumption and energy demand per capita and thus offsets some of the growth in energy supply needed to keep up with population growth. This reduces the rise in energy costs, and can reduce the need for new power plants, and energy imports. The reduced energy demand can provide more flexibility in choosing the most preferred methods of energy production.
By reducing emissions, energy conservation is an important part of lessening climate change. Energy conservation facilitates the replacement of non-renewable resources with renewable energy. Energy conservation is often the most economical solution to energy shortages, and is a more environmentally benign alternative to increased energy production.
By country
United StatesThe United States is currently one of the largest single consumer of energy. The U.S. Department of Energy categorizes national energy use in four broad sectors: transportation, residential, commercial, and industrial.[1]
U.S. Energy Flow Trends - 2002. Note that the breakdown of useful and waste energy in each sector (yellow vs. grey) is estimated arbitrarily and is not based on data. Energy usage in transportation and residential sectors (about half of U.S. energy consumption) is largely controlled by individual domestic consumers. Commercial and industrial energy expenditures are determined by businesses entities and other facility managers. National energy policy has a significant effect on energy usage across all four sectors.
[edit] TransportationThe tranortation sector includes all vehicles used for personal or freight transportation. Of the energy used in this sector, approximately 65% is consumed by gasoline-powered vehicles, primarily personally owned. Diesel-powered transport (trains, merchant ships, heavy trucks, etc.) consumes about 20%, and air traffic consumes most of the remaining 15%.[2]d The two oil supply crisis of the 1970s spurred the creation, in 1975, of the federal Corporate Average Fuel Economy (CAFE) program, which required auto manufacturers to meet progressively higher fleet fuel economy targets. The next decade saw dramatic improvements in fuel economy, mostly the result of reductions in vehicle size and weight which originated in the late 1970s, along with the transition to front wheel drive. These gains eroded somewhat after 1990 due to the growing popularity of sport utility vehicles, pickup trucks and minivans, which fall under the more lenient "light truck" CAFE standard.
In addition to the CAFE program, the U.S. government has tried to encourage better vehicle efficiency through tax policy. Since 2002, taxpayers have been eligible for income tax credits for gas/electric hybrid vehicles. A "gas-guzzler" tax has been assessed on manufacturers since 1978 for cars with exceptionally poor fuel economy. While this tax remains in effect, it currently generates very little revenue as overall fuel economy has improved. The gas-guzzler tax ended the reign of large cubic-inched engines from the musclecar era.
Another focus in gasoline conservation is reducing the number of miles driven. An estimated 40% of American automobile use is associated with daily commuting. Many urban areas offer subsidized public transportation to reduce commuting traffic, and encourage carpooling by providing designated high-occupancy vehicle lanes and lower tolls for cars with multiple riders. In recent years telecommuting has also become a viable alternative to commuting for some jobs, but in 2003 only 3.5% of workers were telecommuters. Ironically, hundreds of thousands of American and European workers have been replaced by workers in Asia who telecommute from thousands of miles away.
Fuel economy-maximizing behaviors also help reduce fuel consumption. Among the most effective are moderate (as opposed to aggressive) driving, driving at lower speeds, using cruise control, and turning off a vehicle's engine at stops rather than idling. A vehicle's gas mileage decreases rapidly highway speeds, normally above 55 miles per hour (though the exact number varies by vehicle). This is because aerodynamic forces are proportionally related to the square of an object's speed (when the speed is doubled, drag quadruples). According to the U.S. Department of Energy (DOE), as a rule of thumb, each 5 mph (8.0 km/h) you drive over 60 mph (97 km/h) is similar to paying an additional $0.30 per gallon for gas [3] The exact speed at which a vehicle achieves its highest efficiency varies based on the vehicle's drag coefficient, frontal area, surrounding air speed, and the efficiency and gearing of a vehicle's drive train and transmission.
Residential sectorThe residential sector refers to all private residences, including single-family homes, apartments, manufactured homes and dormitories. Energy use in this sector varies significantly across the country, due to regional climate differences and different regulation. On average, about half of the energy used in U.S. homes is expended on space conditioning (i.e. heating and cooling).
The efficiency of furnaces and air conditioners has increased steadily since the energy crises of the 1970s. The 1987 National Appliance Energy Conservation Act authorized the Department of Energy to set minimum efficiency standards for space conditioning equipment and other appliances each year, based on what is "technologically feasible and economically justified". Beyond these minimum standards, the Environmental Protection Agency awards the Energy Star designation to appliances that exceed industry efficiency averages by an EPA-specified percentage.
Despite technological improvements, many American lifestyle changes have put higher demands on heating and cooling resources. The average size of homes built in the United States has increased significantly, from 1,500 sq ft (140 m2) in 1970 to 2,300 sq ft (210 m2) in 2005. The single-person household has become more common, as has central air conditioning: 23% of households had central air conditioning in 1978, that figure rose to 55% by 2001.
As furnace efficiency gets higher, there is limited room for improvement--efficiencies above 85% are now common. However, improving the building envelope through better or more insulation, advanced windows, etc., can allow larger improvements. The passive house approach produces superinsulated buildings that approach zero net energy consumption. Improving the building envelope can also be cheaper than replacing a furnace or air conditioner.
Even lower cost improvements include weatherization, which is frequently subsidized by utilities or state/federal tax credits, as are programmable thermostats. Consumers have also been urged to adopt a wider indoor temperature range (e.g. 65 °F (18 °C) in the winter, 80 °F (27 °C) in the summer).
One underutilized, but potentially very powerful means to reduce household energy consumption is to provide real-time feedback to homeowners so they can effectively alter their energy using behavior. Recently, low cost energy feedback displays, such as The Energy Detective or wattson [1], have become available. A study of a similar device deployed in 500 Ontario homes by Hydro One [2] showed an average 6.5% drop in total electricity use when compared with a similarly sized control group.
Standby power used by consumer electronics and appliances while they are turned off accounts for an estimated 5 to 10% of household electricity consumption, adding an estimated $3 billion to annual energy costs in the USA. "In the average home, 75% of the electricity used to power home electronics is consumed while the products are turned off." [3]
Home energy consumption averages Wikibooks has a book on the topic of How to reduce energy usage Home heating systems, 30.7% Water heating, 13.5% Home cooling systems, 11.5% Lighting, 10.3% Refrigerators and freezers, 8.2% Home electronics, 7.2% Clothing and dish washers, 5.6% (includes clothes dryers, does not include hot water) Cooking, 4.7% Computers, 0.9% Other, 4.1% (includes small electrics, heating elements, motors, pool and hot tub heaters, outdoor grills, and natural gas outdoor lighting) Non end-user energy expenditure, 3.3%[4] Energy usage in some homes may vary widely from these averages. For example, milder regions such as the southern U.S. and Pacific coast of the USA need far less energy for space conditioning than New York City or Chicago. On the other hand, air conditioning energy use can be quite high in hot-arid regions (Southwest) and hot-humid zones (Southeast) In milder climates such as San Diego, lighting energy may easily consume up to 40% of total energy. Certain appliances such as a waterbed, hot tub, or pre-1990 refrigerator use significant amounts of electricity. However, recent trends in home entertainment equipment can make a large difference in household energy use. For instance a 50" LCD television (average on-time= 6 hours a day) may draw 300 Watts less than a similarly sized plasma system. In most residences no single appliance dominates, and any conservation efforts must be directed to numerous areas in order to achieve substantial energy savings. However, Ground, Air and Water Source Heat Pump systems are the more energy efficient, environmentally clean, and cost-effective space conditioning and domestic hot water systems available (Environmental Protection Agency), and can achieve reductions in energy consumptions of up to 69%.
Best building practicesCurrent best practices in building design, construction and retrofitting result in homes that are profoundly more energy conserving than average new homes. This includes insulation and energy-efficient windows and lighting [5]. See Passive house, Superinsulation, Self-sufficient homes, Zero energy building, Earthship, MIT Design Advisor, Energy Conservation Code for Indian Commercial Buildings.
Smart ways to construct homes such that minimal resources are used to cooling and heating the house in summer and winter respectively can significantly reduce energy costs.
The commercial sector consists of retail stores, offices (business and government), restaurants, schools and other workplaces. Energy in this sector has the same basic end uses as the residential sector, in slightly different proportions. Space conditioning is again the single biggest consumption area, but it represents only about 30% of the energy use of commercial buildings. Lighting, at 25%, plays a much larger role than it does in the residential sector.[6] Lighting is also generally the most wasteful component of commercial use. A number of case studies indicate that more efficient lighting and elimination of over-illumination can reduce lighting energy by approximately fifty percent in many commercial buildings.
