Too smart by half? Reducing household energy consumption and emissions
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- Laura Owens
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1 Too smart by half? Reducing household energy consumption and emissions Adam Rysanek, Irina Shaorshadze, Laura Platchkov, Scott Kelly University of Cambridge Judge Business School,
2 Introduction Adam Rysanek Department of Engineering
3 3 The GHG emissions from the UK residential sector GHG emissions by end-use in the UK 2008 Average per capita individual direct carbon emissions in 2005 Source: DUKES (2010) Source: UK Energy Efficiency Action Plan (2007)
4 Interactive Polling Result 4 1. By 2030, what percentage of the UK housing stock is likely to consist of buildings already existing today? 1. 0% (We will replace all of our buildings) 48% 2. 25% 3. 50% 35% 4. 75% 5. Over 90% 0% 4% 13%
5 5 The retrofit objectives of the UK Over 90% of the UK s building stock beyond 2030 will likely consist of buildings already existing today. (Hinnells et al. 2008, CIBSE 2010) More than one house will need to be refurbished every minute for the next 40 years to meet our GHG reduction targets (CIBSE 2010)
6 Energy Efficiency Adam Rysanek Department of Engineering
7 7 The GHG emissions from the UK residential sector GHG emissions by end-use in the UK 2008 Average per capita individual direct carbon emissions in 2005 Heating contributes to over 40% of direct emissions from households Source: DUKES (2010) Source: UK Energy Efficiency Action Plan (2007)
8 8 Rating the energy efficiency of your house Energy Performance of Houses It is mandatory for anyone selling a home in the UK to obtain and provide an Energy Performance Certificate (EPC) to potential buyers Houses in the UK are rating using the Standard Assessment Procedure (SAP) Source: Directgov (2011), CLG (2007)
9 9 Rating the energy efficiency of your house Standard Assessment Procedure (SAP) Rating Less cost = More efficient SAP Rating Bad Good If you pay a lot in energy bills, in relation to your home s size Energy Cost Factor Annual Energy Costs ( ) / Household Floor Area (m 2 )
10 10 Know your domestic energy efficiency rating Source: CLG (2006)
11 11 Why care about the energy efficiency of homes? Source: IEA (2010)
12 12 Why care about the energy efficiency of homes? Approximately 40% of houses in the UK were built before 1945 Source: IEA (2010)
13 13 What can you do to increase your energy efficiency? Cavity wall or solid wall insulation Install double glazing Drought proofing Loft insulation Buying an A-rated appliances (including boiler) Install a timed thermostat to control your heating
14 14 Cavity What can Wall you do to increase your energy efficiency? Insulation Cavity wall or solid wall insulation Install double glazing Weatherstripping Loft insulation Buying A-rated appliances (including boiler) Install a timed thermostat to control your heating
15 15 What can you do to increase your energy efficiency? Solid Wall Insulation Cavity wall or solid wall insulation Install double glazing Weatherstripping Loft insulation Buying A-rated appliances (including boiler) Install a timed thermostat to control your heating
16 16 Loft What insulation can you do to increase your energy efficiency? Cavity wall or solid wall insulation Install double glazing Weatherstripping Loft insulation Buying A-rated appliances (including boiler) Install a timed thermostat to control your heating
17 17 Draught What can proofing you do to increase your energy efficiency? Cavity wall or solid wall insulation Install double glazing Weatherstripping Loft insulation Buying A-rated appliances (including boiler) Install a timed thermostat to control your heating
18 Interactive Polling Result If you were to own a typical dwelling in Cambridge, which energy-efficiency measure would likely earn you the most amount of money after 5 years? 50% 1. Hot-water tank insulation 2. Cavity wall insulation 3. Loft insulation 4. Install double glazing 5. Install an A-rated boiler 13% 17% 17% 4%
19 19 The cost of household energy efficiency Type of Measure Insulation Heating system Measures Average Cost Cost saved Carbon saved Pay back Revenue after 3 years Revenue after 5 years /yr kgc/yr years Hot water tank Cavity wall Solid wall 3, ,010 1,250 Loft Draught proofing Double glazing 4, ,877 3,795 Improved controls A rated boiler 1, Solar water heating 2, ,481 2,385 Photovoltaic (PV) electricity 9, ,208 8,784 Micro CHP 1, Source: CLG (2006)
20 20 The cost of household energy efficiency Type of Measure Insulation Heating system Measures Average Cost Cost saved Carbon saved Pay back Revenue after 3 years Revenue after 5 years /yr kgc/yr years Hot water tank Cavity wall Solid wall 3, ,010 1,250 Loft Draught proofing Double glazing 4, ,877 3,795 Improved controls A rated boiler 1, Solar water heating 2, ,481 2,385 Photovoltaic (PV) electricity 9, ,208 8,784 Micro CHP 1, Source: CLG (2006)
21 21 The cost of household energy efficiency Type of Measure Insulation Heating system Measures Average Cost Cost saved Carbon saved Pay back Revenue after 3 years Revenue after 5 years /yr kgc/yr years Hot water tank Cavity wall Solid wall 3, ,010 1,250 Loft Draught proofing Double glazing 4, ,877 3,795 Improved controls A rated boiler 1, Solar water heating 2, ,481 2,385 Photovoltaic (PV) electricity 9, ,208 8,784 Micro CHP 1, But in this economic climate, who can help us brave the costs?
