District heating and energy efficiency in detached houses of differing size and construction

House envelope measures and conversion of heating systems can reduce primary energy use and CO₂ emission in the existing Swedish building stock. We analysed how the size and construction of electrically heated detached houses affect the potential for such measures and the potential for cogenerated district heating. Our starting point was two typical houses built in the 1970s. We altered the floor plans to obtain 6 houses, with heated floor space ranging between 100 and 306 m². One of the houses was also analysed for three energy standards with differing heat loss rates. CO₂ emission, primary energy use and heating cost were estimated after implementing house envelope measures, conversions to other heating systems and changes in the generation of district heat and electricity. The study accounted for primary energy, including energy chains from natural resources to useful heat in the houses. We showed that conversion to district heating based on biomass, together with house envelope measures, reduced the primary energy use by 88% and the CO₂ emission by 96%, while reducing the annual societal cost by 7%. The choice of end-use heating system was decisive for the primary energy use, with district heating being the most efficient. Neither house size nor energy standard did significantly change the ranking of the heating systems, either from a primary energy or an economic viewpoint, but did affect the extent of the annual cost reduction after implementing the measures.     

Economic potential of energy-efficient retrofitting in the Swiss residential building sector: The effects of policy instruments and energy price expectations

The aim of this paper is to analyse the profitability of energy-efficient retrofit investments in the Swiss residential building sector from the house owner's perspective. Different energy price expectations, policy instruments such as subsidies, income tax deduction and a carbon tax, as well as potential future cost degression of energy efficiency measures were taken into account. The discounted cash flow method was used for the investment analysis of different retrofit packages applied to a model building scheduled for renovation, i.e. a single-family house constructed between 1948 and 1975. The results show that present Swiss policy instruments push investments for energy-efficient retrofitting to profitability. Cost degression has a minor significance for investment profitability. However, the most relevant factor for the investment analysis is the expected energy price. Expecting a future fuel oil price at the level of 2005, efficiency investments are close to profitability even without policy support. If higher energy prices were expected, energy-efficient retrofitting would be an attractive investment opportunity.     

White Certificates for energy efficiency improvement with energy taxes: A theoretical economic model

In this paper we analyze interactions of two energy policy instruments, namely a White Certificates (WhC) scheme as an innovative policy instrument for energy efficiency improvement and energy taxation. These policy instruments differ in terms of objectives and final impacts on the price of electricity. We examine the effect of these policy instruments in the electricity sector, focusing on electricity producers and suppliers in a competitive market. Using microeconomic theory, we identify synergies between market players and demonstrate the total effect on the electricity price when suppliers internalize the behaviour of producers in their decisions. This model refers to an ideal market situation of full liberalization. The cases we examine consist of electricity producers with and without a carbon tax, electricity suppliers with and without an electricity tax, and with WhC obligations. Furthermore, we present a parallel implementation of WhC for electricity suppliers with carbon tax on electricity producers and an electricity tax with WhC obligations to electricity suppliers. We demonstrate differences in optimization behaviour of producers and suppliers. Based on a couple of cases of WhC with carbon and electricity taxes, various positive and negative effects of both schemes in terms of target achievement and efficiency are present, which can lead to an added value of such schemes in the policy mix, although uncertainties of outcomes are quite high. A basic finding is that in a merit order several parameters can increase final electricity price after the implementation of different policies: demand for electricity and electricity supply cost at a large scale and then follow the level of level of obligation for energy saving, level of penalty, and price of WhC (representing the marginal costs of energy saving projects). The impact magnitude of parameters depends on the values chosen and on the initial position of suppliers (i.e. if their actual behaviour deviates from full compliance with targets).     

