Energy Account, Australia methodology

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

• physical supply and use tables that show physical values of energy from both a user and producer perspective;
• monetary supply and use tables that show monetary values of energy from both a user and producer perspective;
• energy indicators; and
• energy assets.

 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).
 

Data on the physical supply and use of energy products are primarily derived from the Department of industry, Science, Energy and Resources publication, Australian Energy Update 2021. The ABS translates this data into the SEEA framework, thereby enabling linkages between energy supply, energy use and the SNA.

To estimate monetary values associated with the supply and use of energy, data is mapped from the Australian supply-use benchmarks to certain industry and product groupings. The compilation process ensures coherence between the resulting tables and the supply-use benchmarks underpinning the latest national accounts.

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.

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.

The EAA provides a framework for linking physical information to core components of the SNA. The production of physical supply and use tables, monetary supply and use tables, energy asset tables, are (to the extent that it is conceptually possible) consistent with the approaches used in the construction of the 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.

The supply table records the total supply of energy within the economy, including imports. The use table records the total use of energy within the economy and for export. The supply and use tables can be compiled in both physical and monetary terms.

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

Gross energy flow accounts record total energy extracted from nature and energy 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.

In any aggregation of physical gross data by industry, totals will exceed net totals as both primary and secondary energy flows are included in gross totals.

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).

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.

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 = Use
Where:

• Supply = Imports + Direct extraction, and
• Use = Exports + Final use of energy + Conversions and losses + Inventory changes.

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 conversions and losses.

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.

The use of energy products can occur without an explicit monetary transaction. This includes the use of own account 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 monetary tables represent all energy use, including non-purchased energy, rather than showing only explicit expenditure on energy.

Energy indicators are used to provide a greater understanding of the production and use of energy.

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.

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.

One of the means of extending the life of energy products is to use those products that 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.

Energy intensity is a ratio of energy consumed per unit of economic output. 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 EAA uses annually reweighted chain volume estimates of IGVA in the estimation of energy intensity from Australian System of National Accounts. These IGVA estimates are re-weighted each year, and therefore energy intensity measures are updated with each annual estimation cycle. For example, all figures contained in the EAA 2019-20 estimates of energy intensity are recorded in 2019-20 prices and are thus directly comparable over time.

Household physical energy use is presented on both a per person and per household basis. 

ABS sources for household and population data are as follow:

• National, state and territory population; and 
• ABS Household estimates

Household estimates are based on a combination of:

• latest estimated resident population 
• proportion of people living in private dwellings, from Censuses
• average household sizes from Censuses
• Census household counts
• Post Enumeration Survey household estimates

These estimates differ from those published in Household and Family Projections, Australia, 2016 to 2041 as they are based on estimated resident population rather than population projections.

Household monetary energy use estimates are drawn from the monetary use tables. Estimates are presented in aggregate, and separately for gas, petroleum products and electricity.

Coverage for physical supply and use tables includes the following energy products:

• Black coal;
• Brown coal;
• Metallurgical coke;
• Coal by-products (including blast furnace gas, coal tar, benzene/toluene/xylene feedstock and coke oven gas);
• Brown coal briquettes;
• Natural gas (including coal seam methane gas);
• Crude oil and feedstocks (including refinery feedstock, ethane and other petrochemical feedstocks);
• Petrol;
• Diesel;
• Liquefied petroleum gas (LPG);
• Other refined products (including aviation turbine fuel, aviation gasoline, kerosene, heating oil, and fuel oil);
• Biofuels (including ethanol, biodiesel, landfill and sludge biogas, and other biofuels);
• Wood and wood waste;
• Bagasse;
• Electricity;
• Hydro energy;
• Solar energy;
• Wind energy; and
• Uranium.

Industry classifications used in this publication follow the 2006 edition of the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (Revision 2.0)

• Agriculture, forestry and fishing;
• Mining;
• Manufacturing;
• Electricity, gas, water supply and waste services;
• Construction;
• Transport; and
• Commercial and services.

Several industries are further broken down on an energy use significance basis into the following groupings, with the relevant ANZSIC codes listed in brackets:

Mining:

• Coal (subdivision 6);
• Oil and gas (subdivisions 7); and
• Other mining (subdivisions 8-10). 

Manufacturing:

• 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); and
• Other manufacturing (subdivisions 20, 22-25).

 Electricity, gas, water supply and waste services:

• Electricity supply (subdivision 26);
• Gas supply (subdivision 27); and
• Water supply and waste services (subdivisions 28-29).

