Cost Of Energy Services Research Articles

Optimal Microgrids in Buildings with Critical Loads and Hybrid Energy Storage

This research aims to optimize and compare the annual costs of energy services in buildings with critical loads and analyze case studies for hospitals and higher education institutions in the United States. Besides electricity and natural gas costs, the study considers all the infrastructure costs of capital amortization and maintenance. In addition, it studies energy resilience improvement due to distributed generation, including solar photovoltaic, solar thermal, internal combustion engine, and fuel cell sources. The optimization considers the electrical consumption, the heating and cooling demands, and the operational strategy of the energy storage systems. To simulate real scenarios, energy tariffs were modeled and considered, and final optimization results were produced. Some of the microgrid load was considered critical to model resilience benefits. The results show that if favorable energy tariffs are applied, the benefits of increasing energy resilience represent a novel market with high potential in facilities with significant critical loads. This methodology can be used in similar scenarios, adapting each particular load profile and critical load to provide a combined optimal solution regarding resilience and economic benefits.

Are clean energy technologies a panacea for environmental sustainability in sub-Saharan African countries?

The average population in sub-Saharan Africa that has access to clean fuel for cooking and technology is 23.6%. This study examines the panel data for 29 sub-Saharan African (SSA) countries for the period 2000-2018 to estimate impacts of clean energy technologies on environmental sustainability measured by load capacity factor (LCF) to capture both nature's supply and man's demand for the environment. The study used generalized quantile regression, which is more robust to outliers and eliminates the endogeneity of variables in the model using lagged instruments. Results show that clean energy technologies (clean fuelsfor cooking and renewable energy) have positive and statistically significant impacts on environmental sustainability in SSA for almost all quantiles. For robustness checks, we used Bayesian panel regression estimates and the results remained unchanged. The overall results suggest that clean energy technologies improve environmental sustainability in SSA. The result shows a U-shaped relationship between environmental quality and income and confirms the Load Capacity Curve (LCC) hypothesis in SSA, which implies that income first worsens environmental sustainability and then, after exceeding certain quantiles, improves environmental sustainability. On the other hand, the results also confirm the environmental Kuznet curve (EKC) hypothesisin SSA. The findings show the importance of using clean fuels for cooking, trade, and renewable energy consumption in improving environmental sustainability in the region. The policy implication is that governments in SSA should reduce the cost of energy services (i.e., renewable energy and clean fuels for cooking) to achieve greater environmental sustainability in the region.

Do energy efficiency improvements reduce energy use? Empirical evidence on the economy-wide rebound effect in Europe and the United States

Increasing energy efficiency is often considered to be one of the main ways of reducing greenhouse gas emissions. However, efficiency gains that reduce the cost of energy services result in energy use rebounding and potential energy use savings being eaten up. Empirical research that quantifies the economy-wide rebound effect while taking the dynamic economic responses to energy efficiency improvements into account is limited. We use a Structural Factor-Augmented Vector Autoregressive model (S-FAVAR) that allows us to track how energy use changes in response to an energy efficiency improvement while accounting for a vast range of potential confounders. We find economy-wide rebound effects of 78% to 101% after two years in France, Germany, Italy, the UK, and the US. This implies that energy efficiency innovations alone may be of limited help in reducing future energy use and emphasizes the importance of tackling carbon emissions directly.

Long-Term Techno-Economic Performance Monitoring to Promote Built Environment Decarbonisation and Digital Transformation—A Case Study

Buildings’ long-term techno-economic performance monitoring is critical for benchmarking in order to reduce costs and environmental impact while providing adequate services. Reliable building stock performance data provide a fundamental knowledge foundation for evidence-based energy efficiency interventions and decarbonisation strategies. Simply put, an adequate understanding of building performance is required to reduce energy consumption, as well as associated costs and emissions. In this framework, Variable-base degree-days-based methods have been widely used for weather normalisation of energy statistics and energy monitoring for Measurement and Verification (M & V) purposes. The base temperature used to calculate degree-days is determined by building thermal characteristics, operation strategies, and occupant behaviour, and thus varies from building to building. In this paper, we develop a variable-base degrees days regression model, typically used for energy monitoring and M & V, using a “proxy” variable, the cost of energy services. The study’s goal is to assess the applicability of this type of model as a screening tool to analyse the impact of efficiency measures, as well as to understand the evolution of performance over time, and we test it on nine public schools in the Northern Italian city of Seregno. While not as accurate as M & V techniques, this regression-based approach can be a low-cost tool for tracking performance over time using cost data typically available in digital format and can work reasonably well with limited resolution, such as monthly data. The modelling methodology is simple, scalable and can be automated further, contributing to long-term techno-economic performance monitoring of building stock in the context of incremental built environment digitalization.