Commercial buildings can greatly increase energy efficiency by thoughtful design, with today's building stock being very poor examples of the potential of systematic (not expensive) energy efficient design (Steffy, 1997). Commercial buildings often have professional management, allowing centralized control and coordination of energy conservation efforts. As a result, fluorescent lighting (about four times as efficient as incandescent) is the standard for most commercial space, although it may produce certain adverse health effects.[7][8][9][10] Potential health concerns can be mitigated by using newer fixtures with electronic ballasts rather than older magenetic ballasts. As most buildings have consistent hours of operation, programmed thermostats and lighting controls are common. However, too many companies believe that merely having a computer controlled Building automation system guarantees energy efficiency. As an example one large company in Northern California boasted that it was confident its state of the art system had optimized space heating. A more careful analysis by Lumina Technologies showed the system had been given programming instructions to maintain constant 24 hour temperatures in the entire building complex. This instruction caused the injection of nighttime heat into vacant buildings when the daytime summer temperatures would often exceed 90 °F (32 °C). This mis-programming was costing the company over $130,000 per year in wasted energy (Lumina Technologies, 1997). Many corporations and governments also require the Energy Star rating for any new equipment purchased for their buildings.
Solar heat loading through standard window designs usually leads to high demand for air conditioning in summer months. An example of building design overcoming this excessive heat loading is the Dakin Building in Brisbane, California, where fenestration was designed to achieve an angle with respect to sun incidence to allow maximum reflection of solar heat; this design also assisted in reducing interior over-illumination to enhance worker efficiency and comfort.
Recent advances include use of occupancy sensors to turn off lights when spaces are unoccupied, and photosensors to dim or turn off electric lighting when natural light is available. In air conditioning systems, overall equipment efficiencies have increased as energy codes and consumer information have begun to emphasise year round performance rather than just efficiency ratings at maximum output. Controllers that automatically vary the speeds of fans, pumps, and compressors have radically improved part-load performance of those devices. For space or water heating, electric heat pumps consume roughly half the energy required by electric resistance heaters. Natural gas heating efficiencies have improved through use of condensing furnaces and boilers, in which the water vapor in the flue gas is cooled to liquid form before it is discharged, allowing the heat of condensation to be used. In buildings where high levels of outside air are required, heat exchangers can capture heat from the exhaust air to preheat incoming supply air.
A company in Florida tackled the issue of both energy-conservation and enhancing its workplace environment by implementing a conveyor system that is 40-60% quieter than traditional systems, emitting a noise level of only 55-50 decibels, equivalent to a soft-rock radio station. Lighting was addressed by not only programming the lighting console so that isolated lights could be switched on and off in designated areas of the warehouse, but also by enhancing natural lighting through the use of skylights and a high-gloss floor. (6)

Industrial sectorThe industrial sector represents all production and processing of goods, including manufacturing, construction, farming, water management and mining. Increasing costs have forced energy-intensive industries to make substantial efficiency improvements in the past 30 years. For example, the energy used to produce steel and paper products has been cut 40% in that time frame, while petroleum/aluminum refining and cement production have reduced their usage by about 25%. These reductions are largely the result of recycling waste material and the use of cogeneration equipment for electricity and heating.
Another example for efficiency improvements is the use of products made of High temperature insulation wool (HTIW) which enables predominantly industrial users to operate thermal treatment plants at temperatures between 800 and 1400°C. In these high-temperature applications, the consumption of primary energy and the associated CO2 emissions can be reduced by up to 50% compared with old fashioned industrial installations. The application of products made of High temperature insulation Wool is becoming increasingly important against the background of the currently dramatic rising cost of energy.
The energy required for delivery and treatment of fresh water often constitutes a significant percentage of a region's electricity and natural gas usage (an estimated 20% of California's total energy use is water-related.[11]) In light of this, some local governments have worked toward a more integrated approach to energy and water conservation efforts.
To conserve energy, some industries have begun using solar panels to heat their water.[citation needed]
Unlike the other sectors, total energy use in the industrial sector has declined in the last decade. While this is partly due to conservation efforts, its is also a reflection of the growing trend for U.S. companies to move manufacturing operations overseas.

United KingdomMain article: Energy use and conservation in the United KingdomEnergy conservation in the United Kingdom has been receiving increased attention over recent years. Key factors behind this are the Government's commitment to reducing carbon emissions, the projected 'energy gap' in UK electricity generation, and the increasing reliance on imports to meet national energy needs. Domestic housing and road transport are currently the two biggest problem areas.
The UK Government has jointly funded the Energy Saving Trust to promote energy conservation at a consumer, business and community level since 1993.
Issues with energy conservationCritics and advocates of some forms of energy conservation make the following arguments:
Standard economic theory suggests that technological improvements that increase energy efficiency will tend to increase, rather than reduce energy use. This is called the Jevons Paradox and it is said to occur in two ways. Firstly, increased energy efficiency makes the use of energy relatively cheaper, thus encouraging increased use. Secondly, increased energy efficiency leads to increased economic growth, which pulls up energy use in the whole economy. This does not imply that increased fuel efficiency is worthless. Increased fuel efficiency enables greater production and a higher quality of life.[12] Some retailers argue that bright lighting stimulates purchasing. Health studies have demonstrated that headache, stress, blood pressure, fatigue and worker error all generally increase with the common over-illumination present in many workplace and retail settings (Davis, 2001), (Bain, 1997). It has been shown that natural daylighting increases productivity levels of workers, while reducing energy consumption.[13] The use of telecommuting by major corporations is a significant opportunity to conserve energy, as many Americans now work in service jobs that enable them to work from home instead of commuting to work each day. [14] Electric motors consume more than 60% of all electrical energy generated and are responsible for the loss of 10 to 20% of all electricity converted into mechanical energy. [15] Consumers are often poorly informed of the savings of energy efficient products. The research one must put into conserving energy often is too time consuming and costly when there are cheaper products and technology available using today's fossil fuels. [16]
ated reading or external links, but its sources remain unclear because it lacks inline citations. Please improve this article by introducing more precise citations where appropriate. (April 2009)
Scott Davis, Dana K. Mirick, Richard G. Stevens (2001). "Night Shift Work, Light at Night, and Risk of Breast Cancer". Journal of the National Cancer Institute 93 (20): 1557–1562. doi:10.1093/jnci/93.20.1557. PMID 11604479. . Bain, A., “The Hindenburg Disaster: A Compelling Theory of Probable Cause and Effect,” Procs. NatL Hydr. Assn. 8th Ann. Hydrogen Meeting, Alexandria, Va., March 11-13, pp 125–128 (1997} Gary Steffy, Architectural Lighting Design, John Wiley and Sons (2001) ISBN 0-471-38638-3 Lumina Technologies, Analysis of energy consumption in a San Francisco Bay Area research office complex, for (confidential) owner, Santa Rosa, Ca. May 17, 1996 GSA paves way for IT-based buildings [4]
This article is about decreasing energy consumption. For the law of conservation of energy in physics, see Conservation of energy.Energy conservation is the practice of decreasing the quantity of energy used. It may be achieved through efficient energy use, in which case energy use is decreased while achieving a similar outcome, or by reduced consumption of energy services. Energy conservation may result in increase of financial capital, environmental value, national security, personal security, and human comfort. Individuals and organizations that are direct consumers of energy may want to conserve energy in order to reduce energy costs and promote economic security. Industrial and commercial users may want to increase efficiency and thus maximize profit.

IntroductionElectrical energy conservation is an important element of energy policy. Energy conservation reduces the energy consumption and energy demand per capita and thus offsets some of the growth in energy supply needed to keep up with population growth. This reduces the rise in energy costs, and can reduce the need for new power plants, and energy imports. The reduced energy demand can provide more flexibility in choosing the most preferred methods of energy production.
By reducing emissions, energy conservation is an important part of lessening climate change. Energy conservation facilitates the replacement of non-renewable resources with renewable energy. Energy conservation is often the most economical solution to energy shortages, and is a more environmentally benign alternative to increased energy production.
By country
United StatesThe United States is currently one of the largest single consumer of energy. The U.S. Department of Energy categorizes national energy use in four broad sectors: transportation, residential, commercial, and industrial.[1]
U.S. Energy Flow Trends - 2002. Note that the breakdown of useful and waste energy in each sector (yellow vs. grey) is estimated arbitrarily and is not based on data. Energy usage in transportation and residential sectors (about half of U.S. energy consumption) is largely controlled by individual domestic consumers. Commercial and industrial energy expenditures are determined by businesses entities and other facility managers. National energy policy has a significant effect on energy usage across all four sectors.
