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4604.0 - Energy Account, Australia, 2010-11 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 30/05/2013   
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EXPLANATORY NOTES


INTRODUCTION

1
The ABS Energy Account, Australia (EAA) is one of the set of environmental–economic accounts produced by the ABS based on the System of Environmental–Economic Accounting (SEEA). It consists of :

  • supply and use tables that identify physical volumes by industry and energy product; and
  • a Hybrid Energy Use table which provides a combined presentation of physical and monetary use of energy products between industry and by households.

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, such as that in Australia's National Accounts.

3
Environmental–Economic accounts can provide information and improved understanding on a range of issues including:
  • broader assessment of the consequences of economic growth;
  • the contribution of sectors to particular environmental problems; and
  • implications of environmental policy measures across sectors (for example, taxes, regulations, charges and incentives).


ENVIRONMENTAL ACCOUNTING FRAMEWORK


4
The EAA was developed using the System of Environmental–Economic Accounts (SEEA) and the SEEA–Energy (SEEA–E). SEEA was first published by the United Nations in 1993 and was elevated to an international statistical standard in 2012. Environmental accounts extend the boundaries of the System of National Accounts (SNA) framework to include environmental resources, which occur outside the economic production and asset boundaries measured by the SNA.


RELATIONSHIP BETWEEN ENERGY ACCOUNT, AUSTRALIA AND THE AUSTRALIAN NATIONAL ACCOUNTS


5
Energy supply and use tables provide a framework to link physical information to core components of the Australian National Accounts (ANA). Physical data are presented in supply and use tables and monetary energy use is juxtaposed with physical energy use in the Hybrid Energy Use table.


SUPPLY AND USE OF ENERGY


6
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.

7
The supply and use methodology is based on the fundamental economic identity that supply of products equals use of products.


Scope


8
This edition of EAA presents information on the net supply and use of energy in physical terms for the Australian economy. A 'hybrid' (physical and monetary) table of gross energy supply and use is also presented.

9
Data on the physical supply and use of energy products are primarily derived from the Bureau of Resources and Energy Economics (BREE) Australian Energy Statistics – Energy Update 2012 (AES). The ABS transforms AES into the SEEA framework to enable linkages between energy supply, energy use and the Australian National Accounts.

10
To estimate monetary use of energy, the ABS used implicit unit prices and expenditure data drawn from a number of sources, including ABS surveys and relevant Price Indexes.

Net Energy Flow Accounts


11
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.

12
The supply table of the net energy flow accounts shows the different energy products extracted within a country and supplied from the rest of the world (imports). Note that direct extraction by households is treated as supply by the relevant industry, but is also identified separately.

13
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:
    Supply (Imports + Direct extraction) = Use (Exports + Final use of energy + Energy losses due to conversions + Inventory changes)

14
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.

15
Data contained in the net supply and use tables of this publication are used to compile the energy intensity time series estimates.

Gross Energy Flow Accounts and the Hybrid (physical–monetary) Energy
Supply and Use Table

16
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 (eg. 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 our 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.

17
In any aggregation of gross data by industry, totals are subject to double counting of energy flows.

18
Gross energy flows are used in the Hybrid Energy Supply and 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 (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.

Monetary valuations and non–market
supply and use

19
Significant supply and 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 table represent all energy use, including non–purchased energy, rather than showing only explicit expenditure on energy. Nevertheless, some relatively minor energy products such as briquettes have been excluded from the Hybrid Energy Use table due to lack of data on unit prices.

Territory principle


20
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.


Coverage


21
Coverage for physical supply and use tables includes the following energy products:
  • Black coal;
  • Brown coal;
  • Brown coal briquettes;
  • Metallurgical coke;
  • Coal by–products (including blast furnace gas, coal tar, benzene/toluene/xylene feedstock and coke oven gas);
  • Natural gas;
  • Crude oil and other refinery feedstock;
  • Propane, butane, LPG;
  • Refined products (including petrol, diesel, aviation turbine fuel, kerosene, heating oil, fuel oil, refinery fuel and naphtha);
  • Liquid/gas biofuels;
  • Biomass wood;
  • Biomass bagasse;
  • Electricity;
    • solar electricity
    • wind electricity
    • hydro–electricity
    • other (i.e. that generated from fossil fuels)
  • Solar hot water; and
  • Uranium.

22
Wherever possible, data related to the refined petroleum products (petrol and diesel), have been shown separately.

23
The Hybrid Energy Use table also separates liquefied natural gas (LNG) from natural gas. At present, this separation is not made in the net physical supply and use tables.

24
Industry classifications used in this publication follow the 2006 edition of the Australian and New Zealand Standard Industry Classification (ANZSIC).
  • Agriculture, Forestry and Fishing;
  • Mining;
  • Manufacturing;
  • Construction;
  • Transport;
  • Electricity, Gas, Water Supply and Waste Services; and
  • Commercial and Services (see below).

25
Manufacturing and Transport are further broken down on an energy use significance basis into the following groupings, with the relevant ANZSIC codes listed in brackets:
  • Food, beverages and textiles (subdivisions 11–13);
  • Wood, paper and printing (subdivisions 14–16);
  • Petroleum and chemical products (subdivisions 17–19);
  • Iron and steel (groups 211, 212);
  • Non–ferrous metals (groups 213–214);
  • Other manufacturing (subdivisions 20, 22–25);
  • Road transport (subdivision 46);
  • Rail transport (subdivision 47);
  • Water transport (subdivision 48);
  • Air transport (subdivision 49); and
  • Other transport, storage and services (subdivisions 50–53).

