Estimating the potential for electricity savings in households

Improving efficiency in the use of energy is an important goal for many nations since end-use energy efficiency can help to reduce CO₂ emissions. Furthermore, since the residential sector in industrialised countries requires around one third of the end-use electricity, it is important for policy makers to estimate the scope for electricity saving in households to reduce electricity consumption by using appropriate steering mechanisms. We estimate the level of technical efficiency in the use of electricity using data from a Swiss household survey. We find an average inefficiency in electricity use by Swiss households of around 20 to 25%. Bottom-up economic-engineering models estimate the potential in Switzerland to be around 15%. In this paper we use a sub-vector input distance frontier function based on economic foundations. Our estimates lie at the upper end of the electricity saving potential estimated by the afore-mentioned economic-engineering approach.     

Modelling useful energy demand system as derived from basic needs in the household sector

Inter-fuel substitution in the household sector depends on whether their target energy use is similar or not. To account for the effect of end-use application on energy demand, the concept of useful energy is utilized in which energy carriers are grouped according to their end-use applications. Useful energy is assumed as a commodity demanded to satisfy needs. Therefore, it should possess certain characteristics in accordance with the nature of basic needs. These characteristics were investigated through a two-level budgeting system with demographic variables indicating rural and urban households of Iran. The model has been applied to estimate the behavioural parameters such as income and price elasticities of useful energy demand. The estimated values of income and own-price elasticity show that all categories of useful energy are necessities with a relatively inelastic demand. Among them, cooling and non-substitutable electricity has the highest income and own-price elasticity, while lighting and water heating are ranked as the most necessary types of useful energy due to their low-income elasticity. In addition, small values of cross price elasticities support the idea that different types of useful energy are almost independent. Therefore, the results confirm that useful energy demands could be considered as basic needs.     

Renewable energy sources in the Mexican electricity sector

This paper analyzes the role of renewable energy sources (RES) in the Mexican electricity sector in the context of the proposed renewable energy bill currently under consideration in the Mexican Congress. This paper was divided into three parts. The first part presents a chronology of institutional background related to the RES. This is followed by an analysis of the coordination and management system of the Mexican electricity sector, which can facilitate the promotion and integration of the RES without significant structural changes. Finally, the pros and cons of the renewable energy bill are analyzed in order to demonstrate the need for greater coherence between the bill and the coordination system of the sector. It is concluded that when inconsistency is eliminated, RES would strongly be promoted in Mexico.     

Modelling the impacts of CDM incentives for the Thai electricity sector

The CDM Executive Board recently took a positive decision on programmatic CDM, also known as a CDM Programme of Activities. This prompts the author to present a new tool that has been developed recently for the Thai electricity market. The Renewable Energy Development (RED) Model, initially developed in the framework of the DANIDA funded project: Promotion of Renewable Energy in Thailand (PRET), at the Ministry of Energy of Thailand, was designed for the modelling of different incentive schemes and their effects on the Thai power system for the promotion of renewable energy technologies (RETs). Within this article, an extension of the existing RED model, including the CDM as additional incentive measure, is presented (RED-CDM). Along with the project-based approach, also a sectoral and programmatic approach is included as well. Several scenarios developed with the RED-CDM model show the influence of different incentive mechanisms on the Thai power market and their potentials for reaching the policy targets stated in the Energy Strategy of Thailand for Competitiveness. The main results show that reaching the policy targets is possible, while the price can be extremely high if the targets are to be achieved on schedule. Another important result is that a sectoral CDM approach could help financing about 20% of the incentives needed for a shift towards a more sustainable power grid, if the certified emission reductions (CERs) are sold at a price of 15 Euro/ton.     

Human health-related externalities in energy system modelling the case of the Danish heat and power sector

This paper discusses methodology of energy system modelling when reduction of local externalities, such as damage to the human health from energy production-related air pollution, is in focus. Ideally, the local energy externalities should be analysed by adopting the impact pathway approach of ExternE study, and following the pollutants from their release to the personal uptake and resulting health effects. This would require inclusion of air pollution modelling and monetary valuation of the impacts into an energy system optimisation process. However, this approach involves a complex study and generalisations are needed.     

Barriers to electricity load shift in companies: A survey-based exploration of the end-user perspective

As countries move toward larger shares of renewable electricity, the slow diffusion of active electricity load management should concern energy policy makers and users alike. Active load management can increase capacity factors and thereby reduce the need for new capacity, improve reliability, and lower electricity prices. This paper conceptually and empirically explores barriers to load shift in industry from an end-user perspective. An online survey, based on a taxonomy of barriers developed in the realm of energy efficiency, was carried out among manufacturing sites in mostly Southern Germany. Findings suggest that the most important barriers are risk of disruption of operations, impact on product quality, and uncertainty about cost savings. Of little concern are access to capital, lack of employee skills, and data security. Statistical tests suggest that companies for which electricity has higher strategic value rate financial and regulatory risk higher than smaller ones. Companies with a continuous production process report lower barrier scores than companies using batch or just-in-time production. A principal component analysis clusters the barriers and multivariate analysis with the factor scores confirms the prominence of technical risk as a barrier to load shift. The results provide guidance for policy making and future empirical studies.     