Energy efficiency measures and conversion of fossil fuel boiler systems in a detached house

There is a large potential to reduce primary energy use and CO₂ emissions from the Swedish building stock. Here detached houses heated by oil, natural gas or electric boilers were assessed. CO₂ emissions, primary energy use and heating costs were evaluated before and after implementing house envelope measures, conversions to more efficient heating systems and changes to biomass fuel use. The study included full energy chains, from natural resources to usable heat in the houses. The aim was to evaluate the societal economic cost effectiveness of reducing CO₂ emission and primary energy use by different combinations of changes. The results demonstrated that for a house using an electric boiler, a conversion to a heat pump combined with house envelope measures could be cost efficient from a societal economic perspective. If the electricity was based on biomass, the primary energy use was at the same time reduced by 70% and the CO₂ emission by 97%. Large emission reductions were also seen for conversions from oil and gas boilers to a biomass-based system. However, for these conversions the heating cost increased, leading to a mitigation cost of around €50/tonne C avoided. The price of oil and natural gas greatly influenced the competitiveness of the alternatives. House envelope measures were more cost-effective for houses with electric boilers as the cost of energy for this system is high. The results are specific to a Swedish context, but also give an indication of the potential in other regions, such as northern European and large parts of North America, which have both a cold climate and a widespread use of domestic boilers.     

Avoiding adverse employment effects from electricity taxation in Norway: What does it cost?

Welfare analyses of energy taxes typically show that systems with uniform rates perform better than differentiated systems. However, most western countries include some exemptions for their energy-intensive export industries and thereby avoid this potential welfare gain. Böhringer and Rutherford (1997) find that uniform taxation of carbon emissions in combination with a wage subsidy preserves jobs in these industries at a lower welfare cost compared with a differentiated system. The wage subsidy scheme generates a substantial welfare gain per job saved. This study, however, finds that welfare costs are substantial when less accurate policy measures, represented by production-dependent subsidies, protect jobs in Norwegian electricity-intensive industries. The welfare cost per job preserved by this subsidy scheme amounts to approximately 60% of the wage cost per job, suggesting that these jobs are expensive to preserve. A uniform electricity tax combined with production-dependent subsidies preserves jobs at a lower welfare cost compared with the current differentiated electricity tax system.     

Factors influencing energy efficiency investments in existing Swedish residential buildings

We used the data from a survey conducted in 2008 of 3,000 owners of detached houses to analyse the factors that influence the adoption of investment measures to improve the energy efficiency of their buildings. For the majority of Swedish homeowners, it was important to reduce their household energy use, and most of them undertook no-cost measures as compared to investment measures. Personal attributes such as income, education, age and contextual factors, including age of the house, thermal discomfort, past investment, and perceived energy cost, influence homeowners’ preference for a particular type of energy efficiency measure. The implications for promoting the implementation of energy efficiency investment measures are discussed.     

Are green hopes too rosy? Employment and welfare impacts of renewable energy promotion

In view of pressing unemployment problems, policy makers across all parties jump on the prospects of renewable energy promotion as a job creation engine which can boost economic well-being. Our analytical model shows that initial labor market rigidities in theory provide some scope for such a double dividend. However, the practical outcome of renewable energy promotion might be sobering. Our computable general equilibrium analysis of subsidized electricity production from renewable energy sources (RES-E) in Germany suggests that the prospects for employment and welfare gains are quite limited and hinge crucially on the level of the subsidy rate and the financing mechanism. If RES-E subsidies are financed by labor taxes, welfare and employment effects are strictly negative for a broad range of subsidy rates. The use of an electricity tax to fund RES-E subsidies generates minor benefits for small subsidy rates but these benefits quickly turn into significant losses as the subsidy rate exceeds some threshold value.     

Supplementing an emissions tax by a feed-in tariff for renewable electricity to address learning spillovers

In the presence of learning spillovers related to renewable energy technologies, an optimal strategy to mitigate climate change should complement an emissions tax by a subsidy for renewables. This article addresses the question how such subsidy should be designed. It is shown that the widely-used approach of a revenue-neutral fixed feed-in tariff can yield an optimal outcome under restrictive conditions only. It has to be adapted continuously as the electricity price changes. Moreover, funding the tariff by a surcharge on the electricity price has important implications for the design of the emission tax. The optimal tax rate has to be below the Pigovian level, differentiated across fossil fuels and adapted over time as the patterns of technological development change. These requirements may pose a formidable challenge for practical decision-making. However, it is important to point out that the eventual choices made with respect to the design and funding of a feed-in tariff have to be based on a careful and more comprehensive policy assessment, including, inter alia, economic effects beyond the electricity sector and existing institutional constraints.     

