Both for energy efficiency and for many forms of renewable energy, the major part of the financial effort is situated in the initial investment, which is then paid back over the years. Making lifecycle costing into a standard practice for energy related investments would therefore stimulate the energy transition.
And more generally, the energy transition moves the energy system from being primarily fuel-based to a mixed basis of fuel and capital. In such a context, lowest-first-cost is not a good idea, as it will increase system costs.
Let’s avoid turning capital goods into consumables, and pay attention to durability and circularity.
You could think that the device with the highest energy efficiency is the most difficult to improve. However, this is not always true. Even if the energy efficiency of a device is already high, it can be worth considering further improvements. And because power transformers are nearly continuously loaded, the smallest efficiency gain adds up to a substantial saving at the end of the year.
Lessons to be learned include careful design to develop super-efficient transformers, loading considerations, power quality issues (particularly harmonics), asset management, lifecycle costing in regulated networks, and recycling practices, to name a few.
When comparing the cost of wind or solar electricity with conventional power generation, it doesn’t suffice to look at generation cost only. Rather one must look at the system cost of delivering energy to consumers at the time needed.
Here again we can observe the power of energy efficiency: a kWh saved does not require conventional, wind, water or solar electricity. And it does not need to be transported, distributed or balanced.
The multiple benefits of energy efficiency are a recurring theme in this booklet [50, 77, 79, 92]. A lot of work has been performed to identify and quantify these benefits at the macro level, producing a reasonable body of evidence for policy makers.
However, little progress has been made thus far to make the multiple benefits count at the micro level, i.e. for projects. That’s why it is exciting news that a H2020 project is starting on this topic – the M-Benefits project on ‘Valuing and Communicating the Multiple Benefits of Energy-Efficiency Projects’. The promise of M-Benefits is nothing less than promoting energy efficiency to be a strategic priority within organisations.
Energy efficiency investments in private dwellings pay themselves back. But what if that takes years and you want to sell the house in the meantime?
A study by the UK government showed that the investment is not lost. It registered an 11% to 38% increase in home values where energy efficiency investments had been made, with 16% as an average. Not surprisingly, the increases in value were larger in the north of England, where high quality insulation can create the biggest reductions in heating cost.