Energy efficiency as a credence good: A review of informational barriers to energy savings in the building sector

Information problems have early been suspected to be the main barrier to energy-efficiency investment. I review the vast yet piecemeal research that has been carried out since. Focusing on energy efficiency in buildings, I organize the review around the concept of credence good: just like that of auto repairs or taxi rides, the quality of energy-efficiency measures is never fully revealed to the buyer; as a result, it is subject to multiple information asymmetries. My first contribution is to distinguish symmetric-information problems from information asymmetries. The former arise when information is either incomplete or imperfect, but equally shared by contracting parties; as non-market failures, these can be addressed by technological progress and insurance markets. My second contribution is to give structure to the information asymmetries associated with energy efficiency by disentangling screening, signalling, moral hazard and price discrimination within a variety of contractual relationships involving buyers and sellers, owners and renters, borrowers and lenders, and regulators and policy stakeholders. I find evidence of information asymmetries to be compelling in utility-included rental contracts, unclear in home sales and rentals, and scarce in retrofit contracting and financing. I conclude by discussing the intricacies between informational and behavioural problems in energy-efficiency decisions.     

Long-term energy savings and greenhouse gas emission reductions in the Swiss residential sector

The aim of this paper is to explore the possibilities to reach two long-term targets regarding energy consumption and greenhouse gas emissions of the Swiss residential building stock: a reduction of the final energy consumption by a factor of 3 and of _CO2${\mathrm{CO}}_2$ emissions by a factor of 5 until 2050. A model is constructed to describe the dynamics of the energy-relevant properties of the residential building stock. Appropriate scenarios are discussed in terms of decisions made during construction or renovation of residential buildings which affect heat demand and determine the energy carriers used for heating and hot water generation. We show that both targets could be reached, although ambitious efforts are necessary. The central element of a successful strategy is to reduce the specific heat demand of existing buildings during renovation and to substitute the heating and hot water systems by less carbon intensive ones. Our results suggest that there is more flexibility to reach the emission target than the energy reduction target.     

The barriers to energy efficiency in China: Assessing household electricity savings and consumer behavior in Liaoning Province

This article investigates the barriers to energy efficiency at the residential sector within one province in China and explores patterns of household electricity consumption. The article presents the results of a survey questionnaire distributed to more than 600 households in Liaoning Province, field research at various Liaoning government agencies, and research interviews of Liaoning government officials to determine the efficacy of their energy efficiency efforts in China. It then investigates the extent that electricity consumers have taken advantage of energy efficiency opportunities relating to more efficient lights, water heaters, appliances, air-conditioners and heaters, and better energy-efficiency labels. The article also assesses the degree that electricity users have become more aware about electricity prices and their levels of consumption, and touches on the connection between rising levels of income and electricity use. It concludes by providing recommendations for how to improve efforts to promote conservation and reduce electricity load growth in Liaoning Province and beyond.     

An analysis of long-term scenarios for the transition to renewable energy in the Korean electricity sector

This paper analyzes the energy, environmental and economic influences of three electricity scenarios in Korea by 2050 using the “Long-range Energy Alternatives Planning system” (LEAP) model. The reference year was 2008. Scenarios include the baseline (BL), new governmental policy (GP) and sustainable society (SS) scenarios. The growth rate of electricity demand in the GP scenario was higher than that of the BL scenario while the growth rate in the SS scenario was lower than that of the BL scenario.Greenhouse gas emissions from electricity generation in 2050 in the BL and GP scenarios were similar with current emissions. However, emissions in 2050 in the SS scenario were about 80% lower than emissions in 2008, because of the expansion of renewable electricity in spite of the phase-out of nuclear energy.While nuclear and coal-fired power plants accounted for most of the electricity generated in the BL and GP scenarios in 2050, the SS scenario projected that renewable energy would generate the most electricity in 2050. It was found that the discounted cumulative costs from 2009 to 2050 in the SS scenario would be 20 and 10% higher than that of the BL and GP scenarios, respectively.     

Adoption of energy efficient technologies and carbon abatement: the electricity generating sector in India

A behavioral micro-economic framework was developed to analyze the impact of alternative mixes of policy reforms that eliminate existing regulatory distortions and a carbon emissions-tax on incentives to adopt energy efficient technologies and their implications for carbon emissions and output. An empirical application of this framework to the electricity-generating sector in India demonstrates that elimination of existing domestic and trade policy distortions has the potential to reduce carbon emissions even in the absence of an emissions-tax, by inducing the adoption of energy efficient technologies. In the presence of these policy reforms, an emissions-tax achieves a given level of abatement with higher output levels than in the absence of these reforms. This analysis indicates the potential for achieving a complementarity between the goals of reducing carbon emissions and increasing electricity generation by identifying the regulatory distortions that are hindering adoption of energy efficient technologies and tailoring policy reforms to specific distortions.     

