Transcript Mechanisms for controlling trends in energy consumption

HORIZONTAL MEASURES (taxes,
regulations, standards and norms,
information campaigns) are useful, but …
• E.g. minimum efficiency standards take away from the
market the worst equipment and systems (class D
refrigerators), but vertical measures
(Programmes&Services) are needed to remove barriers
to the open the market for the best cost-effective
technologies
• E.g. penetration of energy efficiency appliances (A) in the
Netherlands is almost twice the average than in EU,
thanks to a Programme of incentives.
• Similar vertical measures (incentives for condensing
boilers, efficient motors,...) proved successful in UK, DK..
Prof. Lorenzo Pagliano Director of eERG - University of Milano
are HORIZONTAL MEASURES (taxes, …)
useful within this Directive?
•
Objective of the Directive: “There is a clear need to improve the
functioning of the energy market by removing barriers ....”
• e’.g the investor-users dilemma, limited access to capital, … which
will not be modified by increasing prices e.g. by a tax
• in Italy in spite of high prices of energy, electric air conditioning grew
very fast in the last 10 y, and nothing happened for improving
buildings through solar protections, selective glazing, passive cooling.
• The 2005-2010 Italian program just confirmed will work actively
(through vertical measures-P&S-) to promote those technologies
Prof. Lorenzo Pagliano Director of eERG - University of Milano
The 1% savings objective can be reached via
Energy Efficiency Programmes and Services
based on VERTICAL measures ONLY
• through vertical measures (active actions targeted to
customers –e.g. economic incentives- or market actors
–e.g. training of installers).
• SAVE study BEST on : 1% of savings /y can be
achieved and 10 Billion euros/y saved net of investment
costs and (bottom-up) evaluation cost
• Analysis is presented in the Report (www.eerg.it) and
discussed in 7 national workshops and an international
conference in Bruxelles
Prof. Lorenzo Pagliano Director of eERG - University of Milano
Adjusting the level of the saving target
• If the Directive includes also horizontal
measures it will then include EVERY
possible action to save energy,
• then the 1% target will no more be
adequate, and we should aim at 2-3%/y
savings
• but this brings in evaluation problems,
Prof. Lorenzo Pagliano Director of eERG - University of Milano
What bottom up methods can estimate and with
which uncertainty
• bottom-up evaluation of a vertical measure (e.g. increased wall
insulation or windows performance), is precise an with good ratio
quality/costs
• evaluate the uncertainty about the of savings in an individual building
• evaluate the uncertainty introduced by sampling (e.g. checking
directly 5 buildings out of 100)
• combine those uncertainties to obtain the level of uncertainty about
the effect of the entire programme and the confidence level.
• E.g 10% uncertainty at 90% confidence: there is a 90% probability to
get the real value of savings with an error of less than 10%.
• Costs are in the order of 2-3% of total cost of savings
• In fact every evaluation should be accompanied by the specification of
uncertainty and confidence level.
Prof. Lorenzo Pagliano Director of eERG - University of Milano
What top-down (aggregate) methods can
estimate and with which uncertainty
• it is not feasible to start from the behaviour of the entire
economy to get down to estimate the effects of single
programmes.
• Italy 2003: electricity consumption +2.9%, GDP + 0.4%, that
is electricity intensity + 2.5% . How do we go from this data to an
evaluation of effects of EE programmes going on in 2003 in
Italy?
• data on energy intensity, have to be corrected to eliminate the
effects of changes in economic activity, changes in the structure
of the economy, effects of climate,…
• even if relative (%) errors were low, absolute errors are large
compared to the quantity we would like to measure/estimate
(the savings),.
Prof. Lorenzo Pagliano Director of eERG - University of Milano
Use each methodology where more
appropriate
• Vertical measures should be evaluated via a bottom-up
methodology (precise, good ratio quality/costs)
• Vertical measures are the more direct way to overcome
barriers and achieve the 1% target
• If we consider in this directive also horizontal measures,
accordingly the target should be increased to 2-3%
• Global trends in energy consumption can be followed via
aggregated (top-down) models
• Bottom-up evaluation of savings of vertical measures will
be an extremely important source of data to fill the
aggregated models with good quality and up to date
information on energy efficient technologies, penetration
rates,..
