Drivers for energy efficiency and their effect on barriers: empirical evidence from Italian manufacturing enterprises

Industrial activities are responsible for a significant share of both global delivered energy demand and CO₂ emissions. Hence, a widespread adoption of energy-efficient technologies and practices represents a crucial means for sustainable production. Adopting a novel framework of drivers for energy efficiency describing the effect of drivers on barriers in the decision-making process steps and able to account for the nature of drivers and the stakeholders responsible for their promotion, we have performed an exploratory investigation into 61 manufacturing small- and medium-sized enterprises in Northern Italy. Our findings have highlighted the importance of information and economic drivers, showing the need for enterprises to be supported not only by public institutions but also by external stakeholders involved in the supply of energy-efficient technologies and practices such as industrial associations and groupings, as well as service and technology suppliers. Moreover, our study has highlighted an almost equal relevance of both internal and external drivers. According to our findings, the increase of awareness—generating the interest to energy issues and stimulated both by external and internal stakeholders—as well as financial issues have emerged as the most critical in the decision-making process to adopt an energy-efficient measure. A preliminary comprehension of the mechanisms relating drivers to barriers in the decision-making process brought additional value to the study, highlighting the most effective and specific means to overcome the existing barriers. We have also explored the effect of several firm characteristics, such as firm size and energy intensity offering suggestions for industrial decision-makers as well as policy-makers.     

Broadening to sustainability the perspective of industrial decision-makers on the energy efficiency measures adoption: some empirical evidence

The industry should take further efforts towards increased energy efficiency, that is a major contributor to improve industrial sustainability performance, by implementing energy efficiency measures (EEMs). However, the rate of adoption of these measures is still quite low. Hitherto, EEMs and barriers to their adoption have been evaluated almost exclusively from the viewpoint of energy efficiency decision-makers, not accounting for the broader sustainability perspective. This work aims at understanding whether an industrial sustainability perspective can better address issues related to EEMs adoption, analyzing the question through different viewpoints and insights offered by industrial decision-makers of different industrial sustainability areas within a firm. By doing this, we aim at offering a contribution in the understanding of the low rate of adoption of EEMs. As case studies, we investigated 12 firms from Northern Italy. In comparison to previous literature, results show that an industrial sustainability perspective can better explain the real decision-making process of adopting an EEM. Indeed, people knowledgeable about different industrial sustainability areas may perceive different barriers about the same EEM. EEMs may be negatively affected by reasons related to other areas of industrial sustainability, while positive reciprocal impacts may exist among areas of industrial sustainability; thus, EEMs may have effects on areas other than energy efficiency, and these effects may be perceived only by such areas. The study concludes with some remarks for policy and industrial decision-makers and advice for further research.     

Energy efficiency in the food retail sector: barriers,drivers and acceptable policies

The objectives of this research are to examine empirically the drivers and barriers to energy efficiency measures in an important energy-using sector, namely, the food retail sector, and to gain an understanding of more effective energy efficiency policies in this sector. Although food retailers consume a significant amount of energy due to the specialised needs of stores, there has been little research on the barriers and drivers of energy efficiency measures in this sector. A survey of small food retailers was carried out to understand attitudes to energy efficiency measures and to examine the acceptability of different energy efficiency policy options. In addition, external stakeholders were consulted in order to validate and contextualise the results of the survey. We find that there is a complementary relationship between energy efficiency barriers and drivers for food retailers and that it is remarkably coherent. We identify policies, such as subsidies and support for ESCOs, that exploit both the complementarities between barriers and drivers and are acceptable to food retailers also. This methodology should help identify and design more effective policies to deliver energy efficiency improvements in the food retail and other services subsectors.     

