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2 The aim of the EAA is to integrate data from different sources into a consolidated information set, making it possible to link physical data on energy to economic data in Australian System of National Accounts (SNA) (cat. no. 5204.0).
3 Environmental-economic accounts provide information and an improved understanding on a range of issues including:
ENVIRONMENTAL ACCOUNTING FRAMEWORK
4 The EAA is based on the SEEA Central Framework. The SEEA Central Framework is a conceptual framework designed to support an understanding and the measurement of the interactions between the economy and the environment, and the stocks and changes in stocks of environmental assets. The SEEA Central Framework was adopted by the United Nations (UN) Statistical Commission as an international statistical standard in 2012.
5 The SEEA Central Framework uses a systems approach to organise environmental and economic information, covering, as completely as possible, the stocks and flows that are relevant to the analysis of environmental and economic issues. In using this approach, the SEEA Central Framework applies the accounting concepts, structures, rules and principles of the SNA. Environmental-economic accounts ('environmental accounts') deliver important extensions to SNA accounts. In practice these accounts may include physical supply and use tables, functional accounts (such as environmental expenditure accounts), and asset accounts for natural resources.
RELATIONSHIP BETWEEN ENERGY ACCOUNT, AUSTRALIA AND THE AUSTRALIAN SYSTEM OF NATIONAL ACCOUNTS
6 The energy accounts provide a framework to link physical information to core components of the SNA. The production of physical supply and use tables, monetary supply and use tables, energy asset tables, as well as a Hybrid Energy Use table, are (to the extent that it is conceptually possible) consistent with the approaches used in the construction of the Australian SNA. This allows for consistent analysis of the contribution of energy to the economy, the impact of the economy on non-renewable energy reserves, and the efficiency of the use of energy resources within the economy.
7 However a major conceptual difference exists in the treatment of brown coal extracted and used by the ‘Electricity, gas, water supply & waste services' industry. Inclusion on both ‘supply’ and ‘use’ side of Energy Accounts differs from the SNA view that where no monetary transactions occur within the economy (most brown coal is extracted by this industry for its own use), no supply to electricity generators in this industry classification has occurred.
SUPPLY AND USE OF ENERGY
8 The supply table records the total supply of energy products within the economy, including imports. The use table records the total use of energy products within the economy and for export. The supply and use tables can be compiled in both physical and monetary terms.
9 The supply and use methodology is based on the fundamental economic identity that supply of products equals use of products.
10 This edition of EAA presents a 'hybrid' (physical and monetary combined) table of gross energy use - in addition to discrete physical and monetary energy accounts - for the Australian economy for the years 2008-09 to 2013-14.
11 Data on the physical supply and use of energy products are primarily derived from the Department of Industry, Innovation and Science publication, Australian Energy Statistics (AES). The ABS transforms data from the AES into the SEEA framework to enable linkages between energy supply, energy use and the SNA.
12 To estimate monetary values associated with the supply and use of energy, the ABS used implicit unit prices and expenditure data drawn from a number of sources, including ABS surveys.
Net Energy Flow Accounts
13 Net energy flow accounts record only energy 'entering' the economy (imports and extraction) and energy 'leaving' the economy (exports, energy used for final purposes and energy losses in conversion processes), within a supply-use framework.
14 The supply table of the net energy flow accounts shows the different energy products extracted within Australia and supplied from the rest of the world (imports). Note that, in line with the SNA guidelines, direct extraction by households is treated as supply by the relevant industry, but is also identified separately.
15 The use table shows the different energy products consumed for final purposes (final use of energy plus energy losses due to conversions) and supplied to the rest of the world (exports), along with inventory changes. The main accounting identity underlying the net flow accounts for energy is:
16 This accounting identity is only valid for the sum of all energy products in the economy and not for individual energy products. This is because the net supply table balances all energy use, whereas supply of an individual product will generally not equal use of that product due to losses and transformations.
17 Data contained in the net supply and use tables of this publication are used to compile the energy intensity time series estimates, and the household energy Indicators.
