Technological and Economical Potentials to Save End-Use Energy

Transcription

1 Technological and Economical Potentials to Save End-Use Energy Wolfgang Irrek (Co-ordination) / Stefan Thomas with support from: Claus Barthel Within the scope of a study on behalf of the German power supplier E.ON AG the Wuppertal Institute analysed 70 technologies resp. measures regarding their potential to reduce CO 2 emissions and to save or substitute end-use energy in Germany (Wuppertal Institute 2006). The identified potentials have been exclusively evaluated from a micro-economic perspective (interest rate of calculation: 8%) as well as from the macro-economic point of view (interest rate of calculation: 4%). The analyses have been conducted the years 2005 (year of creation of the study), 2010 and 2015 and with respect to common cycles of reinvestment. The result of the study of all individual technologies and system solutions can be presented in various ways. 1 Wuppertal Institut für Klima, Umwelt, Energie

2 Figure 1: Results of an analysis of 70 energy efficiency technologies Source: Wuppertal Institute 2006 In order to define ecological efficiency, it is reasonable to identify the particular CO 2 emissions reductions, thereby allowing a comparison between the different measures electricity and heating fuel and fuel switching. The total CO 2 reduction all reduction technologies and all sectors is shown in Figure 1 above. Here, measures which aim at the same end-use and which are implemented in the same technology markets have been summarised. The CO 2 reductions of each individual measure were added together, the costs of conserved energy and the costs of CO 2 abatement, the weighted averages were calculated. Thus, it is possible to compare the CO 2 reduction potentials and the net costs of saved energy resulting from different end-uses and technology markets. The technology markets are partially overarching different sectors. In this figure, the curves of net costs of conserved energy (bold line) and of net costs of CO 2 reduction (thin line) represent, from a macroeconomic view, the measures in an ascending order relative to the average net costs of conserved energy in Euro per kwh of conserved or substituted energy (electricity or heating fuel). costs of conserved energy are the additional costs of each individual technology less minus the long-run avoided sys-tem costs the supply of electricity and heating fuels. The additional costs of technical or organisational energy efficiency measures in relation to a saved kwh are calculated from the additional costs of an energy-efficient or energy efficiency technology compared to the costs of a baseline technology. The latter are the costs that arise when a normal reinvestment or refurbishment is implemented anyway, using technology that complies with minimal standards or market average. Any investment in highly energy-efficient technology will immediately or later replace an investment in a less energy-efficient, business-as-usual technology which we use the term base- 2 Wuppertal Institut für Klima, Umwelt, Energie

3 July 2008 Technological and Economical Potentials to Save End-Use Energy line technology here. The costs this baseline technology will be incurred in any case and may thus not be counted towards the energy efficiency measure. It should be noted that the costs presented here are always average values additional costs, derived from the analysis of an average case. For the planning of an investment decision, however, the individual case should always be taken as the basis, particularly more complex measures. All measures with net costs of saved or substituted energy below zero are costeffective from the perspective of society. Measures with net costs above zero, in turn, cause additional costs even after the deduction of the avoided energy system costs. Thus, it will be cost-effective from the perspective of society to apply the examined efficiency technologies and measures saving more than 120 million tons of CO 2 per year within ten years. Especially the insulation of buildings, the hydraulic optimisation in the residential, commercial, public and industrial sector as well as the of process heat and the installation of pumps with frequency converters in the commercial, public and industrial sector can considerably contribute to cost-effective energy and CO 2 reductions. Additionally, the net costs of CO 2 reduction in Euro per ton each individual technology are shown from a total resource cost perspective (thin line in figure 1). Applying this indicator, most of the analysed potentials are cost-effective too, i.e. the costs of CO 2 -abatement are below the expected price per certificate of 10 Euros per ton. When calculating the costs of CO 2 reduction, we did not include the price of a certificate in the avoided energy costs. However, there are mathematical problems especially in the case of resources with a negative value of CO 2 -abatement costs, thus not allowing the comparison between measures saving an end-use energy and fuel switching measures. Outstanding beneficial areas of technologies and application in the microeconomic and macroeconomic perspective concerning private households, commercial and public services and industry are (in this respect cf. more detailed Wuppertal Institute 2006): - Savings of fuel process heat in the industry - Heat optimisation / hydraulic adjustment / factor-4-circulation pumps in households - Thermal insulation following the low-energy house standard and the renewal of edificial heating systems (exchange of gas / oil boilers) - Efficient pumps in industry, commercial and public sector - Efficient ventilation and air conditioning in industry, commercial and public sector - Optimised setting of installations (ventilation, pumps, engines) in industry, commercial and public sector - Reduced stand-by electricity consumption in ICT and TVs as well as in trade, commerce and services Wuppertal Institut für Klima, Umwelt, Energie 3