22 Government Policies Scott Kelly Faculty of Land Economy
23 BARRIERS 23
24 Interactive Polling Result What is the single largest barrier preventing you from improving energy efficiency or installing low-carbon technologies in your home? 1. Upfront cost is too expensive 36% 2. Financial savings are not enough 3. It is a nuisance and I do not have enough time 23% 23% 4. Never thought about it before 5. Too difficult to find a trustworthy installer 6. I m not responsible for this 14% 5% 0%
25 GOVERNMENT POLICY AND TECHNOLOGY FITs RHI RO GreenDeal
26 Interactive Polling Result Do you think you pay too much towards environmental policies in your energy bills? 68% 1. Yes 2. No 32% 1 2
27 Interactive Polling Result How much of the average annual energy bill in the UK do you think goes towards environmental policies? 1. over 600 (over 58%) (34%-58%) 42% 37% (20%-33%) (7.3%-19%) 5. under 75 (under 7.3%) 11% 5% 5% * The average UK energy bill is around 1239 per annum
28 Lets compare policies FITs RHI GreenDeal RO Cost Total Cost ( billions) Saving CO 2 savings (MtCO2) Energy Bill Year 1 Energy Bill Year *Assumes 30 year payback of scheme and the same % from energy bill is paid back each year * Assumes bills increase by 5% per annum the number of dwellings increase 1.5% per annum 28
29 Smart Meters and Smart Appliances Irina Shaorshadze Faculty of Economics
30 Interactive Polling Result When should you avoid using the washing machine (in terms of costs of producing electricity)? 1. 9am 4pm 2. 5pm 8pm 65% 3. 9pm 6am 4. It is a matter of convenience, not cost 5. There is no difference. A load of laundry is a load of laundry. 9% 0% 13% 13%
31 31 UK Wholesale Electricity Prices, /MWh off peak day median day
32 32 UK Wholesale Electricity Prices, /MWh off peak day median day
33 33 UK Wholesale Electricity Prices, /MWh peak day off peak day median day
34 34 UK Wholesale Electricity Prices, /MWh peak day off peak day median day
35 35 UK Wholesale Electricity Cost Demand Source: Ofgem (2010), Demand Side Response
36 36 UK Wholesale Electricity Cost Costs after smoothing Source: Ofgem (2010), Demand Side Response
37 37 UK Wholesale Electricity Cost Source: Ofgem (2010), Demand Side Response
38 Benefits of Shifting Loads Off-Peak: Wholesale Electricity Cost Savings 0.7m 1.7m per year Capital Cost Savings Generation Cost: 265m- 536m per year Transmission: 28m per year Total Savings: m per year In addition, Carbon Emissions Savings 800t 2,550t per day 0.16% % Also, flexible demand facilitates Variable Generation (Wind, solar) Source: Ofgem (2010), Demand Side Response 38
39 39 Currently meters do not facilitate flexible demand But this is about to change..