[edit] TransportationThe tranortation sector includes all vehicles used for personal or freight transportation. Of the energy used in this sector, approximately 65% is consumed by gasoline-powered vehicles, primarily personally owned. Diesel-powered transport (trains, merchant ships, heavy trucks, etc.) consumes about 20%, and air traffic consumes most of the remaining 15%.[2]d The two oil supply crisis of the 1970s spurred the creation, in 1975, of the federal Corporate Average Fuel Economy (CAFE) program, which required auto manufacturers to meet progressively higher fleet fuel economy targets. The next decade saw dramatic improvements in fuel economy, mostly the result of reductions in vehicle size and weight which originated in the late 1970s, along with the transition to front wheel drive. These gains eroded somewhat after 1990 due to the growing popularity of sport utility vehicles, pickup trucks and minivans, which fall under the more lenient "light truck" CAFE standard.
In addition to the CAFE program, the U.S. government has tried to encourage better vehicle efficiency through tax policy. Since 2002, taxpayers have been eligible for income tax credits for gas/electric hybrid vehicles. A "gas-guzzler" tax has been assessed on manufacturers since 1978 for cars with exceptionally poor fuel economy. While this tax remains in effect, it currently generates very little revenue as overall fuel economy has improved. The gas-guzzler tax ended the reign of large cubic-inched engines from the musclecar era.
Another focus in gasoline conservation is reducing the number of miles driven. An estimated 40% of American automobile use is associated with daily commuting. Many urban areas offer subsidized public transportation to reduce commuting traffic, and encourage carpooling by providing designated high-occupancy vehicle lanes and lower tolls for cars with multiple riders. In recent years telecommuting has also become a viable alternative to commuting for some jobs, but in 2003 only 3.5% of workers were telecommuters. Ironically, hundreds of thousands of American and European workers have been replaced by workers in Asia who telecommute from thousands of miles away.
Fuel economy-maximizing behaviors also help reduce fuel consumption. Among the most effective are moderate (as opposed to aggressive) driving, driving at lower speeds, using cruise control, and turning off a vehicle's engine at stops rather than idling. A vehicle's gas mileage decreases rapidly highway speeds, normally above 55 miles per hour (though the exact number varies by vehicle). This is because aerodynamic forces are proportionally related to the square of an object's speed (when the speed is doubled, drag quadruples). According to the U.S. Department of Energy (DOE), as a rule of thumb, each 5 mph (8.0 km/h) you drive over 60 mph (97 km/h) is similar to paying an additional $0.30 per gallon for gas [3] The exact speed at which a vehicle achieves its highest efficiency varies based on the vehicle's drag coefficient, frontal area, surrounding air speed, and the efficiency and gearing of a vehicle's drive train and transmission.
Residential sectorThe residential sector refers to all private residences, including single-family homes, apartments, manufactured homes and dormitories. Energy use in this sector varies significantly across the country, due to regional climate differences and different regulation. On average, about half of the energy used in U.S. homes is expended on space conditioning (i.e. heating and cooling).
The efficiency of furnaces and air conditioners has increased steadily since the energy crises of the 1970s. The 1987 National Appliance Energy Conservation Act authorized the Department of Energy to set minimum efficiency standards for space conditioning equipment and other appliances each year, based on what is "technologically feasible and economically justified". Beyond these minimum standards, the Environmental Protection Agency awards the Energy Star designation to appliances that exceed industry efficiency averages by an EPA-specified percentage.
Despite technological improvements, many American lifestyle changes have put higher demands on heating and cooling resources. The average size of homes built in the United States has increased significantly, from 1,500 sq ft (140 m2) in 1970 to 2,300 sq ft (210 m2) in 2005. The single-person household has become more common, as has central air conditioning: 23% of households had central air conditioning in 1978, that figure rose to 55% by 2001.
As furnace efficiency gets higher, there is limited room for improvement--efficiencies above 85% are now common. However, improving the building envelope through better or more insulation, advanced windows, etc., can allow larger improvements. The passive house approach produces superinsulated buildings that approach zero net energy consumption. Improving the building envelope can also be cheaper than replacing a furnace or air conditioner.
Even lower cost improvements include weatherization, which is frequently subsidized by utilities or state/federal tax credits, as are programmable thermostats. Consumers have also been urged to adopt a wider indoor temperature range (e.g. 65 °F (18 °C) in the winter, 80 °F (27 °C) in the summer).
One underutilized, but potentially very powerful means to reduce household energy consumption is to provide real-time feedback to homeowners so they can effectively alter their energy using behavior. Recently, low cost energy feedback displays, such as The Energy Detective or wattson [1], have become available. A study of a similar device deployed in 500 Ontario homes by Hydro One [2] showed an average 6.5% drop in total electricity use when compared with a similarly sized control group.
Standby power used by consumer electronics and appliances while they are turned off accounts for an estimated 5 to 10% of household electricity consumption, adding an estimated $3 billion to annual energy costs in the USA. "In the average home, 75% of the electricity used to power home electronics is consumed while the products are turned off." [3]
Home energy consumption averages Wikibooks has a book on the topic of How to reduce energy usage Home heating systems, 30.7% Water heating, 13.5% Home cooling systems, 11.5% Lighting, 10.3% Refrigerators and freezers, 8.2% Home electronics, 7.2% Clothing and dish washers, 5.6% (includes clothes dryers, does not include hot water) Cooking, 4.7% Computers, 0.9% Other, 4.1% (includes small electrics, heating elements, motors, pool and hot tub heaters, outdoor grills, and natural gas outdoor lighting) Non end-user energy expenditure, 3.3%[4] Energy usage in some homes may vary widely from these averages. For example, milder regions such as the southern U.S. and Pacific coast of the USA need far less energy for space conditioning than New York City or Chicago. On the other hand, air conditioning energy use can be quite high in hot-arid regions (Southwest) and hot-humid zones (Southeast) In milder climates such as San Diego, lighting energy may easily consume up to 40% of total energy. Certain appliances such as a waterbed, hot tub, or pre-1990 refrigerator use significant amounts of electricity. However, recent trends in home entertainment equipment can make a large difference in household energy use. For instance a 50" LCD television (average on-time= 6 hours a day) may draw 300 Watts less than a similarly sized plasma system. In most residences no single appliance dominates, and any conservation efforts must be directed to numerous areas in order to achieve substantial energy savings. However, Ground, Air and Water Source Heat Pump systems are the more energy efficient, environmentally clean, and cost-effective space conditioning and domestic hot water systems available (Environmental Protection Agency), and can achieve reductions in energy consumptions of up to 69%.
Best building practicesCurrent best practices in building design, construction and retrofitting result in homes that are profoundly more energy conserving than average new homes. This includes insulation and energy-efficient windows and lighting [5]. See Passive house, Superinsulation, Self-sufficient homes, Zero energy building, Earthship, MIT Design Advisor, Energy Conservation Code for Indian Commercial Buildings.
Smart ways to construct homes such that minimal resources are used to cooling and heating the house in summer and winter respectively can significantly reduce energy costs.
The commercial sector consists of retail stores, offices (business and government), restaurants, schools and other workplaces. Energy in this sector has the same basic end uses as the residential sector, in slightly different proportions. Space conditioning is again the single biggest consumption area, but it represents only about 30% of the energy use of commercial buildings. Lighting, at 25%, plays a much larger role than it does in the residential sector.[6] Lighting is also generally the most wasteful component of commercial use. A number of case studies indicate that more efficient lighting and elimination of over-illumination can reduce lighting energy by approximately fifty percent in many commercial buildings.
Commercial buildings can greatly increase energy efficiency by thoughtful design, with today's building stock being very poor examples of the potential of systematic (not expensive) energy efficient design (Steffy, 1997). Commercial buildings often have professional management, allowing centralized control and coordination of energy conservation efforts. As a result, fluorescent lighting (about four times as efficient as incandescent) is the standard for most commercial space, although it may produce certain adverse health effects.[7][8][9][10] Potential health concerns can be mitigated by using newer fixtures with electronic ballasts rather than older magenetic ballasts. As most buildings have consistent hours of operation, programmed thermostats and lighting controls are common. However, too many companies believe that merely having a computer controlled Building automation system guarantees energy efficiency. As an example one large company in Northern California boasted that it was confident its state of the art system had optimized space heating. A more careful analysis by Lumina Technologies showed the system had been given programming instructions to maintain constant 24 hour temperatures in the entire building complex. This instruction caused the injection of nighttime heat into vacant buildings when the daytime summer temperatures would often exceed 90 °F (32 °C). This mis-programming was costing the company over $130,000 per year in wasted energy (Lumina Technologies, 1997). Many corporations and governments also require the Energy Star rating for any new equipment purchased for their buildings.
