Seasonal relationship of peak demand and energy impacts of energy efficiency measures—a review of evidence in the electric energy efficiency programmes

While energy efficiency programmes traditionally focus on energy savings, there is also a policy interest in their impact on system peak demand. Examples include demand-side management, integrated resource planning and recent developments to integrate energy efficiency into forward capacity markets. However, there is only limited research on the relationship between peak demand impacts and overall energy savings from efficiency measures, although this relationship can have important bearings on efficiency programmes. This paper reviews utility efficiency programmes in nine jurisdictions in North America and analyses how the seasonal peak-energy relationship differs between commercial and industrial (C&I) and residential sectors, among efficiency measures. In terms of the seasonal difference in peak demand impacts, these programmes show that residential lighting and residential water heating can deliver greater peak savings in weekday early evening winter peak periods. By contrast, C&I lighting and residential appliances make higher peak savings in weekday afternoon summer peak periods. A seasonal difference is more significant in lighting, especially residential lighting, than other measures. The evidence from North America also suggests that space cooling in both sectors and C&I lighting may well make greater peak savings relative to non-peak impacts than other measures during summer peak periods, while in winter peak periods, residential lighting can achieve greater peak savings relative to non-peak impacts. This review highlights the significance of regional electricity use patterns along with climatic and regulatory conditions and indicates how further research may contribute to appropriate electricity demand reduction programme design and monitoring regimes in particular regions.     

Fiscal impacts of energy efficiency programmes—The example of solid wall insulation investment in the UK

Programmes supporting the installation of energy efficiency measures typically incur a cost in the form of subsidies as well as lost VAT income due to reduced energy consumption. Those costs are to some extent offset by the tax receipts and other revenue streams generated as a result of the activities promoted under the programme. In this paper we analyse the budgetary effects of energy efficiency programmes focusing on the example of solid wall insulation in the UK. Three distinct subsidy options have been defined and modelled for the purpose of this research including two policies with varying degrees of direct subsidy and a low interest loan scheme. Our analysis shows that a significant amount of the cost of a scheme funding solid wall insulation would be offset by increased revenues and savings. A loan scheme, due to the high leverage, achieves not only budget neutrality but generates additional revenue for the Exchequer.     

To cool a sweltering earth: Does energy efficiency improvement offset the climate impacts of lifestyle?

As technical efficiency improvement in energy use remains a touchstone measure to curb greenhouse gas (GHG) emissions, there is substantial concern about whether this approach can offset the large and expanding impacts of human actions. Critics contend that without adjustments to the prevailing consumptive lifestyle, energy efficiency improvement will generate only token reductions in GHG emissions. I address this concern by examining the extent to which technical efficiency improvement in energy use offsets the impacts of housing-related lifestyle on GHG emissions. I build from two perspectives, the physical–technical–economic models that consider energy efficiency improvement as a potent strategy to curb residential energy consumption, and the lifestyle and social–behavioral approach, which questions this view. The analyses reveal consistent positive relationship between lifestyle and energy consumption. The results also indicate that energy efficiency improvement has mixed effects on energy consumption. In fact, model-based figures show that technical efficiency improvement in energy use leads to slightly higher energy consumption if it is not accompanied by adjustments to lifestyle.     

Ready, aim, implement: designing, implementing and evaluating energy efficiency targets—summary of a panel discussion, 10 June, Paris, France

How useful are energy efficiency targets? This was the 'Hot Topic' a panel held at the IEPEC 2010 Conference in Paris. The results of the debate are summarised in this paper.     