Implementation of energy efficiency measures in compressed air systems: barriers,drivers and non-energy benefits

Increased global competition and resource scarcity drives industrial companies to cut costs. Energy can be a significant component of such cuts, particularly for energy-intensive companies. Improving energy efficiency in industry is complex, as it pertains to various energy-using processes that are heavily intertwined. One such process is the compressed air system (CAS), which is used in most industrial companies worldwide. Since energy efficiency improvement measures for various types of energy-using processes differ, technology-specific measures might encounter different barriers to and drivers for energy efficiency. The same applies to the non-energy benefits (NEBs) related to energy efficiency improvement measures; since measures vary between various energy-using processes, the perceived NEBs might be different as well. The aim of this paper is to study the barriers to, drivers for and NEBs of CAS energy efficiency improvement measures from the perspectives of three actors. Carried out as an interview study combined with a questionnaire, the paper merges the perspectives of users, audit experts and suppliers of CASs. The results showed that the major barriers are related to the investment, or are of an organisational character, and that organisational and economic factors seemed to be important for making positive decisions on energy efficiency investments and measures in CASs. Major NEBs for CASs include productivity gains and the avoidance of capital expenditures. The results of this study also address the importance of having a comprehensive approach to recognise additional effects of energy efficiency improvements in CASs.     

Towards cooperative policy approaches in China—Drivers for voluntary agreements on industrial energy efficiency in Nanjing

Energy efficiency is a national priority for China as rapid energy consumption growth aggravates its greenhouse gas emissions, local air pollution and energy scarcity. In the 1990s, a large number of voluntary agreements emerged in industrialised countries in order to improve industrial energy efficiency. These experiences are now taken into account in China. This article analyses the drivers for voluntary agreements on industrial energy efficiency in China, based on a case study of three enterprises in Nanjing, Jiangsu Province. Furthermore, the article reviews the institutional set-up of energy policy and investigates the pertaining policy culture. From the findings, conclusions are drawn on the role of voluntary agreements within China's larger policy context. We conclude that opposed to avoiding stricter regulation, voluntary agreements in Nanjing are reinterpreted in view of more stringent national provisions on energy efficiency in the 11th Five Year Plan. Hence, agreements have evolved into an implementation tool of national policy at the local level. For industry, another major driver for participation was identified as improving its relations with local authorities. Voluntary agreements showed to have the potential to overcome traditional constraints of implementing top–down policies at the local level in China.     

Barriers to energy efficiency improvement and decision-making behavior in Thai industry

The industrial sector is one of the main energy consuming sectors in Thailand and accounted for 36.7% of total energy consumption in 2005. The trend of rising energy prices and tougher competition increases the demand to improve energy efficiency in Thai industry. However, the existence of various barriers often hinders the realization of even some cost-effective energy efficiency measures. In an attempt to investigate key barriers to and drivers for energy efficiency improvement in Thai industry, this study found that the most important barrier expressed by both the textile and cement industries studied as well as experts interviewed is that the management is concerned about production and other matters rather than energy efficiency. Reducing product cost by reducing energy cost is found to be the main driver for energy efficiency investment. Using a conceptual industrial energy efficiency policy framework this study shows how various energy efficiency policies can affect the process of decision-making for and investment in energy efficiency in industry.     

Barriers to and drivers for energy efficiency in the Swedish foundry industry

Despite the need for increased industrial energy efficiency, studies indicate that cost-efficient energy conservation measures are not always implemented, explained by the existence of barriers to energy efficiency. This paper investigates the existence of different barriers to and driving forces for the implementation of energy efficiency measures in the energy intensive Swedish foundry industry. The overall results from a questionnaire show that limited access to capital constitutes by far the largest barrier to energy efficiency according to the respondents. A comparison between group-owned and privately owned foundries shows that, except for limited access to capital, they face different high-ranked barriers. While barriers within group owned companies are more related to organizational problems, barriers within private foundries are more related to information problems. This study also found that energy consultants or other actors working with energy issues in foundries are of major importance in overcoming the largest barriers, as the foundries consider them trustworthy. They may thus help the foundries overcome organizational problems such as lack of sub-metering and lack of budget funds by quantifying potential energy efficiency investments. The two, by far, most important drivers were found to be people with real ambition and long-term energy strategies.     