Solar heat loading through standard window designs usually leads to high demand for air conditioning in summer months. An example of building design overcoming this excessive heat loading is the Dakin Building in Brisbane, California, where fenestration was designed to achieve an angle with respect to sun incidence to allow maximum reflection of solar heat; this design also assisted in reducing interior over-illumination to enhance worker efficiency and comfort.
Recent advances include use of occupancy sensors to turn off lights when spaces are unoccupied, and photosensors to dim or turn off electric lighting when natural light is available. In air conditioning systems, overall equipment efficiencies have increased as energy codes and consumer information have begun to emphasise year round performance rather than just efficiency ratings at maximum output. Controllers that automatically vary the speeds of fans, pumps, and compressors have radically improved part-load performance of those devices. For space or water heating, electric heat pumps consume roughly half the energy required by electric resistance heaters. Natural gas heating efficiencies have improved through use of condensing furnaces and boilers, in which the water vapor in the flue gas is cooled to liquid form before it is discharged, allowing the heat of condensation to be used. In buildings where high levels of outside air are required, heat exchangers can capture heat from the exhaust air to preheat incoming supply air.
A company in Florida tackled the issue of both energy-conservation and enhancing its workplace environment by implementing a conveyor system that is 40-60% quieter than traditional systems, emitting a noise level of only 55-50 decibels, equivalent to a soft-rock radio station. Lighting was addressed by not only programming the lighting console so that isolated lights could be switched on and off in designated areas of the warehouse, but also by enhancing natural lighting through the use of skylights and a high-gloss floor. (6)

Industrial sectorThe industrial sector represents all production and processing of goods, including manufacturing, construction, farming, water management and mining. Increasing costs have forced energy-intensive industries to make substantial efficiency improvements in the past 30 years. For example, the energy used to produce steel and paper products has been cut 40% in that time frame, while petroleum/aluminum refining and cement production have reduced their usage by about 25%. These reductions are largely the result of recycling waste material and the use of cogeneration equipment for electricity and heating.
Another example for efficiency improvements is the use of products made of High temperature insulation wool (HTIW) which enables predominantly industrial users to operate thermal treatment plants at temperatures between 800 and 1400°C. In these high-temperature applications, the consumption of primary energy and the associated CO2 emissions can be reduced by up to 50% compared with old fashioned industrial installations. The application of products made of High temperature insulation Wool is becoming increasingly important against the background of the currently dramatic rising cost of energy.
The energy required for delivery and treatment of fresh water often constitutes a significant percentage of a region's electricity and natural gas usage (an estimated 20% of California's total energy use is water-related.[11]) In light of this, some local governments have worked toward a more integrated approach to energy and water conservation efforts.
To conserve energy, some industries have begun using solar panels to heat their water.[citation needed]
Unlike the other sectors, total energy use in the industrial sector has declined in the last decade. While this is partly due to conservation efforts, its is also a reflection of the growing trend for U.S. companies to move manufacturing operations overseas.

United KingdomMain article: Energy use and conservation in the United KingdomEnergy conservation in the United Kingdom has been receiving increased attention over recent years. Key factors behind this are the Government's commitment to reducing carbon emissions, the projected 'energy gap' in UK electricity generation, and the increasing reliance on imports to meet national energy needs. Domestic housing and road transport are currently the two biggest problem areas.
The UK Government has jointly funded the Energy Saving Trust to promote energy conservation at a consumer, business and community level since 1993.
Issues with energy conservationCritics and advocates of some forms of energy conservation make the following arguments:
Standard economic theory suggests that technological improvements that increase energy efficiency will tend to increase, rather than reduce energy use. This is called the Jevons Paradox and it is said to occur in two ways. Firstly, increased energy efficiency makes the use of energy relatively cheaper, thus encouraging increased use. Secondly, increased energy efficiency leads to increased economic growth, which pulls up energy use in the whole economy. This does not imply that increased fuel efficiency is worthless. Increased fuel efficiency enables greater production and a higher quality of life.[12] Some retailers argue that bright lighting stimulates purchasing. Health studies have demonstrated that headache, stress, blood pressure, fatigue and worker error all generally increase with the common over-illumination present in many workplace and retail settings (Davis, 2001), (Bain, 1997). It has been shown that natural daylighting increases productivity levels of workers, while reducing energy consumption.[13] The use of telecommuting by major corporations is a significant opportunity to conserve energy, as many Americans now work in service jobs that enable them to work from home instead of commuting to work each day. [14] Electric motors consume more than 60% of all electrical energy generated and are responsible for the loss of 10 to 20% of all electricity converted into mechanical energy. [15] Consumers are often poorly informed of the savings of energy efficient products. The research one must put into conserving energy often is too time consuming and costly when there are cheaper products and technology available using today's fossil fuels. [16]
ated reading or external links, but its sources remain unclear because it lacks inline citations. Please improve this article by introducing more precise citations where appropriate. (April 2009)
Scott Davis, Dana K. Mirick, Richard G. Stevens (2001). "Night Shift Work, Light at Night, and Risk of Breast Cancer". Journal of the National Cancer Institute 93 (20): 1557–1562. doi:10.1093/jnci/93.20.1557. PMID 11604479. . Bain, A., “The Hindenburg Disaster: A Compelling Theory of Probable Cause and Effect,” Procs. NatL Hydr. Assn. 8th Ann. Hydrogen Meeting, Alexandria, Va., March 11-13, pp 125–128 (1997} Gary Steffy, Architectural Lighting Design, John Wiley and Sons (2001) ISBN 0-471-38638-3 Lumina Technologies, Analysis of energy consumption in a San Francisco Bay Area research office complex, for (confidential) owner, Santa Rosa, Ca. May 17, 1996 GSA paves way for IT-based buildings [4]
Eugene Green Energy Standard
"EUGENE" redirects here. For other uses, see Eugene (disambiguation).The Eugene Green Energy Standard is an international standard to which national or international green electricity labelling schemes can be accredited to confirm that they provide genuine environmental benefits. It is designed to encourage the generation and use of additional renewable energy sources for electricity generation, although the limited use of additional natural gas-fired cogeneration plant is also supported.[1]
1 The standard 2 Accredited energy labels 3 The Eugene Network 4 See also 5 References 6 External links
The standardThe standard confirms that energy supplied under the accredited schemes:[2]
Is produced from genuinely sustainable energy sources. Will result in a real increase in renewable generation beyond the requirements imposed by government ('additionality'). That the demand from consumers is matched by renewable generation. Two variations of the standard, 'gold' and 'silver', differentiate between schemes depending on the additionality of new renewable energy supplied. The development of the standard was aided by the European Union's CLEAN-E initiative during 2005 and 2006[3][4]
Discussions on increasing the flexibility of the standard were due to commence during 2007 'to better reflect the reality of the voluntary green power market'.[5]
[edit] Accredited energy labelsAccredited national energy labels include:[6]
Germany: OK Power Switzerland: Naturemade Star The organisation also recommends certain other national schemes that are progressing towards accreditation, including:[7]
Finland: Norppa Netherlands: Milieukeur Sweden: Bra Miljöval In the absence of a Eugene accredited scheme in the United Kingdom, Eugene supports Ecotricity[8], while Good Energy claim to be ready for accreditation to the Eugene Standard[9]
The Eugene Standard has also been adopted in Chile,[10] while a pilot scheme is in progress in France.[11] Discussions with other national certification bodies are also in progress.
The Eugene NetworkThe standard is managed by the Eugene Network (formerly the European Green Electricity Network), an international membership-based non-profit organization. The Network aims to coordinate and harmonise green energy labelling nationally and internationally, promote the adoption of the Eugene Standard as the basis for national and international green energy markets, and encourage consumers and suppliers to choose credible green energy products. Formal discussions on the Eugene standard first took place in 2000, lead by the World Wide Fund for Nature, and was officially launched on June 24, 2002.[12] The Eugene Network was legally established in 2003 and the first national energy labels were accredited in 2004.[13]
Full voting membership of the Network is open to 'citizen organisations pursuing not for profit activities with the objectives of promoting green electricity but with no direct interests in the generation and supply of energy services'. Organisations outside this scope but which do 'have a commitment and interest in creating a viable green energy market' can become non-voting associate members or supporters.[14]
As of June 2007, the members of the Eugene Network were:[15]
World Wide Fund for Nature [1] Chile: Instituto de Ecología Política [2] Finland: Finnish Association for Nature Conservation [3] France: Comité de Liaison Energies Renouvelables [4] Germany: EnergieVision [5] Spain: Asociacion para la Defensa de la Naturaleza [6] Sweden: Swedish Society for Nature Conservation [7] Switzerland: Association for Environmental Friendly Electricity (VUE) [8] Switzerland: Swiss Federal Institute for Environmental Science and Technology (EAWAG) [9]
Environmental concerns with electricity generationFrom Wikipedia, the free encyclopediaJump to: navigation, searchModern technology uses large amounts of electrical power. This is normally generated at power plants which convert some other kind of energy into electrical power. Each such system has advantages and disadvantages, but many of them pose environmental concerns.
