Exergy Economics

Exergy Economics is an emerging field that has the potential to throw new light on the relationship between economic growth and energy consumption.

Energy productivity theme icon
Industry theme icon
Start date: 25 April, 2016 - End date: 1 February, 2018

Exergy economics examines the interaction between energy use and society by focusing upon the useful stage of the energy provision chain. In particular, we focus upon useful exergy – the portion of energy flows which can be put to productive use. For example, the exergy outputs of end-use conversion devices, such as the mechanical drive from an engine, the high-temperature heat from a furnace or the visible light from a lightbulb.

Exergy Economics hinges upon the thermodynamic concept of exergy and the use of second law rather than first law measures of thermodynamic efficiency. Exergy is the preferred way to measure energy flows since it captures both the quantity and quality of energy, while second law efficiency measures are preferred since they reflect the distance from the theoretical maximum efficiency.

Research within the network is investigating the claim that it is useful exergy that drives economic activity – and that orthodox economics has paid insufficient attention to the importance of energy in driving productivity improvements and economic growth. The research involves developing datasets of useful exergy consumption and using these within both orthodox and heterodox models of economic growth. A related strand of research is focusing upon the net energy yield from different energy sources and assessing the importance of this for economic activity.

CIED is collaborating with the Centre on Industrial Energy, Materials and Products (CIE-MAP) on the project, which has already hosted an international workshop and is currently developing a five-year research roadmap in this area.

Full details of research within the network can be found at the Exergy Economics website.

Project publications