Energy currency

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Energy from primary energy sources almost always transformed into different forms to make it easier to use, transport, or store. These forms are called energy currencies. Several authors have introduced the idea of energy currency as a way to think about these useful intermediate forms of energy.[1]

Humans harvest primary energy from nature and eventually turn this energy into an energy service. Primary energy sources include primary energy flows (like solar power) and primary fuels (like raw natural gas). The energy service is what maintains a high energy society (through heating, transportation, etc.). These intermediate forms, energy currencies, are used because they are flexible and transportable energy, which allows moving the energy supply almost anywhere.[1] For example, while it's nice to enjoy sunlight, it doesn't recharge the battery in a cell phone; some energy conversion technology is required to get it into the specific form (and then moved with energy distribution technology, like pipelines or the electrical grid). The form that holds that energy from the energy conversion technology is sometimes referred to as an energy currency. There is always some energy loss when making an energy currency, often due to the second law of thermodynamics.

Figure 1. A diagram of how energy makes its way from the sun into the energy services used everyday. Energy currencies like electricity and gasoline are a critical step.[2] Without the currency stage, the primary energy wouldn't be able to be turned into the energy service.

Electricity, consumer natural gas and gasoline are the most relevant energy currencies, and are derived from primary energy. These energy currencies are easier to turn into useful work than most primary energy is. For example, a lump of coal can be burned for lighting a house, but it’s much cleaner (at least for the living room) to burn that lump of coal in a power plant and send the electricity through the grid to the house.

Energy currencies are flexible; they can be used for many energy services. For example, electricity is far more flexible than wind power. When an electric kettle boils water, the water boils no differently whether the electricity came from coal, nuclear, biomass, wind, or hydro. The electricity could have also been used to play a computer game. See more in the article electricity as an energy currency.

This flexibility of use means that, in general, the amount of energy currency that the world uses is growing faster than primary energy use is. In other words, the percentage of energy use that goes to electricity is rising (electricity use is rising faster than energy use). Worldwide, more and more energy is being turned into energy currencies because of how useful they are. Visit the article on trends in energy currencies for more information.

Examples of Energy Currency


The most relevant energy currency in society is electricity. Electricity is flexible, easy to use for just about anything, and is made specifically for the transportation and use of energy. Electricity will never run out because the electrons aren't getting used up; they're just carrying energy by moving. More energy can always be put into the same electrons over and over again, and taken out to use for more energy services.

Oil Products

Gasoline, diesel and kerosene are energy currencies as well. While these are not as flexible as electricity, they are an intermediate form of energy that is produced specifically to enable easy use of the stored chemical energy.


Many people are talking about using molecular hydrogen as an energy currency (that's hydrogen as a molecule, rather than hydrogen as an atom), with the thought that hydrogen will become an increasingly important energy currency[1] (and some disagree[3]).

Natural Gas

The idea of an energy currency gets more confusing with natural gas. Natural gas is used with very minimal processing, the distinction between raw natural gas and consumer natural gas isn't talked about much. That being said, raw natural gas still must undergo natural gas processing at a natural gas processing plant. Raw natural gas is extracted from the ground and would be a primary fuel. Consumer natural gas is used for heating or for vehicles that use natural gas to operate. Natural gas is quite flexible and is used for (among many possibilities): electricity generation, home heating, and cooking.

In summary, when extracted from the ground, before it's processed, natural gas (raw natural gas) is primary, but the gas delivered for use by consumers (consumer natural gas) is an energy currency.

Nuclear Fuel

Nuclear fuel is not considered an energy currency even though it is considered a secondary fuel. Nuclear fuel is a secondary fuel because nuclear power plants cannot use raw uranium ore as fuel; the ore needs to be processed into fuel pellets. Nuclear fuel is an intermediate form of energy which makes it easier to use. This form of fuel is quite inflexible; nuclear fuel usually has to be put into a specific type of nuclear reactor, and not just any reactor will do! This means that while an intermediate form, it's not an energy currency, because it provides electricity (and perhaps heat someday) but the nuclear fuel itself is not used to provide energy services (like space heating, transportation, etc.).

For Further Reading


  1. 1.0 1.1 1.2 Scott, Smelling Land, 1st edition. Vancouver, Canada: Canadian Hydrogen Association, 2007
  2. This drawing was made by Xining Chen for this website in August 2014 and is used with her permission.
  3. McMahon, Emperor's New Hydrogen Economy, 1st edition. iUniverse, Inc., 2006