The role of corporate reputation and employees' values in the uptake of energy efficiency in office buildings

Although office market actors in the United Kingdom show a growing interest in energy efficiency, the pace of takeup of energy efficient office features is slow. Previous studies have highlighted the roles of limited direct financial costs and benefits (‘efficiency gaps’) and market barriers in limiting the rate of technology adoption. This study provides further evidence on the importance of these factors, but the primary contribution is focused on the role of corporate reputation and on the importance of individuals' values in shaping corporate behaviour. The paper presents a theoretical framework to explain environmental decision making in firms and we present qualitative evidence drawing from sixteen semi-structured individual and group interviews with office market stakeholders in London, Glasgow and Edinburgh. The research finds that companies, despite gradually becoming more energy conscious, still regard energy costs as a negligible part of their business costs. Nevertheless, an increasingly important driver is the reputational gain obtained by corporate businesses implementing sustainable practices. All the interviewees agreed that the pace of change in the office market is slow and that only further policy interventions will accelerate it.     

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.     

Policy drivers and barriers for coal-to-liquids (CtL) technologies in the United States

Because of a growing dependence on oil imports, powerful industrial, political and societal stakeholders in the United States are trying to enhance national energy security through the conversion of domestic coal into synthetic hydrocarbon liquid fuels—so-called coal-to-liquids (CtL) processes. However, because of the technology's high costs and carbon intensity, its market deployment is strongly affected by the US energy, technology and climate policy setting. This paper analyses and discusses policy drivers and barriers for CtL technologies in the United States and reaches the conclusion that an increasing awareness of global warming among US policy-makers raises the requirements for the technology's environmental performance and, thus, limits its potential to regional niche markets in coal-producing states or strategic markets, such as the military, with specific security and fuel requirements.     

Collaborate,involve, or defend? A critical stakeholder assessment and strategy for the Danish hydrogen electrolysis industry

Denmark's national energy strategy for 2050 calls explicitly for the use of hydrogen to store excess electricity from intermittent wind farms. However, the Danish hydrogen electrolysis industry lacks full knowledge of its stakeholders and business prerequisites needed to achieve its aims. To fill this gap, this study identifies the stakeholders in the Danish energy and electricity industry to find how both industries may benefit from cooperating with each other. The research has been conducted using a newly constructed model for determination of relevant stakeholders, based on their technological and commercial influence on the project. Qualitative interviews are an important part of the model, and have been performed with stakeholders in both industries. The research revealed which stakeholders that were affected and could affect the Danish hydrogen industry both as complementors and competitors. However, we conclude that major uncertainties relate to (1) political decision making, (2) maturity of technologies, (3) stakeholder incentive structures. This study highlights both the complexity and dynamics of a fossil free society especially related to the relationship between technological maturity and stakeholders' choice of strategic action.     

Carbon intensity changes in the Asian Dragons. Lessons for climate policy design

There is a growing political interest in carbon intensity targets because they are the basis for climate pledges from relevant developing countries such as China. They may be also the basis for policy designs in developed countries like EU members. This paper develops a comprehensive econometric study on the main drivers of national emissions intensity in emerging countries in East Asia. This regional focus responds to their pivotal position in global economic growth and remarkable trends in carbon emissions intensity. The main hypothesis of this paper is that the nature of economic growth has a major effect on carbon intensity trends that deserves some attention. Accordingly, the novelty of this paper is to examine the contribution of “intensive” and “extensive” GDP growth for carbon intensity abatements. Labour productivity is revealed to be the main factor responsible for major carbon intensity reductions by Asian Dragons. Whereas household energy per capita and industrial energy per worker contributed in the opposite direction. Consequently, intensity targets may become “meaningless” for real climate action contributions if they do not take into account labour productivity trends.     

