The effect of energy end-use efficiency improvement on China’s energy use and CO2 emissions: a CGE model-based analysis

With its rapid economic growth, China is now confronted with soaring pressure from both its energy supply and the environment. To deal with this conflict, energy end-use efficiency improvement is now promoted by the government as an emphasis for future energy saving. This study explores the general equilibrium effect of energy end-use efficiency improvement on China’s economy, energy use, and CO₂ emissions. This paper develops a static, multisector computable general equilibrium model (CGE) for China, with specific detail in energy use and with the embodiment of energy efficiency. In order to explore the ability of subsidizing non-fossil-generated electricity on moderating potential rebound effects, in this model, the electricity sector was deconstructed into five specific generation activities using bottom–up data from the Chinese electricity industry. The model is calibrated into a 16-sector Chinese Social Accounting Matrix for the year 2002. In the analysis, seven scenarios were established: business as usual, solely efficiency improvement, and five policy scenarios (taxing carbon, subsidized hydropower, subsidized nuclear power, combination of taxing carbon and subsidized hydropower, combination of taxing carbon and subsidized nuclear power). Results show that a sectoral-uniform improvement of energy end-use efficiency will increase rather than decrease the total energy consumption and CO₂ emissions. The sensitivity analysis of sectoral efficiency improvement shows that efficiency improvements happened in different sectors may have obvious different extents of rebound. The three sectors, whose efficient improvements do not drive-up total national energy use and CO₂ emissions, include Iron and Steel, Building Materials, and Construction. Thus, the improvement of energy end-use efficiency should be sectoral specific. When differentiating the sectoral energy-saving goal, not only the saving potential of each sector but also its potential to ease the total rebound should be taken into account. Moreover, since the potential efficiency improvement for a sector over a certain period will be limited, technology measures should work along with a specific policy to neutralize the rebound effect. Results of policy analysis show that one relatively enhanced way is to combine carbon taxing with subsidized hydropower.     

On the potential trade-offs between energy supply and end-use technologies for residential heating

In Sweden, where district heating accounts for a significant share of residential heating, it has been argued that improvements in end-use energy efficiency may be counter-productive since such measures reduce the potential of energy efficient combined heat and power production. In this paper we model how the potential trade-offs between energy supply and end-use technologies depend on climate policy and energy prices. The model optimizes a combination of energy efficiency measures, technologies and fuels for heat supply and district heating extensions over a 50 year period. We ask under what circumstances improved end-use efficiency may be cost-effective in buildings connected to district heating? The answer hinges on the available technologies for electricity production. In a scenario with no alternatives to basic condensing electricity production, high CO₂ prices result in very high electricity prices, high profitability of combined heat and power production, and little incentive to reduce heat demand in buildings with district heating. In contrast, in a scenario where electricity production alternatives with low CO₂ emissions are available, the electricity price will level out at high CO₂ prices. This gives heat prices that increase with the CO₂ price and make end-use efficiency cost-effective also in buildings with district heating.     

Identifying electricity-saving potential in rural China: Empirical evidence from a household survey

In recent years, there has been a fast-growing body of literature examining energy-saving potential in relation to electricity. However, empirical studies focusing on non-Western nations are limited. To fill this gap, this study intends to examine the electricity-saving potential of rural households in China using a unique data set from the China Residential Electricity Consumption Survey (CRECS) in collaboration with the China General Social Survey (CGSS), conducted nationwide at the household level in rural China. We use a stochastic frontier model, which allows us to decompose residential electricity consumption into the minimum necessary amount of consumption based on physical characteristics (e.g. house size, house age, number of televisions or refrigerators) and estimate the consumption slack (i.e. the amount of electricity consumption that could be saved), which depends on various factors. We find that rural households in China are generally efficient in electricity saving and the saving potential is affected by (fast) information feedback and social-demographic characteristics, instead of by the (averaged) electricity price, or energy efficiency labelling signals. In addition, we find no evidence of regional heterogeneity on electricity saving potential for rural households. Policy implications are derived.     