Gross Energy Flow Accounts and the Hybrid (physical and monetary) Energy Use Table
18 Gross energy flow accounts record total energy products extracted from nature and energy products processed from that energy. For example, a gross energy account includes electricity, in addition to fuels (e.g. coal) combusted to generate that electricity. The total gross energy use by industry is, therefore, not equal to total 'net' energy consumption, which is energy consumed for 'final purposes'. In this electricity generation example, only the electricity is considered as 'net' use by the industry, as it can no longer be used for any other energy purpose. The fuels used to generate electricity are treated separately as conversions and losses.
19 In any aggregation of physical gross data by industry, totals are subject to double counting of energy flows.
20 Gross energy flows are presented in the Hybrid Energy Use Account (Hybrid table). This table combines valuations of various energy products with the associated physical use from which implicit energy prices can be derived. This allows analysis of differentials in unit prices paid by industry for various energy products. Gross energy accounts are consistent with national accounting principles and with relevant monetary measures from the Australian System of National Accounts (SNA) (cat. no. 5204.0). While the monetary valuations of energy products can be summed to calculate the total monetary value of energy use, physical use should not be summed due to double-counting of repeated uses of the same energy in different forms.
21 The Hybrid Energy Use table includes a row titled “statistical discrepancy” between supply and use of energy products reflecting differences in timing, scope, classifications, coverage and methodology across the range of sources used to compile the account.
Monetary valuations and non-market use
22 Significant use of many energy products occurs without an explicit monetary transaction. This includes, for example, the use of own energy production and energy losses which are recorded as physical use by an energy-producing industry. In keeping with SEEA and SNA principles the monetary valuations presented in the Hybrid Energy Use and Monetary Supply Use tables represent all energy use, including non-purchased energy, rather than showing only explicit expenditure on energy. Nevertheless, some relatively minor energy products have been excluded from the Hybrid Energy Use table due to lack of data on unit prices.
23 The 2013-14 EAA Hybrid tables and SNA Input/Output tables show the same total value for each energy product. However SNA basic price balancing procedures result in small differences in the Input/Output values for some products at the Australian and New Zealand Standard Industry Classification (ANZSIC) Division and Subdivision levels.
24 Information contained in this publication is based on data collected on a 'territory basis', rather than on the SNA's 'residency basis'. While some adjustments have been made to exports to move closer to the preferred residency basis, insufficient data are currently available to make comprehensive adjustments to the supply and use of all products affected. The ABS will continue to review data availability to improve the compliance with the SNA residency principle.
25 Coverage for physical supply and use tables includes the following energy products:
26 Wherever possible, data related to refined petroleum products (petrol and diesel) have been shown separately.
27 The Hybrid Energy Use table also separates liquefied natural gas (LNG) from natural gas except for imports. At present, this separation is not made in the net physical supply and use tables.
28 Industry classifications used in this publication follow the 2006 edition of the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (Revision 2.0) (cat. no. 1292.0).
29 Several industries are further broken down on an energy use significance basis into the following groupings, with the relevant ANZSIC codes listed in brackets:
31 Electricity, Gas, Water Supply and Waste Services:
33 Commercial and Services covers a broad grouping of thirteen ANZSIC division level service industries. These industries have been grouped together because the energy consumption of each individually is relatively small and AES statistical coverage of such industries is not as detailed as for other industries. Commercial and Services corresponds to the grouping of the same name used in the AES and consists of the following ANZSIC divisions:
General Government as an industry grouping
34 Government energy use as identified in the physical supply use tables refers to General Government industries. This industry covers the Commonwealth Government, state governments and local government municipalities, as well as associated agencies and non-departmental bodies. Public universities are also included in this industry.
35 Further information about the definitions of the General Government are available in the explanatory notes for the Government Finance Statistics, Australia (cat. no. 5512.0) publication.
36 The estimates contained in this publication are drawn from a wide range of ABS and non-ABS data sources, including:
37 ABS sources:
38 Non-ABS sources:
39 A range of other data sources were used in EAA for validation, as an input to developing estimation methodologies, or for developing relevant indicators.
