THE LOST EFFICIENCY: THE ENDURING

Transcription

1 Forward-looking socio-economic research on Energy Efficiency in EU countries GA INTERNATIONAL CONFERENCE DELIVERING EFFECTIVE ENERGY EFFICIENCY POLICIES OVERCOMING SOCIO ECONOMIC BARRIERS UNIVERSITA COMMERCIALE LUIGI BOCCONI, MILAN, ITALY 28 September 2017 THE LOST EFFICIENCY: THE ENDURING EFFECT OF SOCIAL, TECHNICAL AND CULTURAL BARRIERS Edoardo Croci Iefe Bocconi University

2 Summary The Paris Agreement and energy efficiency (EE) Multifaceted objectives of EE policies Barriers affecting EE policies Early theory and worldwide evidence Heron contribution Harmonized taxonomy of EE barriers Quantification of the «lost» efficiency Heron legacy Designing EE policies aimed at overcoming barriers Heron project, GA number:

3 Paris Agreement and the Nationally Determined Contributions (NDCs) A keyword search of NDCs under Paris Agreement for 189 countries in 2017 shows that (IEA, 2017): 188 NDCs mentioned energy; 168 energy efficiency; 147 renewable energy; 10 nuclear power; 11 CCS. 135 countries set specific NDC goals framed in terms of energy metrics, with all of them including targets for renewable energy or clean energy supply, while 15 also set energy efficiency or energy demand targets. Heron project, GA number:

4 Measures needed to surpass current NDCs to reach 2 C trajectory by 2100, through 2060 Source: IEA (2017), Tracking Clean Energy Progress 2017 Reference Technology Scenario (RTS) takes into account today s commitments by countries to limit emissions including the NDCs pledged under the Paris Agreement; 2 C Scenario (2DS). It lays out an energy system pathway and a CO2 emissions trajectory consistent with at least a 50% chance of limiting the average global temperature increase to 2 C by Annual energy related CO2 emissions are reduced by 70% fromtoday slevelsby Heron project, GA number:

5 Principal drivers of EE polices worldwide (% amount to 100 for each region) EE policies target multifaceted objectives: according to an OECD survey, environmental reasons are not even the first of these objectives. Source: OECD, IEA (2010) Heron project, GA number:

6 Energy Efficiency barriers The existence of an energy efficiency gap and market barriers to energy efficiency investment has been analyzed in scientific literature since the early 1970s. Barriers to energy efficiency can be defined as postulated mechanisms that inhibit investment in technologies that are both energy efficient and economically efficient. Based on the theoretical efforts with which energy efficiency barriers are approached, it is possible to identify three major categories of barriers: Market failures; Behavioural failures; Modelling failures. Heron project, GA number:

7 Early Taxonomy of energy efficiency barriers Experimental settings and empirical observations indicate that behaviours deviates systematically from perfect rationality; Behavioural biases often affect consumers decision making; Energy consumption is affected as well, and this adds to the explanation of a persistent energy efficiency gap; Heron focuses on the first two types of failures. Heron project, GA number:

8 Frequency of energy efficiency barriers cited by respondents at World level d Behavioural barriers Source: OECD, IEA, 2010 Heron project, GA number:

9 Potential energy savings due to EE policies specific targeting behavioural barriers Source: EEA, 2013 Heron project, GA number:

10 Heron European Survey A questionnaire based online survey aimed to gather further inputs from experts and stakeholders regarding the relevance of energy efficiency barriers in their respective country was performed in Heron project. A total of 184 respondents took part in the survey. The aims of the Heron European survey were: to collect experts and stakeholders opinions on the relevance of each barrier in each country, to rate the relevance of the different barriers in influencing the degree of implementation of energy efficiency policy instruments, technologies or practices, as well as the interactions between the barriers; to suggest possible ways to overcome them; to map additional barriers which had not been considered in literature. Heron project, GA number:

