IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/93076.html
   My bibliography  Save this paper

Construction of energy savings cost curves: An application for Denmark

Author

Listed:
  • Pasquali, Andrea
  • Klinge Jacobsen, Henrik

Abstract

This paper investigate the construction and use of energy saving cost curves. We discuss the various methodologies for calculating costs of savings measures and whether these can be compared across different sectors, end-uses and over time. The costs are fundamentally different if estimated as full cost of a measure, including installation, financing, transaction costs etc. or just the marginal cost of a more energy efficient component, for example type of glass or appliance model. We also highlight the difference in gross measures considered when examing option for residential building or industrial process equipment. Finally we introduce a few examples from Danish cost curves constructed and illustrate how different aggregation would be depending of which categories of costs are used in the construction of the curves.

Suggested Citation

  • Pasquali, Andrea & Klinge Jacobsen, Henrik, 2019. "Construction of energy savings cost curves: An application for Denmark," MPRA Paper 93076, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:93076
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/93076/1/MPRA_paper_93076.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Martinaitis, Vytautas & Kazakevicius, Eduardas & Vitkauskas, Aloyzas, 2007. "A two-factor method for appraising building renovation and energy efficiency improvement projects," Energy Policy, Elsevier, vol. 35(1), pages 192-201, January.
    2. Richard G. Newell & Juha Siikamäki, 2015. "Individual Time Preferences and Energy Efficiency," American Economic Review, American Economic Association, vol. 105(5), pages 196-200, May.
    3. Mikulčić, Hrvoje & Vujanović, Milan & Duić, Neven, 2013. "Reducing the CO2 emissions in Croatian cement industry," Applied Energy, Elsevier, vol. 101(C), pages 41-48.
    4. Petersen, Steffen & Svendsen, Svend, 2012. "Method for component-based economical optimisation for use in design of new low-energy buildings," Renewable Energy, Elsevier, vol. 38(1), pages 173-180.
    5. Morrow, William R. & Marano, John & Hasanbeigi, Ali & Masanet, Eric & Sathaye, Jayant, 2015. "Efficiency improvement and CO2 emission reduction potentials in the United States petroleum refining industry," Energy, Elsevier, vol. 93(P1), pages 95-105.
    6. Toleikyte, Agne & Kranzl, Lukas & Müller, Andreas, 2018. "Cost curves of energy efficiency investments in buildings – Methodologies and a case study of Lithuania," Energy Policy, Elsevier, vol. 115(C), pages 148-157.
    7. Bühler, Fabian & Guminski, Andrej & Gruber, Anna & Nguyen, Tuong-Van & von Roon, Serafin & Elmegaard, Brian, 2018. "Evaluation of energy saving potentials, costs and uncertainties in the chemical industry in Germany," Applied Energy, Elsevier, vol. 228(C), pages 2037-2049.
    8. Klinge Jacobsen, Henrik & Juul, Nina, 2015. "Demand side management - electricity savings in Danish households reduce load variation, capacity requirements and associated emission," MPRA Paper 80060, University Library of Munich, Germany.
    9. Bruderer Enzler, Heidi & Diekmann, Andreas & Meyer, Reto, 2014. "Subjective discount rates in the general population and their predictive power for energy saving behavior," Energy Policy, Elsevier, vol. 65(C), pages 524-540.
    10. Hasanbeigi, Ali & Morrow, William & Sathaye, Jayant & Masanet, Eric & Xu, Tengfang, 2013. "A bottom-up model to estimate the energy efficiency improvement and CO2 emission reduction potentials in the Chinese iron and steel industry," Energy, Elsevier, vol. 50(C), pages 315-325.
    11. Fleiter, Tobias & Fehrenbach, Daniel & Worrell, Ernst & Eichhammer, Wolfgang, 2012. "Energy efficiency in the German pulp and paper industry – A model-based assessment of saving potentials," Energy, Elsevier, vol. 40(1), pages 84-99.
    12. Hassett, Kevin A. & Metcalf, Gilbert E., 1993. "Energy conservation investment : Do consumers discount the future correctly?," Energy Policy, Elsevier, vol. 21(6), pages 710-716, June.
    13. García-Gusano, Diego & Espegren, Kari & Lind, Arne & Kirkengen, Martin, 2016. "The role of the discount rates in energy systems optimisation models," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 56-72.
    14. Worrell, Ernst & Martin, Nathan & Price, Lynn, 2000. "Potentials for energy efficiency improvement in the US cement industry," Energy, Elsevier, vol. 25(12), pages 1189-1214.
    15. Zvingilaite, Erika & Klinge Jacobsen, Henrik, 2015. "Heat savings and heat generation technologies: Modelling of residential investment behaviour with local health costs," Energy Policy, Elsevier, vol. 77(C), pages 31-45.
    16. Ronald J. Sutherland, 1991. "Market Barriers to Energy-Efficiency Investments," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 15-34.
    17. Fabian Bühler & Stefan Petrović & Torben Ommen & Fridolin Müller Holm & Henrik Pieper & Brian Elmegaard, 2018. "Identification and Evaluation of Cases for Excess Heat Utilisation Using GIS," Energies, MDPI, vol. 11(4), pages 1-24, March.
