Electricity as an energy currency

Electricity is the classic example of an energy currency.[1] An energy currency is simply some transformed form of energy that came from a primary source, but is easier to use, transport, or store. Several authors have introduced the idea of energy currency as a way to think about these useful intermediate forms of energy.[1]

The single biggest drawback of using electricity as an energy currency is that it is very difficult to store electricity. Electricity generated on the electrical grid must be used immediately (within thousandths of a second after it's produced). This is why energy storage technologies like pumped storage and batteries are so important for intermittent power sources like wind power and solar power. The electrical grid must carefully monitor demand in order to make sure that enough electricity is produced to meet the immediate demand.

Why is Electricity an Energy Currency?

Electricity is a popular energy currency because it is so flexible in that it has many more uses than some primary energy, such as oil. Electricity can run household electronics and light bulbs, cook a meal, heat houses, or even run an electric vehicle. Electricity is the most flexible form of energy now and for the foreseeable future. Crude oil, on the other hand is a fuel that must be separated into a number of different useful products through a refining process.

Since electricity is such a popular form of energy currency and finds so many uses, its use is growing extremely fast. This growth worldwide can be seen in the simulation below. Note that some third world countries have low levels of electrification, while other modernizing countries have a quickly expanding electricity use. To get some idea of how electricity is growing compared to total energy look at the line chart below. This shows that the flexibility of electricity creates a strong incentive to have as great a fraction of energy produced in that form as is possible. To get some specific details, click on different years and notice how the fraction of the total final consumption that is electricity grows with time (for most countries). Click on different countries on the map to find country specific data.

What Type of Energy is Electricity?

Electricity provides much of the power that is needed for maintaining a high energy society. Even though electricity provides energy, it is not a fuel. Even though electricity flows through wires, it is not a primary energy flow. Electricity isn't a primary energy source because electricity is always produced from some fuel or primary flow. Electricity is rather a way of moving and using the energy from those primary sources.

Electrons do not inherently have useful energy. Rather, power plants and batteries put energy into electrons, which can be harvested at the other end by electronics for energy services.

For Further Reading


  1. 1.0 1.1 Scott, Smelling Land, 1st ed. Vancouver, Canada: Canadian Hydrogen Association, 2007.