Author: Johannes Thema

G20 EE Investment toolkit highlights multiple benefits

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The G20 Energy Efficiency Investment Toolkit is a collaborative work of 15 participating country members of the G20’s Energy Efficiency Finance Task Group, co-chaired and coordinated by France and Mexico.

It offers a new perspective on the challenge of scaling-up energy efficiency investments by defining and separating “core” energy efficiency investments (those stand- alone projects where the delivery of energy savings is the lead driver) and “integral” energy efficiency investments (where overall asset performance is the lead driver, yet multiple benefits -including improved energy performance- are delivered by an incremental “embedded” investment). The Toolkit also provides insights into national policy developments, showcasing good practices, as well as an insight into policy tracking databases, using the Voluntary Energy Efficiency Investment Principles as a frame for their comparison. Finally, the Toolkit reveals how public and private sector financial institutions are tackling the energy efficiency investment challenge, through their commitments, approaches, tools and by sharing the areas that they identify for further joint development.

The document highlights the importance of accounting for multiple impacts on national and investor scale.

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Download the G20 EE Investment Toolkit

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COMBI lecture at Jadavpur University

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COMBI-researcher Souran Chatterjee (partner CEU/ABUD) gave a lecture on

Productivity impact from multiple impact perspective

Full economic assessment is required to understand the full potential of any energy policy. However, today these assessments often do not include important factors such as co-benefits/multiple impacts of any energy policy. The inclusion of additional impact into decision-making analysis may influence any policy maker to design a better policy portfolio. Most of the time, multiple impacts of energy efficiency policy are not incorporated into ex-ante policy analysis due to the absence of mature methodologies. Therefore, this research contributes to the methodological tool box by proposing the solutions to the key methodological challenges of aggregation of multiple impacts including the risks of double counting.

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New IEA/IRENA study finds global energy transition affordable – also due to multiple impacts

Johannes Thema Leave a comment

PERSPECTIVES FOR THE ENERGY TRANSITION
Investment Needs for a Low-Carbon Energy System

A recent study commissioned by the German G20 presidency to the IEA and IRENA sees energy efficiency as one main element for a Global energy transition. Only decreasing 2050 primary energy supply by 27% through energy efficiency allows meeting 65% of this demand with renewable energy.

Total investment of around 145 bn US$ in energy supply would only slightly need to rise (by 1 bn/year) over today’s level to achieve climate targets, while there is significant additional investment needed in end-use sectors. However, twice to 6 times this amount would be saved by positive environmental and health impacts. Additional GDP effects will be around 0.7–1.7%, and additional human welfare effects are not even included therein. Around 6 mn additional jobs could be expected.

Scope of the study (from Executive Summary)

Investment is the lifeblood of the global energy system. Individual decisions about how to direct capital to various energy projects – related to the collection, conversion, transport and consumption of energy resources – combine to shape global patterns of energy use and related emissions for decades to come. Government energy and climate policies seek to influence the scale and nature of investments across the economy, and long-term climate goals depend on their success. Understanding the energy investment landscape today and how it can evolve to meet decarbonisation goals are central elements of the energy transition. Around two-thirds of global greenhouse gas (GHG) emissions stem from energy production and use, which puts the energy sector at the core of efforts to combat climate change.

Against this backdrop, the German government has requested the International Energy Agency (IEA) and the International Renewable Energy Agency (IRENA) to shed light on the essential elements of an energy sector transition that would be consistent with limiting the rise in global temperature to well below two degrees Celisius (2°C), as set out in the Paris Agreement. The overarching objective of this study is to analyse the scale and scope of investments in low-carbon technologies in power generation, transport, buildings and industry (including heating and cooling) that are needed to facilitate such a transition in a cost-effective manner, while also working towards other policy goals. The findings of this report will inform G20 work on energy and climate in the context of the 2017 German G20 presidency.