11 Heron: a harmonized taxonomy of barriers for EU policymaking We have identified three categories, each of which contains several specific barriers: Social, cultural and educational: 12 barriers; Economic: 7 barriers; Institutional: 10 barriers. Of course, not all barriers are present in each partner country and, as the result of the survey shows, the importance of each barrier differs greatly in different Member States; Still, an harmonized taxonomy allows for a EU wide monitoring system, allowing the EU to set Country specific targets. Heron project, GA number:

12 Heron European Survey main results The high relevance energy efficiency barriers in 8 European Heron countries are: Building sector Socio economic status of building users (11,7% of respondents); Lack of funds or access to finance (10% of respondents); Habits and relevant behavioural aspects (7,5% of respondents). Transport sector Lack of finance for new vehicles/ulta low emission vehicles/public transport (8,2% of respondents); Limited infrastructure investments (8,1% of respondents); The economic aspects, related to the lack of funding, access to finance, lack of financial incentives, high capital costs and financial risk, emerge as a key barriers to both sectors in all partner countries. Behavioural aspects are more important in building sector than in transport sector. Heron project, GA number:

13 Heron Decision Support Tool (DST) The Heron Decision Support Tool (DST) is a software able to calculate the energy efficiency barriers negative impacts on different energy efficiency scenarios. The DST allows to quantify the impacts of behavioural barriers on an energy efficiency technology penetration rate. The combination of an harmonized EUwide taxonomy along with the DST tool will enable the design of EU EE policies specifically targeting EE barriers. Heron project, GA number:

14 Heron energy efficiency 2030 scenarios Each partner developed different 2030 EE national scenarios: Business as Usual (BAU) scenario: trends until 2030 with policy measures and instruments already implemented; Energy Efficiency (EE 0) scenario: scenario that models, along with new specific policies, the technical and economic penetration potential of different energy efficient technologies; Barriers to energy efficiency (EE 1) scenario: scenario that models the impact of EE barriers on the adoption of EE technologies; Barriers minimization (EE 2 to 4) scenarios: scenarios that model the minimization of the impact of EE barriers. Heron project, GA number:

15 The lost efficiency: Building sector 2030 buildings energy consumption, Mtoe 2030 buildings direct CO2 emissions, MtCO2eq Bulgaria s lost efficiency: 18% Germany s lost efficiency: 27% Italy s lost efficiency: 5% Heron project, GA number:

16 The lost efficiency: Transport sector 2030 transport energy consumption, Mtoe 2030 transport direct CO2 emissions, MtCO2eq Bulgaria s lost efficiency: 4% Germany s lost efficiency: 9% Italy s lost efficiency: 3% Heron project, GA number:

17 The lost efficiency: the main barriers for Italy In the building sectors, barriers with the highest singular weights are: socio economic status of building users lack of awareness on savings potential lack of any type of financial support These barriers alone can reduce the saving potential by 26% for heat pumps technologies andby 21% in cooling technologies; In the transport sector, the barriers with highest single impact are: low satisfaction/lack of trust for public transport lack or limited financial incentives concerns on reliability / hesitation to trust new technologies These barriers alone can reduce the saving potential by 25% for electric cars, by 20% forbiodiesel by 15% to 20% for modal shift. Heron project, GA number:

18 The lost efficiency: conclusion EE is the leading sector for achieving the Paris Agreement goals; Penetration of EE technologies has been always affected by several barriers; In order to overcome these barriers there is the need to have a harmonized classification and a precise quantitative measure of their effects; The Heron project delivers both solutions and these solutions will enable policymakers to design innovative EE policies able to internalize and overcome the effect of (behavioural) barriers. Heron project, GA number:

19 Edoardo Croci Iefe Bocconi University THANK YOU Forward-looking socio-economic research on Energy Efficiency in EU countries 19

20 HERON project received funding from the European Union s Horizon 2020 Research and Innovation programme under grant agreement No Forward-looking socio-economic research on Energy Efficiency in EU countries 20