Prof. Lorenzo Pagliano Director of eERG - University of Milano
What are the costs of evaluating the savings of
EnEff Programmes & Services via a bottom-up
methodology?
• E.g. UK National Audit Office 1998 (ex-post analysis):
– Economic Benefits 4 times larger than total costs
(including costs for bottom-up evaluation),
• Compare with costs of restructuring/liberalization:
Prof. Lorenzo Pagliano Director of eERG - University of Milano
Costs of EnEff P&S and evaluation are in
fact investments with a high IRR
• in UK creating retail competition for small
customers had a cost of nearly 1 Billion Euros
[Offer, 1997],
• the cost of the newly redesigned UK
wholesale market (NETA) is estimated to
exceed 800 M Euros [ “Energy Policy” 2003]
• running the Balancing Market element of
wholesale market alone costs 110 M Euros/y
[”Power UK” 2002a],
Prof. Lorenzo Pagliano Director of eERG - University of Milano
Bibliography 1
– EU Commission 2000: Green Paper Towards a European strategy for the
security of supply (COM (2000) 769 final), 29th November 2000.
– EU Commission 2001a: European Climate Change Programme; Report –
June 2001
– EU Commission 2001b: Communication from the Commission to the
European Parliament and the Council “European energy infrastructure”
COM(2001) 775 final, 20 December 2001
– EU Commission 2002a: Implementing the Internal Energy Market, first
benchmarking report,
– EU Commission 2002b: second benchmarking report on the implementation
of the internal electricity and gas markets, 01/10/2002
– Goldmann et al. 1998: The Energy Services Company (ESCO) Industry:
Industry and Market Trends , D. S. Dayton HEC Inc., Natick, MA, C.
Goldman and S. Pickle, LBNL, In the Proceedings of the 1998 ACEEE's
Summer Study on Energy Efficiency in Buildings: August 1998.
Prof. Lorenzo Pagliano Director of eERG - University of Milano
Bibliography 2
– Goldmann et al. 2002: Assessing U.S. ESCO Industry: Results from the
NAESCO Database Project, J. Osborn, C. Goldman and N. Hopper – LBNL,
T. Singer – NAESCO, In the proceedings of the ACEEE’s Summer Study on
Energy Efficiency in Buildings, August 2002
– OFFER 1997: Supply price restraint proposals. Offer Press Release
R44/97, 16 October 1997.
– Power UK, 2002a: One year on—has NETA been a success? Power UK,
March 2002, p. 16.
– Power UK, 2002b: Prices fall for some but stay the same for others. Power
UK, March 2002, pp. 27–28.
– Wuppertal Institute, Politecnico di Milano et al. 2000: Completing the Market
for Least-Cost Energy Services, Strengthening Energy Efficiency in the
Changing European Electricity and Gas Markets, A Study under the SAVE
Programme, Project Final Report.
Prof. Lorenzo Pagliano Director of eERG - University of Milano
Riduzione del 50% dei costi delle
technologie efficienti (1996-2001, dati EST)
Real cost of Energy Efficiency Measures (SoP schemes)
CFLs
1.9
Loft Insulation
Cavity Wall Insulation
Condensing Boiler
1.7
Tank Insulation
Fridge Freezer (A-Rated)
Index (1999 = 1.0)
1.5
1996/99 costs are costs are
actuals obtained fromEESoP1 & 2
scheme submissions. 2001
(EESoP3) costs based on a costs
disclosure exercise undertaken for
DEFRA.
1.3
Costs have been updated to 2002
equivalent using Retail Price
Indices (index used 'All items
excluding mortgage interest
payments and indirect taxes')
1.1
0.9
Loft prices are for professional
installation. Loft thickness for
SoP1 was 150mm; SoP2 & 3 was
200mm, have been rebased to
200mm
0.7
0.5
1995
1996
1997
Prof.1998
Lorenzo Pagliano
Director
University of2002
Milano
1999
2000of eERG -2001
Prof. Lorenzo Pagliano Director of eERG - University of Milano