Barriers and Tools for Barriers and Tools for Energy Efficiency: A Energy Efficiency: A

Socio-economic Socio-economic ApproachApproach

By: Katherine Bergen By: Katherine Bergen

Myriam BrouéMyriam Broué

Vanessa DziarmagaVanessa Dziarmaga

Suzanne LoveSuzanne Love

Julie SmithJulie Smith

OverviewOverview

The Client The Client

Introduction to Introduction to

energy efficiencyenergy efficiency

Research QuestionsResearch Questions

MethodologyMethodology

Results and AnalysisResults and Analysis

Conclusions and Conclusions and

RecommendationRecommendation

ss

AcknowledgmentsAcknowledgments

The Client - L’Union The Client - L’Union des Consommateursdes Consommateurs

Fédération des Acef du Québec (FACEF) Fédération des Acef du Québec (FACEF)

and Action Réseau Consommateurand Action Réseau Consommateur

Non -profit organizationNon -profit organization

Defends rights and interests of consumersDefends rights and interests of consumers

lower incomeslower incomes

The Client - L’Union The Client - L’Union des des

ConsommateursConsommateurs

Interested in:Interested in:

the potential for energy efficiency in the potential for energy efficiency in

QuébecQuébec

barriers to energy efficiency by socio-barriers to energy efficiency by socio-

economic classeseconomic classes

tools for overcoming barriers to tools for overcoming barriers to

energy efficiencyenergy efficiency

Low-Income DefinitionLow-Income Definition

Number of people per householdNumber of people per household

1 person: 21,2131 person: 21,213

4 people: 42,0844 people: 42,084

7 people: 53,6777 people: 53,677

What is Energy What is Energy Efficiency?Efficiency?

Defined by the World Energy Defined by the World Energy CouncilCouncil

‘ ‘ all changes that result in decreasing the all changes that result in decreasing the

amount of energy used to produce one unit amount of energy used to produce one unit

of economic activity… or to meet the energy of economic activity… or to meet the energy

requirements for a given level of comfort. ’requirements for a given level of comfort. ’

‘ ‘ associated to economic efficiency and associated to economic efficiency and

includes technological, behavioral and includes technological, behavioral and

economic changes. ’economic changes. ’

Why is energy efficiency Why is energy efficiency important?important?

66thth largest consumer of energy largest consumer of energy Environmental, economic and social Environmental, economic and social

concernsconcerns Desirable to reduce energy Desirable to reduce energy

consumptionconsumption

How? How? INCREASE ENERGY INCREASE ENERGY EFFICIENCYEFFICIENCY

How can energy efficiency How can energy efficiency be increased?be increased?

20 % of energy is used in the 20 % of energy is used in the

residential sectorresidential sector

Benefits of improving residential Benefits of improving residential

energy efficiency:energy efficiency: Environmental benefitsEnvironmental benefits

Economic benefitsEconomic benefits

Social benefitsSocial benefits

The Research The Research QuestionsQuestions

(1)(1) How big is the potential for energy efficiency How big is the potential for energy efficiency in the Québec residential sector?in the Québec residential sector?

(2)(2) What are the barriers within various socio-What are the barriers within various socio-economic classes that inhibit consumers economic classes that inhibit consumers from from being more energy efficient at home?being more energy efficient at home?

(3)(3) What are the appropriate “tools” that are What are the appropriate “tools” that are needed to help each socio-economic class of needed to help each socio-economic class of residential consumers overcome the residential consumers overcome the identified barriers to energy efficiency?identified barriers to energy efficiency?

The Research The Research QuestionsQuestions

(1)(1) How big is the potential for energy How big is the potential for energy efficiency efficiency in the Québec residential in the Québec residential sector?sector?

Methodology: Methodology: Question 1Question 1

evaluate three different calculations of evaluate three different calculations of

potentialpotential

reports by various organizationsreports by various organizations

potentials were evaluated and compared potentials were evaluated and compared

analysis of calculated potentialsanalysis of calculated potentials

Results: Question 1Results: Question 1

Hydro-Québec Development Plan, Hydro-Québec Development Plan, 19901990

2 goals2 goals energyenergy savings savings consumption managementconsumption management

technical potential: 45 TWhtechnical potential: 45 TWh economic potential: 27.6 TWheconomic potential: 27.6 TWh overall objective 9.3 TWh revised to 6.2 overall objective 9.3 TWh revised to 6.2

TWhTWh

Results: Question 1Results: Question 1

Potential Savings by Energy Use (Service Planification Commerciale, 1992)

heating

lighting

water heating appliances

new constructions

air conditioning

pool

Results: Question 1Results: Question 1

Economic Potential for Energy Efficiency (Hydro-Québec and Energy Efficiency Agency, 2001)

0

0.5

1

1.5

2

2.5

3

Electricity Natural Gas Oil Wood

Energy Source

To

tal

Po

ten

tial

(T

Wh

)

Results: Question 1Results: Question 1

Hydro-Québec Development Plan, 1990Hydro-Québec Development Plan, 1990

potential for all of Québecpotential for all of Québec

hard to determine accuratelyhard to determine accurately

Results: Question 1Results: Question 1

1992 vs. 20011992 vs. 2001Factors :Factors : calculated 9 years apartcalculated 9 years apart improved technologiesimproved technologies increased available programsincreased available programs increased regulationsincreased regulations better understanding of parametersbetter understanding of parameters reduction in avoided costreduction in avoided cost

The Research The Research QuestionsQuestions

(2)(2) What are the barriers within What are the barriers within various socio-various socio- economic classes economic classes that inhibit consumers that inhibit consumers from from being more energy efficient at home?being more energy efficient at home?

