The multiple benefits of current and potential energy efficiency policies: A Scottish islands case study

Energy efficiency is essential for decarbonisation targets, but quantifying its multiple benefits remains difficult given heterogeneity of technologies, stakeholders, and interactions. This study uses a 100%-sample, hourly model to estimate electricity demand and economics for the Scottish islands by 2045. Scenarios of current and more ambitious policies for appliances, buildings, heating, transport and industry are compared. The framework allows assessment of annual demand, peak demand, and average household bills changes which could either increase or decrease depending on policy commitment. Although improving building efficiency can contribute, heat pumps have by far the greatest benefit in reducing bills, annual demand, and peak demand (both daily and maximum winter demand). Increased peak heating and vehicle demand highlights the importance of flexibility. Historic rates of policy achievement will result in significantly increased electricity demand, which could further stress already constrained networks. Although upfront costs are high, most measures have favourable rates of return and all have positive NPVs relative to current electricity prices. Policies to support these costs and distribute the benefits to households, businesses and the energy system will be crucial. As the model only considers changes in technologies, results are likely optimistic given potential rebound effects which could increase demand.