Analysis of CO2 emissions reduction potential in secondary production and semi-fabrication of non-ferrous metals

Industrial sector growth in developing countries requires the provision of alternatives to guarantee sustainable development. Improving energy efficiency and fuel switching are two measures to reduce CO₂ emissions in the industrial sector, with natural gas and low-carbon electricity as the most feasible options in the short term. In this work, a linear programming optimization model has been developed to study the potential of energy efficiency improvement and fuel substitution for CO₂ emissions reduction, at national level in the non-ferrous metals industry. The energy resource/end-use device allocation problem in secondary metal production and semi-fabrication has been modeled. Using this model, the particular case of Colombia, where low-carbon electricity is available, has been studied. By improving energy efficiency, energy use and CO₂ emissions can be reduced significantly, 73% and 72%, respectively, at negative costs. Further CO₂ emissions reductions, up to 88%, are possible with fuel switching to low-carbon electricity, increasing the costs for the energy system; however, cost reductions caused by energy efficiency improvement outweigh cost increments of fuel switching. Benefits achieved with fuel substitution using low-carbon electricity can be lost if hydropower is not available; in such a case, efficient natural gas-fired end-use devices are preferable.     

Energy efficiency standards for refrigerators in Brazil: A methodology for impact evaluation

In Brazil energy efficiency standards for cold appliances was established in 2007. A specified single set of MEPS (minimum energy performance standards) for refrigerators, freezers and freezer refrigerators was implemented without evaluating its impacts and estimation of potential electricity savings. This paper presents a methodology for assessing the impacts of the Brazilian MEPS for cold appliances. It uses a bottom-up approach to estimate residential end-use consumption and to evaluate the energy saving potential for refrigerators. The household electricity consumption is projected by modeling appliance ownership using an econometric approach based on the recent household survey data. A cost–benefit analysis for more stringent standards is presented from the perspective of the society and electricity customers. The results showed that even considering the current market conditions (high discount rate for financing new efficient equipment) some MEPS options are advantageous for customers. The analysis also demonstrates significant cost-effective saving potential from the society perspective that could reach 21 TWh throughout the period of 2010–2030—about 25% of current residential consumption.     

Long term climate change mitigation goals under the nuclear phase out policy: The Swiss energy system transition

The Swiss electricity system is dominated by low-carbon hydro and nuclear generation. The Government's decision to phase-out nuclear energy exacerbates Switzerland's climate change mitigation goals. Response to this challenge requires systemic changes to the energy system, which is generally a long-term, uncertain and systemic process, affected by technology choices across the entire energy system. A comprehensive Swiss TIMES Energy system Model (STEM) with high temporal detail has been developed for the analysis of plausible low-carbon energy pathways focusing on uncertainties related to policy (climate change mitigation and acceptability of new centralised electricity generation) and international fuel prices. Increasing electrification of end-uses is seen across the scenarios, resulting in continuous growth in electricity demands. The electrification of heating and e-mobility substitute direct use of fossil fuels in end-use sectors and contribute to a significant carbon dioxide emission (CO₂) reduction. Centralised gas power plants and renewables become key source of electricity supply. Given the phaseout of nuclear generation, clear policy signals are required to ensure capacity is built to achieve a low-carbon energy system. At the same time, it is also essential to ensure consistency between the electricity sector and end-use energy policies. For the long-term carbon reduction target, some non-cost-effective conservation measures are important early in the period because they are available only at the time of building renovation.     

Model projections for household energy use in India

Energy use in developing countries is heterogeneous across households. Present day global energy models are mostly too aggregate to account for this heterogeneity. Here, a bottom-up model for residential energy use that starts from key dynamic concepts on energy use in developing countries is presented and applied to India. Energy use and fuel choice is determined for five end-use functions (cooking, water heating, space heating, lighting and appliances) and for five different income quintiles in rural and urban areas. The paper specifically explores the consequences of different assumptions for income distribution and rural electrification on residential sector energy use and CO₂ emissions, finding that results are clearly sensitive to variations in these parameters. As a result of population and economic growth, total Indian residential energy use is expected to increase by around 65–75% in 2050 compared to 2005, but residential carbon emissions may increase by up to 9–10 times the 2005 level. While a more equal income distribution and rural electrification enhance the transition to commercial fuels and reduce poverty, there is a trade-off in terms of higher CO₂ emissions via increased electricity use.     