4 - Efficient process cooling and production of compressed air in industry - Efficient lighting in all sectors - Efficient cooling of groceries through ready-to-use, efficient refrigerators in the commercial sector - Efficient refrigerators and freezers, hot fill clothes and dish washers and efficient clothes dryers in households - Electricity substitution in households, trade, commerce and services (fuel-switching space and water heating, cooking and cooling) - Heat recovery in industry and commerce - Optimisation of air conditioning of mobile phone base stations. Table 1: Technology or end-use area INDUSTRY Economic results of the aggregation of all energy efficiency measures, which are economical in the year 2015 differentiated by technology or end-use area (not taking into account transaction costs of implementation) Industry and Trade, Commerce, and Services CO 2 reduction potential [t/a] electricity fuel benefit custo mers Euro/ benefit society Euro/ Payback time customer [years] IRR custo -mer [%] Pumps 9,822, % Process heat (substitution, 34,829, ,648 1, % fuel ) Process cooling 1,287, % Compressed air 1,608, % Lighting 2,357, % Ventilation and air conditioning Thermal insulation + renewal of edificial heating system (exchange of gas/oil boilers) 1,812, % 1,215, % Heat recovery 353, % Total 53,285, ,560 3,268 Source: Own calculation of Wuppertal Institute, The payback times are dynamic ones. Saved CO 2 certificates are valued at 10 Euros/t CO 2. 4 Wuppertal Institut für Klima, Umwelt, Energie

5 July 2008 Technological and Economical Potentials to Save End-Use Energy Table 2: Technology or end-use area Economic results of the aggregation of all energy efficiency measures which are economically differentiated by technology or end-use area (not taking into account transaction costs of implementation) Trade, Commerce and Services. Results after ten years of implementation. CO 2 reduction potential [t/a] electricity fuel benefit custo mers Euro/ benefit society Euro/ Payback time customer [years] TRADE, COMMERCE, AND SERVICES Air conditioning of mobile phone base stations 880, IRR custo -mer [%] % Reduced stand-by electricity consumption in ICT s 2,403, % Pumps 3,638, % Indoor lighting 6,115, % Ventilation and air conditioning 1,504, % Cooling / freezing 2,528, % Process heat (substitution, fuel ) 5,461, % Cooking (substituting electricity by gas) 411, % Street lighting and traffic signal lighting 584, % Hot water (substituting electricity by gas) 305, % Heat recovery 1,155, % Thermal insulation + renewal of edificial heating system (exchange of gas/oil boilers) 3,616, % Total 28,604, ,204 2,099 Source: Own calculation of Wuppertal Institute, The payback times are dynamic ones. Saved CO 2 certificates are valued at 10 Euros/t CO 2. Wuppertal Institut für Klima, Umwelt, Energie 5

6 Table 3: Technology or end-use area Economic results of the aggregation of all energy efficiency measures which, are economically differentiated by technology or end-use area (not taking into account transaction costs of implementation) Private Households. Results after ten years of implementation. CO 2 reduction potential [t/a] electricity fuel benefit society Euro/ benefit customers Euro/ Payback time customer [years ] IRR customer [%] PRIVATE HOUSEHOLDES Reduced stand-by electricity consumption in audio/video equipment and TV s 3,987, % Dish washer (hot fill) 172, % Lighting 1,521, % Refrigerators and freezers (A+, A++) Heat optimisation (exchange of pumps, hydraulic adjustment) 3,551, % 14,986, , % Dryers 2,364, % Washing machines 829, % (A+, hot fill) Thermal insulation 18,901, , % + renewal of edificial heating system (exchange of gas/oil boilers) 7 Electricity substitution (space and water heating) 6,854, % Total 53,169, ,160 5,550 Source: Own calculation of Wuppertal Institute, The payback times are dynamic ones. Saved CO 2 certificates are valued at 10 Euros/t CO 2. Currently, the Wuppertal Institute is conducting similar potential estimations the EU- 27 in association with project partners (status: May 2008). The following table provides a rough and comparative estimation from different German studies of potentials due to energy. 6 Wuppertal Institut für Klima, Umwelt, Energie

7 Table 4: Comparison of the assessment of current energy saving and CO2 reduction potentials Germany Note: Wuppertal Institut für Klima, Umwelt, Energie 7

