Total energy supply (TES) includes all the energy produced in or imported to a country, minus that which is exported or stored. It represents all the energy required to supply end users in the country. Some of these energy sources are used directly while most are transformed into fuels or electricity for final consumption.
Energy production includes any fossil fuels drilled and mined, which can be burned to produce electricity or used as fuels, as well as energy produced by nuclear fission and renewable power sources such as hydro, wind and solar PV. Bioenergy - which here includes both modern and traditional sources, including the burning of municipal waste - is also an important domestic energy source in many countries.
Imports, particularly of fossil fuels like oil, natural gas and coal, make up an important part of the energy supply in many countries. Countries that rely heavily on imported energy may be vulnerable to supply disruption from external events such as the Covid-19 pandemic and the war in Ukraine. In countries that export large amounts of energy, falling energy prices can also cause major economic shocks.
Energy sources, particularly fossil fuels, are often transformed into more useful or practical forms before being used. For example, crude oil is refined into many different kinds of fuels and products, while coal, oil and natural gas can be burned to generate electricity and heat. Other forms of transformation, such as extracting gas or oil from coal, play a relatively minor role in the energy systems of most countries.
One of the most important types of transformation for the energy system is the refining of crude oil into oil products, such as the fuels that power automobiles, ships and planes.
Another important form of transformation is the generation of electricity. Thermal power plants generate electricity by harnessing the heat of burning fuels or nuclear reactions – during which up to half of their energy content is lost. Renewable power sources generate electricity directly from natural forces such as the sun, wind, or the movement of water.
Total final consumption (TFC) is the energy consumed by end users such as individuals and businesses to heat and cool buildings, to run lights, devices, and appliances, and to power vehicles, machines and factories. It also includes non-energy uses of energy products, such as fossil fuels used to make chemicals.
Some of the energy found in primary sources is lost when converting them to useable final products, especially electricity. As a result, the breakdown of final consumption can look very different from that of the primary energy supply (TES). Both are needed to fully understand the energy system.
The sectoral breakdown of a country''s energy demand, which is based on its economy, geography and history, can greatly impact its energy needs and which energy sources it relies on to meet those needs – such as fueling automobiles, heating or cooling homes or running factories.
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Renewables are an increasingly important source of energy as countries seek to reduce their CO2 emissions and dependence on imported fossil fuels. Renewables are mainly used to generate electricity, though renewable technologies can also be used for heating in homes and buildings. Renewable biofuels are also an emerging technology solution to decarbonise parts of the transport sector.
Note thatmodern renewablesexcludes traditional uses of biomass, such as burning collected wood, agricultural byproducts or dung for cooking or heating. This has serious negative consequences on health and the environment, including contributing to millions of deaths annually from air pollution, and is targeted for phase-out in international development and climate goals and in the IEA''s Net Zero scenario.
Biofuels, mostly made from plants, and waste products, such as household trash and industrial wastes, can be burned to generate electricity or heat. This can have environmental and climate advantages compared to burning fossil fuels, though the impact varies widely depending on the fuel source and how it is used. Traditional uses of biomass for heating and cooking, which remain a major source of energy in many developing countries, are targeted for phase-out in international climate goals and IEA scenarios.
Biofuels are used in all parts of the energy system: as replacement for oil-based fuels in transportation, to generate electricity, for heating buildings, or to provide heat for industrial processes.
Renewables such as solar panels, wind turbines and hydroelectric dams generate electricity without burning fuels that emit greenhouse gases and other pollutants. As the costs of solar panels and wind turbines have fallen dramatically in recent years, renewables now represent the cheapest source of new electricity generation in many parts of the world.
Renewables also have an important role in providing heat for buildings and industrial processes. To achieve decarbonisation and energy saving objectives, many countries are encouraging individual homes and buildings to shift from fossil fuel heating systems such as gas- or oil-fired boilers to systems like heat pumps which are much more efficient and can be powered with electricity from low-carbon sources. However, in areas that rely on heating from centralised heat plants or combined heat and power (CHP) plants, burning biofuels and waste products can provide a lower-carbon alternative to fossil fuels. Geothermal heating can also provide renewable, low-carbon heat but is only feasible in specific locations with the right kind of volcanic or tectonic activity.
Renewable heat sources have made fewer inroads in industry, as many important industrial processes such as steelmaking require higher heat than renewable fuels can achieve. New techniques and technologies will be needed to decarbonise these areas.
By: Todd Smith, GMU Student Contributor
El Salvador provides a fantastic case study into the energy sector and how size is not necessary to promote transitions to renewable energy. Through various policies drafted and passed over the past three decades, El Salvador has set itself on a path towards clean energy – a necessity for a country that is severely at-risk of climate change and its effects.
In the following paper, I attempt to provide pertinent, contextual background information on El Salvador''s geography, economy, trade, and energy mix to show where they have succeeded, and where work can still be done.
