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Cost-effectiveness of energy efficiency programmes—evaluating the impacts of a regional programme in France

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Abstract

This paper presents the evaluation of a regional energy efficiency programme implemented in two “départements” of France. Électricité de France (EDF), a French energy company, provides refurbishment advice and financial incentives to end-users in the residential sector as well as specific training courses and certification to local installation contractors and building firms. Refurbishment measures analysed in this paper are efficient space heating equipment (condensing boilers, heat pumps and wood stoves or boilers), solar water heating systems and the installation of double-glazed windows. A billing analysis based on a survey of programme participants’ energy consumption is used to calculate the energy savings attributed to the programme. In order to receive an economic feedback of this demonstration programme, the evaluation of both saved energy and programme costs is of importance. Detailed knowledge of the programme’s cost-effectiveness is essential for EDF to achieve the saving obligations imposed by the French White Certificate scheme at the lowest cost. Results of this evaluation can support the development and implementation of further energy efficiency programmes with similar characteristics in other regions of France. The cost-effectiveness is determined from the perspective of the programme participant and the society as well as the energy company in charge of the programme. All cost and benefit components are calculated in Euro per kilowatt-hour, which allows a direct comparison of levelized costs of conserved energy with the avoidable costs of the energy supply system.

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Notes

  1. Barriers to invest in energy efficiency are widely described in literature, for example in Golove and Eto (1996) as well as in Schleich and Gruber (2008).

  2. In addition to the improvement of energy efficiency, the EU climate and energy package contains a reduction in greenhouse gas emissions of at least 20% below 1990 levels and an EU energy consumption share of 20% of renewable resources. These goals are collectively known as the 20-20-20 targets (http://ec.europa.eu/environment/climat/climate_action.htm).

  3. Programme evaluations from different perspectives are widely known from the Californian evaluation practice. The reference methodology for these types of evaluations is described in the California Standard Practice Manual (CPUC 2001).

  4. In the administrative division Meuse 193,701 inhabitants are registered, in Haute-Marne 187,654 inhabitants (INSEE 2006).

  5. The agreement is assigned under the trademark “bleu ciel”, http://www.edf.fr/edf-fr-accueil/edf-partenaires-118001.html

  6. Data were excluded due to incomplete data sets and thus missing values for the calculations, and if the energy consumption of a household was affected due to significant other factors than the measure implementation. Such factors include changing numbers of persons living in the household, completely new residents in the specific building during the timeframe of the study, or the implementation of further energy efficiency measures than the assessed one.

  7. It is assumed that low-temperature boilers represent currently the standard technology on the market.

  8. The number of participants in the sample with electric heating also before the heat pump installation was too small for a representative evaluation.

  9. In this programme, around 60% of the installed heat pumps are used in combination with oil boilers or wood-based heating systems as extra heaters.

  10. Savings of insulation of walls and roofs could not be assessed with a reasonable accuracy due to a too low sample size.

  11. From −5°C to+6°C, with an average of +1.5°C (sample of 119 participants).

  12. The application of gross-to-net correction factors is pointed out in Wuppertal Institute (2009).

  13. This need not necessarily be the reality, but there is no other way to assess it in this study.

  14. As three different stakeholder perspectives are assessed, a discount rate assumption for each cost-effectiveness test is necessary. The average lending rate of private individuals is appropriate from the participant perspective as it reflects the debt costs an average household would pay to finance an investment in energy efficiency. It is assumed to be 8%. The interest rate that is relevant from the energy company perspective is reflected by the weighted average cost of capital (WACC). The WACC of EDF is approximately 8%. A lower discount rate of 3% is used from the societal perspective.

  15. Growth rates of oil, natural gas and CO2 prices are calculated according to the fossil fuel price assumptions in the Current Policies Scenario of the World Energy Outlook 2010 for the year 2035 (IEA 2010b). As there is no appropriate study available, in which future electricity prices of France are estimated, it is assumed that future electricity prices will behave as the electricity price development in France between 1990 and 2009 (IEA 2010a). For wood, it is assumed that prices will increase in future according to the price development in France between 2003 and 2008 (SoES 2010).

  16. The application in cost-effectiveness calculations of energy efficiency measures is explained in more detail in Müller and Walter (1994).

  17. Considering that individuals act as pure rational agents.

  18. The main motivation for a refurbishment was, for 42% of the households asked in the survey, to increase their level of comfort. For 40% of the households an improved energy performance was of importance. An increasing property value was decisive for 5% of the households.

  19. The following reasons for an installation of new windows were stated by MDE 52-55 programme participants: comfort (32%), energy efficiency (32%), aesthetic (22%), acoustic reasons/noise abatement (6.5%) and an increasing property value (6.5%).

  20. CO2 factors of fuels are specified according to Ministère de l’Emploi, de la Cohésion Sociale et du Logement (2006).

  21. The effects that lead to the outlined cost degression potentials can be quantified by the experience curve approach that analyses the development of historical and future costs of technologies. The experience curve approach has been applied for various kinds of energy efficient demand technologies for example by Weiss et al. (2008) as well as Jakob and Madlener (2003).

  22. Concerning the benefit of additional electricity consumption, the calculations assume that the households remain customers of EDF.

  23. Cumac stands for cumulated over the measure lifetime and discounted at a rate of 4%.

  24. Average weighted market price of certificates exchanged in the national registry between March 2009 and November 2010, a time frame in which the price fluctuations was relatively low (Emmy 2010).

  25. By September 2010, around 1.2 TWh cumac were traded compared to a total amount of 145 TWh cumac registered.

  26. In order to allow a comparison of the costs per kilowatt-hour saved with the avoided penalties and the average market price of white certificates, the specific avoided penalties and the average market price of the FWC scheme that are expressed in kWh cumac must be calculated in Euro per kilowatt-hour per year and expressed in relation to the savings calculated from the billing analysis.

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Acknowledgements

This paper was built on the work and carried out with the help of Frédéric Marteau, EDF-R&D project manager. His valuable contributions and his unremitting effort to gather all the data is gratefully acknowledged and made this study feasible. The authors would also like to thank two anonymous reviewers whose comments have improved the paper considerably.

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Authors and Affiliations

  1. Wuppertal Institute for Climate, Environment and Energy, Döppersberg 19, 42103, Wuppertal, Germany

    Felix Suerkemper & Stefan Thomas

  2. EDF-R&D, Site des Renardières–Avenue des Renardières, Ecuelles, 77818, Moret-sur-Loing cedex, France

    Dominique Osso

  3. EDF-R&D, 1, Avenue du Général de Gaulle, 92141, Clamart Cedex, France

    Paul Baudry

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  1. Felix Suerkemper
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  2. Stefan Thomas
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Correspondence to Felix Suerkemper.

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Suerkemper, F., Thomas, S., Osso, D. et al. Cost-effectiveness of energy efficiency programmes—evaluating the impacts of a regional programme in France. Energy Efficiency 5, 121–135 (2012). https://doi.org/10.1007/s12053-011-9112-z

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