A critical review on energy accounting – established methods and a new alternative method based on electrification

Understanding energy accounting is increasingly important because it directly influences our understanding of the energy system and what energy policies make sense. Yet, the confusion has never been more obvious, particularly in the media, consulting arenas and also in some academic work. It is therefore time to revisit the energy accounting methods in the light of the current energy transition and electrification. Do they still make sense, or is an overhaul due? This paper critically reviews the literature to assess the suitability of the established methods, but also whether or not a new alternative method based on electrification represents an improvement. The conclusion is that the substitution method is the least wrong approach. The new alternative method based on electrification significantly misrepresents the hard-to-abate industries; it misses the energy demand in 2024 by more than 50%, and the electrification it requires appears extremely demanding concerning both material usage and area constraints.