Efficiency improvement opportunities for personal computer monitors: implications for market transformation programs

Displays account for a significant portion of electricity consumed in personal computer (PC) use, and global PC monitor shipments are expected to continue to increase. We assess the market trends in the energy efficiency of PC monitors that are likely to occur without any additional policy intervention and estimate that PC monitor efficiency will likely improve by over 40 % by 2015 with saving potential of 4.5 TWh per year in 2015, compared to today's technology. We discuss various energy-efficiency improvement options and evaluate the cost-effectiveness of three of them, at least one of which improves efficiency by at least 20 % cost effectively beyond the ongoing market trends. We assess the potential for further improving efficiency taking into account the recent development of universal serial bus-powered liquid crystal display monitors and find that the current technology available and deployed in them has the potential to deeply and cost effectively reduce energy consumption by as much as 50 %. We provide insights for policies and programs that can be used to accelerate the adoption of efficient technologies to further capture global energy saving potential from PC monitors which we estimate to be 9.2 TWh per year in 2015.     

Unintended outcomes of electricity smart-metering: trading-off consumption and investment behaviour

Smart-metering allows electricity utilities to provide consumers with better information on their energy usage and to apply time-of-use pricing. These measures have been shown to reduce electricity consumption and induce time-shifting of demand. Less is known about how they affect residential energy efficiency investment behaviour. We use data from a randomised-controlled trial on a sample of almost 2500 Irish consumers, conducted over a 12-month period to investigate the effect of smart-metering and residential feedback on household investment behaviour. The results show that exposure to time-of-use pricing and information stimuli, while reducing overall and peak usage, can also have the unintended effect of reducing investment in energy efficiency measures within the home. Our findings indicate that households exposed to treatment were less likely to adopt any energy saving measure (23–28 % on average), and those households adopted less energy saving features than those in the control group (15–21 % on average). This result highlights the potential for behavioural interventions to have unintended consequences on behaviours other than those specifically targeted. Furthermore, it underlines the importance of examining a wider range of outcomes and allowing longer time-scales when evaluating this type of experiment.     

Assessment of long-term sustainable end-use energy demand in Romania*

Romania is the 10th largest economy in EU-28 and also one of the fastest growing economies in the region. An end-use energy demand model is developed for Romania to assess energy requirement by sector and by end-use for 2015–2050 period. Industry would surpass residential sector as the largest final energy-consuming sector from 2035 onwards. Services sector would exhibit the fastest growth of energy consumption. Despite expected decline in country’s population, demand for electricity would grow in the future driven by increased household income and expanded services sector, which is relatively electricity intensive. Still, Romania’s per capita electricity consumption would be about half of the EU-28 average. At the end-use level, thermal processes in industry, space heating in the residential and services, and road passenger travel in transport sector would be dominant throughout the study period. Improvement of energy efficiency in the heating system exhibits the highest potential of energy saving.     

Electricity and natural gas use for residential space heating: U.S. experience, 1976–1980

Energy consumption for residential space heating has been studied for households using electricity and natural gas, based on aggregate sales data for 1976–1980. The ratio of average end-use energy consumption with electricity to that with natural gas was found to be 0.44 ± 0.06, despite little use of electric heat pumps. Together with the results of other studies, this estimate suggests that electric space heating can be used in future construction without requiring more primary input energy (including generation losses) than the average input energy used for gas space heating in existing residences, assuming modest conservation measures. While these results do not establish the relative fuel consumption in future gas-heated and electrically-heated households, they do provide a rough ceiling on the amount of energy required if electricity is used.     

Energy efficiency,CO2 emission performance and technology gaps in fossil fuel electricity generation in Korea: A meta-frontier non-radial directional distance functionanalysis

This paper proposes a meta-frontier non-radial directional distance function to model energy and CO₂ emission performance in electricity generation. This approach allows for the consideration of the group heterogeneity of electricity generation, non-radial slacks, and undesirable outputs simultaneously. We extend several standardized indices to measure total-factor energy efficiency, CO₂ emission performance, and technology gaps in electricity generation. We estimate the potential reductions in energy use and CO₂ emissions under different technology assumptions. We conduct an empirical analysis of fossil fuel electricity generation in Korea by using the proposed approach. The results indicate that coal-fired power plants show higher levels of total-factor energy efficiency and CO₂ emission performance than oil-fired ones. Under the meta-frontier technology assumption, coal-fired power plants show a smaller technology gap than oil-fired ones. This suggests that the Korean government should promote technological innovation to reduce technology gaps for oil-fired plants, thereby improving energy and CO₂ emission performance and meeting emission reduction targets in the electricity generation industry.     