8 The economical potential of all three studies has been evaluated in the perspective of the consumer resp. decision maker. However, different interest rates have been taken as a basis studying: The calculations of Prognos are grounded on an interest rate of 4.2% resp. 4.5%.The Wuppertal Institute evaluated in the perspective of the consumer and used an interest rate of 8%. McKinsey takes interest rates of decision makers into consideration and the margin ranges from 4% private households to 9.5% industry. Concerning process heat: The economical potential can exceed the technical potential due to calculation effects caused by substitution measures. Concerning Prognos, industry: Certain measures have not been explicitly attributable and those measures have been listed as other appliances resp. overall. Concerning Wuppertal Institute, heating systems: A negative economical potential has been identified by the Wuppertal Institute regarding fuel-fired heating systems in private households. On the one hand, the negative potential of energy results from the substitution of night-storage heaters by fuel-fired heaters (increased consumption of fuel). On the other hand, the installation of condensing boilers is in many cases not economical in comparison to low temperature heaters according to the calculations which have been coordinated with E.ON Ruhrgas. Great costs indispensable physical alterations of the flue gas installation arising from the installation of a condensing boiler are the reason the addressed uneconomicalness. Source: Wuppertal Institute 2006, PROGNOS 2007, McKinsey Wuppertal Institut für Klima, Umwelt, Energie

9 July 2008 Technological and Economical Potentials to Save End-Use Energy Example: Energy and material in the case of optimisation of the heating system including pump replacement The energetic renewal of school buildings which have been realised in the context of the German Solar & Spar-Projects ( and assisted by the Wuppertal Institute supersede old heating circulating pumps whereby material and energy are saved. Even greater energy arise from the replacement of the remaining pumps with highly efficient pumps (up to 85% of electric energy) and from optimisation of the heating net due to optimisation of management and regularisation including the so called hydraulic adjustment. In the residential sector alone approx. 1% of the German electricity consumption could be exclusively saved due to the installation of appropriate dimensioned highly efficient heating circulation pumps in case of a heating system renewal. The addressed pumps are permanentmagnetic EC motor pumps with low engine power instead of generally used inefficient heating circulation pumps, which are often unregulated. The hydraulic adjustment in the context of optimising of management resp. regularisation of the heating system optimises the water flow in the pipes. However, also the hot-water provision can be optimised, e.g. by an adjustment of the pump size or by optimising of the operating pump. Energy due to a highly efficient pump while at the same time measuring the optimisation carried out amount to of up to 400 kwh of electricity and 4,500 kwh of thermal energy sources. This is equal to cost of 250 Euros a year higher energy costs even lead to further. The following calculation shows that the measure pays off after a period of approx. three to four years, in the case of large buildings after approx. four to seven years: highly efficient pump conventional pump acquisition cost and installation 425 Euro 240 Euro costs optimisation of heating and hot water 680 Euro total costs 1,105 Euro 240 Euro saved energy costs per year payback period of the highly efficient pump Euro approx. 3-4 years What is in many cases the problem the failure of this beneficial measure of efficiency? Only a small amount of craft enterprises include the energy efficient but more expensive pump while making an offer. Many craft enterprises do not consider these pumps, since they do not have an adequate knowledge about highly efficient pumps or assume that customers are just placing value on acquisition costs. Alternatively, they are afraid of expending efts which are e.g. to give customers advice during pump selection and to convince them that an optimisation of the heating systems makes sense in the course of a pump exchange. Furthermore, manufacturers and salesmen cannot earn higher profits by selling pumps that are more expensive. And most of the proprietors of a building do not make efts to gather inmation about Wuppertal Institut für Klima, Umwelt, Energie 9

10 potential pumps their heating system, to compare the costs and finally to select the pump having the lowest life cycle costs. Eventually, people are often in a hurry to get a new pump when it suddenly breaks down in the winter and has to be replaced. In addition, many of the proprietors of a building do not know about the options in order to optimise the heating and hot water system. 10 Wuppertal Institut für Klima, Umwelt, Energie

11 July 2008 Technological and Economical Potentials to Save End-Use Energy Literature McKinsey & Company (2007): Kosten und Potenziale der Vermeidung von Treibhausgasemissionen in Deutschland, Studie im Auftrag von BDI initiativ Wirtschaft für Klimaschutz, Berlin PROGNOS (2007): Potenziale für Energieeinsparung und Energieeffizienz im Lichte aktueller Preisentwicklungen, Endbericht 18/06 im Auftrag des BMWi, bearbeitet von F. Seefeldt et al., Basel und Berlin Wuppertal Institut (2006): Optionen und Potenziale für Endenergieeffizienz und Energiedienstleistungen, Kurzfassung, Endbericht im Auftrag der E.ON AG, Wuppertal Wuppertal Institut für Klima, Umwelt, Energie 11