Modelling and simulation of a distributed power generation system with energy storage to meet dynamic household electricity demand

Electrical consumption in a household is not stable but changeable in one day throughout a whole year. The consumption depends on weather, seasons and users. This characteristic of demand makes it difficult to design and build a distributed power generation system to meet the demand for a household. For this reason, a stand-alone distributed power generation system (DPGS) needs to be carefully designed not only to meet the dynamic household electricity demand, but also to be economical. Hence, for a DPGS, it is essential to utilise electrical energy storage (EES) unit to store the excessive energy while power generation is running at off-peak time; and then the EES may supply the stored energy during the peak demand period. This study investigates a distributed power generation system with an electric energy storage unit to meet the dynamic electricity demand in a household. The system composes of one diesel-engine-generator (DG) running with biofuel; a fuel cell; integrated with an energy storage unit including a supercapacitor and a group of batteries. Models have been set up in Dymola software and two different system configurations are proposed and simulated. The characteristics of the integrated DPGS–EES system are presented and discussed. The results show that both configurations are working properly to meet the demand.     

A statistical approach to the determination of energy savings in a solar-assisted water-heating system

A method of determining the cost benefits of a flat-plate solar-energy collector system used for domestic hot-water preheat is reported. Because the method obviates the need for a non-solar heated control comparison and does not call for any temperature logging within the system it is ideally suited to existing installations. The method relies on a statistical analysis of readily-available data and has been applied to assess the savings made in a number of flats within an Edinburgh tenement block. Several different combinations of data inputs may be used with varying degrees of reliability in the results.     

Applying portfolio theory to the electricity sector: Energy versus power

Portfolio theory has found its way in numerous applications for optimizing the electricity generation mix of a particular region. Existing models, however, consider typically a single time period and correspondingly do not properly account for actual dispatch constraints and energy sources with a non-dispatchable, variable output. This paper presents a portfolio theory model that explicitly distinguishes between installed capacity (power), electricity generation (energy) and actual instantaneous power delivery. This way, the variability of wind power and ramp limits of conventional power plants are correctly included in the investment optimization. The model is written as a quadratically constrained programming problem and illustrated in a case study. The results show that the introduction of wind power can be motivated to lower the risk on generation cost, albeit to smaller levels than typically reported in the literature. This wind power deployment further requires the need for sufficiently rampable technologies, to deal with its fluctuating output.     

Rewarding energy savings rather than energy efficiency: Exploring the concept of a feed-in tariff for energy savings

Financial incentives are important for overcoming certain market barriers to improved energy efficiency and for the adoption of energy efficient technologies. Financial incentives are mainly focused on the introduction of specific technologies, rather than behavioural change. While the declared goal of financial support schemes very often is to save energy or reduce harmful emissions rather than to foster new technologies per se, it is often encountered that such financial support for energy efficient technologies may not ensure real energy savings due to the rebound effect and various market barriers.In the area of renewable energies it is common for financial support to be given to power producers for the verified production of renewable electricity, in the form of a guaranteed financial incentive (feed-in tariff). In the energy efficiency policy research little attention has been paid to the possible use of a “feed-in tariff” in the form of a financial incentive based on the kWh saved by the end-user. This paper discusses the possible setup of a feed-in tariff designed to reward energy savings.     

Looking into the Danish energy system: Lesson to be learned by other communities

Industrialization, development and social transformation has brought together issues of over exploitation of limited energy resource base (e.g. fossil fuel), accelerated threats of energy insecurity, and liberation of greenhouse gas emissions across the continents. The global challenge for the 21st century and way ahead is to find other means of satisfying energy needs, diversifying the energy supply, up-scaling the make-up of renewable energy to a greater extent, optimization of energy consumption and supply system. Denmark has been continuously moving towards optimization of energy production, usage and its overall management, during and even after the first global oil crisis. The country has been delivering its priority in the development of renewable energy and standing the country an energy self sufficient from last three decades. Country's overall consumption of energy has decreased than that of the decades of 1980 and 1990s, with wider range of energy mix and saving options. The Danish government has strategized to make the country fossil fuel free by 2050, where special attention and interventions is required to boost up its development of renewable energy in the country. The past efforts of the Danish government in the energy development has helped not only making the country ‘energy self sufficient’, but also lowering the level of carbon dioxide in the atmosphere. Danish energy policy and strategies have been found more conducive and reflective of the joint EU priorities on the matter of dealing with climate change and energy security. All the past progress and its allied policies seem to be quite supportive in fulfilling its strategies for greener future. This review paper will discuss on the past efforts of Danish government in energy management and highlights on some political initiatives, which have been realised to support the country moving towards clean and green energy future.     