 Transport:

• 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).

 Commercial and Services:

• Wholesale trade (subdivisions 33-38);
• Retail trade (subdivisions 39-43);
• Accommodation and food services (subdivisions 44-45);
• Information, media and telecommunication services (subdivisions 54-60);
• Financial and insurance services (subdivisions 62-64);
• Rental, hiring and real estate services (subdivisions 66-67);
• Professional, scientific and technical services (subdivisions 69-70);
• Administrative and support services (subdivisions 72-73);
• Public administration and safety (subdivisions 75-77);
• Education and training (subdivisions 80-82);
• Health care and social assistance (subdivisions 84-87);
• Arts and recreation services (subdivision 89-92); and
• Other services (subdivisions 94-96).
   

The Net Present Value (NPV) was applied from the Australian System of National Accounts 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.

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.

The EDR/extraction rate ratio provides an indicator of years of availability of a resource under current levels of EDR's and extractions.

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

ABS sources:

• Energy, Environment and Water Survey (EWES) 2011-12, 2014-15, and 2017-18;
• Environment Indicators Survey (EIS) 2012-13, 2013-14, 2015-16, 2016-17, 2018-19, and 2019-20;
• Australian System of National Accounts;
• Australian National Accounts: Input-Output Tables (Product Details);
• Australian Population Census 2016; and
• Mining Operations, Australia.

Non-ABS sources:

• Department of Industry, Science, Energy and Resources, Australian Energy Update 2021;
• Clean Energy Regulator, National Greenhouse and Energy Reporting Scheme (NGERS);
• Department of Industry, Science, Energy and Resources, Australian Petroleum Statistics 2021;
• Department of Industry, Science, Energy and Resources, Resources and Energy statistics;
• Department of Industry, Science, Energy and Resources, Energy Use in the Australian Government's Operations;
• The Australian Energy Council, Electricity Gas Australia; and
• Energy Rating website (www.energyrating.gov.au).

Changes in stocks of produced assets and product inventories, previously referred to as changes in inventories.

The dry pulpy fibrous residue that remains after sugarcane or sorghum stalks are crushed to extract their juice. It is used as a biofuel for the production of heat, energy, and electricity, and in the manufacture of pulp and building materials.

Produced from renewable organic sources or ‘feedstocks’, biofuels include ethanol and biodiesel, and are commonly used as a fuel in transportation.

Includes wood and wood waste used to produce energy, usually through burning.

A sedimentary organic rock consisting of anthracite, bituminous and sub-bituminous rank coals. Black coal is primarily used as a solid fuel to raise steam to generate electricity and to produce coke for steel making.

Made from brown coal through a process of crushing, drying and the addition of a binding agent, to produce a compact, high energy fuel easily transported and commonly used for industrial and domestic heating.

Also known as lignite, brown coal is a low rank, brownish-black coal with a high moisture content of around 60%.

A gaseous hydrocarbon and the fourth member of the paraffin series (following methane, ethane and propane). If exposed to higher pressures or lower temperatures it can be converted to liquid form, and is a major component of LPG.

For certain types of economic analysis it is useful to examine estimates of the principal flows of goods and services in the economy revalued in such a way as to remove the direct effects of price change over the relevant period. These estimates are obtained by first weighting together the elemental volume indexes from the previous financial year to the current financial year, where the weights are calculated using the current price value shares of the previous financial year. Second, the resulting aggregate year-to-year volume indexes are linked together to form a time series. Third, the time series is referenced to the current price estimates of the reference year.

Includes blast furnace gas (from iron and steel processing), coal tar and benzene/toluene/xylene (BTX) feedstock and coke oven gas (from the coke making process).

A liquid mixture of pentanes and heavier hydrocarbons that form part of the vapour phase of natural gas in the reservoir and become liquid under standard field separation conditions.

Energy lost in the transformation of a primary fuel to a derived (secondary) energy product.

A mixture of hydrocarbons, existing in the liquid state; both in natural underground reservoirs and at atmospheric pressure after passing through surface separating facilities.

Measures the dependence on energy imports to sustain current energy activity. The degree of dependence on imports or 'self-sufficiency', the relationship between gross domestic energy inputs and the domestic end use inclusive of conversion and distribution losses, can be calculated from the Energy Account Australia. This measure is closely connected with the pattern of extraction of energy resources presented in the energy asset tables. An energy self-sufficiency number greater than 100 indicates net exports, a number less than 100 indicates net imports of energy.