Indoor temperature changes in retrofit homes

The behavioral response (e.g. changes in indoor temperatures, attention to window and door openings) to residential technical efficiency improvements (e.g. attic insulation, storm windows) is an important and largely unresolved issue. Although there is considerable discussion concerning the extent to which households take back some of the energy savings due to technical efficiency improvements in increased comfort, there is almost no empirical evidence on the subject.Detailed electricity billing data (from mid-1981 to mid-1983) were analyzed for 79 households that received financial assistance from the Bonneville Power Administration to retrofit their homes in mid-1982. The mean retrofit expenditure in these homes was $1900; the mean reduction in annual electricity use was 4700 kWh, of which 83% was due to reductions in space heating electricity use. Analysis of the electricity billing data suggests that these households increased their indoor temperature settings after retrofit by almost 1 °F on average. This temperature increase led to an estimated average loss of almost 600 kWh of electricity saving. In other words, roughly 10% of the energy saving due to retrofit was taken back in terms of increased comfort. These results concerning changes in indoor temperatures should be viewed cautiously because of limitations in the analytical method and the large variation across households.     

Motor systems energy efficiency supply curves: A methodology for assessing the energy efficiency potential of industrial motor systems

Motor-driven equipment accounts for approximately 60% of manufacturing final electricity use worldwide. A major barrier to effective policymaking, and to more global acceptance of the energy efficiency potential in industrial motor systems, is the lack of a transparent methodology for quantifying the magnitude and cost-effectiveness of these energy savings. This paper presents the results of groundbreaking analyses conducted for five countries and one region to begin to address this barrier. Using a combination of expert opinion and available data from the United States, Canada, the European Union, Thailand, Vietnam, and Brazil, bottom-up energy efficiency supply curve models were constructed to estimate the cost-effective electricity efficiency potentials and CO₂ emission reduction for three types of motor systems (compressed air, pumping, and fan) in industry for the selected countries/region. Based on these analyses, the share of cost-effective electricity saving potential of these systems as compared to the total motor system energy use in the base year varies between 27% and 49% for pumping, 21% and 47% for compressed air, and 14% and 46% for fan systems. The total technical saving potential varies between 43% and 57% for pumping, 29% and 56% for compressed air, and 27% and 46% for fan systems.     

Electricity consumption and energy savings potential of video game consoles in the United States

Total energy consumption of video game consoles has grown rapidly in the past few decades due to rapid increases in market penetration, power consumption of the devices, and increasing usage driven by new capabilities. Unfortunately, studies investigating the energy impacts of these devices have been limited and potential responses, such as ENERGY STAR requirements, have been difficult to define and implement. We estimate that the total electricity consumption of video game consoles in the US was around 11?TWh in 2007 and 16?TWh in 2010 (approximately 1?% of US residential electricity consumption), an increase of almost 50?% in 3?years. However, any estimate of total game console energy consumption is highly uncertain, and we have determined that the key uncertainty is the unknown consumer behavior with regards to powering down the system after use. Even under this uncertainty, we demonstrate that the most effective energy-saving modification is incorporation of a default auto power down feature, which could reduce electricity consumption of game consoles by 75?% (10?TWh reduction of electricity in 2010), saving consumers over $1 billion annually in electricity bills. We conclude that using an auto power down feature for game consoles is at least as effective for reducing energy consumption as implementing a strict set of energy efficiency improvements for the devices, is much easier to implement given the nature of the video game console industry, and could be applied retroactively to currently deployed consoles through firmware updates.     