Methodology: Methodology: Question 2Question 2

Examination of literatureExamination of literature Barriers categorized by socioeconomic Barriers categorized by socioeconomic

classclass All socioeconomic classAll socioeconomic class Universal barriers, which are Universal barriers, which are amplified in low socioeconomic classamplified in low socioeconomic class

Low socioeconomic classLow socioeconomic class Average incomeAverage income

Results: Question 2 Results: Question 2

All socioeconomic classes:All socioeconomic classes:

Pricing of energy below its true costPricing of energy below its true cost

Attitudes towards energy efficiencyAttitudes towards energy efficiency

Construction of new homes and buildings- Construction of new homes and buildings-

separation of expenditure and benefitseparation of expenditure and benefit

Results: Question 2 Results: Question 2

Universal barriers, which are amplified in Universal barriers, which are amplified in low socioeconomic classlow socioeconomic class

1.1. Information accessInformation access

2.2. Uncertain technologiesUncertain technologies

3.3. Consumer creditConsumer credit

4.4. Lack of knowledgeLack of knowledge

5.5. Unfavourable payback periodsUnfavourable payback periods

6.6. High initial capital costsHigh initial capital costs

7.7. Difficult installationDifficult installation

Results: Question 2 Results: Question 2

Low socioeconomic class Low socioeconomic class

TenancyTenancy

Low LiquidityLow Liquidity

High perceived discount ratesHigh perceived discount rates

Results: Question 2 Results: Question 2

Low socioeconomic classLow socioeconomic class

Tenancy: separation of Tenancy: separation of

expenditure and benefitexpenditure and benefit

Tenant-landlord interactionTenant-landlord interaction

Tenancy ratesTenancy rates

Results: Question 2 Results: Question 2

Low socioeconomic classLow socioeconomic class

Low liquidityLow liquidity

little cash little cash

low ability to raise cashlow ability to raise cash

Results: Question 2 Results: Question 2

Low socioeconomic class Low socioeconomic class

High Perceived discount ratesHigh Perceived discount rates

The undervaluation of future energy The undervaluation of future energy

savingssavings

Results: Question 2 Results: Question 2

Average IncomeAverage Income

Energy costs are a small part of Energy costs are a small part of

household expenditureshousehold expenditures

Low income: 14%Low income: 14%

Average income: 3%Average income: 3%

The Research The Research QuestionsQuestions

(3)(3) What are the appropriate “tools” that What are the appropriate “tools” that are are needed to help each socio-needed to help each socio-economic class of economic class of residential consumers residential consumers overcome the overcome the identified barriers identified barriers to energy efficiency?to energy efficiency?

Methodology: Question Methodology: Question 33

Tools used in programs Tools used in programs

Programs from Federal and Programs from Federal and

Provincial governments Provincial governments

NGOsNGOs

Energy supplying companiesEnergy supplying companies

Results: Question 3Results: Question 3

ToolsTools

LeadershipLeadership

Information Information

and educationand education

Volunteering Volunteering

initiativesinitiatives

Financial Financial

incentivesincentives

RegulationRegulation

Research and Research and

developmentdevelopment

Results: Question 3Results: Question 3

Federal ProgramsFederal Programs

Natural Resource Canada and Natural Resource Canada and

Office of Energy EfficiencyOffice of Energy Efficiency

EnerGuideEnerGuide

Energy StarEnergy Star

R- 2000R- 2000

Results: Question 3Results: Question 3

Non-governmental Non-governmental

OrganizationsOrganizations

Canadian Low-Income Energy Canadian Low-Income Energy

Efficiency ProgramEfficiency Program

Results: Question 3Results: Question 3

Provincial programsProvincial programs

Hydro-QuébecHydro-Québec

Gaz MétopolitainGaz Métopolitain

Results: Question 3Results: Question 3

Non-governmental OrganizationsNon-governmental Organizations

Energy-Cost Saving Program for Energy-Cost Saving Program for

Low-Income HouseholdsLow-Income Households

General Recommendations

educational programseducational programs

subsidize energy efficiency programssubsidize energy efficiency programs

government regulationsgovernment regulations

NGO’sNGO’s

information accessinformation access

Recommendations to the Recommendations to the clientclient

Continue researchContinue research

Collect raw data for Montreal Collect raw data for Montreal

AcknowledgementsAcknowledgements

The group would like to thank The group would like to thank

Prof. George McCourt and Prof. George McCourt and

Mounir Gouja for their Mounir Gouja for their

patience and assistance.patience and assistance.