The flow of electrical power or charge. It is a secondary energy source, meaning it is derived from the conversion of primary sources of energy such as coal, natural gas, oil and nuclear power.

The term decoupling refers to a break in the link between the use of energy products and economic growth. The extent to which such decoupling takes place can be illustrated by comparing the change in chain volume Gross Domestic Product (GDP) with the change in total domestic use of energy. Decoupling occurs when the growth rate of energy use is less than (or higher than) that of its economic driving force (e.g. GDP) over a given period. Decoupling can be either absolute or relative. Absolute decoupling occurs when the environmentally relevant variable (e.g. energy) is stable or decreasing while the economic driving force is growing. Decoupling is said to be relative when the growth rate of the environmentally relevant variable is positive, but less than the growth rate of the economic variable.

Energy extracted per household is calculated by dividing the net energy supplied by households by the estimated number of households.

A measure of the energy consumed to produce one unit of output. Energy intensity measures are calculated for a selected range of industries that rely on energy inputs to produce output based on the net energy use table. Estimates of value added from 'ownership of dwellings' was excluded from the calculation of energy intensity.

Include forms of energy suitable for direct use (e.g. electricity and heat) and energy products that release energy while undergoing some chemical or other process (including combustion). By convention, energy products also include peat, biomass and waste when and only when they are used for energy purposes.

Energy use per household is calculated from net household energy use divided by the estimated number of households.

An information system and framework that links the economic activities and uses of a resource to changes in the natural resource base, therefore linking resource use with the System of National Accounts. See also SEEA.

Goods exported (exports) represents the quantity of goods sent to other countries or for which ownership changes from residents to non-residents.

Measure the rate at which physical removal of energy resources occurs from the energy deposits which occur naturally. Extraction rate is the production rate divided by the economic demonstrated resource of an energy asset.

Use that finally consumes a product, as opposed to an intermediate use. Final use includes: household final consumption; government final consumption; exports; and changes in inventories.

General term used for a framework presents information on the physical flows of resources throughout the economy. Flow accounts published for energy include supply and use tables.

Any natural fuel derived from decomposed or partly decomposed organic matter.

Total energy including that derived from primary as well as secondary energy sources. See also net energy.

Gross energy input reflects the total energy captured from the environment, energy products that are imported, and energy from residuals within the economy. In Australia, due to limitations on losses due to extraction, this measure is calculated using total gross supply.

Total energy including that derived from primary as well as secondary energy sources. See also net energy.

Net expenditure on goods and services by persons and expenditure of a current nature by private non-profit institutions serving households. This item excludes by unincorporated businesses and expenditures on assets by non-profit institutions (included in gross fixed capital formation). Also excluded is expenditure on maintenance of dwellings (treated as intermediate expenses of private enterprises), but personal expenditure on motor vehicles and other durable goods and the imputed rent of owner-occupied dwellings are included. The value of 'backyard' production (including food produced and consumed on farms) is included in household final consumption expenditure and the payment of wages and salaries in kind (e.g. food and lodging supplied free to employees) is counted in both household income and household final consumption expenditure.

A process in which flowing water is used to spin a turbine connected to a generator.

Goods imported (imports) represent the quantity of goods received from other countries or for which ownership changes from non-residents to residents.

The value of an industry’s output at basic prices, minus the value of goods and services consumed as inputs during the process of production. Basic prices valuation of output removes the distortion caused by variations in commodity taxes and subsidies across the output of individual industries.

Intermediate use consists of goods and services consumed as inputs by a process of production, excluding fixed assets whose consumption is recorded as consumption of fixed capital. The goods or services may be either transformed or used up by the production process.

Natural gas which has been processed and then refrigerated to the very low temperatures needed to reach the liquid state.

Consists of propane, butane and isobutane and petroleum and is derived by processing through a low pressure gas separation plant the natural gas produced from either gas or oil reservoirs.

Coke resulting from high-temperature retorting of suitable coal; a dense, crush-resistant fuel for use in shaft furnaces.

Systematic summary of national economic activity. At a detailed level it shows a statistical picture of the performance and structure of the economy.

The NGERS, which commenced in relation to the 2008-09 reference period, is a framework for the mandatory reporting of greenhouse gas emissions, energy consumption and energy production by Australian businesses exceeding specified thresholds.

A combustible mixture of hydrocarbon gases. While natural gas is formed primarily of methane, its composition can vary widely, commonly including ethane, propane, butane and pentane.

