Current magazine 4/37 (December 2018)

ACTA ENERGETICA 04/2018
no 4/2018

Assessing the Intangibles Socioeconomic Benefits of Improving Energy Efficiency

Publication date: 2019-03-15
DOI: 10.12736/issn.2300-3022.2018408
About authors | How to cite | Publication history (expand all)

1. Introduction

Energy efficiency is a priority topic in the around the world during many years due to the impact of the high, and increasing, energy consumption and CO2 emissions observed.

The European Union (EU) has a range of policies to require Member States to improve the efficiency with which energy is used. Policy has been implemented through three key Directives – Ecodesign (2009/125/EC), Energy Performance of Buildings (EPBD – 2009/125/EC and the Energy Efficiency Directive (EED – 2012/27/EU). Under the Energy Efficiency Directive, EU countries are required to use energy more efficiently at all stages of the energy chain from its production to its final consumption.

On 30 November 2016 the European Commission (EC) published their proposals for the period post-2020, under the title “Clean Energy for all Europeans“.1 The legislative proposals, known as the “Winter Package”, cover energy efficiency, renewable energy, the design of the electricity market, security of electricity supply and governance rules for the Energy Union. 

The European Commission has adopted a number of measures to improve energy efficiency in EU members countries, launching new and innovative one, and proposed a binding 30% energy efficiency target for 2030, up from the current target of at least 27%. EC extends the energy saving obligation requiring energy suppliers and distributors to save 1.5% of energy each year from 2021 to 2030. More attention will be paid to improvement metering and billing of energy consumption for heating and cooling consumers. The Commission has also proposed changes to the Energy Performance of Buildings Directive,

The policy approach proposed by the European Commission in the Winter Package is “energy efficiency first”. Energy efficiency first is a framework which focuses on energy-related decision making, and aims to ensure that energy efficiency is considered before supply side options, when meeting demand.

EU energy saving and energy efficiency targets thus are closely linked with customers awareness and knowledges on good practices and multiple benefits from energy efficiency. Customers across the EU are active and central players on the coming energy markets.

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Fig. 1. Capturing the Multiple Benefits of Energy Efficiency, IEA, 2014

Besides, in these ideas are considered the smart technologies and Demand Response programs in order to monitor activities which involve energy consumption. This measure is providing a considerable help to manage the energy efficiency improvement.

2. Multiple benefits according to IEA categories

Term “multiple benefits” is focused on capturing reality that is often overlooked, and in practice investment in energy efficiency can provide many different benefits to number of stakeholders.

Of the presented 15 broad categories of energy efficiency improvement benefits, only energy savings and GHG emissions reduction have been measured systematically to date. Current approach proposes broader view, beyond reduction of energy demand and GHG emission, as intangible concept. Term ‘intangible refers to benefits which cannot be quantified or estimated accurately (in monetary terms), but suggests achievement of diverse economic and social value added to stakeholders. Therefore, intangible benefits are not always evident to investors, consumers and government policy makers.

3. Case studies

There are a number of examples of energy efficiency initiatives in the European Union countries, resulting in substantial savings of energy consumption, reduced costs and greenhouse gas emission, and brings a range of benefits at all levels of economy, society and environment. Aim of presented case studies in selected European Union countries is to show, on regional and local energy efficiency initiatives, and to provide information on economic and social benefits of energy efficiency improvements, according to IEA classification.

3.1. Multiple benefits of energy efficiency in energy regions in Austria

Austria is constituted of 9 federal provinces (Bundesländer) and in each federal province, the regional parliament (“Landtag”) is – among other things – in charge of executing and shaping national policies in the energy sector. The national objective is to increase the share of renewable energy to 34% by 2020 and to reach this goal, several provinces have set their own targets.. In addition to these governance bodies, bottom-up initiatives led by communities and engaged citizens have developed so called “eco-regions” or “energy regions”. Energy regions are defined as regional organizations or initiatives that focus on the use of regional (and renewable) energy sources to support the development strategies of the region. Their ultimate goal is often to achieve energy self-sufficiency with decentralised energy infrastructures and a network of stakeholders (e.g., energy experts or any person interested). Austria counts to date 104 energy regions (Klima- und Energiemodellregionen, 2015). On the basis of the TERIM2 research project focusing on the energy demand of buildings in two energy regions in Austria (“ökoEnergieland” in Burgenland and “Energieregion Weiz-Gleisdorf” in Styria), multiple benefits of energy efficiency are identified.

The benefits presented in Table 1 were identified through a qualitative content analysis of the TERIM final report with a coding system based on the IEA categories as well as a semi-structured interview with one of the former project employee from TERIM.