    18. Kelly Kissock, J. & Eger, Carl, 2008. "Measuring industrial energy savings," Applied Energy, Elsevier, vol. 85(5), pages 347-361, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Schleich, Joachim & Gassmann, Xavier & Faure, Corinne & Meissner, Thomas, 2016. "Making the implicit explicit: A look inside the implicit discount rate," Energy Policy, Elsevier, vol. 97(C), pages 321-331.
    2. Peng, Bin-Bin & Xu, Jin-Hua & Fan, Ying, 2018. "Modeling uncertainty in estimation of carbon dioxide abatement costs of energy-saving technologies for passenger cars in China," Energy Policy, Elsevier, vol. 113(C), pages 306-319.
    3. Kong, Lingbo & Hasanbeigi, Ali & Price, Lynn & Liu, Huanbin, 2017. "Energy conservation and CO2 mitigation potentials in the Chinese pulp and paper industry," Resources, Conservation & Recycling, Elsevier, vol. 117(PA), pages 74-84.
    4. Fischbacher, Urs & Schudy, Simeon & Teyssier, Sabrina, 2021. "Heterogeneous preferences and investments in energy saving measures," Resource and Energy Economics, Elsevier, vol. 63(C).
    5. Schleich, Joachim & Faure, Corinne & Meissner, Thomas, 2021. "Adoption of retrofit measures among homeowners in EU countries: The effects of access to capital and debt aversion," Energy Policy, Elsevier, vol. 149(C).
    6. Richard B. Howarth & Alan H. Sanstad, 1995. "Discount Rates And Energy Efficiency," Contemporary Economic Policy, Western Economic Association International, vol. 13(3), pages 101-109, July.
    7. Olsthoorn, Mark & Schleich, Joachim & Faure, Corinne, 2019. "Exploring the diffusion of low-energy houses: An empirical study in the European Union," Energy Policy, Elsevier, vol. 129(C), pages 1382-1393.
    8. Katrin Millock & Céline Nauges & Åsa Löfgren, 2007. "Using Ex Post Data to Estimate the Hurdle Rate of Abatement Investments – An Application to the Swedish Pulp and Paper Industry and Energy Sector," Post-Print halshs-00272041, HAL.
    9. Li, Yuan & Zhu, Lei, 2014. "Cost of energy saving and CO2 emissions reduction in China’s iron and steel sector," Applied Energy, Elsevier, vol. 130(C), pages 603-616.
    10. Andersson, Elias & Karlsson, Magnus & Thollander, Patrik & Paramonova, Svetlana, 2018. "Energy end-use and efficiency potentials among Swedish industrial small and medium-sized enterprises – A dataset analysis from the national energy audit program," Renewable and Sustainable Energy Reviews, Elsevier, vol. 93(C), pages 165-177.
    11. Todd D. Gerarden & Richard G. Newell & Robert N. Stavins, 2017. "Assessing the Energy-Efficiency Gap," Journal of Economic Literature, American Economic Association, vol. 55(4), pages 1486-1525, December.
    12. Jonathan G. Koomey & Alan H. Sanstad & Leslie J. Shown, 1996. "Energy‐Efficient Lighting: Market Data, Market Imperfections, And Policy Success," Contemporary Economic Policy, Western Economic Association International, vol. 14(3), pages 98-111, July.
    13. Rodrigues da Silva, Rafael & Mathias, Flavio Roberto de Carvalho & Bajay, Sergio Valdir, 2018. "Potential energy efficiency improvements for the Brazilian iron and steel industry: Fuel and electricity conservation supply curves for integrated steel mills," Energy, Elsevier, vol. 153(C), pages 816-824.
    14. Hepburn, Cameron & Teytelboym, Alexander & Cohen, Francois, 2018. "Is Natural Capital Really Substitutable?," INET Oxford Working Papers 2018-12, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    15. Schleich, Joachim & Gassmann, Xavier & Meissner, Thomas & Faure, Corinne, 2023. "Making the factors underlying the implicit discount rate tangible," Energy Policy, Elsevier, vol. 177(C).
    16. Löfgren, Åsa & Millock, Katrin & Nauges, Céline, 2008. "The effect of uncertainty on pollution abatement investments: Measuring hurdle rates for Swedish industry," Resource and Energy Economics, Elsevier, vol. 30(4), pages 475-491, December.
    17. Philip B. Thompson, 2002. "Consumer Theory, Home Production, And Energy Efficiency," Contemporary Economic Policy, Western Economic Association International, vol. 20(1), pages 50-59, January.
    18. O'Malley, Eoin & Scott, Susan & Sorrell, Steve, 2003. "Barriers to Energy Efficiency: Evidence from Selected Sectors," Research Series, Economic and Social Research Institute (ESRI), number PRS47, June.
    19. Wang, Ke & Wang, Shanshan & Liu, Lei & Yue, Hui & Zhang, Ruiqin & Tang, Xiaoyan, 2016. "Environmental co-benefits of energy efficiency improvement in coal-fired power sector: A case study of Henan Province, China," Applied Energy, Elsevier, vol. 184(C), pages 810-819.
    20. Thomas Meissner & Xavier Gassmann & Corinne Faure & Joachim Schleich, 2023. "Individual characteristics associated with risk and time preferences: A multi country representative survey," Journal of Risk and Uncertainty, Springer, vol. 66(1), pages 77-107, February.

    More about this item

    Keywords

    Energy savings; cost curve; conservation;
    All these keywords.

    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:93076. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.