A Review: The Energy Poverty Issue in the European Union and Latvia

Abstract Energy poverty is a growing concern in the European Union. Following energy market liberalization, the problem of energy affordability has entered the political discussion, making it necessary to estimate its dimensions, develop and implement a policy and means for its mitigation. To evaluate the situation in Latvia, the paper reviews the way energy poverty is currently defined and measured, investigating the advantages and shortcomings of various definitions and approaches. It then provides a brief analysis of energy poverty in three char-acterising dimensions: low income, high costs of energy services and unsatisfactory housing conditions (primarily related to energy efficiency aspects), using available statistical data. The characterising indicators of energy poverty are compared with the EU average values. Finally, this paper highlights individual policy measures for diminishing energy poverty.

Economic tools for integration of alternative energy into the energy system of China

The relevance of the research topic is determined by special attention to the development of «green» energy in the state policy of the People's Republic of China. The problem of the development of the Chinese energy sector is the shift of priorities to the search for alternative, clean energy sources that will replace oil and gas. Analysis of recent publications ensures in a persistent interest in the problems of alternative energy in the majority of countries implementing stable economic growth. According to the authors, the processes of integration of alternative energy into the energy system of China, a country with high rates of economic growth, remain unexplored. The purpose of the study is to substantiate the choice of economic instruments for the integration of alternative energy into the energy system of China. The research methods used in the work are comparison, grouping, systems approach, formalization, axiomatic method, analogies, abstraction and modeling. Results of work. Within the framework of this study, the dynamics of changes in the structure of energy consumption in China has been studied, from the point of view of energy sources. China's energy policy issues go hand in hand with its economic policy goals. The country needs to support rapid development and economic growth, but in a much less energy-intensive way. This is widely recognized by the Chinese government, but significant changes in energy consumption versus production could mean major changes in its economic structure. The field of application of the research results is the energy policy of the state, aimed at the greening of life. Findings. The transition to renewable energy is inevitable, so the question is how best to manage this process while minimizing the total cost of energy services and the cost of damage caused by energy use. The combination of energy efficient and renewable energy sources will eventually replace the existing traditional energy system, which is dominated by fossil fuels. The most important factor for such an early transition is the need to address the problem of catastrophic climate change.

Do Energy Efficiency Improvements Reduce Energy Use? Empirical Evidence on the Economy-Wide Rebound Effect in Europe and the United States

Improving energy efficiency is often considered to be one of the keys to reducing greenhouse gas emissions. However, efficiency gains also reduce the cost of energy services and may even reduce the price of energy, resulting in energy use rebounding and potential energy use savings being eaten up. There is only limited empirical research quantifying the economy-wide rebound effect that takes the dynamic economic responses to energy efficiency improvements into account. We use a Structural Factor-Augmented Vector Autoregressive model (S-FAVAR) that allows us to track how energy use changes in response to an energy efficiency improvement while accounting for a vast range of potential confounders. Our findings point to economy-wide rebound effects of 78% to 101% after two years in France, Germany, Italy, the U.K., and the U.S. These findings imply that energy efficiency innovations alone may be of limited help in reducing future energy use and emphasize the importance of tackling carbon emissions directly.

Rethinking indoor thermal comfort in the era of rebound and pre-bound effect for the developing world: A systematic review.

This paper presents a review on thermal comfort research that is informed by changes in occupant behavior, lifestyle, and income leading to rebound or pre-bound effect. It explores the current state of research in thermal comfort domain through a systematic review to identify the gaps and opportunities specifically focusing on energy-intensive developing countries. This review argues that adaptive thermal comfort is a continuously evolving domain owing to dynamic modifications in occupant behavior occurring from changes in the cost of energy services and preference of comfort (rebound/pre-bound effect). A conceptual framework linking thermal comfort, rebound/pre-bound effect, and occupant behavior is forwarded through the introduction of an exogenous factor related to occupant well-being. The results ascertain that there is a need of localized thermal comfort model with an occupant-centric approach that can help in enhancing comfort and reducing energy consumption.