The analyses in this report are framed by several key questions which include:

  • How can the energy sector achieve a transition to a decarbonised, reliable and secure energy sector at reasonable costs?
  • What are the investment needs associated with the energy sector transition and how do investment patterns need to change to reach a low-carbon energy system?
  • What are the co-benefits for other energy policy objectives that could result from an energy sector transformation?
  • Assuming a timely and effective low-carbon energy sector transition, what is the outlook for stranded assets? What is the impact for stranded assets if action is delayed and the transition is sharper?
  • How does the trend of declining costs for renewables and other low-carbon energy technologies, as well as acceleration of efficiency gains, support the decarbonisation? How can policy accelerate this development?
  • What are the roles of carbon pricing and the phase-out of fossil fuel subsidies in ensuring a cost-effective decarbonisation of energy systems?
  • What are the roles of more stringent regulations, better market design and/or higher carbon prices for the energy sector transition?
  • What is the role of research, development and demonstration, and how can early deployment of a broad array of low-carbon technologies support an efficient and effective energy sector transition?

In order to address these questions, the IEA and IRENA separately have examined the investment needs for energy sector pathways that would foster putting the world on track towards a significant reduction in energy-related GHG emissions until the middle of this century. Each institution has developed one core scenario that would be compatible with limiting the rise in global mean temperature to 2°C by 2100 with a probability of 66%, as a way of contributing to the “well below 2°C” target of the Paris Agreement. Both the IEA and IRENA analyses start with the same carbon budget for the energy sector. But the pathways to reaching the goal differ between the two analyses: the modelling analysis conducted by the IEA aims at laying out a pathway towards energy sector decarbonisation that is technology-neutral and includes all low- carbon technologies, taking into account each country’s particular circumstances. The analysis conducted by IRENA maps out an energy transition that stresses the potential of energy efficiency and renewable energy sources to achieving the climate goal, while also taking into consideration all other low-carbon technologies.

While IEA and IRENA base their energy sector analyses on different approaches and use different models and/or tools, there are similarities in high-level outcomes that support the relevance for a pathway and framework for a timely transition of the global energy sector. In the following sections, key findings from the analyses of each organisation are presented.

Find the full study at the IRENA website.

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COMBI at World Sustainable Energy Days

Johannes Thema Leave a comment

COMBI-researcher Souran Chatterjee presented first draft productivity impacts from the project at the World Sustainable Energy Days 2017 conference in Wels/Austria.

Full economic assessment is required to understand the full potential of any energy policy. However, today these assessments often do not include important factors such as co-benefits/multiple impacts of any energy policy. The inclusion of additional impact into decision-making analysis may influence policy maker to design a better policy portfolio. Most of the time, multiple impacts of energy efficiency policy are not incorporated into ex-ante policy analysis due to the absence of mature methodologies. Therefore, this research contributes to the methodological tool box by proposing solutions to the key methodological challenges of aggregation of multiple impacts including the risks of double counting.

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COMBI blog post on social impacts of energy efficient buildings

Johannes Thema Leave a comment

COMBI researcher Nora Mzavanadze posted a blog entry on the website of Energy Vulnerability and Urban Transitions on an RMIT Europe workshop:

“RMIT Europe has gathered a number of experts from academia and industry to a half-day workshop on November 28, 2016 – “The social impacts of digitally-enabled energy efficiency in buildings: shaping sustainable energy futures”. The participants discussed energy consumption trends in the residential buildings’ sector, the possibilities that digital technologies could bring in understanding these trends and also in achieving reductions in energy consumption. Social impacts arising as a result of energy efficiency, energy conservation and renewable energy measures in residential housing has been at the center of presentations and discussions […].”

Read full blog post

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EEA: Air pollution causes close to half mn premature deaths in Europe

Johannes Thema Leave a comment

Air pollution is causing around 467,000 premature deaths in Europe every year, the European Environment Agency (EEA) has warned. People in urban areas are especially at risk, with around 85% exposed to fine particulate matter (PM2.5) at levels deemed harmful by the World Health Organization (WHO). These particles are too small to see or smell, but have a devastating impact.
PM2.5 can cause or aggravate heart disease, asthma and lung cancer.