Assessment of energy savings from the revised building energy code of Thailand

The government of Thailand legislated an Energy Conservation Promotion Act (ECP Act) in 1992 and set bye-laws that identify designated buildings (DBs) and detail mandatory requirements for energy conservation for DBs in 1995. An Energy Conservation Promotion Fund (ENCON Fund) was also created to fund energy audits on 1900 DBs. Recently the requirements and procedures for energy conservation in buildings have been revised where system performance requirements for building envelope, lighting, air-conditioning, and hot water generation are adopted. Moreover, the new building energy code (BEC) distinguishes different categories of DBs, provides credit for use of solar energy, and introduces a new option of whole building energy compliance. The authors develop building models from data obtained from energy audit reports and use them to estimate savings on energy and peak demand from future new buildings using forecasted energy and peak demand data from the Load Forecast Subcommittee, a panel tasked to forecast future electric load of Thailand. From a modest level of energy saving in the first year that the code is expected to be enforced, the level of saving rise to over 10% and 20% annually of requirement of target buildings in 6 and 12 years respectively.     

Carbon emission flow: from electricity network to multiple energy systems

Anthropogenic carbon emissions associated with energy consumption are rapidly increasing. Such carbon emissions are further directly related to global climate change. Thus, reducing carbon emissions to mitigate global climate change has been attracting increasing attention. Energy production and energy consumption is linked by energy networks. The network-constrained energy flow leads to a virtual circulation of embedded carbon emissions. This paper introduces the concept and significance of carbon emission flow (CEF), which helps identify the relationship between carbon emissions and energy consumption. Challenges for extending the CEF from an electricity network to multiple energy systems (MES) are analyzed, and CEF models in both the electricity network and MES are summarized. The distribution of CEF and transfer of carbon emissions are studied using realistic case studies based on the energy interconnection system of Southeast Asia and real-world MES in the Jing-Jin-Ji economic circle. Considering the electricity trade in Southeast Asia in 2050, the results show that significant amounts of carbon emissions are transferred among countries. Approximately 19698 ktCO₂ of carbon emissions in Malaysia are attributable to electricity demands of other countries. Conversely, the Philippines and Vietnam would be responsible for additional carbon emissions of 10620 ktCO₂ and 42375 ktCO₂, respectively. With the CEF model, carbon emissions in different energy sectors can be reasonably quantified, thus facilitating the allocation of emission reduction targets in climate change negotiations and low-carbon policymaking.     

Heat Roadmap Europe: Combining district heating with heat savings to decarbonise the EU energy system

Six different strategies have recently been proposed for the European Union (EU) energy system in the European Commission's report, Energy Roadmap 2050. The objective for these strategies is to identify how the EU can reach its target of an 80% reduction in annual greenhouse gas emissions in 2050 compared to 1990 levels. None of these scenarios involve the large-scale implementation of district heating, but instead they focus on the electrification of the heating sector (primarily using heat pumps) and/or the large-scale implementation of electricity and heat savings. In this paper, the potential for district heating in the EU between now and 2050 is identified, based on extensive and detailed mapping of the EU heat demand and various supply options. Subsequently, a new ‘district heating plus heat savings’ scenario is technically and economically assessed from an energy systems perspective. The results indicate that with district heating, the EU energy system will be able to achieve the same reductions in primary energy supply and carbon dioxide emissions as the existing alternatives proposed. However, with district heating these goals can be achieved at a lower cost, with heating and cooling costs reduced by approximately 15%.     

Assessment of demand for natural gas from the electricity sector in India

Electricity sector is among the key users of natural gas. The sustained electricity deficit and environment policies have added to an already rising demand for gas. This paper tries to understand gas demand in future from electricity sector. This paper models the future demand for gas in India from the electricity sector under alternative scenarios for the period 2005–2025, using bottom-up ANSWER MARKAL model. The scenarios are differentiated by alternate economic growth projections and policies related to coal reforms, infrastructure choices and local environment. The results across scenarios show that gas competes with coal as a base-load option if price difference is below US $ 4 per MBtu. At higher price difference gas penetrates only the peak power market. Gas demand is lower in the high economic growth scenario, since electricity sector is more flexible in substitution of primary energy. Gas demand reduces also in cases when coal supply curve shifts rightwards such as under coal reforms and coal-by-wire scenarios. Local environmental (SO₂ emissions) control promotes end of pipe solutions flue gas de-sulfurisation (FGD) initially, though in the longer term mitigation happens by fuel substitution (coal by gas) and introduction of clean coal technologies integrated gasification combined cycle (IGCC).