Integrated resources planning as a tool to address energy poverty in Brazil

This paper departs from a planning tool to assist policy makers and energy planners to improve energy access and affordability, besides developmental needs of low-income/underserved households and small entrepreneurs. The methodology aims to systematically integrate energy technologies (supply and demand-side), new and innovative business models and local developmental issues into long term power plans by applying concepts and the process known as Integrated Resources Planning (IRP). To illustrate the application of the methodology, referred to as IRP-Access in this paper, some possibilities are tested to reduce Energy Service Costs (EC), analyzing the impacts in the electricity affordability of low-income consumers. For this purpose, we use data from a Brazilian electricity concessionaire which operates in a complex socioeconomic region in the Southeast of the country, where the energy access is solved, but affordability is still a current issue. The results illustrate the potential of implementing technological alternatives in Brazil, from the supply and demand side, in order to improve affordability, to address energy poverty and to systematically incorporate such critical issues into the long-term energy planning.

Microeconomics of the Rebound Effect for Residential Solar Photovoltaic Systems

The rebound effect is a well-known behavioral response whereby potential energy savings from efficiency improvements are partially offset by increased consumption of energy services, as the marginal cost of energy services is reduced. This paper characterizes a similar rebound effect related to installation and operation of a residential photovoltaic (PV) system. This solar rebound effect is different from traditionally studied rebound effects, primarily because it is due not to an improvement in the energy efficiency of a household’s appliances, but to the supply of a zero-marginal-cost perfect substitute for grid electricity. The solar rebound effect is first derived in the absence of any subsidization mechanism. We then modify the model to account for two commonly implemented incentives: installation rebates and net metering. Rebates are shown to increase the rebound effect, whereas the effect of net metering depends on the per-unit compensation rate.

Distribución de la pobreza energética en la ciudad de Madrid (España)

A methodology that allows the localization of urban areas that are suffering from fuel poverty is developed. Average incomes per household and residential energy consumption for each urban area are analyzed with a Geographical Information System. This methodology is applied to a case study: the city of Madrid (Spain). By estimating the cost of energy services per household, the weight of the different factors influencing the energy services is uncovered: quality of construction, thermal facilities, energy sources supply and billing structure used by Spanish energy sector. It is concluded that the interaction of these factors causes households included in the minimum income brackets to be at risk of energy poverty independently of the energy efficiency of housing. This means that specific public policies to combat energy poverty are needed, in order to complement energy refurbishment plans.

Microeconomics of the Rebound Effect for Residential Solar Photovoltaic Systems

The rebound effect is a well-known behavioral response whereby potential energy savings from efficiency improvements are partially offset by increased consumption of energy services, as the marginal cost of energy services is reduced. This paper characterizes a similar rebound effect related to installation and operation of a residential photovoltaic (PV) system. This solar rebound effect is different from traditionally studied rebound effects, primarily because it is due not to an improvement in the energy efficiency of a household’s appliances, but to the supply of a zero-marginal-cost perfect substitute for grid electricity. The solar rebound effect is first derived in the absence of any subsidization mechanism. We then modify the model to account for two commonly implemented incentives: installation rebates and net metering. Rebates are shown to increase the rebound effect, whereas the effect of net metering depends on the per-unit compensation rate.

Prioritizing among the end uses of excess renewable energy for cost-effective greenhouse gas emission reductions