The efficiency of some of these systems can be improved by cogeneration (combined heat and power) methods. Process steam can be extracted from steam turbines. Waste heat produced by thermal generating stations can be used for space heating of nearby buildings. By combining electric power production and heating, less fuel is consumed, thereby reducing the environmental effects compared with separate heat and power systems.
Carbon dioxide gas emissions given by source. Lower greenhouse gas emissions are typically desired in new power stations.Contents [hide]1 Water usage 2 Fossil fuels 3 Nuclear power 4 Tidal power 5 Biomass 6 Wind power 7 Geothermal power 8 Solar power 9 Negawatt power 10 See also 11 References 12 External links

Water usageThe amount of water usage is often of great concern for electricity generating systems as populations increase and droughts become a concern. Still, according to the U.S. Geological Survey, thermoelectric power generation accounts for only 3.3 percent of net freshwater consumption with over 80 percent going to irrigation. General numbers for fresh water usage of different power sources are shown below.
Water usage (gal/MW-h) Power source Low case Medium/Average case High case Nuclear power 400 (once-through cooling) 400 to 720 (pond cooling) 720 (cooling towers) Coal 300 480 Natural gas 100 (once-through cycle) 180 (with cooling towers) Hydroelectricity 1,430 Solar thermal 1,060 geothermal 1,800 4,000 Biomass 300 480 Solar photovoltaic 30 Wind power .5 1 2.2
All thermal cycle plants (nuclear, coal, NG, solar thermal) require a great deal of water for condensing, and the amount of water needed will be reduced with increasing boiler temperatures. Coal, being able to burn at high temperatures is thus more efficient and uses less water, while nuclear is more limited by material constraints and solar is more limited by potency of the energy source.
Thermal cycle plants, however, also have the option of using salt water if located on the seacoast. Such a site will not have cooling towers and will be much less limited by environmental concerns of the discharge temperature due to the fact that dumping heat will have very little effect on something with such a comparatively large thermal mass. This will also not deplete the water available for other uses. Nuclear power in Japan for instance, uses no cooling towers at all because all plants are located on the coast. Also, if dry cooling systems are used, significant water from the water table will not be used. Other, more novel, cooling solutions exist, such as sewage cooling at the Palo Verde Nuclear Generating Station.
Hydroelectricity's main cause of water usage is both evaporation and seepage into the water table.
Reference: Nuclear Energy Institute factsheet using EPRI data and other sources.hOE
Fossil fuels An oil-fired power station in IraqMain article: Fossil fuelSee also: Environmental impact of oil shale industryMost electricity today is generated by burning fossil fuels and producing steam which is then used to drive a steam turbine that, in turn, drives an electrical generator.
Such systems allow electricity to be generated where it is needed, since fossil fuels can readily be transported. They also take advantage of a large infrastructure designed to support consumer automobiles. The world's supply of fossil fuels is large, but finite. Exhaustion of low-cost fossil fuels will have significant consequences for energy sources as well as for the manufacture of plastics and many other things. Various estimates have been calculated for exactly when it will be exhausted (see Peak oil). New sources of fossil fuels keep being discovered, although the rate of discovery is slowing while the difficulty of extraction simultaneously increases.
More serious are concerns about the emissions that result from fossil fuel burning. Fossil fuels constitute a significant repository of carbon buried deep under the ground. Burning them results in the conversion of this carbon to carbon dioxide, which is then released into the atmosphere. This results in an increase in the Earth's levels of atmospheric carbon dioxide, which enhances the greenhouse effect and contributes to global warming. The linkage between increased carbon dioxide and global warming is well accepted, though fossil-fuel producers vigorously contest these findings.
Flue gas stacks at Ekibastuz GRES-1 Power Plant in Ekibastus, Kazakhstan are 330 meters tallDepending on the particular fossil fuel and the method of burning, other emissions may be produced as well. Ozone, sulfur dioxide, NO2 and other gases are often released, as well as particulate matter. Sulfur and nitrogen oxides contribute to smog and acid rain. In the past, plant owners addressed this problem by building very tall flue gas stacks, so that the pollutants would be diluted in the atmosphere. While this helps reduce local contamination, it does not help at all with global issues.
Fossil fuels, particularly coal, also contain dilute radioactive material, and burning them in very large quantities releases this material into the environment, leading to low levels of local and global radioactive contamination, the levels of which are, ironically, higher than a nuclear power station as their radioactive contaminants are controlled and stored.
Coal also contains traces of toxic heavy elements such as mercury, arsenic and others. Mercury vaporized in a power plant's boiler may stay suspended in the atmosphere and circulate around the world. While a substantial inventory of mercury exists in the environment, as other man-made emissions of mercury become better controlled, power plant emissions become a significant fraction of the remaining emissions. Power plant emissions of mercury in the United States are thought to be about 50 tons per year in 2003, and several hundred tons per year in China. Power plant designers can fit equipment to power stations to reduce emissions.
According to Environment Canada:
"The electricity sector is unique among industrial sectors in its very large contribution to emissions associated with nearly all air issues. Electricity generation produces a large share of Canadian nitrogen oxides and sulphur dioxide emissions, which contribute to smog and acid rain and the formation of fine particulate matter. It is the largest uncontrolled industrial source of mercury emissions in Canada. Fossil fuel-fired electric power plants also emit carbon dioxide, which may contribute to climate change. In addition, the sector has significant impacts on water and habitat and species. In particular, hydro dams and transmission lines have significant effects on water and biodiversity."[1]
Coal mining practices in the United States have also included strip mining and removing mountain tops. Mill tailings are left out bare and have been leached into local rivers and resulted in most or all of the rivers in coal producing areas to run red year round with sulfuric acid that kills all life in the rivers.
Nuclear power The Onagawa Nuclear Power Plant - a plant that cools by direct use of ocean water, not requiring a cooling tower.Main article: Environmental effects of nuclear powerSee also: Nuclear debateNuclear power plants do not burn fossil fuels and so do not directly emit carbon dioxide; because of the high energy yield of nuclear fuels, the carbon dioxide emitted during mining, enrichment, fabrication and transport of fuel is small when compared with the carbon dioxide emitted by fossil fuels of similar energy yield.
A large nuclear power plant may reject waste heat to a natural body of water; this can result in undesirable increase of the water temperature with adverse effect on aquatic life.
Emission of radioactivity from a nuclear plant is controlled by regulations. Abnormal operation may result in release of radioactive material on scales ranging from minor to severe; although these scenarios are very rare.
Mining of uranium ore can disrupt the environment around the mine. Disposal of spent fuel is controversial, with many proposed long-term storage schemes under intense review and criticism. Diversion of fresh or spent fuel to weapons production presents a risk of nuclear proliferation. Finally, the structure of the reactor itself becomes radioactive and will require decades of storage before it can be economically dismantled and in turn disposed of as waste.
Tidal powerMain article: Tidal powerIn regions such as the Bay of Fundy with very large tidal swings, tidal power plants can be built to extract electrical power from the tidal motion.
Tidal power is also renewable, in the sense that it will continue for as long as the Moon orbits the Earth. However, it has environmental problems similar to those of hydroelectric power. A tidal power plant usually requires a large dam, which can endanger ecosystems by restricting the motion of marine animals. Perhaps more seriously, a tidal power plant reduces or increases the tidal swing, which can severely disrupt ecosystems which depend on being periodically covered by water; resulting changes in fisheries or shellfish beds may result in adverse economic effects. Certain proposed tidal power plants in the Bay of Fundy would increase the tidal swing by an estimated 50 cm as far south as the coast of Maine (where the tidal swing is not particularly large now).
BiomassMain article: BiomassElectrical power can be generated by burning anything which will combust. Some electrical power is generated by burning crops which are grown specifically for the purpose. Usually this is done by fermenting plant matter to produce ethanol, which is then burned. This may also be done by allowing organic matter to decay, producing biogas, which is then burned. Also, when burned, wood is a form of biomass fuel.
Burning biomass produces many of the same emissions as burning fossil fuels. However, growing biomass captures carbon dioxide out of the air, so that the net contribution to global atmospheric carbon dioxide levels is lessened.
The process of growing biomass is subject to the same environmental concerns as any kind of agriculture. It uses a large amount of land, and fertilizers and pesticides may be necessary for cost-effective growth. Biomass that is produced as a by-product of agriculture shows some promise, but most such biomass is currently being used, for plowing back into the soil as fertilizer if nothing else.
