Professor Aaron Praktiknjo

 

Gas-Based Power Production: Study Conducted by RWTH Pinpoints Saving Potential (30.06.2022)

In the light of reduced gas flows from Russia, a research team at RWTH has examined Europe’s dependence on power generation from natural gas.

Considering the curtailing of Russian gas supplies to be an imminent threat to Germany‘s energy supply, the German Federal Government has moved the country’s Gas Emergency Plan to “alarm“ level. RWTH scientists have now examined whether it would be possible to significantly reduce gas-based power production and have come to the conclusion that there is substantial saving potential.

The results of their simulations show that the electric power sector could reduce its own average energy consumption by 30 percent without posing any danger of increased power outages or increased economic costs. A reduction of 30 percent of the usual gas-based power production would incur economic costs of approx. 1.4 billion euros per year. According to the scientists involved, this amount represents about 0.01 percent of the European Union’s GDP. The costs would, then, be manageable. According to Professor Aaron Praktiknjo, Chair for Energy Systems Economics, "This finding does of course assume that power consumption will be economically and intelligently rationed in the case of shortages".

As Professor Albert Moser, Chair for Transmission Grids and Energy Economics, added: “The results show that we can dispense with some parts of our gas-based power production in shortage situations”. The gas that would be saved in this way could be then secured for households and the industry.

 

600,000 More Households in Germany Fall Below the Threshold at Which They are at Risk of Poverty (29.03.2022)

The RWTH Chair of Energy System Economics has examined the effects of rising energy prices. Low-income households are also being disproportionately burdened as a result of the war in Ukraine.

Energy prices have risen very sharply in recent months. Most recently, the war in Ukraine has caused further tension in the already very high energy prices. The steep energy price increases also place a burden on private households. In a short study by the Chair of Energy System Economics at RWTH Aachen University, these effects were investigated using energy economic simulation models.

According to the results of the study, there is a significant additional financial burden across all household groups. An average four-person household that obtains heat from a gas heating system currently has to reckon with additional expenditure of 1,624 euros per year compared with the beginning of 2020, i.e. before the effects of the Coronavirus pandemic. Of this, electricity accounts for 10.6 percent (172 euros), natural gas accounts for 46.4 percent (753 euros), and gasoline and diesel account for 43.0 percent (699 euros).

The study examines the consequences for households with different income levels. The annual additional expenditure for the lowest-income households in the lowest decile is 492 euros compared with the beginning of 2020. The additional expenditure of the highest-income households in the top decile is 1,419 euros. Although there is a factor of 2.9 between the two household groups in terms of additional expenditure on energy, there is a factor of 8.2 between the disposable incomes of the two household groups when they are compared.

Lowest-income households hit the hardest

The lowest-income households are therefore most affected by this rise in energy prices in proportion to their income. According to the study's findings, the significant rise in energy prices since the beginning of 2020 alone will cause around 600,000 additional households in Germany to slip below the threshold at which they are at risk of poverty. In the lowest decile, natural gas dominates with 42 percent of the total additional expenditure on energy. This share is 31 percent for the highest-income households in the top decile. Conversely, in the highest-income household decile, additional spending on gasoline and diesel dominates with a share of 43 percent. This figure is 24 percent in the lowest-income decile.

Furthermore, the study concludes that households are significantly reducing their energy consumption in the face of high prices. As a result of higher energy prices, the average four-person household reduces its electricity consumption by 4.9 percent (202 kWh), natural gas consumption by 25.0 percent (3,436 kWh) and uses 14.0 percent (205 liters) less fuel (gasoline and diesel) over a typical year.

According to the Chair's study results, high-income households are more likely to benefit from the relief recently presented by the German government for consumers of gasoline and diesel, while low-income households are more likely to benefit from reductions in the price of natural gas. Furthermore, the authors of the study advise against relief via a direct reduction in energy prices if possible. This is because the high prices would also help to reduce consumption of fossil fuels and import dependencies on them.

The short study is available online.

 

How dangerous is the Bitcoin for the climate? (30.08.2019)

Scientists from RWTH and the Institute for Climate Protection, Energy and Mobility – IKEM have published their research findings on the energy consumption of bitcoins.

October 2018, a publication in the Nature Climate Change journal caused an international sensation. A US team consisting of seven members, headed by Camilo Mora of the University of Hawaiʻi at Mānoa published an urgent warning regarding the impending failure to meet the international climate policy goal of limiting the global temperature increase to below two degrees Celsius within the next two decades. The research team identified the bitcoin network as the sole cause for this. Their forecast was underpinned by an analysis of the bitcoin’s electricity consumption and associated greenhouse gas emissions.

The US research team’s findings are however controversial. German energy researchers Aaron Praktiknjo, Junior Professor of Energy Resource and Innovation Economics at RWTH and Lars Dittmar from the Institute for Climate Protection, Energy and Mobility – IKEM have now published an article criticizing the analysis by Mora’s team in Nature Climate Change. While the two scientists confirm that the bitcoin network is generally energy-intensive, they claim the results of the US research team are overestimated by several orders of magnitude. In particular, they assert that their assumptions about bitcoin technology and the energy system are simply not tenable.

Mora's team assumes, for example, that in the future, all global electronic payments will be made by bitcoin. Dittmar and Praktiknjo argue however that the bitcoin protocol provides a technical upper limit for the annual number of transactions, which is 500 times too low to allow for global electronic payments. Another assumption that proves equally problematic is that the bitcoin network’s energy consumption would grow in proportion to the number of transactions. The two researchers explain that there is a highly complex system behind the bitcoin's electricity consumption, which essentially depends on the bitcoin rate and electricity costs, but not however on the number of transactions.

Immense Growth Refuted

Further, Dittmar and Praktiknjo also criticized the energy consumption scenarios regarding the bitcoin, which suggest that bitcoin technology would triple global electricity consumption in the next five years. According to Dittmar and Praktiknjo, such rapid growth is unrealistic due to technical restrictions: "The planning and construction of energy infrastructure requires considerable lead times. From an organizational perspective, it would be impossible to triple the energy infrastructure within only five years.” Even the theoretical assumption that such immense growth is technically possible can be refuted for economic reasons. "If global electricity consumption tripled within just five years, this would lead to a price explosion of electricity due to a shortage of resources. A price explosion on this scale would in turn have a dampening effect on the electricity demand – and also when it comes to prospecting for bitcoins."

The researchers’ findings have been published in the Nature Climate Change journal under the title "Could Bitcoin Emissions Push Global Warming above 2°C?”