How big is the problem?

It’s pretty bad. Within the European Union (EU), more than 430,000 people died prematurely due to PM2.5 in 2013, the most recent year with figures available.

Read BBC article

Full EEA report

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Seminar on social impacts of building EE in Spain

Johannes Thema

Half day seminar addressing the social impacts of energy efficient buildings to ensure a more sustainable future

Date & time: 28 Nov 2016, 10:00 am-02:30 pm (CET)

Venue: RMIT Europe, Minerva 2, 08006 Barcelona, Spain

Cost: Free

Traditionally, policymakers and researchers have focused on the techno-economic approach in assessing the impacts of energy efficient buildings (EEB). However, with sustainable energy becoming a prominent topic in recent times, there has been a growing need to widen the scope to include both social and ethical factors. This seminar brings together insights from academia and industry to shed light on reasons why society should account for human experience, activity and social practices in influencing energy consumption, and how these understandings can help plan for a sustainable future.

COMBI researcher Nora Mzavanadze will be a speaker at the seminar.

Find out more

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COMBI paper: Measuring multiple impacts of low-carbon energy options in a green economy context

Johannes Thema

A COMBI paper will be published on October 1, 2016 in Applied Energy and is already published online. The article can be openly accessed via ScienceDirect until October 18, 2016:

Measuring multiple impacts of low-carbon energy options in a green economy context

Highlights

  • Including co-benefits into the cost-benefit analysis of energy options is pivotal.
  • This is not done mainly due to lack of adequate methods, this paper fills this gap.
  • We identify the key challenges to integrating co-impacts into cost-benefit analysis.
  • We propose a menu of solutions to each challenge.
  • An analytical framework systematically addressing interactions among co-impacts.

Abstract

The economic assessment of low-carbon energy options is the primary step towards the design of policy portfolios to foster the green energy economy. However, today these assessments often fall short of including important determinants of the overall cost-benefit balance of such options by not including indirect costs and benefits, even though these can be game-changing. This is often due to the lack of adequate methodologies.

The purpose of this paper is to provide a comprehensive account of the key methodological challenges to the assessment of the multiple impacts of energy options, and an initial menu of potential solutions to address these challenges.

The paper first provides evidence for the importance of the multiple impacts of energy actions in the assessment of low-carbon options.

The paper identifies a few key challenges to the evaluation of the co-impacts of low-carbon options and demonstrates that these are more complex for co-impacts than for the direct ones. Such challenges include several layers of additionality, high context dependency, and accounting for distributional effects.

The paper continues by identifying the key challenges to the aggregation of multiple impacts including the risks of overcounting while taking into account the multitude of interactions among the various co-impacts. The paper proposes an analytical framework that can help address these and frame a systematic assessment of the multiple impacts.

Full article via ScienceDirect

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New ECF report: Looking at EE from societal perspective including wider benefits

Johannes Thema

In the recently published report on “Efficiency First”, the European Climate Foundation asks the EU Commission to analyse Energy Efficiency from a societal perspective,

“to quantify, monetise and factor in the wider social benefits of energy efficiency”, namely to “benefits beyond direct savings to individual households. These benefits include better energy security, air quality, job creation and a reduction in CO2 emissions” and to apply lower discount rates.

 

Full report:

EFFICIENCY FIRST: A NEW PARADIGM FOR THE EUROPEAN ENERGY SYSTEM

Driving competititveness, energy security and decarbonisation through increased energy productivity

Summary

This briefing explains what “Efficiency First” is and why it should underpin the Energy Union. In a nutshell, it comes down to prioritising investments in energy efficiency -– whether end-use savings or demand response – whenever they would cost less or deliver more than investing in supply or networks. Applying this logic to all energy policy decisions can strengthen Europe’s economic recovery, lower fuel imports, build competitiveness, create jobs, improve air quality and bring down the costs of the transition to a low-carbon society.

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