I am not the first to conduct such an analysis, as the Salvadoran government and the International Renewable Energy Agency (IRENA) have worked to create a National Energy Policy 2010 – 2024 and a Renewable Readiness Report, respectively. In addition, this Renewable Readiness Report is now driving additions and changes to the National Energy Policy 2020 – 2050. I analyzed these sources and, once again, identified areas of strength, pain points, and opportunities for improvement.
Ultimately, I recommend three different policy recommendations:
El Salvador is sandwiched between the Pacific Ocean, Guatemala, and Honduras, it is the smallest country in Central America by land size with about 21,000 square kilometers of land, and is by no means a major tourist destination. And yet, El Salvador turns out to be a unique and interesting perspective and case study for the Energy sector.
From a trade perspective, El Salvador is part of numerous trade agreements, organizations, and treaties. They joined the World Trade Organization (WTO) in 1995, the U.S.-Central America Dominican Republic Free Trade Agreement (CAFTA-DR) was applied in 2006, and the Central American Common Market (CACM) with Costa Rica, Guatemala, Honduras, and Nicaragua was revived in the early 1990s after previously collapsing in the 1960s. In the CACM, these countries have agreed upon maximum tariffs and beneficial tariff rates, mostly for industrial goods.[4] In addition to these, El Salvador has signed Free Trade Agreements with: the Dominican Republic, Chile, Panama, Mexico, Taiwan, Colombia, the European Union, the United Kingdom, the Republic of Korea, Cuba, Bolivia, and Ecuador.
El Salvador runs in a trade deficit – in 2019, their trade deficit was slightly above $6 billion. Their top importing partners were the United States, China, Guatemala, Mexico, and Honduras, while their top exporting partner was far and away the United States, followed by their regional neighbors in Guatemala, Honduras, Nicaragua, and Costa Rica.[5]
Lastly, GDP (2020) was $28.74 billion (USD), with a population of around 6 million, their GDP per capita is approximately $3,800 (USD). Extreme poverty, as measured as $1.90 a day, declined from 13% in 1995 to 1.5% in 2019.[6] Interestingly enough, in 2001, El Salvador switched their official currency from the Salvadoran colon to the U.S. Dollar. Despite this, World Bank ranks El Salvador 91st in terms of ease of doing business. And yes, in 2021, El Salvador was the first country to adopt Bitcoin as official tender, however for the purposes of our study, we will not be discussing further implications or usages until there are further use cases.
The final, and perhaps, most important piece of our Salvadoran case study, is the country''s inherent climate risk and pending catastrophe. According to the World Bank''s Climate Change Knowledge Portal, El Salvador is one of the most affected countries in the world by weather-related events and hazards, and the most at-risk in Central America. Due to these weather-related events and hazards, they incur annual losses equivalent to 2.5% of GDP. They also rank second highest in risk of exposure to two or more hazards, and are the highest in total population at a high risk of mortality.[7]
The United Nations Sustainable Development Goal Seven is to "Ensure access to affordable, reliable, sustainable and modern energy for all."[8] In this regard, El Salvador has done a fantastic job – officially reporting 100% access to electricity in 2020.[9] They have also done a great job providing access to clean cooking fuels, with continuous growth year over year, reporting 92% total access in 2020. However, there is a rural and urban split, as they reported 80.9% and 96.7%, respectively.[10]
On the topic of electricity, World Bank last collected El Salvador''s transmission loss in 2011 at 11%, which has shown a steady decrease over the past several decades,[11] indicating greater infrastructure and procedural efficiency.
El Salvador''s grid is interconnected with six regional neighbors – Belize, Costa Rica, Panama, Guatemala, Honduras, and Nicaragua – through the Central American Electrical Interconnection System (SIEPAC).[14] Because of this, there has been a decrease in domestic electricity generation, mainly due to growing electricity imports, most of which comes from Guatemala and Honduras, their immediate neighbors to the west and north.
El Salvador''s energy supply primarily comes from fossil fuels, such as oil, gasoline, diesel, liquid petroleum gas (LPG), kerosene, and bunker fuel. Natural gas does not play a role in El Salvador''s energy supply. Prioritizing renewables is of utmost priority to El Salvador from an energy security basis, as they do not have any domestic oil, gas or coal supply and are dependent on imported fossil fuels from their partners.[15]
As of 2019, total installed capacity reached 2.2 gigawatts (GW) (including off-grid generation), with an average growth rate of around 6%. Net electricity supply, including imports, totaled approximately 6,600 gigawatt hours (GWh). To be expected, fossil fuels made up the greatest share at 32.5%, followed by net imports at 21.8%, hydropower at 21.7%, geothermal at 20.7%, and other renewable energy sources at 3.3%.[16]
To their credit, El Salvador has worked to pass various national energy policies that are meant to diversify their energy portfolio, expand extended electricity access (as they are already at 100% access, technically), and strengthen the regional energy integration throughout Central America. It has been noted that El Salvador''s national policies have begun to fall in line with the United Nations 2030 Agenda for Sustainable Development. El Salvador''s National Energy Council (CNE) develops their energy strategy, and has focused on energy efficiency and the promotion of renewable energy sources.[17]
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