China's energy and emissions outlook to 2050: Perspectives from bottom-up energy end-use model

Although China became the world's largest CO₂ emitter in 2007, the country has also taken serious actions to reduce its energy and carbon intensity. This study uses the bottom-up LBNL China End-Use Energy Model to assess the role of energy efficiency policies in transitioning China to a lower emission trajectory and meeting its 2020 intensity reduction goals. Two scenarios – Continued Improvement and Accelerated Improvement – were developed to assess the impact of actions already taken by the Chinese government as well as planned and potential actions, and to evaluate the potential for China to reduce energy demand and emissions. This scenario analysis presents an important modeling approach based in the diffusion of end-use technologies and physical drivers of energy demand and thereby help illuminate China's complex and dynamic drivers of energy consumption and implications of energy efficiency policies. The findings suggest that China's CO₂ emissions will not likely continue growing throughout this century because of saturation effects in appliances, residential and commercial floor area, roadways, fertilizer use; and population peak around 2030 with slowing urban population growth. The scenarios also underscore the significant role that policy-driven efficiency improvements will play in meeting 2020 carbon mitigation goals along with a decarbonized power supply.     

Tariff-based incentives for improving coal-power-plant efficiencies in India

Improving the efficiency of coal-based power plants plays an important role in improving the performance of India's power sector. It allows for increased consumer benefits through cost reduction, while enhancing energy security and helping reduce local and global pollution through more efficient coal use. A focus on supply-side efficiency also complements other ongoing efforts on end-use efficiency. The recent restructuring of the Indian electricity sector offers an important route to improving power plant efficiency, through regulatory mechanisms that allow for an independent tariff setting process for bulk purchases of electricity from generators. Current tariffs based on normative benchmarks for performance norms are hobbled by information asymmetry (where regulators do not have access to detailed performance data). Hence, we propose a new incentive scheme that gets around the asymmetry problem by setting performance benchmarks based on actual efficiency data, rather than on a normative basis. The scheme provides direct tariff-based incentives for efficiency improvements, while benefiting consumers by reducing electricity costs in the long run. This proposal might also be useful for regulators in other countries to incorporate similar incentives for efficiency improvement in power generation.     

Estimates of the potential for energy conservation in the Chinese steel industry

The study evaluates the energy saving potential of the Chinese steel industry by studying its potential future energy efficiency gap. In order to predict the future energy efficiency gap, a multivariate regression model combined with risk analysis is developed to estimate future energy intensity of China's steel industry. It is found that R&D intensity, energy saving investment, labor productivity and industry concentration are all important variables that affect energy intensity. We assess the possible measures as to how China's steel industry can narrow the energy efficiency gap with Japan by means of scenario analysis. Using Japan's current energy efficiency level as baseline, the energy saving potential of China's steel industry is more than 200 million ton coal equivalent in 2008, and it would fall to zero in 2020. However, if greater efforts were made to conserve energy, it would be possible to narrow down the energy efficiency gap between China and Japan by around 2015. Finally, using the results of the scenario analysis, future policy priorities for energy conservation in China's steel industry are assessed in this paper.     

Cost-effective incentives for cooperation between participants in the electricity market

In the Swedish electricity system there is a great potential for increasing the cost efficiency of electricity use. Today economic incentives, offered for instance by existing electricity tariffs, are too weak to improve the use of the system. On the Swedish electricity market, there are at least three different participants, the power producer, the distributor and the customer. Today these participants act separately owing to low awareness of the costs for electricity over the year and the day. If the participants are aware of the real electricity costs, cost-effective incentives for cooperation will arise. When participants cooperate, the introduction of end-use measures will reduce system costs for those participants that are involved in cooperation. We present a system analysis for cooperation between distributor and customers. We also present results from a project, where behaviours of an existing distributor and existing customers have been analysed. The results show that there exist cost-effective incentives for cooperation when end-use measures are introduced.     

Household electricity demand forecast and energy savings potential for Vientiane,Lao PDR

This paper uses the survey data on household electricity demand from five districts of Vientiane, Lao PDR, for the demand projection up to 2030 using the end-use model. The scenario analysis is used to verify the potential of an energy-saving program by alternating selected appliances with more energy-efficient ones following the labelling standard of Thailand. The demographic structure of electrified households and the energy efficiency of electric appliances are considered as the dominant factors affecting electricity demand. Under the base-case scenario, the total electricity demand of Vientiane increased from 593?GWh in 2013 to 965?GWh in 2030. In the energy efficiency scenario, it is revealed that the appliance standard enhancement program can save total electricity demand in 2030 by 147?GWh (?15.2%), where 117?GWh (?12.1%) of which is contributed by the air conditioner and 30?GWh (?3.1%) by the lighting equipment.