40 ABS data sources:
41 Non-ABS sources:
Methods for Calculating Physical Energy Supply and Use
42 These notes are intended as a general guide to the method of calculating estimates of energy supply and use. For more detail please contact the National Information and Referral Service on 1300 135 070.
43 Data on the physical supply and use of energy products are primarily derived from the Australian Energy Statistics (AES) - Energy Update 2016.
44 EAA domestic net energy consumption figures do not align with AES Total Final Energy Consumption (TFEC) although both of these are 'net' measures of energy use due to differing treatments of distribution and extraction losses and own use of energy within industries. TFEC excludes distribution and extraction losses and own use of energy within 'conversion sectors' while EAA treat these as part of intermediate consumption. The largest contributors to the difference between the two measures are in consumption of electricity and natural gas because distribution and extraction losses are recorded in EAA as use by the relevant industries but are excluded from TFEC in the AES.
45 While the EAA draws on data from the AES, data from the ABS Energy, Water and Environment Survey (EWES) 2014-15 and Energy Use, Electricity Generation and Environmental Management, Australia (cat. no. 4660.0) were used to allocate the supply and use of energy products among industries.
46 The following changes have been applied to allow linkages between energy supply, energy use and the SNA:
Reallocation of Petrol, Diesel and LPG use by Industry and Households
47 In the AES, the physical use of land transport fuels (petrol, diesel and LPG) is assigned on the basis of activity type rather than 'industry of ownership'. For example, fuel used by a truck owned by a mining company and operating between mining sites would likely be treated as transport activity in AES but an industry-based view would assign this use to the Mining industry. In practice, application of the fuel use re-allocation methodology impacts significantly on derived estimates of fuel use.
48 EAA uses the EWES and the ABS Survey of Motor Vehicle Use data to reallocate land transport fuels, to align with SEEA and SNA industry recording principles.
49 The reallocation methodology impacts significantly on AES fuel use figures. For example, the proportion of refined fuel use attributed to households ('residential') in AES is negligible. However, when usage is recorded on the basis of ownership, households are the largest single user of refined fuels. The implications are also significant for industry-based measures of energy intensity.
Partial reallocation of Electricity and Natural Gas
50 In the AES, the physical use of fuels is allocated on an activity basis. This means that some businesses and activities are classified to different industries. In particular, estimates for the Construction, Transport and Commercial and services industries' energy use are not compatible with ABS estimates and have been reallocated accordingly.
51 EAA uses survey data from EWES to reallocate electricity and natural gas between selected industries to align with expenditure data in these surveys better.
Treatment of chemical feedstocks
52 Chemical industry feedstocks are not separately identified in the AES and are included in 'petroleum products not elsewhere classified'. For the purpose of closer concordance with the SNA, these have been identified and reallocated to the energy product category Crude Oil and Feedstocks.
Treatment of biofuels
53 Biofuels identified in EAA include biodiesel, ethanol and biogas (landfill and sludge). This treatment differs to the current AES treatment which includes biogas within natural gas. In addition, AES assigns bio-diesel and ethanol as consumed by activities such as transport, while EAA shows these fuels as consumed (i.e. blended) in the production of petrol and diesel. Consumption of these blended fuels is then contained within general final use of petrol and diesel.
Treatment of Household production of energy
54 EAA follows SEEA and SNA principles for recording and including so-called 'backyard' production by households in estimates. As an example, in the case of agriculture the application of this principle results in the imputed value of household fruit and vegetable production and meat produced from livestock raised for household use being included in the value of goods produced by Division A, Agriculture, Forestry and Fishing.
55 An analogous approach is used to assign energy production within the SEEA framework: "following the general principles from the national accounts, if households extract or produce energy, the energy extraction or production should be recorded as part of the product output of the industry that would otherwise have produced the energy. At the same time a corresponding private consumption of energy products should be recorded for the households". (Draft SEEA-Energy chapter 5).
