A modelling framework for the diffusion of low carbon energy performance contracts

Abstract

The building sector contributes significantly to global energy consumption and CO2 emissions. It is urgent to reduce them through the retrofit of the current building stock and improvements in new building designs. The energy performance contracts that can deliver energy consumption savings must have an attractive rate of return to make financial sense for public and private sector buildings. These contracts must also have a wide uptake in the market to improve significantly the energy performance of the building stock. This paper develops a hybrid bottom up and system dynamics modelling framework to: (1) explore the diffusion of energy performance contracts and its effect on operational building energy consumption and (2) facilitate integration into policy making. The bottom up modelling component is used to provide estimates of potential operational building energy use savings. The estimates are the input to the system dynamics diffusion model which is used to explore diffusion pathways of energy performance contracts. The framework will facilitate scenario and policy analysis for the diffusion of the contracts on the building stock and their potential impact on energy consumption and associated CO2 emissions.