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Profiting from negawatts: Reducing absolute consumption and emissions through a performance-based energy economy

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  • Steinberger, Julia K.
  • van Niel, Johan
  • Bourg, Dominique

Abstract

Current energy and GHG emissions policies either focus directly on emissions or promote renewable production and the implementation of specific efficiency measures. Meanwhile, the fundamental structure of the energy market based on profits through energy throughput remains largely unchallenged. This policy oversight prevents the transition to an energy economy in which profits are based on energy services delivered at the lowest energy cost: a performance-based energy economy (PBEE). The PBEE applies the combined concepts of the performance economy and energy services to the energy sector. Energy Service Companies (ESCOs) are discussed as an example of PBEE practices. The implications for energy suppliers and consumers as well as the conditions for PBEE diffusion and consequences for technological change are also explored. The expected environmental, social and economic benefits are described. However, absolute consumption and emissions reductions may prove elusive due to the rebound effect. In order to forestall rebound-led increases, complementary policy measures likely to lead to absolute reductions are required.

Suggested Citation

  • Steinberger, Julia K. & van Niel, Johan & Bourg, Dominique, 2009. "Profiting from negawatts: Reducing absolute consumption and emissions through a performance-based energy economy," Energy Policy, Elsevier, vol. 37(1), pages 361-370, January.
  • Handle: RePEc:eee:enepol:v:37:y:2009:i:1:p:361-370
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    References listed on IDEAS

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    Cited by:

    1. Apajalahti, Eeva-Lotta & Lovio, Raimo & Heiskanen, Eva, 2015. "From demand side management (DSM) to energy efficiency services: A Finnish case study," Energy Policy, Elsevier, vol. 81(C), pages 76-85.
    2. K. Scott & H. Daly & J. Barrett & N. Strachan, 2016. "National climate policy implications of mitigating embodied energy system emissions," Climatic Change, Springer, vol. 136(2), pages 325-338, May.
    3. Sousa, José Luís & Martins, António Gomes & Jorge, Humberto, 2013. "Dealing with the paradox of energy efficiency promotion by electric utilities," Energy, Elsevier, vol. 57(C), pages 251-258.
    4. Overholm, Harald, 2015. "Spreading the rooftop revolution: What policies enable solar-as-a-service?," Energy Policy, Elsevier, vol. 84(C), pages 69-79.
    5. Hannon, Matthew J. & Foxon, Timothy J. & Gale, William F., 2013. "The co-evolutionary relationship between Energy Service Companies and the UK energy system: Implications for a low-carbon transition," Energy Policy, Elsevier, vol. 61(C), pages 1031-1045.
    6. Polzin, Friedemann & von Flotow, Paschen & Nolden, Colin, 2016. "What encourages local authorities to engage with energy performance contracting for retrofitting? Evidence from German municipalities," Energy Policy, Elsevier, vol. 94(C), pages 317-330.
    7. repec:eee:rensus:v:88:y:2018:i:c:p:99-108 is not listed on IDEAS
    8. Nolden, Colin & Sorrell, Steve & Polzin, Friedemann, 2016. "Catalysing the energy service market: The role of intermediaries," Energy Policy, Elsevier, vol. 98(C), pages 420-430.
    9. Cédric Gossart, 2015. "Rebound effects and ICT : a review of the literature," Post-Print hal-01258112, HAL.
    10. Helms, Thorsten, 2016. "Asset transformation and the challenges to servitize a utility business model," Energy Policy, Elsevier, vol. 91(C), pages 98-112.
    11. Roelich, Katy & Knoeri, Christof & Steinberger, Julia K. & Varga, Liz & Blythe, Phil T. & Butler, David & Gupta, Rajat & Harrison, Gareth P. & Martin, Chris & Purnell, Phil, 2015. "Towards resource-efficient and service-oriented integrated infrastructure operation," Technological Forecasting and Social Change, Elsevier, vol. 92(C), pages 40-52.
    12. repec:gam:jsusta:v:7:y:2015:i:12:p:16273-16289:d:60187 is not listed on IDEAS
    13. Marion Drut, 2013. "Vers un système de transport opérant selon les principes de l'économie de la fonctionnalité?," Working Papers hal-00996379, HAL.
    14. Sousa, José L. & Martins, António G. & Jorge, Humberto M., 2013. "World-wide non-mandatory involvement of electricity utilities in the promotion of energy efficiency and the Portuguese experience," Renewable and Sustainable Energy Reviews, Elsevier, vol. 22(C), pages 319-331.
    15. Marion Drut, 2012. "Vers un système de transport opérant selon les principes de l'économie de la fonctionnalité," Working Papers hal-00992621, HAL.
    16. Ingrid Vaileanu Paun, 2010. "Vers une territorialisation de la valeur des entreprises : les apports de l'économie de la fonctionnalité," Post-Print halshs-00560441, HAL.
    17. Hull, David & Ó Gallachóir, Brian P. & Walker, Neil, 2009. "Development of a modelling framework in response to new European energy-efficiency regulatory obligations: The Irish experience," Energy Policy, Elsevier, vol. 37(12), pages 5363-5375, December.

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