Diverting indirect subsidies from the nuclear industry to the photovoltaic industry: Energy and financial returns

Nuclear power and solar photovoltaic energy conversion often compete for policy support that governs economic viability. This paper compares current subsidization of the nuclear industry with providing equivalent support to manufacturing photovoltaic modules. Current U.S. indirect nuclear insurance subsidies are reviewed and the power, energy and financial outcomes of this indirect subsidy are compared to equivalent amounts for indirect subsidies (loan guarantees) for photovoltaic manufacturing using a model that holds economic values constant for clarity. The preliminary analysis indicates that if only this one relatively ignored indirect subsidy for nuclear power was diverted to photovoltaic manufacturing, it would result in more installed power and more energy produced by mid-century. By 2110 cumulative electricity output of solar would provide an additional 48,600 TWh over nuclear worth $5.3 trillion. The results clearly show that not only does the indirect insurance liability subsidy play a significant factor for nuclear industry, but also how the transfer of such an indirect subsidy from the nuclear to photovoltaic industry would result in more energy over the life cycle of the technologies.     

Enhancing public acceptance of renewable heat obligation policies in South Korea: Consumer preferences and policy implications

Renewable heat obligation (RHO) policies have continued to attract global attention, and the South Korean government plans to start enforcing these policies in 2016. To ensure the effectiveness of RHO policies, various preferences of stakeholders, including end users, should be considered in policy development because their benefits and costs can vary according to their level of obligation. A choice experiment was conducted to analyze the preferences of end users for two types of RHO policies: one aimed at heat suppliers and the other at building owners. The results indicate the necessity to focus on costs when designing RHO policies because this element was the most important factor influencing the public's acceptance of these policies and suggest that, for RHO policies aimed at heat suppliers, the government should convince end users of the stability of the heat supply, a factor considered to be important by consumers. Finally, the minimum level of the subsidy required to gain public approval of both types of RHO was examined. The annual government subsidies for the RHO for heating suppliers is expected to be KRW 330 billion, which can be covered by collecting taxes from those consumers not subject to these obligations. The results for RHOs for building owners indicate KRW 900 billion to 1.8 trillion as the amount of subsidy spending required of the government.     

Financial return for government support of large-scale thin-film solar photovoltaic manufacturing in Canada

As the Ontario government has recognized that solar photovoltaic (PV) energy conversion is a solution to satisfying energy demands while reducing the adverse anthropogenic impacts on the global environment that compromise social welfare, it has begun to generate policy to support financial incentives for PV. This paper provides a financial analysis for investment in a 1 GW per year turnkey amorphous silicon PV manufacturing plant. The financial benefits for both the provincial and federal governments were quantified for: (i) full construction subsidy, (ii) construction subsidy and sale, (iii) partially subsidize construction, (iv) a publicly owned plant, (v) loan guarantee for construction, and (vi) an income tax holiday. Revenues for the governments are derived from: taxation (personal, corporate, and sales), sales of panels in Ontario, and saved health, environmental and economic costs associated with offsetting coal-fired electricity. Both governments enjoyed positive cash flows from these investments in less than 12 years and in many of the scenarios both governments earned well over 8% on investments from 100 s of millions to $2.4 billion. The results showed that it is in the financial best interest of both the Ontario and Canadian federal governments to implement aggressive fiscal policy to support large-scale PV manufacturing.     

How building users can contribute to greenhouse-gas emission reductions in Finland: comparative study of standard technical measures,user modifications and behavioural measures

The residential sector is responsible for a considerable share of global greenhouse-gas emissions. In cold climates, space heating and energy-efficiency improvements are critical. Solutions can be off-the-shelf technologies, user modifications to adapt such technologies to local needs or behavioural measures. This paper conducts carbon footprint and profitability analyses of 20 such measures, including conventional technical measures, user modifications and behavioural changes in Finland. The study focuses on detached houses that have the most common heating system in the Finnish context—direct electricity, which is particularly problematic because it limits the options for improvement. The results show that the largest energy and emission savings resulted from heat pump installations and adding insulation to the roof. The most profitable measures were related to heat pumps. Some of the user modifications appeared promising in both respects.     