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Tab. 1. Multiple benefits according to IEA categories/source: own research based on TERIM report

3.2. Kirklees Warm Zone Project, the United Kingdom

Kirklees Warm Zone was a Kirklees Council inspired initiative. It was the largest and most comprehensive local authority home insulation scheme in the United Kingdom and offered free loft and cavity wall insulation to every suitable household in Kirklees. It was the first council-run scheme to offer free non-means tested insulation to every household, and won 2009’ Ashden Award for best local authority sustainable energy scheme in the UK.

Overall aim of the scheme was to improve thermal comfort and energy efficiency of every suitable home in order to tackle fuel poverty and reduce district carbon emissions. The programme ran for three years from 2007 with the homes visited in June 2010 and last installations completed in December 2010.

The project is located in Kirklees, a metropolitan borough of West Yorkshire, England. It has a population of about 401,000, and the borough is divided into 23 wards. Most of the area consists of old mill towns and country villages, interspersed with large areas of arable land. Huddersfield is the main urban conurbation. There is considerable hardship in some areas of Kirklees, and the local authority ranks among the 25% most deprived in England.

The Kirklees project had four core goals to be addressed in partnership with relevant organizations: tackle fuel poverty, deliver a low carbon Kirklees, improve the uptake of state benefit support by residents and create jobs.

Table 2 presents multiple benefits which were assessed/included in the project, according to the project’s own description, and classified by researcher using the IEA categories.

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Tab. 2. Multiple benefits according to IEA categories/source: own research based on: Butterworth N., Southernwood J., Dunham C., Kirklees Warm Zone: Economic impact assessment, Carbon Descent, 2011

Some of these impacts and outcomes are relatively straightforward to measure and to translate into monetary values. Others are harder to capture in this way.

3.3. Improving energy efficiency in publicly owned buildings in Warsaw, Poland

The project “Renewable energy sources and cogeneration in the Capital City of Warsaw” concerns diverse efforts to improve energy efficiency and reduce annual energy consumption in existing public buildings in Warsaw, Poland. The project consists of investments in trigeneration system in hospital and construction of heating pomp and of solar collectors in buildings of school and nursery.

The project was co-financed by the European Fund for Regional Development under priority “Environment, hazard prevention and energy”, measure 4.3 “Protection of atmosphere, energy” of the Regional Operational Programme of Mazowieckie Voivodeship in financial perspective 2007–2013.

The project is located in Warsaw, a capital city of Poland, situated in central part of Mazovieckie voivodeship. City population is amounted to 1,9 million citizens living in area of about 517 sq. km. Warsaw metropolitan area has over 3,3 million people and includes 20 satellite towns. Density of population is 3315 people/1 sq. km.

Key element of investment and modernization was converting commonly used in Warsaw of highly polluting coal for renewable energy sources or natural gas. The project was co-financed by the European Fund for Regional Development.

Purpose of the project named “Trigeneration CHCP (Combined Heat, Cooling and Power) in the Holy Family Hospital” in Warsaw was to build a process system for trigeneration – combined cooling, heat and power for production of electricity, heat and chilled water operating as one technological process. This is first trigenaration system in Warsaw. System started operation on 07.08.2015 year.

Electricity and heat are produced in generators powered by gas-fuelled motors, with simultaneous usage of heat recalculated from motor cooling and exhaust gas for heating purposes (central heating, ventilation process heat, domestic hot water) and for cooling (chilling water for air conditioning). All electricity and heat produced in cogeneration is used for the hospital’s purposes.        

Trigeneration has provided hospital efficient source of electricity supply, and thus increase safety of patient care by providing reliable supply of electricity to the hospital. Increasing technical standards translates directly to quality of health care, so it also improved image of the hospital as patient-friendly unit. 

The hospital is self-sufficient in terms of electricity and cooling, but not fully in heating supply. To ensure smooth functioning of the hospital and uninterrupted operation of medical equipment and apparatus, it is necessary to provide emergency power sources in event of disruptions in supply of electricity and heat from the network. Trigeneration is element of backup system. In case of failure of utility power, installation of two cogeneration units working alternately, provides additional security of supply of electricity, heat and coolness (even in event of failure of one of cogeneration engines).

Eliminating (or even only significant shortening) interruptions in supply of electricity to the hospital should avoid complications due to inability to properly perform medical procedures, thus increasing operating safety of patients, and, which is particularly important for the hospital, exclusion (reduction) of compensation paid to patients with complications in treatment.

Construction of trigeneration system has significantly reduced operating costs of the hospital buildings by reducing fuel consumption and reducing emissions of pollutants into environment.

Construction of high performance heat, cooling and electricity facilities is based on natural gas combustion. Conversion of coal to natural gas brings benefits for environment and reduction of SO2, NO2, CO, CO2, dust and other pollutants. This is corresponding to healthier living environment for inhabitants of Warsaw.

Through use of CHCP has improved state of power infrastructure, which in turn also affects reduction of network losses.