Energy efficiency policy impact in India: case study of investment in industrial energy efficiency

The objective of this paper is to identify the effectiveness of energy policy and capital investment in energy efficiency technologies in the industrial sector in India. Indian energy policies relating to industrial energy efficiency over the past 25 years are briefly reviewed, and a comparison study of these energy efficiency policies and strategies in India and China has been carried out. Interviews were conducted with a number of government policy-making institutions and a national industrial development bank. The accounts of 26 industrial enterprises which applied and used a loan of the Asian Development Bank were audited for data collection. Field-visits to seven industrial entrepreneurs were undertaken in a case study. Methodologies used in this study include documentation, cross-country reviews on energy policies, questionnaire design and distribution in the industrial sector, and on-site auditing of energy efficiency technologies. This paper concludes that current energy policies and strategies in India need further improvement to promote energy efficiency investment and energy efficiency technology development in the industrial sector. This paper will interest those policy makers and industrial entrepreneurs who are willing to finance energy efficiency projects and improve energy efficiency in the industrial sector.     

Decomposing the influencing factors of industrial carbon emissions in Shanghai using the LMDI method

Knowledge of influencing factors of industrial carbon emissions (ICE) is crucial to the efforts of reducing anthropogenic greenhouse gas emissions. In this paper, main factors responsible for the ICE in Shanghai between 1996 and 2007 were identified and quantitatively analyzed using the Log-Mean Divisia Index method. It was found that the industrial output was the main driving force of ICE. The decline in energy intensity and the adjustment of energy and industrial structure are major determinants for reduction of ICE, with the former alone accounting for 90% of the reduction. To better investigate the relative contribution of different industrial sectors and their changes over time, we divided the study period into two equal time intervals and analyzed some high-carbon emission sectors. The results suggested that the intensity of energy use should be reduced further, for it was far higher than the world average. Adjustment of industrial structure by developing low-carbon emission industries is more crucial than energy mix.     

Innovation and adoption of energy efficient technologies: An exploratory analysis of Italian primary metal manufacturing SMEs

Additional efforts will be needed by European countries to improve the energy efficiency, as with current trends the 20% objective will be missed. Small and medium-sized enterprises (SMEs) manufacturing sector is a promising field, as SMEs are less energy-efficient than larger enterprises. Several studies investigated the barriers to the diffusion of technologies and practices for industrial energy efficiency, but little attention has been paid to understand the factors affecting the perception of such barriers by SMEs. In this multiple case-study, we have investigated 20 Primary Metal manufacturing SMEs in Northern Italy. Economic and information barriers are perceived as the major issues. Interestingly, firm's size, innovativeness of the market in which enterprises operate, as well as product and process innovation are factors affecting barriers to energy efficiency. Differences have been observed within SMEs, especially for information and competence-related barriers. In particular, a more innovative external context in which enterprises operate and a greater production process complexity seem to reduce barriers. Moreover, more product innovative enterprises seem to have a lower perception of behavioral and technology-related barriers. The results of this exploratory investigation provide useful suggestions for policy design and further research on industrial energy efficiency.     

Analysis of energy efficiency practices of SMEs in rural Ghana: an application of product generational dematerialization method

Energy is a key input in industrial production, education and health and is one of the main drivers of economic growth in developing economies. However, expanding energy access in the rural areas is one of the key challenges faced by policy makers in developing countries such as Ghana. In this regard, small- and medium-sized enterprises (SMEs) in developing countries face the hydra-headed challenges of energy access, power outages, access to finance and access to market. In some cases, whilst energy efficiency appears to be improving at the national level, the story at the rural areas is different due to overdependence on biomass and other traditional forms of energy and relatively low access compared to urban areas. This research is structured in three steps. In the first step, the product generational dematerialization method is applied to examine the energy efficiency consumption of electricity and fossil fuels. In a second step, the energy efficiency practices of small and medium scale enterprises are investigated. In a third step, the general unrestricted model (GUM) is employed to investigate the relationship between energy efficiency, productivity and carbon emissions. The key findings of the study (i) confirm that the consumption of energy has not been efficient, (ii) show that the reduction in energy consumption among SMEs can be attributed mostly to blackouts and not efficiency and (iii) productivity is a major driver of energy efficiency. In a nutshell, the national analysis shows that improved productivity from more energy-efficient technologies is not responsible for energy reduction. Rather, an analysis of the rural energy situation shows that blackouts render energy reductions unintentionally. Moreover, energy-efficient practices are observed to be nearly non-existent within rural SMEs. The study recommends that public education on energy efficiency is increased and that new appliances rather than second-hand one are used to save energy.     