Beyond economics—understanding the decision-making of German small private landlords in terms of energy efficiency investment

The German government aims to achieve virtually climate-neutral building stock by 2050 to tackle climate change. To realise this goal, comprehensive policy packages based on neoclassical economic theory are in place to foster energy efficiency investment. However, in the building sector, there is increasingly a gap between this aspiration and the reality. It is claimed that one of the main reasons for this is that the existing policy framework fails to address the specific characteristics and needs of different groups of building owners. This is a particular challenge in Germany, where 80% of all dwellings are owned privately and 37% are rented out by small private landlords (SPL). Despite the significant numbers of SPL, they often follow black box decision-making processes when considering energy renovations. In this study, the author uses an explanatory model to understand the decision-making processes of SPL, combining theoretical aspects from different research disciplines. This model was applied to a low-demand housing market in a neighbourhood in the Ruhr area. Eighteen semi-structured interviews (each lasting between 37 and 115 min) were conducted, demonstrating that in addition to economic factors, the values, beliefs, norms and routines of SPL—as well as their personal capabilities and contextual factors—play an important role in their decision-making. Based on the findings, recommendations are made for enhancing the effectiveness of existing energy efficiency policies and other supporting instruments (e.g. tenancy law and social legislation), tailored to the specific needs of SPL.     

Investment in energy efficiency: do the characteristics of investments matter?

??Investment in energy efficiency: do the characteristics of firms matter??? In their famous 1998 paper, DeCanio and Watkins raised the question and answered it affirmatively. Our paper addresses a parallel question: ??Investment in energy efficiency: do the characteristics of investments matter??? To answer this question, we first describe our new investment decision-making model, applicable to all investment types. We then discuss our research results, based on questionnaires submitted to finance managers of 35 major electricity consumers in various commercial and industrial sectors. We show how characteristics other than profitability play an important role in investment choices. The investment category influences profitability evaluation, profitability requirement, and, ultimately, the decision made. For half of the firms in our study, energy-efficiency investments did not exist as a category. However, wide diversity regarding investment behavior is observed between firms. Our findings lead to a different explanation of the energy-efficiency gap and open the way for a new approach to promoting energy-efficiency investments, which is briefly discussed in the conclusion.     

What did we recently learn about the evaluation of energy efficiency policies and programmes? Insights from IEPPEC 2014 in Berlin

This short communication introduces the special issue based on a selection of papers first presented at the International Energy Policy and Programme Evaluation Conference in Berlin on 9 to 11 September 2014.     

Driving forces for and barriers to providing energy services—a study of local and regional energy companies in Sweden

Improving energy efficiency is a cornerstone in climate change mitigation, and energy services are portrayed as a promising market-based approach to achieve this. This paper examines the barriers to, and driving forces needed for, the implementation of energy services from the perspective of Swedish local and regional energy companies. This includes an analysis of the resources needed in three phases of energy service implementation, i.e., development, sales, and deployment. The results indicate a supply-side interest in providing energy services, with the major challenges being related to (a) intra-organizational issues such as a lack of strategic direction and intent and (b) a perceived lack of knowledge, interest, and trust on the part of potential energy service customers. The paper concludes with managerial and policy implications on how an increased focus and impact of energy service can be achieved among local and regional companies.     

Is there a price premium for energy efficiency labels? Evidence from the Introduction of a Label in Korea

This study examines the price premium from Korea's Energy Efficiency Grade Label. The Korean government recently began energy certification of televisions, providing a setting to analyze a possible price effect of the new label. Hedonic regression results seem to show that a price premium exists for products with the Energy Efficiency Grade Label. However, potential unobserved heterogeneity is a concern. Difference-in-difference and fixed-effects models are used to capture the net effect of the label by controlling for time and product differences. The results suggest that any price premium does not result from the energy efficiency label itself. Instead, energy-efficient products already had higher prices before the introduction of the energy efficiency label. The finding turns our attention to the importance of careful design of labeling programs.     

Are energy efficiency standards within the electricity sector a form of regulatory capture?

There is a growing trend to introduce energy efficiency standards at the state level. We examine why electricity utilities may be in favor of such a standard and conclude that energy efficiency standards may be a form of regulatory capture.     