Competition between biomass and food production in the presence of energy policies: a partial equilibrium analysis

Bioenergy has several advantages over fossil fuels. For example, it delivers energy at low net CO₂ emission levels and contributes to sustaining future energy supplies. The concern, however, is that an increase in biomass plantations will reduce the land available for agricultural production. The aim of this study is to investigate the effect of taxing conventional electricity production or carbon use in combination with subsidizing biomass or bioelectricity production on the production of biomass and agricultural commodities and on the share of bioelectricity in total electricity production. We develop a partial equilibrium model to illustrate some of the potential impacts of these policies on greenhouse gas emissions, land reallocation and food and electricity prices. As a case study, we use data for Poland, which has a large potential for biomass production. Results show that combining a conventional electricity tax of 10% with a 25% subsidy on bioelectricity production increases the share of bioelectricity to 7.5%. Under this policy regime, biomass as well as agricultural production increase. A carbon tax that gives equal net tax yields, has better environmental results, however, at higher welfare costs and resulting in 1% to 4% reduction of agricultural production.     

Meeting residential space heating demand with wind-generated electricity

Worldwide, many electricity suppliers are faced with the challenge of trying to integrate intermittent renewables, notably wind, into their energy mix to meet the needs of those services that require a continuous supply of electricity. Solutions to intermittency include the use of rapid-response backup generation and chemical or mechanical storage of electricity. Meanwhile, in many jurisdictions with lengthy heating seasons, finding secure and preferably environmentally benign supplies of energy for space heating is also becoming a significant challenge because of volatile energy markets.Most, if not all, electricity suppliers treat these twin challenges as separate issues: supply (integrating intermittent renewables) and demand (electric space heating). However, if space heating demand can be met from an intermittent supply of electricity, then both of these issues can be addressed simultaneously. One such approach is to use off-the-shelf electric thermal storage systems.This paper examines the potential of this approach by applying the output from a 5.15 MW wind farm to the residential heating demands of detached households in the Canadian province of Prince Edward Island. The paper shows that for the heating season considered, up to 500 households could have over 95 percent of their space heating demand met from the wind farm in question. The benefits as well as the limitations of the approach are discussed in detail.     

Modeling,analysis and control system development for the Italian hydrogen house

This paper provides an analysis of the “Hydrogen from the Sun” project at the “Ecological House” in northern Italy. The modeling and analysis work is being performed in conjunction with the International Energy Agency Hydrogen Implementing Agreement Annex 18: Integrated Systems Evaluation. A customized library of Matlab/Simulink component models is used to simulate the system and evaluate the hydrogen economics and energy production efficiencies. Two control algorithms are developed for the house using a fuzzy logic and an adaptive control strategy. The economic and steady state effects of these two strategies are compared as are the energy sources used to supply the energy demand of the house. The hydrogen production system consists of an electrolyzer, a photo-voltaic collector, and a battery, linked to both a metal hydride and high pressure gas storage system. The hydrogen supplies a fuel cell, which powers a residential estate. The analysis shows the contribution of the different system components to the overall efficiency and cost of hydrogen. However, the control systems presented also have a significant effect on the hydrogen and electricity cost. Reduction of these costs and an increase in system efficiency require optimal use of the hydrogen stored, as well as the optimized distribution of power supply from the generating components. The analysis shows the initial cost of hydrogen to be 9.36 $/kg, with electricity produced at 0.65 $/kWh using a fuzzy logic control system at an electrical efficiency of 50% (of the full hydrogen house system), based on the lower heating value of hydrogen. The result of using an active control strategy is presented.     

Impacts of residential electricity subsidy reform in China

China’s rapid economic growth causes a sharp increase in the demand for electricity. Electricity price in China is generally controlled at a low level by the government, leading to a substantial electricity subsidy. Electricity subsidy is the focus of energy price reform. It is also most closely linked with residential life and is a very sensitive issue to residents. This paper adopts the price-gap approach to estimate the scale of electricity subsidy and finds that in 2010, residential electricity subsidy in China amounted to 467.17 billion CNY (Chinese yuan), accounting for 1.17 % of GDP in that year. Subsequently, the paper estimates the impacts of residential electricity subsidy reform on the welfare of residents using the compensating variation (CV) measurement. The results show that if residential electricity price rises by 50, 100, 150, and 191 %, the CV should be 288.5, 394.2, 451.1, and 467.2 billion CNY, respectively. The residential electricity subsidy reform also has a moderating role in the rebound effect of electricity consumption. The direct rebound effect in China’s residential electricity consumption is 20 %. Electricity subsidy reform will raise terminal electricity price and restrain residential electricity consumption. Therefore, electricity subsidy reform should be an effective measure to mitigate the rebound effect.     