56 Following these principles, in EAA, household production of energy is assigned to the relevant industry to which the activity would normally be classified, but also identified separately within the Supply-Use tables to maintain information detail.
57 Specifically, within EAA, wood extraction by households is considered part of Division A, Agriculture, Forestry and Fisheries. Similarly, solar energy extracted within households for the production of electricity is assigned to Subdivision 26, Electricity supply. Solar energy extracted for hot water production is assigned to Subdivision 28, Water supply. This is following the concordance identified between ANZSIC 2811 Water Supply and International Standard Industrial Classification of All Economic Activities (ISIC) 4030 Steam and hot water supply. More detail on ANZSIC-ISIC concordance can be found in Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (Revision 2.0) (cat. no. 1292.0).
Treatment of Bitumen, Solvents, Lubricants and Greases
58 Bitumen, solvents, lubricants and greases are classified by AES as derived energy within petroleum refining. These products, while containing energy, are not consumed for energy purposes. Their production is classified as final use within Petroleum and chemical products manufacturing.
Netting of Secondary Fuels
59 Secondary fuels (which are then re-consumed) are netted out when producing net flow accounts.
60 The following sources were used to assist in the process of netting out secondary fuels:
Adjustment to imports, exports and production to align with the SNA 'residency' view of the boundaries of the Australian economy
61 Adjustments have been made to the EAA to align with the residency view for activity in the Timor Gap as described in the feature article Statistical Treatment of Economic Activity in the Timor Sea (Feature article, Australian National Accounts: National Income, Expenditure and Product, Sep 2003 (cat. no. 5206.0)). A territory view would exclude this activity entirely from the Australian economy but the residency treatment results in 50% of all activity included as part of the Australian economy.
Adjustment to total electricity supply and use
62 Total electricity supply and use has been modelled based on the following sources and thus deviates from estimates contained in Tables A (Australian energy supply and consumption), F (Australian energy consumption by state by industry by fuel) and O (Australian electricity generation by state, by fuel type) of the AES:
Methods for Calculating Monetary Energy Supply and Use
63 Monetary supply and use tables have been introduced to present monetary estimates that value energy products from both a user and producer perspective. Supply and use tables illustrate the economic transactions associated with the generation and use of different energy types and include the domestic consumption of energy produced overseas (imports) and energy produced in Australia and consumed overseas (exports).
64 For the purpose of energy output or production, detailed estimates have been produced for the Mining, Manufacturing and Electricity, gas, water & waste industries (energy industries). Output of ‘energy’ industries was calculated using the supply use product view of national account data. The output of ‘non-energy’ industries is the residual of total supply minus the output of ‘energy’ industries. Intermediate use of ‘energy’ industries and ‘non-energy’ industries is calculated in the same way.
65 Monetary supply and use tables are constructed by grouping Supply Use Products to derive aggregated output at the ANZSIC division level. The tables are drawn directly from the Industry Supply and Use Products benchmarks. Considerable effort has been made to ensure coherence between the energy accounts and the supply use benchmarks in Australia's national accounts. However, due to the conceptual differences it is recommended that hybrid accounts be used to undertake direct comparisons between monetary and physical estimates rather than combining net physical tables with monetary tables.
66 Monetary estimates are limited to energy generated from coal, other energy metal ores, gas and industrial gases, oil, petroleum products, electricity and non-energy products (referred to as energy types). Energy types in monetary estimates do not cover renewable energy sources (see section below).
67 Energy Products are valued at basic prices or purchases’ prices. The distinction between price levels is related to the treatment of taxes, subsidies, separately invoiced transport margins and wholesalers’ and retailers’ trade margins.
68 For each energy product or type, the total supply at purchaser’s price is equal to the total use at purchasers’ price. This reflects the following accounting identity for the monetary energy flow:
69 Monetary tables encompass:
Renewable energy and the renewable energy market
70 Energy sources are divided into two broad groups – renewable (energy sources for which the supply is essentially inexhaustible) and non-renewable (energy sources with a finite supply). Currently most of Australia’s energy production, for export or domestic consumption, comes from uranium and fossil fuels such as oil, natural gas and coal.