On the appraisal of “Triple-A” energy efficiency investments

Traditional investment institutions lack the technical understanding of the essence of energy efficiency investments. This often creates a lack of trust to such investments, which acts as a barrier to including energy efficiency projects in the investment portfolio, even though such investments are often robust and have a guaranteed return. Mainstreaming energy efficiency finance remains still a challenge. This paper proposes a decision support framework for identifying “Triple-A” energy efficiency investments, aiming to reduce the respective time and effort required at the early stage of the project conceptualization as well as increase transparency and efficiency of decision making. The “Triple-A” investments are the ones that successfully pass the proposed three-step approach, namely Assess – Agree – Assign. By elaborating a meta-analysis on the De-risking Energy Efficiency Platform available data, first insights from the adoption of such an approach are derived. Moreover, future directions are presented and discussed.     

Renewables in Africa—meeting the energy needs of the poor

This paper presents estimates of renewables energy technologies disseminated in sub-Sahara Africa and evaluates the potential of renewables in meeting the energy needs of Africa's poor. Using data mainly from eastern and southern Africa, the paper examines five major renewable energy technologies, namely: (i) large-scale biomass energy; (ii) small-scale biomass energy (iii) solar photovoltaic; (iv) solar thermal; and (v) wind. It then evaluates how suitable each renewable energy technology is to meet the energy needs of the urban and rural poor. The paper ends with key measures that could encourage the large-scale dissemination of renewable energy technologies to the poor in Africa.     

The additional benefits of energy efficiency investments—a systematic literature review and a framework for categorisation

Investments in industrial energy efficiency are essential for meeting future energy needs. Nevertheless, the industrial sector’s current efforts in energy efficiency investments are insufficient. Additional benefits of energy efficiency investments have been suggested to improve the financial attractiveness of energy efficiency investments. Yet, previous research indicates that not all benefits are included when investment opportunities are evaluated, leading to an underestimation of what a firm will gain from the investment. Additionally, previous research lacks conceptual frameworks for describing these additional benefits at an early stage in the investment process. Moreover, various benefit terms are found in currently existing research, but there are a lack of definitions and distinctions attributed to these terms. Therefore, this paper provides a systematic review on the benefit terms of energy efficiency investments, establishes non-energy benefits as the term most relevant for such investments and provides a new definition of the concept. Further, a new framework for categorising non-energy benefits to enable them to be included during the investment process is developed, in which the level of quantifiability and time frame of the non-energy benefits are taken into account. Including non-energy benefits in the investment process can make energy efficiency investments more attractive and increase their priority against other investments. Moreover, non-energy benefits can reinforce drivers as well as counterbalance known barriers to energy efficiency investments. Acknowledging non-energy benefits can thus contribute to an increased adoption level for energy efficiency investments.     

Relationship between the total energy efficiency of a sodium–sulfur battery system and the heat dissipation of the battery case

The relationship between the total energy efficiency of an Na/S battery system and the heat dissipation through its battery case, was investigated. The total energy efficiency was heavily influenced by the heat dissipation of the battery case, and little influenced by the energy efficiency of its cells. In order to obtain a higher total energy efficiency, it is essential to design the battery case with less heat dissipation.     

Setting the standard? A framework for evaluating the cost-effectiveness of building energy standards

The adoption rate and stringency of building energy standards in the U.S. have been increasing since the mid-1990s as a result of the Energy Policy Act mandate of 1992 (EPAct). Current evidence on the energy savings that accrue from commercial building energy standards is based on engineering simulations, which do not account for realized behaviour once a standard is actually adopted. This paper uses quasi-experimental variation in commercial building energy standard adoptions to estimate their effect on realized electricity consumption and cost-effectiveness. In states induced by EPAct to adopt an energy standard where all new nonresidential construction was erected under a commercial standard, electricity consumption per service worker is lower by about 12%, and total commercial electricity consumption is lower by 10%. Including early adopters and never-adopters to the analysis leads to a downward bias in the treatment effect. The realized electricity savings in the EPAct states represent three quarters of predicted simulated savings, and electricity saved in 2010 came at a cost of approximately 7.7 cents per kWh.     