Wind powerMain article: Environmental effects of wind powerWind power harnesses mechanical energy from the constant flow of air over the surface of the earth. Wind power stations generally consist of wind farms, fields of wind turbines in locations with relatively high winds. A primary publicity issue regarding wind turbines are their older predecessors, such as the Altamont Pass Wind Farm in California. These older, smaller, wind turbines are rather noisy and densely located, making them very unattractive to the local population. The downwind side of the turbine does disrupt local low-level winds. Modern large wind turbines have mitigated these concerns, and have become a commercially important energy source. Many homeowners in areas with high winds and expensive electricity set up small windmills to reduce their electric bills.
A modern wind farm, when installed on agricultural land, has one of the lowest environmental impacts of all energy sources:[2]
It occupies less land area per kilowatt-hour (kWh) of electricity generated than any other renewable energy conversion system, apart from rooftop solar energy,[citation needed] and is compatible with grazing and crops. It generates the energy used in its construction within just months of operation. Greenhouse gas emissions and air pollution produced by its construction are small and declining. There are no emissions or pollution produced by its operation. Modern wind turbines rotate so slowly (in terms of revolutions per minute) that they are rarely a hazard to birds.[2] Landscape and heritage issues may be a significant issue for certain wind farms. However, when appropriate planning procedures are followed, the heritage and landscape risks should be minimal. Some people may still object to wind farms, perhaps on the grounds of aesthetics, but their concerns should be weighed against the need to address the threats posed by climate change and the opinions of the broader community.[3]
Geothermal powerMain article: Geothermal powerGeothermal energy is the heat of the Earth, which can be tapped into to produce electricity in power plants.Warm water produced from geothermal sources can be used for industry, agriculture, bathing and cleansing. Where underground steam sources can be tapped, the steam is used to run a steam turbine. Geothermal steam sources have a finite life as underground water is depleted. Arrangements that circulate surface water through rock formations to produce hot water or steam are, on a human-relevant time scale, renewable.
While a geothermal power plant does not burn any fuel, it will still have emissions due to substances other than steam which come up from the geothermal wells. These may include hydrogen sulfide, and carbon dioxide. Some geothermal steam sources entrain non-soluble minerals that must be removed from the steam before it is used for generation; this material must be properly disposed. Any (closed cycle) steam power plant requires cooling water for condensors; diversion of cooling water from natural sources, and its increased temperature when returned to streams or lakes, may have a significant impact on local ecosystems.
Solar powerMain article: Solar PowerCurrently solar photovoltaic power is used primarily in Germany and Spain (where the Governments offer financial incentives) (but Washington state also provides financial incentives) and in areas with an abundant amount of sun. Solar photovoltaic power works by converting the sun's radiation into DC power by use of photovoltaic cells. This power can then be converted into the more common AC power.
Solar photovoltaic power offers a viable alternative to fossils fuels for its cleanliness and supply, although at a high production cost. Future technology improvements are expected to bring this cost down to a more competitive range.
Its negative impact on the environment lies in the creation of the solar cells (which are made of primarily silicon and the extraction of this silicon requires the use of fossil fuels) and the storage of the energy (which usually requires Lead-Acid batteries). It should be noted that solar power carries an upfront cost to the environment via production, but offers clean energy throughout the lifespan of the solar cell.
Solar thermal energy is a technology that generates heat by concentrating sunlight with large mirrors and converts this heat into electricity in a classical turbine.

Negawatt powerMain article: Negawatt powerNegawatt power refers to investment to reduce electricity consumption rather than investing to increase supply capacity. In this way investing in Negawatts can be considered as an alternative to a new power station and the costs and environmental concerns can be compared.
Negawatt investment alternatives to reduce consumption by improving efficiency include:
Providing customers with energy efficient lamps - low environmental impact Improved thermal insulation and airtightness for buildings - low environmental impact Replacing older industrial plant - low environmental impact. Can have a positive impact due to reduced emissions. Negawatt investment alternatives to reduce peak electrical load by time shifting demand include;
Storage heaters - older systems had asbestos. Newer systems have low environmental impact. Demand response control systems where the electricity board can control certain customer loads - minimal environmental impact Thermal storage systems such as Ice storage systems to make ice during the night and store it to use it for air conditioning during the day - minimal environmental impact Pumped storage hydroelectricity - Can have a significant environmental impact - see hydroelectricity. other Grid energy storage technologies - impact varies. Note that time shifting does not reduce total energy consumed or system efficiency however it can be used to avoid the need to build a new power station to cope with a peak load.
Hydroelectricity
The Three Gorges Dam, the largest hydro-electric power station in the world.Renewable energy BiofuelBiomassGeothermalHydropowerSolar powerTidal powerWave powerWind power Hydroelectricity is electricity generated by hydropower, i.e., the production of power through use of the gravitational force of falling or flowing water. It is the most widely used form of renewable energy. Once a hydroelectric complex is constructed, the project produces no direct waste, and has a considerably lower output level of the greenhouse gas carbon dioxide (CO2) than fossil fuel powered energy plants. Worldwide, hydroelectricity supplied an estimated 816 GWe in 2005. This was approximately 20% of the world's electricity, and accounted for about 88% of electricity from renewable sources.[1]

Electricity generation This section includes a list of references, related reading or external links, but its sources remain unclear because it lacks inline citations. Please improve this article by introducing more precise citations where appropriate. (August 2008) Hydraulic turbine and electrical generator. Hydroelectric dam in cross sectionMain article: Electricity generationMost hydroelectric power comes from the potential energy of dammed water driving a water turbine and generator. In this case the energy extracted from the water depends on the volume and on the difference in height between the source and the water's outflow. This height difference is called the head. The amount of potential energy in water is proportional to the head. To obtain very high head, water for a hydraulic turbine may be run through a large pipe called a penstock.
Pumped storage hydroelectricity produces electricity to supply high peak demands by moving water between reservoirs at different elevations. At times of low electrical demand, excess generation capacity is used to pump water into the higher reservoir. When there is higher demand, water is released back into the lower reservoir through a turbine. Pumped storage schemes currently provide the only commercially important means of large-scale grid energy storage and improve the daily load factor of the generation system. Hydroelectric plants with no reservoir capacity are called run-of-the-river plants, since it is not then possible to store water. A tidal power plant makes use of the daily rise and fall of water due to tides; such sources are highly predictable, and if conditions permit construction of reservoirs, can also be dispatchable to generate power during high demand periods.
Less common types of hydro schemes use water's kinetic energy or undammed sources such as undershot waterwheels.
A simple formula for approximating electric power production at a hydroelectric plant is: P = hrgk, where P is Power in kilowatts, h is height in meters, r is flow rate in cubic meters per second, g is acceleration due to gravity of 9.8 m/s2, and k is a coefficient of efficiency ranging from 0 to 1. Efficiency is often higher with larger and more modern turbines.
Annual electric energy production depends on the available water supply. In some installations the water flow rate can vary by a factor of 10:1 over the course of a year.
Industrial hydroelectric plantsWhile many hydroelectric projects supply public electricity networks, some are created to serve specific industrial enterprises. Dedicated hydroelectric projects are often built to provide the substantial amounts of electricity needed for aluminium electrolytic plants, for example. In the Scottish Highlands there are examples at Kinlochleven and Lochaber, constructed during the early years of the 20th century. The Grand Coulee Dam, long the world's largest, switched to support Alcoa aluminum in Bellingham, Washington for America's World War II airplanes before it was allowed to provide irrigation and power to citizens (in addition to aluminum power) after the war. In Suriname, the Brokopondo Reservoir was constructed to provide electricity for the Alcoa aluminium industry. New Zealand's Manapouri Power Station was constructed to supply electricity to the aluminium smelter at Tiwai Point. As of 2007 the Kárahnjúkar Hydropower Project in Iceland remains controversial.[2]
Small-scale hydro-electric plants This section includes a list of references, related reading or external links, but its sources remain unclear because it lacks inline citations. Please improve this article by introducing more precise citations where appropriate. (August 2008)
Main article: Small hydroAlthough large hydroelectric installations generate most of the world's hydroelectricity, some situations require small hydro plants. These are defined as plants producing up to 10 megawatts, or projects up to 30 megawatts in North America. A small hydro plant may be connected to a distribution grid or may provide power only to an isolated community or a single home. Small hydro projects generally do not require the protracted economic, engineering and environmental studies associated with large projects, and often can be completed much more quickly. A small hydro development may be installed along with a project for flood control, irrigation or other purposes, providing extra revenue for project costs. In areas that formerly used waterwheels for milling and other purposes, often the site can be redeveloped for electric power production, possibly eliminating the new environmental impact of any demolition operation. Small hydro can be further divided into mini-hydro, units around 1 MW in size, and micro hydro with units as large as 100 kW down to a couple of kW rating.