As a side effect it has had positive impact on safety of people operating the hospital maintenance electrical installations. Table 3 presents multiple benefits according to IEA categories.

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Tab. 3. Multiple benefits according to IEA categories/source: own research based on: Mazovia Energy Agency Publication concern Trigeneration at the Holy Family Hospital in Warsaw

Table 3 presents multiple benefits which were assessed/included in the project, according to the project’s own description, and classified using the IEA categories.

In presented case studies, stakeholders expressed opinions about the following types of impacts and outcomes:

  • Economic impacts such as local job creation, company growth, household, hospital and other customers saving on energy bills, improved benefit uptake and improvements to property values, improvements technical condition of the buildings, as well as aesthetics and functionality of buildings.
  • Social impacts such as health benefits for elderly and vulnerable residents, tackling fuel poverty, long-term benefits for future generations and scope of the scheme helping to improve general well-being and quality of life, meeting health and safety heat standards, creation of institutions friendly to residents.
  • Environmental impacts such as energy conservation, reduction in carbon emissions, raising awareness of energy efficiency and engaging households in broader green issues. Reduction of heat and electricity production, distribution losses. Using gas instead of coal brings benefits for environment: significant reduction in greenhouse gas emission: SO2, NO2, CO, CO2, dust and other chemical pollutants.
  • Political impacts such as the impact of the scheme on government thinking and policy on green issues and climate change mitigation, the influence on area-based models of home insulation, the national reputation of Kirklees-based organizations, Weiz–Gleisdorf and Warsaw, and the scheme offering opportunities for a range of partners to raise awareness of their service offers.

4. Conclusion

Multiple benefits approach is still relatively new, but it has potential to transform energy efficiency policy by engaging more meaningfully with full diversity of stakeholders involved in energy efficiency investment decisions, whether those decisions are represented as energy efficiency or not.

Context is important, as well as stakeholders involvement to strengthening of knowledge, experience and good practice. 

Different national priorities and stakeholder interests need to be taken into account. Data coverage and availability will be different between countries, placing a practical limit in some cases of how far the multiple benefits approach can be taken. Similarly, administrative systems may need to be adapted to multiple benefits approach, and this in itself may be a barrier. As a starting point, early efforts may need to be exploratory and existing data sets may need to be used creatively.

Inter-disciplinarity is central to multiple benefits approach. Cross-departmental (and cross-disciplinary) teams may be needed to take multiple benefits agenda forward inside government and stakeholders.

This paper is based on work done in the EU H2020 project “Assessing the intangibles: socioeconomic benefits of improving energy efficiency – In-Bee” – www.in-bee.com.

The main aim of In-Bee is to address energy efficiency topic towards intangible benefits through multi-disciplinary approach, combining methods, datasets, and techniques from cutting edge research in law and economics, humanities and consumer behaviour, regulation and environmental sciences, as well as engineering.

  1. “Assessing the intangibles: the socioeconomic benefits of improving energy efficiency”, In-Bee project documents, H2020-EE-2014-2-RIA.
  2. “Capturing the multiple benefits of energy efficiency”, International Energy Agency IEA/OECD 2014.
  3. “Transitionsdynamik in energieregionen: ein ganzheitliches modell für nachhaltige energiepolitik. TERIM” (2015) [on-line], http://www.geographie.uni-muenchen.de/department/fiona/department/sozialgeographie/forschung/terim_eng/index.html [acces: 3.06.2016].
  4. “Klima – und Energiemodellregionen” [on-line], http://www.klimaundenergiemodellregionen.at/start.asp?ID=242147&b=5121 [acces: 15.06.2016].
  5. Liddell C., Morris C., Lagdon S., “Kirklees Warm Zone”, The project and its impact on health and well-being. University of Ulster, Northern Ireland, 2011 [on-line]: http://eprints.ulster.ac.uk/19116/1/KIRKLEES_PROJECT_and_COST_BENEFIT_REPORT.pdf [acces: 21.06.2016].
  6. Butterworth, N., Southernwood, J., Dunham, C., “Kirklees Warm Zone: Economic impact assessment”, Carbon Descent. 2011 [on-line]: http://www.carbondescent.org.uk/data/files/Kirklees_FINAL_Report_2011_06_08_.pdf [acces: 12.08.2016]. 
  7. “Trigeneration at the Holy Family Hospital in Warsaw Mazovia Energy Agency”, publication regarding CEP-REC -Regional Energy Concepts project, Warszawa, 2014.
  8. National Funds for Environmental Protection and Water Management, documents from web [on-line], https://www.nfosigw.gov.pl/ [acces: 12.08.2016].
  9. “Clean Energy for All Europeans – unlocking Europe’s growth potential”, European Commission, 2016, Brussels.
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