Preventing the curtailment of excess renewable generation, caused by mismatches between variable renewable electricity generation and the electric load, is a key strategy for maximizing greenhouse gas emissions reductions by integrating renewable resources into the electric grid. Strategies to harness excess renewable generation for useful purposes exist, but it is unclear which of these end uses provides the most effective use of available excess generation to maximize greenhouse gas emissions reductions in a cost-effective manner. This study investigates and compares three end-use strategies for utilizing excess renewable generation – storage in electrical energy storage systems, production of transportation fuel or vehicle charging, or production of renewable gas – and their diverse technology pathways on the bases of their greenhouse gas emissions reduction potential and the impacts of their implementation on the cost of energy services. This is accomplished by modeling the integration of 46 different technology pathways for using excess renewable generation in a 70% renewable and an 80% renewable electric grid configuration during the year 2050 in California using the Holistic Grid Resource Integration and Deployment (HiGRID) platform, which is a temporally-resolved resource dispatch model of the electricity system. Technology and cost characteristics for batteries, hydrogen energy storage systems, vehicle fueling or charging, and renewable gas production technologies are collected from multiple sources and their effect on reducing greenhouse gas emissions and affecting the Levelized Cost of Energy (LCOE) services in the HiGRID platform are examined. It was discovered that using excess renewable generation to produce transportation fuel for hydrogen vehicles or to charge electric vehicles provided the largest total greenhouse gas emissions reductions and lowest per-ton cost of greenhouse gas reduction. Use in grid energy storage and production of renewable gas provided similar but relatively lower total greenhouse gas reductions than transportation, with the latter imposing lower per-ton costs of greenhouse gas reduction. More generally, greenhouse gas reduction potential of these end uses depended on the intensity of the fuel being displaced by renewables, while LCOE effects depended on the temporal flexibility of the technologies associated with this end use. Overall, this study provides insight into a priority order for directing the use of excess renewable generation towards end uses to achieve greenhouse gas reduction goals such as those in California in a cost-minimal manner, and investigates the sensitivities that influence the effectiveness of these end uses.

Global Kerosene Subsidies: An Obstacle to Energy Efficiency and Development

Summary It is widely agreed that energy subsidies impede the efficient functioning of markets. The resulting distortions in prices work at odds with policies to improve energy efficiency and reduce the cost of energy services and associated externalities such as health and environmental damages. The analysis developed in this article finds that kerosene is used in 173 countries, at a cost to consumers of $43.4B/y, $60.3B/y including direct economic subsidies, and $77.2B/y including certain externalities. Despite low world oil prices, direct economic subsidies for kerosene were $18.4B in 2013, and $34.7B including environmental externalities. These values correspond to 72% and 56% of total kerosene costs being passed through to consumers, respectively. When excluding advanced economies, the pass-through values fall to 40% and 35%. Approximately 52% of the global kerosene supply receives direct subsidy, or 63% when externality costs are considered. The cooking end use receives $2.0B/y in direct kerosene subsidies, lighting $7.1B/y, and heating and other residual uses $9.3B/y, or $76 per over all households each year. Defining subsidies at this level of granularity is useful for pinpointing policy issues and opportunities. Promoting a transition to energy efficient off-grid energy services is one of the most cost-effective ways of reducing dependency on subsidies. However, the very presence of subsidies undercuts this process by diluting market price signals and rendering energy efficiency investments less cost-effective, while competing with other social and development-focused budgetary needs. Kerosene subsidies are additionally counterproductive because the emerging technologies they impede (e.g., improved lighting and cook stoves) also improve productivity, safety, and quality of life. Forty-five countries—many in the developing world—have priced kerosene such that there are no direct subsidies, and twenty-two have done so even when accounting for environmental externalities, suggesting the practice is economically and politically feasible.

The influence of energy efficiency on other natural resources use: An input-output perspective

Energy efficiency improvements reduce the costs of energy services, and under some circumstances, increase the available income. This generates an additional increase of consumption of goods and services that need additional energy to be produced, distributed and consumed. This effect is known as the indirect rebound effect in the literature. However, beyond this additional increase of global energy consumption, there is also a variation of the use of other natural resources due to the same mechanism. This effect, which we label as direct and indirect cross rebound effect, is generally not considered by academia nor policy-making when designing and implementing energy policies. This research conceptualizes this effect, develops a methodology for its estimation and provides estimates for the Spanish economy. Results show that an energy efficiency in households could increase the use of minerals and water, while reducing the use of energy, fossil fuels and metal ores in Spain. These reductions, however, are lower than the expected ones from an input-output perspective, leading to positive direct and indirect cross rebound effects: between 64.6% and 74.7% for energy (equivalent to direct and indirect rebound effect); 48%–63% for fossil fuels. 84%–89% for metal ores; backfire for non-metallic minerals (147%–134%) and extreme backfire for water (1191%–1628%).