Small hydro schemes are particularly popular in China, which has over 50% of world small hydro capacity.[1]
Small hydro units in the range 1 MW to about 30 MW are often available from multiple manufacturers using standardized "water to wire" packages; a single contractor can provide all the major mechanical and electrical equipment (turbine, generator, controls, switchgear), selecting from several standard designs to fit the site conditions. Micro hydro projects use a diverse range of equipment; in the smaller sizes industrial centrifugal pumps can be used as turbines, with comparatively low purchase cost compared to purpose-built turbines.
Advantages The upper reservoir and dam of the Ffestiniog pumped storage scheme. 360 megawatts of electricity can be generated within 60 seconds of the need arising.EconomicsThe major advantage of hydroelectricity is elimination of the cost of fuel. The cost of operating a hydroelectric plant is nearly immune to increases in the cost of fossil fuels such as oil, natural gas or coal, and no imports are needed.
Hydroelectric plants also tend to have longer economic lives than fuel-fired generation, with some plants now in service which were built 50 to 100 years ago.[3] Operating labor cost is also usually low, as plants are automated and have few personnel on site during normal operation.
Where a dam serves multiple purposes, a hydroelectric plant may be added with relatively low construction cost, providing a useful revenue stream to offset the costs of dam operation. It has been calculated that the sale of electricity from the Three Gorges Dam will cover the construction costs after 5 to 8 years of full generation.[4]
Greenhouse gas emissionsSince hydroelectric dams do not burn fossil fuels, they do not directly produce carbon dioxide (a greenhouse gas). While some carbon dioxide is produced during manufacture and construction of the project, this is a tiny fraction of the operating emissions of equivalent fossil-fuel electricity generation.
Related activitiesReservoirs created by hydroelectric schemes often provide facilities for water sports, and become tourist attractions in themselves. In some countries, aquaculture in reservoirs is common. Multi-use dams installed for irrigation support agriculture with a relatively constant water supply. Large hydro dams can control floods, which would otherwise affect people living downstream of the project.
Disadvantages Recreational users must exercise extreme care when near hydroelectric dams, power plant intakes and spillways.[5]Environmental damageHydroelectric projects can be disruptive to surrounding aquatic ecosystems both upstream and downstream of the plant site. For instance, studies have shown that dams along the Atlantic and Pacific coasts of North America have reduced salmon populations by preventing access to spawning grounds upstream, even though most dams in salmon habitat have fish ladders installed. Salmon spawn are also harmed on their migration to sea when they must pass through turbines. This has led to some areas transporting smolt downstream by barge during parts of the year. In some cases dams have been demolished (for example the Marmot Dam demolished in 2007)[6] because of impact on fish. Turbine and power-plant designs that are easier on aquatic life are an active area of research. Mitigation measures such as fish ladders may be required at new projects or as a condition of re-licensing of existing projects.
Generation of hydroelectric power changes the downstream river environment. Water exiting a turbine usually contains very little suspended sediment, which can lead to scouring of river beds and loss of riverbanks.[7] Since turbine gates are often opened intermittently, rapid or even daily fluctuations in river flow are observed. For example, in the Grand Canyon, the daily cyclic flow variation caused by Glen Canyon Dam was found to be contributing to erosion of sand bars. Dissolved oxygen content of the water may change from pre-construction conditions. Depending on the location, water exiting from turbines is typically much warmer than the pre-dam water, which can change aquatic faunal populations, including endangered species, and prevent natural freezing processes from occurring. Some hydroelectric projects also use canals to divert a river at a shallower gradient to increase the head of the scheme. In some cases, the entire river may be diverted leaving a dry riverbed. Examples include the Tekapo and Pukaki Rivers.
Greenhouse gas emissions Bonnington hydroelectric power station, River Clyde, Scotland.The reservoirs of power plants in tropical regions may produce substantial amounts of methane and carbon dioxide. This is due to plant material in flooded areas decaying in an anaerobic environment, and forming methane, a very potent greenhouse gas. According to the World Commission on Dams report, where the reservoir is large compared to the generating capacity (less than 100 watts per square metre of surface area) and no clearing of the forests in the area was undertaken prior to impoundment of the reservoir, greenhouse gas emissions from the reservoir may be higher than those of a conventional oil-fired thermal generation plant.[8] Although these emissions represent carbon already in the biosphere, not fossil deposits that had been sequestered from the carbon cycle, there is a greater amount of methane due to anaerobic decay, causing greater damage than would otherwise have occurred had the forest decayed naturally.
The pipes supplying water from the River Clyde to Bonnington hydroelectric power station, Scotland.In boreal reservoirs of Canada and Northern Europe, however, greenhouse gas emissions are typically only 2% to 8% of any kind of conventional fossil-fuel thermal generation. A new class of underwater logging operation that targets drowned forests can mitigate the effect of forest decay.[9]
In 2007, International Rivers accused hydropower firms for cheating with fake carbon credits under the Clean Development Mechanism (CDM), for hydropower projects already finished or under construction at the moment they applied to join the CDM. These carbon credits – of hydropower projects under the CDM in developing countries – can be sold to companies and governments in rich countries, in order to comply with the Kyoto protocol.[10]
Population relocationAnother disadvantage of hydroelectric dams is the need to relocate the people living where the reservoirs are planned. In February 2008, it was estimated that 40-80 million people worldwide had been physically displaced as a direct result of dam construction.[11] In many cases, no amount of compensation can replace ancestral and cultural attachments to places that have spiritual value to the displaced population. Additionally, historically and culturally important sites can be flooded and lost. Such problems have arisen at the Three Gorges Dam project in China, the Clyde Dam in New Zealand and the Ilısu Dam in Southeastern Turkey.
Dam failuresFailures of large dams, while rare, are potentially serious — the Banqiao Dam failure in Southern China resulted in the deaths of 171,000 people and left millions homeless. Dams may be subject to enemy bombardment during wartime, sabotage and terrorism. Smaller dams and micro hydro facilities are less vulnerable to these threats. The creation of a dam in a geologically inappropriate location may cause disasters like the one of the Vajont Dam in Italy, where almost 2000 people died, in 1963.
Affected by flow shortageChanges in the amount of river flow will correlate with the amount of energy produced by a dam. Because of global warming, the volume of glaciers has decreased, such as the North Cascades glaciers, which have lost a third of their volume since 1950, resulting in stream flows that have decreased by as much as 34%.[12] The result of diminished river flow can be power shortages in areas that depend heavily on hydroelectric power.
Comparison with other methods of power generation This section includes a list of references, related reading or external links, but its sources remain unclear because it lacks inline citations. Please improve this article by introducing more precise citations where appropriate. (August 2008) The hydroelectric power station of Aswan Dam, Egypt Hydroelectric reservoir in Vianden, LuxembourgHydroelectricity eliminates the flue gas emissions from fossil fuel combustion, including pollutants such as sulfur dioxide, nitric oxide, carbon monoxide, dust, and mercury in the coal. Hydroelectricity also avoids the hazards of coal mining and the indirect health effects of coal emissions. Compared to nuclear power, hydroelectricity generates no nuclear waste, has none of the dangers associated with uranium mining, nor nuclear leaks. Unlike uranium, hydroelectricity is also a renewable energy source.
Compared to wind farms, hydroelectricity power plants have a more predictable load factor. If the project has a storage reservoir, it can be dispatched to generate power when needed. Hydroelectric plants can be easily regulated to follow variations in power demand.
Unlike fossil-fueled combustion turbines, construction of a hydroelectric plant requires a long lead-time for site studies, hydrological studies, and environmental impact assessment. Hydrological data up to 50 years or more is usually required to determine the best sites and operating regimes for a large hydroelectric plant. Unlike plants operated by fuel, such as fossil or nuclear energy, the number of sites that can be economically developed for hydroelectric production is limited; in many areas the most cost effective sites have already been exploited. New hydro sites tend to be far from population centers and require extensive transmission lines. Hydroelectric generation depends on rainfall in the watershed, and may be significantly reduced in years of low rainfall or snowmelt. Long-term energy yield may be affected by climate change. Utilities that primarily use hydroelectric power may spend additional capital to build extra capacity to ensure sufficient power is available in low water years.
In parts of Canada (the provinces of British Columbia, Manitoba, Ontario, Quebec, Newfoundland and Labrador) hydroelectricity is used so extensively that the word "hydro" is often used to refer to any electricity delivered by a power utility. The government-run power utilities in these provinces are called BC Hydro, Manitoba Hydro, Hydro One (formerly "Ontario Hydro"), Hydro-Québec and Newfoundland and Labrador Hydro respectively. Hydro-Québec is the world's largest hydroelectric generating company, with a total installed capacity (2007) of 35,647 MW, including 33,305 MW of hydroelectric generation[13].