71 There is a growing need for the publication of a range of estimates that monitor developments in the production and use of renewable energy. Key energy indictors include those that measure growth in the renewable energy market in terms of contribution to total energy supply and use both in physical and monetary terms.
72 In the absence of reliable methods of measuring the monetary value of renewable energy – for example the use of energy by households generated from small scale ‘off-the-grid’ photovoltaics – hybrid accounts (physical and monetary) and the monetary energy accounts include only non-renewable energy types for 2012-13 in the EEA. The exception is that in the hybrid table valuations of supply and use include the total value of all grid-supplied electricity, thereby implicitly valuing the renewable share of electricity production.
73 There are a number of energy indicators that are currently published that provide valuable insights into trends associated with the generation and use of renewable energy:
74 The following renewable energy types are measured in physical supply and use tables:
75 There are numerous other sources of useful information about domestic renewable energy generation and the renewable energy market in Australia generally a small sample of which are listed below:
Data Quality and Reliability
76 Due to recent revisions in the AES methodology, data for 2008-09 to 2014-15 supply and use figures have been adjusted from previously published figures.
77 Energy indicators are used to provide a greater understanding or consequences of the production and use of energy.
78 Energy indicators may relate to social, economic and environmental dimensions. Information contained in the EAA combined with additional demographic and economic information provides insights into energy efficiency and energy productivity. Indicators used in the EAA can be divided into three sectors: total economy indicators; industry indicators and; household indicators.
79 Due to recent revisions in the AES methodology, data for 2008-09 to 2014-15 supply and use figures used within indicators have been adjusted from previously published figures.
Total economy indicators
80 The degree of self-sufficiency (or dependence on imports) measures the proportion of domestically produced energy compared to net energy use plus losses (equivalent to net domestic use plus exports). A self-sufficiency rating of over 100 indicates a net exporter of energy products.
81 One of the means of extending the life of energy products is to use those products which can be renewed through natural processes. The indicator share of renewable energy in net energy inputs measures the renewable content of non-renewable and renewable net energy supply. The indicator is calculated by dividing the net renewable energy supply by net energy supply.
82 Energy decoupling refers to a break in the link between the use of energy products and economic growth. Economic growth, chain volume measures of Gross Domestic Product (GDP), is compared to the growth rate of energy use and decoupling is said to occur when the economic growth rate of GDP is greater than the growth rate of energy use.
83 Contribution to growth by energy indicators were developed through a Capital, Labour, Energy, Non-Energy Materials and Services (KLEMS) productivity measure. These estimates measure the contribution to changes in KLEMS based productivity over time. The methodology and results were published in Information Paper: Experimental Estimates of Industry Level KLEMS Multifactor Productivity, 2015 (cat. no. 5260.0.55.003).
84 Energy intensity is a ratio of energy consumed per unit of economic output (GJ/$m IGVA). The energy intensity analysis is based on the ratios of physical net energy consumption (in gigajoules (GJ)) to industry gross value added (IGVA) data. The converse of this measure (unit of output per unit of energy consumption) is energy productivity. Energy productivity is defined as the GDP per unit of energy used and is a measure of the economic value associated with energy use. Energy productivity (resource productivity) was derived using Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0) Table 5: Gross Value Added by Industry. Energy intensity and energy productivity indicators use a net view of intermediate energy use (i.e. total industry domestic energy use less household energy, energy exports, and conversions and losses).
85 Energy consumption figures are based on Table F (Australian energy consumption by industry and fuel type) of AES, with adjustments from the Net Supply and Use tables in EAA applied for all years from 2002-03 onwards. ABS industry gross value added is drawn from the Australian SNA and is based on ANZSIC 2006.
86 AES presents comprehensive data on energy consumption by industry. This data has been applied to ABS IGVA data, after the application of reallocation and netting adjustments as described above.
