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Implications of an energy efficiency obligation scheme for the Swedish energy-intensive industries: an evaluation of costs and benefits
KTH, School of Industrial Engineering and Management (ITM), Energy Technology, Energy and Climate Studies, ECS.ORCID iD: 0000-0003-2896-8841
KTH, School of Industrial Engineering and Management (ITM), Energy Technology, Energy and Climate Studies, ECS.ORCID iD: 0000-0001-7123-1824
KTH, School of Industrial Engineering and Management (ITM), Energy Technology, Energy and Climate Studies, ECS.ORCID iD: 0000-0002-3618-1259
2016 (English)In: Energy Efficiency, ISSN 1570-646X, E-ISSN 1570-6478, 1-19 p.Article in journal (Refereed) Published
Abstract [en]

The EU Energy Efficiency Directive (EED) aims at improving energy efficiency by implementing actions in all sectors of the economy in the EU. Article 7 of the EED sets the target of 1.5 % cumulative annual energy end-use savings. An energy efficiency obligation scheme (EEO) is one of the policy mechanisms proposed to reach this target. This paper assesses the impact of implementing a Swedish EEO and the implications that such a scheme may have for Swedish energy-intensive industries. The assessment was based on cost-benefit analysis (CBA) methodology. The benefit-to-cost ratio (BCR) ranges from 1.56 to 2.17 and the break-even cost ranges from 83.3 to 86.9 €/MWh with sensitivity analyses performed for the emission allowance prices and eventual costs of the EEO. The annual energy savings potential is estimated to be 1.25 TWh/year. A Swedish EEO could motivate investments in energy efficiency measures and thus help Sweden reach the energy efficiency targets set in the EED.

Place, publisher, year, edition, pages
Elsevier, 2016. 1-19 p.
Keyword [en]
Energy efficiency obligation scheme, Cost-benefit analysis, Industrial energy efficiency, Energy efficiency directive, Sweden
National Category
Energy Systems
Research subject
Energy Technology
Identifiers
URN: urn:nbn:se:kth:diva-185749DOI: 10.1007/s12053-016-9446-7ISI: 000394263100009Scopus ID: 2-s2.0-84964240147OAI: oai:DiVA.org:kth-185749DiVA: diva2:923357
Note

QC 20161010

Available from: 2016-04-26 Created: 2016-04-26 Last updated: 2017-11-30Bibliographically approved
In thesis
1. Is energy efficiency the forgotten key to successful energy policy?: Investigating the Swedish case
Open this publication in new window or tab >>Is energy efficiency the forgotten key to successful energy policy?: Investigating the Swedish case
2016 (English)Licentiate thesis, comprehensive summary (Other academic)
Abstract [en]

Sweden aims to become one of the first fossil-free welfare countries in the world. In 2009, specific energy and climate policy targets were announced for 2020, which exceed the ambition of respective EU targets in some areas. The overarching objective of the thesis is to understand the role of energy efficiency in Swedish energy and climate policy frameworks, and identify the gaps that need to be addressed. In this context, energy efficiency is recognized as a challenge to address. Yet, there are reasons to believe that it is not being pursued with the same dedication as other energy and climate-related targets.

This hypothesis is tested using Mixed Methods research, with cases on different sectors of the Swedish economy, namely energy intensive industry and public bus transport, as well as comparisons with energy efficiency within the EU-28. With the help of abductive reasoning, the observations are inferred to an explanation, and common themes for Swedish energy efficiency policies emerge.

The evidence indicates that energy efficiency has received lower priority than other energy and climate policies. This is demonstrated by the conflict between energy efficiency, emission reduction and renewable energy targets, for example in the case of public transport. There is generally a mismatch between targets and the instruments in place. Thus more attention should be given to energy efficiency and its potential benefits for the Swedish energy system.

Opportunities for energy efficiency improvements are not being fully realized, but new policy initiatives could provide the necessary support to harness the potential. In-depth evaluation of new policy instruments should be integrated in the policy-making process, in order to provide a clear picture of costs versus benefits. An example is given with a Cost-Benefit Analysis for energy efficiency obligations targeting the Swedish energy intensive industry.

Simplicity and transparency in the introduction and monitoring of new instruments need to be sought for. Energy efficiency should be given first priority in relation to other energy and climate targets. The basis for future policies should be grounded now in order for energy efficiency to become the key for successful Swedish energy policy. 

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2016. 62 p.
Series
TRITA-ECS Report, 16/01
Keyword
energy efficiency, energy policy, Sweden, policy research, mixed-methods research, Cost-benefit analysis, energy intensive industries, public transport
National Category
Energy Systems
Research subject
Energy Technology
Identifiers
urn:nbn:se:kth:diva-192291 (URN)978-91-7729-117-6 (ISBN)
External cooperation:
Presentation
2016-10-06, B2, Brinellvägen 23, Stockholm, 10:00 (English)
Opponent
Supervisors
Note

QC 20160914

Available from: 2016-09-14 Created: 2016-09-08 Last updated: 2016-09-14Bibliographically approved

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Xylia, MariaSilveira, SemidaMorfeldt, Johannes

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