1. Gestão de Sistemas Energéticos 2015/2016 Energy Analysis: Input-Output Prof. Tânia Sousa taniasousa@ist.utl.pt

2. Considere the following Economy: Exercise What is the meaning of this?

3. Exercise Considere the following Economy: Compute the matrix A of the technical coeficients: Sales of Agric. to Indus. or Inputs from Agriculture to Industry

4. Exercise Matrix of technical coefficients: What is the meaning of this?

5. Exercise Matrix of technical coefficients: What happens to the matrix of technical coefficients with time? Why? The amount of agriculture products (in money) needed to produce 1 unit worth of industry products

6. Exercise Matrix of technical coefficients: Compute the Leontief inverse matrix:

7. Exercise Matrix of technical coefficients: Compute the Leontief inverse matrix: What is the meaning of this? x 1 =l 11 f 1 +l 12 f 2 +…

8. Exercise Matrix of technical coefficients: Compute the Leontief inverse matrix: the quantity of agriculture products directly and indirectly needed for each unit of final demand of industry products

9. Exercise Matrix of technical coefficients: Compute the Leontief inverse matrix: the quantity of agriculture products directly and indirectly needed for each unit of final demand of industry products ?

10. Exercise Matrix of technical coefficients: Compute the Leontief inverse matrix: What is the meaning of this? x 1 =l 11 f 1 +l 12 f 2 +… x 2 =l 21 f 1 +l 22 f 2 +… x 3 =l 31 f 1 +l 32 f 2 +…

11. Exercise Matrix of technical coefficients: Compute the Leontief inverse matrix: Multiplier of the industry sector: the total output needed for each unit of final demand of industrial products

12. Exercise Matrix of technical coefficients: Compute the Leontief inverse matrix: What is the sector whose increase in final demand has the highest impact on the production of the economy?

13. Exercise If final demand in sector 1 (e.g. agriculture) is to increase 10% –What will be necessary changes in the total outputs of agriculture, industry and services?

14. Exercise If final demand in sector 1 (e.g. agriculture) is to increase 10% –What will be necessary changes in the total outputs of agriculture, industry and services? Initial x

15. Exercise If final demand in sector 1 (e.g. agriculture) is to increase 10% –What will be necessary changes in the total outputs of agriculture, industry and services? –What will be the new sales of industry to agriculture?

16. Exercise If final demand in sector 1 (e.g. agriculture) is to increase 10% –What will be the new sales of industry to agriculture? Initial z 21 =20

17. Intermediate inputs: intersector and intrasector inputs Primary inputs: payments (wages, rents, interest) for primary factors of production (labour, land, capital) & taxes & imports Input-Output Analysis: Primary Inputs The input-ouput model Intermediate Inputs (square matrix) Primary Inputs Inputs Sectors

18. Input-Output: Primary Inputs Primary inputs: For the transactions between sectors we defined: –The inputs of sector j per unit of production of sector i are assumed to be constant

19. Input-Output: Primary Inputs For the primary inputs we define the coefficients: –The added value of sector j per unit of production or imports of sector j per unit of production are assumed to be constant For the transactions between sectors we defined:

20. Input-Output: Primary Inputs For the primary inputs we define the coefficients: –The added value of sector j per unit of production or imports of sector j per unit of production are assumed to be constant How to compute new values for added value or imports?

21. Input-Output: Primary Inputs For the primary inputs we define the coefficients: –The added value of sector j per unit of production or imports of sector j per unit of production are assumed to be constant To compute new values for added value or imports:

22. Input-Output: Primary Inputs For the primary inputs we define the coefficients: –The added value of sector j per unit of production or imports of sector j per unit of production are assumed to be constant To compute new values for added value or imports:

23. Input-Output: Primary Inputs Relevance:

24. Exercise What is the new added value?

25. Exercise What is the new added value? GDP increased by 3%

26. Imports A C B 20 5 30 3 5 2 6 2 5 95 65 150 120 500 Final Demand Exercise Consider na economy based in 3 sectors, A, B e C. Write the matrix with the intersectorial flows and the input-output model. Which is the sector with the highest added value?

27. Exercise Matrix: Input- Output Model:

28. Consider na economy based in 3 sectors, A, B e C. Write the matrix with the intersectorial flows. Which is the sector with the highest added value? Assuming that L=(I-A) -1 =I+A, determine the sector that has to import more to satisfy his own final demand. Imports A C B 20 5 30 3 5 2 6 2 5 95 65 150 120 500 Final Demand Exercise

29. Matrix: Input- Output Model: Matrix L=I+A

30. Exercise For each vector of final demand we compute the change in total output and the change in imports:

31. Input-Output Application to the energy sector?

32. Input-Output Energy needs for different economic scenarios –Using the input-output analysis to build a consistent economic scenario and then combining that information with the Energetic Balance –Using the input-output analysis where one or more sectors define the energy sector –What about embodied energy?

33. Input-Output Analysis: Embodied Energy The input-ouput model Intermediate Inputs (square matrix) Primary Energy Inputs Total Energy in Inputs Embodied Energy in Final Demand Total Energy in outputs Outputs Inputs Sectors

34. Input-Output Analysis: Embodied Energy The input-ouput model Direct Energy Use A C B Final Demand

35. Input-Output Analysis: Embodied Energy The input-ouput model Direct Energy Use A C B Final Demand

36. Input-Output Analysis: Embodied Energy The input-ouput model We can compute the embodied energy intensities for all sectors CE Oi because we have n equations with n unknowns Direct Energy Use A C B Final Demand

37. Input-Output Analysis Can be used to compute embodied “something”, e.g., energy or CO 2, that is distributed with productive mass flows knowing: –(assuming) that outputs from the same operation have the same specific embodied value –the vector with specific direct emissions of “CO2” for each operation –the diagonal matrix with the residue formation factors for each operation –the matrix with the mass fractions There are things that should flow with monetary values instead of mass flows –Economic causality instead of physical causality

38. Input-Output Analysis: Embodied CO2 The input-ouput model Intermediate Inputs (square matrix) Primary CO2 Inputs Total CO2 in Inputs Embodied CO2 in Final Demand Total CO2 in outputs Outputs Inputs Sectors

39. Input-Output Analysis: Motivation Direct and indirect carbon emissions

40. Input-Output Analysis: Embodied Energy Embodied energy intensity, CE i, in outputs from sector i is constant, i.e., Sector 1 receives (direct + indirect) energy which is distributed to its intended output m 1 S 1

41. Input-Output Analysis: Embodied Energy Simplifying per unit of mass:

42. Input-Output Analysis: Embodied Energy Simplifying per unit of mass: We can compute the embodied energy intensities for all sectors CE i because we have n equations with n unknowns –We must know mass flows, residue formation factors and direct energies intensities

43. Input-Output Analysis: Embodied Energy Simplifying per unit of mass: We can compute the change in embodied energy intensities for all sectors with the change in direct energy intensities