Is inexpensive natural gas hindering the grid energy storage industry?

Grid energy storage is a maturing technology and forecasts of the industry's growth have been promising. However, recent years have realized little growth in actual deployments of grid-level storage and several high-profile storage companies and projects have failed. We hypothesize that falling natural gas prices have significantly reduced the potential profit from many U.S. energy storage projects since 2009 and quantify that effect. We use engineering–economic models to calculate the monthly revenue to energy storage devices providing frequency regulation and energy arbitrage in several electricity markets and compare that revenue to prevailing natural gas prices. We find that flywheel devices providing frequency regulation were profitable in months when natural gas prices were above $7/mcf, but face difficulties at current prices (around $4/mcf). For energy arbitrage alone, we find that the breakeven capital cost for large-scale storage was around $300/kWh in several key locations in 2004–2008, but is around $100/kWh in the same locations today. Though cost and performance improvements have been continually decreasing the effective cost of energy services from storage, fundamental market signals indicating the need for energy storage are at or near 10-year lows for both energy arbitrage and frequency regulation.

Calculating impacts of energy standards on energy demand in U.S. buildings with uncertainty in an integrated assessment model

In this paper, an IAM (integrated assessment model) uses a newly-developed Monte Carlo analysis capability to analyze the impacts of more aggressive U.S. residential and commercial building-energy codes and equipment standards on energy consumption and energy service costs at the state level, explicitly recognizing uncertainty in technology effectiveness and cost, socioeconomics, presence or absence of carbon prices, and climate impacts on energy demand. The paper finds that aggressive building-energy codes and equipment standards are an effective, cost-saving way to reduce energy consumption in buildings and greenhouse gas emissions in U.S. states. This conclusion is robust to significant uncertainties in population, economic activity, climate, carbon prices, and technology performance and costs.

Consumer End-Use Energy Efficiency and Rebound Effects

Energy efficiency policies are pursued as a way to provide affordable and sustainable energy services. Efficiency measures that reduce energy service costs will free up resources that can be spent in the form of increased consumption—either of that same good or service or of other goods and services that require energy (and that have associated emissions). This is called the rebound effect. There is still significant ambiguity about how the rebound effect should be defined, how we can measure it, and how we can characterize its uncertainty. Occasionally the debate regarding its importance reemerges, in part because the existing studies are not easily comparable. The scope, region, end-uses, time period of analysis, and drivers for efficiency improvements all differ widely from study to study. As a result, listing one single number for rebound effects would be misleading. Rebound effects are likely to depend on the specific attributes of the policies that trigger the efficiency improvement, but such factors are often ignored. Implications for welfare changes resulting from rebound have also been largely ignored in the literature until recently.

A study of the rebound effect on China's current energy conservation and emissions reduction: Measures and policy choices

Energy efficiency improvement leads to a reduction in the real cost of energy services per unit, thus bringing about an increase in the demand for energy services. Therefore, the potential energy savings and emission reduction from efficiency improvements might be offset, which is known as “the rebound effect”. This study disaggregates the effect into the direct and indirect effects based on the Slutsky Equation and finds that the rebound effect of Chinese urban households is approximately 22%. It is found that the indirect effect is stronger than the direct effect. These findings prove that the initial goals of the government on energy conservation and emission reduction could not be achieved by improving energy efficiency alone, but need to be supplemented with relevant energy pricing reforms.

The future of hydrogen – opportunities and challenges

The following article is reproduced from ‘ The Hydrogen Economy: Opportunities and Challenges’, edited by Michael Ball and Martin Wietschel, to be published by Cambridge University Press in June 2009. In the light of ever-increasing global energy use, the increasing cost of energy services, concerns over energy supply security, climate change and local air pollution, this book centres around the question of how growing energy demand for transport can be met in the long term. Given the sustained interest in and controversial discussion of the prospects of hydrogen, the authors highlight the opportunities and the challenges of introducing hydrogen as alternative fuel in the transport sector from an economic, technical and environmental point of view. Through its multi-disciplinary approach the book provides a broad range of researchers, decision makers and policy makers with a solid and wide-ranging knowledge base concerning the hydrogen economy.