87 EAA uses annually reweighted "chain volume" estimates of IGVA in the estimation of energy intensity from Australian System of National Accounts (cat. no. 5204.0). These give constant price values for all years included in the series. For example, all figures contained in EAA 2014-15 estimates of energy intensity are recorded in 2014-15 prices and are thus directly comparable over time. IGVA estimates are re-weighted each year and therefore energy intensity measures are updated with each annual estimation cycle.
88 The household energy indicator is defined as the total net household energy use per total the number of Australian households. Household numbers were estimated using Household and Family Projections, Australia, 2011-2036 (cat. no. 3236.0).
89 The indicator for household energy use was compared with Household Final Consumption Expenditure (HFCE) for food; transport; electricity, gas and other fuels; and total HFCE. HFCE was derived from Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0) Table 8: Household Final Consumption Expenditure.
90 Energy use per capita measures the net energy use per person. Energy use per capita is calculated by dividing the net energy use by households by the Australian population. Population numbers were estimated using Australian Demographic Statistics, June 2015 (cat. no. 3101.0).
Data Sources - Energy indicators
91 The primary source of data for energy indicators was the Energy Account Australia 2014-15 and supplementary ABS and non-ABS sources as shown below.
92 ABS sources:
93 Non-ABS sources:
PHYSICAL ENERGY ASSET ACCOUNT
94 Asset accounts for energy resources consolidate relevant information including the levels and values of stocks and the changes in these over time. Flows of extraction, depletion and discoveries are central to the asset account and these provide valuable information about energy resources.
Australia's National Classification System for Mineral Resources (2009 edition)
95 The ABS has adopted Australia's National Classification System for Mineral Resources (Geoscience Australia) to assign physical stocks based on Economic Demonstrated Resources (EDR) data.
96 EDRs are resources judged to be economically extractable and for which the quantity and quality are computed partly from specific measurements, and partly from extrapolation for a reasonable physical distance on geological evidence. Figure A1 illustrates where ABS energy asset stocks align with Australia’s National Classification System for Mineral Resources (Geoscience Australia).
Source: Australia’s Identified Mineral Resources 2012, Geoscience Australia.
97 Coverage for the physical energy asset account includes the following energy assets:
98 The estimates contained in the Physical Energy Asset tables are drawn from the following data sources:
METHODS FOR CALCULATING PHYSICAL ENERGY ASSET ACCOUNT
99 These notes are intended as a general guide to the method of calculating estimates Physical Energy Asset Account. For more detail please contact the National Information and Referral Service on 1300 135 070.
Physical Stock Account of Energy Assets
100 Economic Demonstrated Resources (EDR) data from the Australian System of National Accounts (cat. no. 5204.0) Table 62, Value of Demonstrated Mineral and Energy Resources, by Commodity was converted from weight/volume into energy units (petajoules). The conversion into petajoules allows comparability with the flow accounts (supply and use tables).
Physical Energy Asset Account
101 Annual production stocks were applied from the SNA and converted from weight/volume to energy units (petajoules). The weight/volume changes are a measure of the change in output of raw production. The changes in production do not reflect data in the physical supply and use tables due to changes in stock as a result of conversion losses, new discoveries, revaluations and reclassifications. Work is being undertaken on physical energy asset accounts to reconcile SNA data with Australian Identified Mineral Resources used by Geoscience Australia.
102 The Net Present Value (NPV) was applied from the Australian System of National Accounts (cat. no. 5204.0) and is the expected value of the resource based on current resource prices, current extraction methods and costs, and on present physical rates of extraction.
103 The extraction rate measures the rate at which assets are being depleted and the remaining resource life measures life of a resource at current production rates.
104 The EDR/extraction rate ratio provides an indicator of years of availability of a resource under current levels of EDR’s and extractions.
105 For further information on the compilation of energy asset accounts please see the SEEA Energy (draft), which is available from the United Nations Statistical Division.
106 Where necessary, tables have had values suppressed to protect confidentiality.
107 The next release of the EAA (the 2015-16 edition) is scheduled for early 2018.
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