26
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 BREE 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 BREE's AES and consists of the following ANZSIC divisions:
  • Wholesale Trade;
  • Retail Trade;
  • Accommodation and Food Services;
  • Information Media and Telecommunications;
  • Financial and Insurance Services;
  • Rental, Hiring and Real Estate Services;
  • Professional, Scientific and Technical Services;
  • Administrative and Support Services;
  • Public Administration and Safety;
  • Education and Training;
  • Health Care and Social Assistance;
  • Arts and Recreation Services; and
  • Other Services.


Data Sources


27
The estimates contained in this publication are drawn from a wide range of ABS and non–ABS data sources, including:

28 ABS sources:
29
Non ABS sources:
  • Bureau of Resources and Energy Economics, Australian Energy Statistics – Energy Update 2012.

30
A range of other data sources were used in EAA for validation, or as an input to developing estimation methodologies.

31
ABS data sources:
32
Non–ABS sources:
  • Australian Institute of Petroleum, Terminal Gate Prices (Wholesale) and Pump Prices (Retail)
  • Bureau of Resources and Energy Economics, Australian petroleum statistics;
  • Bureau of Resources and Energy Economics, Resources and energy statistics;
  • Clean Energy Regulator, National Greenhouse and Energy Reporting (NGER); and
  • Department of Climate Change and Energy Efficiency, Energy Use in the Australian Government's Operations 2009–10.


Methods for Calculating Energy Supply and Use


33
These notes are intended as a general guide to the method of calculating estimates of energy supply and use. For more detail on the methods please contact the Director, Environmental Accounts Section, Australian Bureau of Statistics (email address: mark.lound@abs.gov.au).

34
Data on the physical supply and use of energy products are primarily derived from the Bureau of Resources and Energy Economics (BREE) Australian Energy Statistics (AES) – Energy Update 2012.

35 ABS Energy Account, Australia 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 treatment of bitumen, solvents, lubricants and greases outlined below also accounts for some of the difference.

36 Australian TFEC in AES is 3839 PJ in 2010–11 while the sum of household and industry net energy use in EAA is 4059 PJ. The largest contributors to the difference between the two measures are in consumption of electricity (117 PJ difference) and natural gas (224 PJ difference), because losses are recorded in Energy Account, Australia as use by the relevant industries but are excluded from TFEC in the AES.

37
While the EAA draws on data from BREE's AES, adjusted benchmark data from the ABS Energy, Water and Environment Management Survey (EWES) 2008–09 were used to allocate the supply and use of energy products between industries.

38
The following changes have been applied to allow linkages between energy supply, energy use and the Australian National Accounts (ANA):

Reallocation of Petrol, Diesel and LPG use by Industry and Households


39
In BREE's AES, physical use of land transport fuels (petrol, diesel and LPG) is assigned on the basis of activity type, rather than according to '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.

40
EAA uses the ABS EWES and Survey of Motor Vehicle Use data to reallocate land transport fuels, to align with SEEA and SNA industry recording principles.

41
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 most significant single user of refined fuels. The implications are also significant for industry–based measures of energy intensity.

Partial reallocation of Electricity and Natural Gas


42
In BREE's AES, physical use of fuels is allocated according to an activity basis and with a differing units model. 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.

43
EAA uses the ABS EWES and ABS 2010–11 Economic Activity Survey data to reallocate electricity and natural gas between Construction, Transport and Commercial and services to better align with expenditure data in these surveys.

Treatment of Bitumen, Solvents, Lubricants and Greases


44
Bitumen, solvents, lubricants and greases are classified by BREE 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


45
Secondary fuels (which are then re–consumed) are netted out when producing net flow accounts.

46
The following sources were used to assist in the process of netting out secondary fuels:
  • ABS, 2008–09, Energy, Water and Environment Management survey;
  • BREE Australian Energy Statistics –Table A and Table F; and
  • Clean Energy Regulator, National Greenhouse and Energy Reporting Scheme (NGERS).

Adjustment to imports, exports and production to align with the ANA "residency" view of the boundaries of the Australian economy


47
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, cat. no. 5206.0 , September 2003). 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.


Data Quality and Reliability


48
Due to recent revisions in AES methodology, data for 2008–09 and 2009–10 supply and use figures have been adjusted from previously published figures.


ENERGY INTENSITY


Scope


49
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 statistics to industry gross value added (IGVA) data. The converse of this measure (unit of output per unit of energy consumption) would be energy productivity.

50
Energy consumption figures are net energy consumption based on Table F of BREE's AES, with adjustments from the Net Supply and Use tables in Energy Account, Australia applied for all years from 2002–03 onwards. ABS industry gross value added is drawn the ASNA and is based on the Australian and New Zealand Standard Industrial Classification (ANZSIC 2006).


Coverage


51
Refer to earlier paragraphs on Coverage.


Data Sources


52
ABS sources:
53
Non ABS Sources:
  • Bureau of Resources and Energy Economics, Australian Energy Statistics – Energy Update 2012.

54
Other data sources

55
The following data sources were used to adjust BREE's' physical consumption by industry data to align with 'industry of ownership' and for data validation;

Methods for Calculating Energy Intensity


56
Energy intensity is a ratio of energy consumed per unit of economic output (GJ/$m IGVA). BREE's 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.


Data Quality and Reliability


57
Due to recent revisions in AES methodology, data for 2008–09 and 2009–10 supply and use figures have been adjusted from previously published figures.


Confidentiality


58
Where necessary, tables have had values suppressed to protect confidentiality.


NEXT EDITION


59
The next release of the EAA, 2011–12 is scheduled for November 2013.

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