too smart by half? reducing household energy … too smart by half? reducing household energy...

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Too smart by half? Reducing household energy consumption and emissions

Adam Rysanek, Irina Shaorshadze, Laura Platchkov, Scott KellyUniversity of Cambridge

Judge Business School, 17.03.11


Introduction

Adam Rysanek Department of Engineering

www.eprg.group.cam.ac.uk 3

The GHG emissions from the UK residential sector

Source: UK Energy Efficiency Action Plan (2007)

GHG emissions by end-use in the UK 2008

Source: DUKES (2010)

Average per capita individual direct carbon emissions in 2005


Interactive Polling Result

1. By 2030, what percentage of the UK housing stock is likely to consist of buildings already

existing today?

1 2 3 4 5

0%

4%

48%

35%

13%

1. 0% (We will replace all of our buildings)

2. 25%

3. 50%

4. 75%

5. Over 90%


The retrofit objectives of the UK

• Over 90% of the UK’s building stock beyond 2030 will likely consist of buildings already existing today. (Hinnells et al. 2008, CIBSE 2010)

• More than one house will need to be refurbished every minute for the next 40 years to meet our GHG reduction targets(CIBSE 2010)


Energy Efficiency

Adam Rysanek Department of Engineering


The GHG emissions from the UK residential sector

Source: UK Energy Efficiency Action Plan (2007)

GHG emissions by end-use in the UK 2008

Source: DUKES (2010)

Average per capita individual direct carbon emissions in 2005

Heating contributes to over 40% of direct emissions from households


Rating the energy efficiency of your house

• It is mandatory for anyone selling a home in the UK to obtain and provide an Energy Performance Certificate (EPC) to potential buyers

• Houses in the UK are rating using the Standard Assessment Procedure (SAP)

Energy Performance of Houses

Source: Directgov (2011), CLG (2007)


Rating the energy efficiency of your house

Energy Cost Factor≈ Annual Energy Costs (£) / Household Floor Area (m2)

SAP

Rat

ing

Standard Assessment Procedure (SAP) Rating

Less cost = More efficient

Bad

Good

If you pay a lot in energy bills, in relation to your home’s size


Know your domestic energy efficiency rating

Source: CLG (2006)


Why care about the energy efficiency of homes?

Source: IEA (2010)


Why care about the energy efficiency of homes?

Approximately 40% of houses in the UK were built before 1945

Source: IEA (2010)


What can you do to increase your energy efficiency?

• Cavity wall or solid wall insulation

• Install double glazing

• Drought proofing

• Loft insulation

• Buying an A-rated appliances (including boiler)

• Install a timed thermostat to control your heating





• Weatherstripping

• Loft insulation

• Buying A-rated appliances (including boiler)


Cavity Wall Insulation






• Loft insulation



Solid Wall Insulation






• Loft insulation



Loft insulation






• Loft insulation



Draught proofing



2. If you were to own a typical dwelling in Cambridge, which energy-efficiency measure would likely earn you

the most amount of money after 5 years?

1 2 3 4 5

4%

13%17%17%

50%

1. Hot-water tank insulation

2. Cavity wall insulation

3. Loft insulation

4. Install double glazing

5. Install an A-rated boiler


The cost of household energy efficiency

Type of Measure

MeasuresAverage Cost

Cost savedCarbon saved

Pay‐backRevenue after 3 years

Revenue after 5 years

£ £/yr kgC/yr years £ £

Insulation

Hot water tank 14 29 53 0.5 73 131

Cavity wall 342 133 242 2.6 57 323

Solid wall 3,150 380 694 8.3 ‐2,010 ‐1,250

Loft 284 104 190 2.7 28 236

Draught proofing 100 23 43 4.3 ‐31 15

Double glazing 4,000 41 26 97.6 ‐3,877 ‐3,795

Heating system

Improved controls 147 43 77 3.4 ‐18 68

A‐rated boiler 1,500 168 177 8.9 ‐996 ‐660

Solar water heating 2,625 48 88 54.7 ‐2,481 ‐2,385Photovoltaic (PV)

electricity9,844 212 249 46.4 ‐9,208 ‐8,784

Micro CHP 1,571 230 508 6.8 ‐881 ‐421

Source: CLG (2006)