Countries with the most hydro-electric capacityThe ranking of hydro-electric capacity is either by actual annual energy production or by installed capacity power rating. A hydro-electric plant rarely operates at its full power rating over a full year; the ratio between annual average power and installed capacity rating is the capacity factor. The installed capacity is the sum of all generator nameplate power ratings. Sources came from BP Statistical Review - Full Report 2009[14] List of the largest hydoelectric power stations. Norway produces 98-99% of its electricity from hydroelectric.[15]
Brazil, Canada, Norway and Venezuela are the only countries in the world where the majority of their internal electric energy production is from hydroelectric power.
Country Annual HydroelectricEnergy Production(TWh) InstalledCapacity (GW) CapacityFactor Percent ofall electricity People's Republic of China(2008)[16] 585.2 171.52 0.37 17.18 Canada 369.5 88.974 0.59 61.12 Brazil 363.8 69.080 0.56 85.56 USA 250.6 79.511 0.42 5.74 Russia 167.0 45.000 0.42 17.64 Norway 140.5 27.528 0.49 98.25[15] India 115.6 33.600 0.43 15.80 Venezuela 86.8 - - 67.17 Japan 69.2 27.229 0.37 7.21 Sweden 65.5 16.209 0.46 44.34 Paraguay(2006) 64.0 - - France 63.4 25.335 0.25 11.23
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Old hydro-electric power stations
Northern hemisphereAppleton, Wisconsin, USA completed 1882, A waterwheel on the Fox river supplied the first commercial hydroelectric power for lighting to two paper mills and a house, two years after Thomas Edison demonstrated incandescent lighting to the public. Within a matter of weeks of this installation, a power plant was also put into commercial service at Minneapolis. Niagara Falls, New York. For many years the largest hydroelectric power station in the world. Operation began locally in 1895 and power was transmitted to Buffalo, New York, in 1896. Decew Falls 1, St. Catharines, Ontario, Canada completed 25 August 1898. Owned by Ontario Power Generation. Four units are still operational. Recognized as an IEEE Milestone in Electrical Engineering & Computing by the IEEE Executive Committee in 2002. Claverack Creek, in Stottville, New York, believed to be the oldest hydro power site in the United States. The turbine, a Morgan Smith, was constructed in 1869 and installed 2 years later. It is one of the earliest water wheel installations in the United States to generate electricity. It is owned today by Edison Hydro.[citation needed] The oldest continuously-operated commercial hydroelectric plant in the United States is built on the Hudson River at Mechanicville, New York. The seven 750 kW units at this station initially supplied power at a frequency of 38 Hz, but later were increased in speed to 40 Hz. It went into commercial service July 22,1898. It is now being restored to its original condition and remains in commercial operation.[17] The oldest continuously-operated hydroelectric generator in Canada is located in St. Stephen, New Brunswick, Canada. Part of the construction of the Milltown Cotton Mill, this rope-driven generator originally powered the electric lights for the mill when it opened in 1882, and in 1888 started providing power to homes in the town. NB Power now owns and operates this as part of the Milltown Dam hydroelectric station.
Southern hemisphereA small hydroelectric station, generating 650 kW, opened at Waratah, Tasmania, in 1885 Duck Reach, Launceston, Tasmania. Completed 1895. The first publicly owned hydro-electric plant in the Southern Hemisphere. Supplied power to the city of Launceston for street lighting. Chivilingo was the first hydroelectric plant in Chile and the second in South America. With first power produced in 1897, it has two Pelton wheel turbines each turning a 215 kW generator. It was installed to provide power to mines and the city of Lota, Chile.[18] The Snowy Mountains Scheme has turbines all along the tunnel so it, in some perspectives it is also another hydroelectric station. However it only operates during peak hours of the day and mostly during the evening and early night. It supplies electricity to all over the state of NSW.
Major schemes under construction This section includes a list of references, related reading or external links, but its sources remain unclear because it lacks inline citations. Please improve this article by introducing more precise citations where appropriate. (August 2008)
Only projects with generating capacity greater than or equal to 2,000 MW are listed.
Name Maximum Capacity Country Construction started Scheduled completion Comments Three Gorges Dam 22,500 MW China December 14, 1994 2011 Largest power plant in the world. First power in July 2003, with 12,600 MW installed by October 2007. Xiluodu Dam 12,600 MW China December 26, 2005 2015 Construction once stopped due to lack of environmental impact study. Siang Upper HE Project 11,000 MW India April, 2009 2024 Multi-phase construction over a period of 15 years. Construction was delayed due to dispute with China. Xiangjiaba Dam 6,400 MW China November 26, 2006 2015 Longtan Dam 6,300 MW China July 1, 2001 December 2009 Nuozhadu Dam 5,850 MW China 2006 2017 Jinping 2 Hydropower Station 4,800 MW China January 30, 2007 2014 To build this dam, 23 families and 129 local residents need to be moved. It works with Jinping 1 Hydropower Station as a group. Laxiwa Dam 4,200 MW China April 18, 2006 2010 Xiaowan Dam 4,200 MW China January 1, 2002 December 2012 Jinping 1 Hydropower Station 3,600 MW China November 11, 2005 2014 Pubugou Dam 3,300 MW China March 30, 2004 2010 Goupitan Dam 3,000 MW China November 8, 2003 2011 Guanyinyan Dam 3,000 MW China 2008 2015 Construction of the roads and spillway started. Lianghekou Dam[19] 3,000 MW China 2009 2015 Boguchan Dam 3,000 MW Russia 1980 2012 Chapetón 3,000 MW Argentina Dagangshan 2,600 MW China August 15, 2008[20] 2014 Jinanqiao Dam 2,400 MW China December 2006 2010 Guandi Dam 2,400 MW China Novermber 11 2007 2012 Liyuan Dam 2,400 MW China 2008[21] Tocoma Dam Bolívar State 2,160 MW Venezuela 2004 2014 This new power plant would be the last development in the Low Caroni Basin, bringing the total to six power plants on the same river, including the 10,000MW Guri Dam.[22] Ludila Dam 2,100 MW China 2007 2015 Construction halt due to lack of the evnironmental assessment. Bureya Dam 2,010 MW Russia 1978 2009 Shuangjiangkou Dam 2,000 MW China December, 2007[23] The dam will be 314 m high. Ahai Dam 2,000 MW China July 27, 2006 Lower Subansiri Dam 2,000 MW India 2005 2010
Proposed major hydroelectric projects This section includes a list of references, related reading or external links, but its sources remain unclear because it lacks inline citations. Please improve this article by introducing more precise citations where appropriate. (August 2008)
Only projects with generating capacity greater than or equal to 2,000 MW are listed.
Name Maximum Capacity Country Construction starts Scheduled completion Comments Red Sea dam 50,000 MW Middle East Unknown Unknown Still in planning, would be largest dam in the world Grand Inga 40,000 MW Democratic Republic of the Congo 2010 Unknown Baihetan Dam 13,050 MW China 2009 2015 Still in planning Wudongde Dam 7,500 MW China 2009 2015 Still in planning Rampart Dam 4,500 MW United States Canceled Maji Dam 4,200 MW China 2008 2013 Songta Dam 4,200 MW China 2008 2013 Liangjiaren Dam 4,000 MW China 2009 2015 Still in planning Jirau Dam 3,300 MW Brazil 2007 2012 Pati Dam 3,300 MW Argentina Santo Antônio Dam 3,150 MW Brazil 2007 2012 Dibang 3,000 MW India Lower Churchill 2,800 MW Canada 2009 2014 HidroAysén 2,750 MW Chile 2020 Lenggu Dam 2,718 MW China 2015 Subansiri Upper HE Project 2,500 MW India 2012 Unknown Changheba Dam 2,200 MW China 2009 2015 Banduo 1 Dam 2,000 MW China 2009
Cost
United StatesIn the United States, a study is required before constructing a hydroelectric project. In 2008, a study could cost up to $50,000 for a 100 feet (30 m) run of a stream. Both federal and state licenses were required. A license typically cost between $150,000 and $1 million. A project earns money from the sale of energy, the sale of capacity, and the sale of renewable energy credits.[24]
See alsoRenewable energy BiofuelBiomassGeothermalHydropowerSolar powerTidal powerWave powerWind power Energy portal Topics:
Environmental concerns with electricity generation Environmental impacts of dams Hydropower Pumped-storage hydroelectricity Run-of-the-river hydroelectricity Small hydro