Pricing district heating by marginal cost

A vital measure for industries when redirecting the energy systems towards sustainability is conversion from electricity to district heating (DH). This conversion can be achieved for example, by replacing electrical heating with DH and compression cooling with heat-driven absorption cooling. Conversion to DH must, however, always be an economically attractive choice for an industry. In this paper the effects for industries and the local DH supplier are analysed when pricing DH by marginal cost in combination with industrial energy efficiency measures. Energy audits have shown that the analysed industries can reduce their annual electricity use by 30% and increase the use of DH by 56%. When marginal costs are applied as DH tariffs and the industrial energy efficiency measures are implemented, the industrial energy costs can be reduced by 17%. When implementing the industrial energy efficiency measures and also considering a utility investment in the local energy system, the local DH supplier has a potential to reduce the total energy system cost by 1.6 million EUR. Global carbon dioxide emissions can be reduced by 25,000 tonnes if the industrial energy efficiency measures are implemented and when coal-condensing power is assumed to be the marginal electricity source.     

Cost-benefit analysis of domestic energy efficiency

There are a number of driving forces behind energy efficiency. In recent times, the Kyoto Protocol has been the most prominent in bringing energy efficiency to the fore. In some countries, the domestic sector has been highlighted as an area which has a significant potential for improvement. However, prior to the implementation of large-scale energy-efficiency programmes, it is important to evaluate whether they make economic sense. Heretofore, most economic evaluations of energy-efficiency programmes have concentrated purely on the associated costs of the programmes and the energy savings that result. At best, reductions in environmental benefits are also estimated, but rarely are other benefits calculated, such as increases in the levels of household comfort and improvements in human health. This paper endeavours to provide a template for ex ante economic evaluations of domestic energy-efficiency programmes. A comprehensive cost–benefit analysis of a programme to retrofit various energy-efficiency technologies and heating upgrades to the Irish dwelling stock is taken as a case study. The study demonstrates how energy savings, environmental benefits, and health and comfort improvements may be assessed. In so doing, it provides insights into the methodological difficulties and solutions for assessing the social efficiency of large-scale domestic energy-conservation projects.     

Government regulation and associated innovations in building energy-efficiency supervisory systems for large-scale public buildings in a market economy

The supervision of energy efficiency in government office buildings and large-scale public buildings is the main embodiment for government implementation of Public Administration in the fields of resource saving and environmental protection. Aimed at improving the current situation of lack of government administration in building energy efficiency, this paper proposes the concept of “change and redesign of governmental supervision in building energy efficiency”, repositioning the role of government supervision. Based on this theory and other related theories in regulation economic and modern management, this paper analyzes and researches the action and function of all level governments in execution of the supervisory system of building energy efficiency in government office buildings and large-scale public buildings. This paper also defines the importance of government supervision in energy-efficiency system. Finally, this paper analyzes and researches the interaction mechanism between government and owners of different type buildings, government and energy-efficiency service institution with gambling as main features. This paper also presents some measurements to achieve a common benefit community in implementation of building energy-efficiency supervisory system.     

Potential of building-scale alternative energy to alleviate risk from the future price of energy

The energy used for building operations, the associated greenhouse gas emissions, and the uncertainties in future price of natural gas and electricity can be a cause of concern for building owners and policy makers. In this work we explore the potential of building-scale alternative energy technologies to reduce demand and emissions while also shielding building owners from the risks associated with fluctuations in the price of natural gas and grid electricity. We analyze the monetary costs and benefits over the life cycle of five technologies (photovoltaic and wind electricity generation, solar air and water heating, and ground source heat pumps) over three audience or building types (homeowners, small businesses, large commercial and institutional entities). The analysis includes a Monte Carlo analysis to measure risk that can be compared to other investment opportunities. The results indicate that under government incentives and climate of Toronto, Canada, the returns are relatively high for small degrees of risks for a number of technologies. Ground source heat pumps prove to be exceptionally good investments in terms of their energy savings, emission, reductions, and economics, while the bigger buildings tend also to be better economic choices for the use of these technologies.