The value of domestic building energy efficiency — evidence from Ireland

Following the transposition of the EU Energy Performance of Buildings Directive into Irish law, all properties offered for sale or to let in Ireland are obliged to have an energy efficiency rating. This paper analyses the effect of energy efficiency ratings on the sale and rental prices of properties in the Republic of Ireland. Using the Heckman selection technique we model the decision to advertise the energy efficiency rating of a property and the effect of energy efficiency ratings on property values. Our results show that energy efficiency has a positive effect on both the sales and rental prices of properties, and that the effect is significantly stronger in the sales segment of the property market. We also analyse the effect of energy efficiency across different market conditions and we find that the effect of the energy rating is generally stronger where market conditions are worse.     

Is disaggregation the holy grail of energy efficiency? The case of electricity

This paper aims to address two timely energy problems. First, significant low-cost energy reductions can be made in the residential and commercial sectors, but these savings have not been achievable to date. Second, billions of dollars are being spent to install smart meters, yet the energy saving and financial benefits of this infrastructure – without careful consideration of the human element – will not reach its full potential. We believe that we can address these problems by strategically marrying them, using disaggregation. Disaggregation refers to a set of statistical approaches for extracting end-use and/or appliance level data from an aggregate, or whole-building, energy signal. In this paper, we explain how appliance level data affords numerous benefits, and why using the algorithms in conjunction with smart meters is the most cost-effective and scalable solution for getting this data. We review disaggregation algorithms and their requirements, and evaluate the extent to which smart meters can meet those requirements. Research, technology, and policy recommendations are also outlined.     

An ex-post assessment of the regulation on the energy performance of buildings in Greece and the Netherlands—a cross-country comparison

Hastening the energy saving rate in the built environment is a common goal of both the Dutch and the Greek government within the context of EU2020 strategy. In view of the recast Directive on the Energy Performance of Buildings (EPBD) (2010/31/EC), considered to be an important route towards exploiting the energy saving potential of the building stock, this paper conducted an ex-post assessment of the national Regulations on Energy Performance of Buildings (REPB) including energy performance certificates (EPCs), as transposed and implemented in Greece and the Netherlands. Results suggest that the implementation of the new EPBD requirements is still at an early stage for both countries. Similarities in the design of the two national schemes are demonstrated regarding quality assurance systems, while enforcement regimes show contrasting approaches with the Dutch EPCs operating at a voluntary basis. Both Dutch and the Greek scheme present a similar case regarding their low implementability, attributed though to dissimilar causes and external influences. Policy incoherence is another common characteristic traced between the two national yet different administration styles across governance levels, lacking of policy integration and coordination. The evaluation framework sheds some light on the understanding of the policy outcomes and design characteristics of the transposed REPB schemes in relation to the theory behind their implementation, while dealing with regulatory elements verified by observations and experiences, which need to be considered.     

The German energy audit program for firms—a cost-effective way to improve energy efficiency?

In 2008, a program was established in Germany to provide grants for energy audits in small- and medium-sized enterprises. It aims to overcome barriers to energy efficiency, like the lack of information or a lack of capacity, and is intended to increase the adoption of energy efficiency measures. We evaluate the program's impact in terms of energy savings, CO₂ mitigation, and cost-effectiveness. We find that firms adopt 1.7?C2.9 energy efficiency measures, which they would not have adopted without the program. Taking a firm's perspective, the program shows a net present value ranging from ?0.4 to 6??/MWh saved, which very likely implies a net benefit. For the government, each ton of CO₂ mitigated costs between 1.8 and 4.1??. Each euro of public expenditure on audit grants led to 17?C33?? of private investment. The cost-effectiveness of the program for firms and the low share of public expenditure underline its value for the German energy efficiency policy mix and suggest that it should be expanded in Germany. Further, the good experiences with the program in Germany should encourage countries which have not yet established an audit program to do so.