Tracking industrial energy efficiency trends using index decomposition analysis

Index decomposition analysis (IDA) has been widely used to track economy-wide and sectoral energy efficiency trends. An integral part of this application is identifying the drivers of energy use for the energy consuming sector studied. In the case of industry, a monetary activity indicator such as value added is often taken as the driver. With the availability of physical production data for some industry subsectors, such as in tonnes or cubic meters, effort has been made by researchers to incorporate physical activity indicators in order to produce results that can better capture energy efficiency trends. We review and consolidate two different approaches to incorporating physical activity indicators in industrial energy studies using IDA. Based on their underlying concept, they are referred to as the intensity refactorization (IR) approach and the activity revaluation (AR) approach. We refine the AR approach, and compare the AR, IR, and the conventional monetary-based IDA approaches. Numerical examples and recommendations are presented.     

Measuring the efficiency of energy-intensive industries across European countries

This study evaluates the energy efficiency trends of five energy-intensive industries in 23 European Union (EU) countries over the period 2000–2009. In particular, the performance of the construction, electricity, manufacturing, mining and quarrying, and transport sectors is examined. The analysis is based on Data Envelopment Analysis (DEA) combined with the Malmquist Productivity Index (MPI), which allows for distinctions between efficiency and technology changes over time. At the second stage of the analysis, cross-classified multilevel modelling is applied to analyse the main drivers behind efficiency performance using a number of sector and country characteristics. Based on DEA results, an overall improvement in efficiency is observed in all sectors over the period. The decomposition of the MPI indicates that technology change is primarily responsible for the improvements achieved in most sectors. The results obtained by the cross-classified model show, among other things, that the high electricity prices, energy taxes, and market share of the largest generator in the electricity market have a negative effect on industrial energy efficiency.     

Assessing energy efficiency of Indian paper industry and influencing factors: A slack-based firm-level analysis

This study estimates efficiency in energy utilization at firm level and feasible energy saving target of the pulp and paper industry in India. For this analysis, data is extracted from prowess database for a panel of 67 major pulp and paper producing firms over the period of 2003–04 to 2013–14. We employed radial and non-radial variants of data envelopment analysis to assess the feasible energy saving target with the current level of output. Particularly, we employed slack-based method with variable returns to scale as a flexible and pragmatic approach to performance analysis. Results reveal no significant improvement in the energy efficiency level of the firms over the study period and show vast energy saving potential. Results of slack-based measure of energy efficiency show the feasible energy saving potential of 40%. Further, size of the firm, age and financial performance are important factors that influence energy efficiency. Therefore, this study recommends special attention to the paper industry while implementing energy efficiency programme. We also reviewed four major policies for industrial energy efficiency improvement initiated by Bureau of Energy Efficiency, India.     

Success factors of energy management in energy‐intensive industries: Development priority of energy performance measurement

Economic, environmental and social pressures have increased the need for business organisations to control and manage their energy performance on a continual basis. Responding to these pressures follows a learning curve that is influenced by changing drivers and barriers. Consequently, different energy management factors have different development priorities over time. This paper explores the development priority of one factor, namely, energy performance measurement, in the energy‐intensive industrial sector, which is the most advanced industrial sector in its energy management learning curve. In addition, the paper identifies the research and development needs of energy performance measurement that are required to further improve energy performance. The results are based on interviews carried out with managers and operators in three energy‐intensive industrial sectors in Finland. Energy performance measurement is found to be the third development priority in energy management, behind resource and commitment issues. This represents a paradox as resources and commitment are prerequisites for energy performance measurement to be developed, whereas energy performance measurement influences the very same issues by enforcing changed behaviour. Several deficiencies are identified in energy performance measurement in the temporal, systemic and organisational dimensions. Research should be continued towards the implementation of energy performance measurement as a process, the integration of energy performance metrics into overall management and the development of metrics for different industrial sectors, companies and operating cultures. Copyright © 2012 John Wiley & Sons, Ltd.