Energy from natural inputs encompasses flows of energy resulting from the extraction and capture of energy from the environment by resident economic units.

Measures all uses of energy by residents of a country. It is equal to the total net use of energy less exports of energy.

Total net energy accounts for the transformation process of a primary energy product to a secondary energy product and related conversion losses. In this way, estimates for total net energy avoid double-counting the amount of converted primary energy. See also gross energy.

Total net energy accounts for the transformation process of a primary energy product to a secondary energy product and related conversion losses. In this way, estimates for total net energy avoid double-counting the amount of converted primary energy. See also gross energy.

Other volume changes are concerned with quantifying changes in resources that occur between one period and another.

Consists of those goods and services produced within a business that become available for use outside that business, plus any goods and services produced for own final use.

The joule is the standard unit of energy in general scientific applications. One joule is the equivalent of one watt of power radiated or dissipated for one second.  One petajoule is 1 million billion joules, or 278 giga watt hours.

Naturally occurring hydrocarbon or mixture of hydrocarbons as oil or gas, or in solution found in sedimentary rocks.

Those forms of energy obtained directly from nature. They include both non-renewable and renewable energy. Primary energy sources include firewood, coal, crude oil, natural gas, liquefied natural petroleum gases, uranium, bagasse, hydro, wind and solar energy.

A gaseous hydrocarbon and the third member of the paraffin series (following methane and ethane). If exposed to higher pressures or lower temperatures it can be converted to liquid form, and is a major component of LPG.

A petroleum product which has been derived from processes such as catalytic cracking and fractional distillation. Refined products include: automotive gasoline and diesel, aviation gasoline and turbine fuel, kerosene and heating oil, industrial diesel and fuel oil, and others such as naphtha and petroleum coke used as fuel.

Measures the expected life of a resource under current production levels. Remaining resource life is calculated from the economic demonstrated resource of an energy asset divided by the production rate. This is different to the Net Present Value (NPV) which predicts the expected value of the resource based on current prices, current extraction methods and costs, and on present physical rates of extraction.

Renewable energy is defined as those energy resources that are naturally replenishing. They are virtually inexhaustible in duration but limited in the amount of energy that is available per unit of time. Renewable energy resources include: biomass, hydro, geothermal, solar, wind, ocean thermal, wave action, and tidal action.

Measures the contribution to total net energy supply through renewable sources extracted by households. The indicator is calculated by dividing household renewable energy supply by total net domestic use.

Measures the proportion of total renewable energy supply compared to total domestic use (i.e. total net energy use minus exports).

Energy residuals in physical terms comprise energy losses and other energy residuals. Particular examples of energy losses include flaring and venting of natural gas and losses during transformation in the production of primary energy products from natural inputs and in the production of secondary energy products. Energy losses during distribution may arise from the evaporation and leakages of liquid fuels, loss of heat during transport of steam, and losses during gas distribution, electricity transmission and pipeline transport. Energy residuals also include other energy residuals particularly heat generated when end users (either households or enterprises) use energy products for energy purposes (e.g. household lighting).

A concentration of naturally occurring solid, liquid, or gaseous materials in or on the earth’s crust and in such form that its economic extraction is presently or potentially feasible. The definition does not intend to imply that exploitation of any such material will take place in that time span, but only that its possibility might reasonably be considered.

A product that has been derived from a primary energy source. Secondary energy resources include: refined petroleum products; coal by-products; coke; and electricity.

Measures the proportion of renewable energy compared to a gross energy inputs into the economy and households. See gross energy inputs.

Photovoltaic conversion generates electric power directly from the light of the sun in a photovoltaic (solar) cell. Solar thermal electric generators use the radiant energy from the sun to produce steam to drive turbines.

An accounting framework utilising the basic principle that the total supply of a product is equal to its total use.

The SEEA is a framework used to develop environmental accounts by integrating environmental information into an accounting framework. The SEEA handbook provides the conceptual basis for developing a framework to describe the inter-relationship between the natural environment and the economy. See also Environmental account.

The SNA is an international framework which can be used to develop a comprehensive, consistent and flexible set of macroeconomic accounts.

A measure of total resident energy use including losses such as those due to conversion or transformation into other energy products. Total domestic energy use is calculated from total net energy use minus exports of energy products.

Defined as the total net energy use per capita. Energy use per capita is calculated by dividing total net energy use by estimated resident population.

Australian production plus imports.

Radioactive grey heavy metallic element, used as a source of nuclear energy.

The conversion of wind energy into electricity using wind turbines.