40 Interactive Polling Result Would you be willing to have a smart meter in your home? 1. Yes and I will pay up to 80 for it 52% 2. Yes, but only if supplier puts it for free 3. No, because I m concerned about my privacy 30% 9% 9% 4. No, because I don t need one
41 41 Potential Benefits and Costs of Smart Meter Consumer savings (Based on avg. bill 512 per year) Better Information on real time consumption (2.8% reduction in energy) Multi-tariff metering (Time of Use) (20% take up, 5% peak shift, 3% off electricity bill) Supplier Savings passed on to Consumers (per meter per year): Avoid need of on-site meter readings 6.75 Customer service overhead (call center savings) 2.20 Remote switching 0.50 Total Savings (per year): Costs (per unit): Display and meter Network Installation Total Cost : (per unit) Source: DECC, 2009, Impact Assessment of Smart Meter Rollout
42 42 Potential Benefits and Costs of Smart Meter Consumer savings (Based on avg. bill 512 per year) Better Information on real time consumption (2.8% reduction in energy) Multi-tariff metering (Time of Use) (20% take up, 5% peak shift, 3% off electricity bill) Supplier Savings passed on to Consumers (per meter per year): Avoid need of on-site meter readings 6.75 Customer service overhead (call center savings) 2.20 Remote switching 0.50 Total Savings (per year): Costs (per unit): It could pay for itself in less than 3 years Display and meter Network Installation Total Cost :(per unit) Source: DECC, 2009, Impact Assessment of Smart Meter Rollout
43 43 Potential Concerns Privacy?... Confidentiality?... Fraud?... Has derailed mandatory Smart Meter rollout in Netherlands Why is it a concern? Personal Information not previously obtainable New mechanism for obtaining private information Area of concern Network Privacy (Consumer to Utility) Data Access Privacy (Energy provider, third party, criminals ) But Have been able to successfully safeguard sensitive data: Bank accounts, Phone records, Health records
44 Interactive Polling Result If electricity costs you twice as much 6-8pm would you rather: 1. Not change your daily habits 60% 2. Delay using some appliances until after 8pm 3. Get Smart Appliances and preset them with timer 4. Get Smart Appliances and let your supplier manage them (less to worry about?..) 5. Demand switching to flat tariff 5% 20% 5% 10%
45 45 Source:
46 Smart Appliance Deployment Scenarios A. Information is provided through signal from supplier when the renewable energy is available. B. Direct Load Control through signal from supplier 1: Preset to start at certain time, or when renewable energy is available. (Ex. Use washing machine, dryer, dish-washer after 9PM) 2: Interruptions (Ex. refrigerator, freezer interrupted for 2-3 minutes) 3: Cycle is delayed/extended (Ex. washing machine, dryer taking longer) 4: Restricted usage at times of peak (Ex. Limit use of cooker for 30min intervals a few times a year) 46
47 Share of Respondents Accepting Discount 20% 40% 60% 80% Cumulative Share of Respondents that Accept Modifications to Appliance Use in Exchange for Discount 0 1% 2% 5% 10% 20% Discount Offered Wet Appl. Run Longer Wet Appl. Preset White Appl.Interrupt Cooker Capped Source: EPRG Survey of UK Households 47
48 48 What influences acceptance? Habits: Acceptance highest for measures that do not involve significant lifestyle changes Convenience: Supply interruptions, even if they are planned have the lowest acceptance rates Savings: However stated acceptance rates are high, even for low discounts on bills Values: Those expressing concern for environment had higher acceptance rates Information Preferences Lifestyles
49 Afterthought Laura Platchkov Faculty of Economics
50 Interactive Polling Result Congratulations! Thanks to your smart meter & energy efficiency measures, you have saved 300 on your energy bills! How will you spend the money? 1. Save the money/spend it on other bills/ donate to an environmental charity 48% 2. Put the thermostat higher 3. Pub/restaurant 4. Travel 17% 17% 5. Shopping (clothes, shoes, home fabric, sports equipment, books) 9% 9%
51 51 Energy abatement & energy efficiency measures => lower CO2 emissions/energy AND implicit price of energy services = YOU SAVE MONEY! you reallocate your consumption and partially offset the savings=>rebound you reallocate your consumption and negate the savings=> backfire Rebound estimates in developed nations - Summary energy service Source: Jenkins et al. (2011) estimates best guess degree of confidence automotive transport 5 87% 10 30% high space heating % 10 30% medium space cooling 0 50% 1 26% low water heating 10 40%? very low other consumer energy services 0 49% <20% low
52 2 Your CO2 savings Average tco2/person in the UK = 15.42tCO2 1.5 tonnes of CO2 saved save or donate clothes pub & restaurant other shopping warmer home books gadgets flying Source: 52
53 53 Do you have any questions?
54 54 Thank You
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