L4 - Energy efficiency

Question 1

Give examples of motives for energy efficiency as a policy objective.

Answer 1

• Security of supply
• Improved competitiveness
• Reducing emissions
• Reducing deforestation
• Reducing “energy poverty”: health

Question 2

What is energy conservation?

Answer 2

Energy conservation is the decision and practice of using less energy. Turning off the light when you leave the room, unplugging appliances when they’re not in use and walking instead of driving are all examples of energy conservation.

Question 3

What is energy intensity and what is it affected by?

Answer 3

Energy intensity is a measure of the energy inefficiency of an economy.

(a) technical energy efficiency
(b) the structure (composition) of the economye.g. more services and less products

Question 4

What is the thermodynamic limit of efficiency?

Answer 4

ηc= 1 –(Tlow/ Thigh)

Question 5

What is CCE?

Answer 5

Cost of Conserved Energy

Question 6

What is the energy efficiency gap?

Answer 6

Energy efficiency gap refers to the improvement potential of energy efficiency or the difference between the cost-minimizing level of energy efficiency and the level of energy efficiency actually realized.

Question 7

What is top-down analyses?

Answer 7

In summary, a top-down analysis is when investors first take a broad picture of the economies and sectors they want to invest in. It means that they assess the economic growth rates of different countries across the globe. … The last step is to pick firms thriving in that particular industry, which they then invest in.

• Studying the system as a black box without specific technological measures.
• Using statistical analysis (econometrics) to quantify how factors like energy prices and income affect energy use.
• Data either historical (time series), comparing for example countries (cross sectional), or a combination of both (panel data).
• Results could be interpreted as market potentials, i.e. what actually happens when prices increase.
• An obvious problem is that future changes in technology are per definition different from historical changes

Question 8

What is price elasticity?

Answer 8

•Price elasticity of demand (ε) is the change in demand for a good due to a change in price.

The formula is:
ε = (dQ/Q) / (dP/P)
i.e., the percent change in quantity (Q) divided by the percent change in price (P)

• Or: Q = Q0·(P/P0)^ε
• Typical long-run price elasticities: -1 to -0.5 (lower in short-term)

Typical income elasticity: +1

Question 9

What is the rebound effect? Direct and indirect effect? Economy-wide effects?

Answer 9

• Engineering savings: the theoretical amount of energy that would be saved by an improvement in energy efficiency, if behaviours remain unchanged
• RE is the share of engineering savings lost through some behavioural response