Type of Measure






Insulation

Hot water tank 14 29 53 0.5 73 131

Cavity wall 342 133 242 2.6 57 323

Solid wall 3,150 380 694 8.3 ‐2,010 ‐1,250

Loft 284 104 190 2.7 28 236


Double glazing 4,000 41 26 97.6 ‐3,877 ‐3,795

Heating system


A‐rated boiler 1,500 168 177 8.9 ‐996 ‐660


electricity9,844 212 249 46.4 ‐9,208 ‐8,784

Micro CHP 1,571 230 508 6.8 ‐881 ‐421


Source: CLG (2006)


Type of Measure






Insulation

Hot water tank 14 29 53 0.5 73 131

Cavity wall 342 133 242 2.6 57 323

Solid wall 3,150 380 694 8.3 ‐2,010 ‐1,250

Loft 284 104 190 2.7 28 236


Double glazing 4,000 41 26 97.6 ‐3,877 ‐3,795

Heating system


A‐rated boiler 1,500 168 177 8.9 ‐996 ‐660


electricity9,844 212 249 46.4 ‐9,208 ‐8,784

Micro CHP 1,571 230 508 6.8 ‐881 ‐421

But in this economic climate, who can help us brave the costs?



Government Policies

Scott KellyFaculty of Land Economy

BARRIERS

23



3. What is the single largest barrier preventing you from improving energy efficiency or installing low-carbon

technologies in your home?

1. Upfront cost is too expensive

2. Financial savings are not enough

3. It is a nuisance and I do not have enough time

4. Never thought about it before

5. Too difficult to find a trustworthy installer

6. I’m not responsible for this 1 2 3 4 5 6

23%

5%

36%

14%

0%

23%

GOVERNMENT POLICY AND TECHNOLOGY

FITs

RHI

RO

GreenDeal



4. Do you think you pay too much towards environmental policies in your energy bills?

1 2

68%

32%

1. Yes

2. No



5. How much of the average annual energy bill in the UK do you think goes towards environmental

policies?

1 2 3 4 5

5%

11%

37%

42%

5%

* The average UK energy bill is around £1239 per annum.

1. over £600 (over 58%)

2. £350-£600 (34%-58%)

3. £200-£349 (20%-33%)

4. £75-£199 (7.3%-19%)

5. under £75 (under 7.3%)


Lets compare policies

FITs RHI GreenDeal RO

Total Cost(£ billions)

£8.7 £12.2 £7.5 £30.4

CO2 savings (MtCO2) 11 60 5 300

Energy BillYear 1

£4.50 £6.30 0 £15

Energy Bill Year 30

£18.60 £26 £100-£500 £64

*Assumes 30 year payback of scheme and the same % from energy bill is paid back each year* Assumes bills increase by 5% per annum the number of dwellings increase 1.5% per annum

Cost

Saving


Smart Meters and Smart Appliances

Irina ShaorshadzeFaculty of Economics



6. When should you avoid using the washing machine (in terms of costs of producing

electricity)?

1 2 3 4 5

9%

65%

13%13%

0%

1. 9am – 4pm

2. 5pm – 8pm

3. 9pm – 6am

4. It is a matter of convenience, not cost

5. There is no difference. A load of laundry is a load of laundry.


0.00

20.00

40.00

60.00

80.00

100.00

120.00

£/MWh

UK Wholesale Electricity Prices, 2009

off peak day

median day


0.00

20.00

40.00

60.00

80.00

100.00

120.00

£/MWh


off peak day

median day


0.00

100.00

200.00

300.00

400.00

500.00

600.00

700.00

800.00

900.00

£/MWh


peak day

off peak day

median day


UK Wholesale Electricity Cost

Demand

Source: Ofgem (2010), Demand Side Response



Costs after “smoothing”



Benefits of Shifting Loads Off-Peak:

• Wholesale Electricity Cost Savings • £0.7m – £1.7m per year

• Capital Cost Savings–Generation Cost: £265m- £536m per year–Transmission: £28m per year

•Total Savings: £297.7 – £565m per year• In addition, Carbon Emissions Savings

• 800t – 2,550t per day• 0.16% - 0.50%

• … Also, flexible demand facilitates • Variable Generation

• (Wind, solar)…•Source: Ofgem (2010), Demand Side Response


Currently meters do not facilitate flexible demand But this is about to change…..



7. Would you be willing to have a smart meter in your home?

1 2 3 4

30%

9%9%

52%1. Yes and I will pay up to

£80 for it

2. Yes, but only if supplier puts it for free

3. No, because I’m concerned about my privacy

4. No, because I don’t need one


Potential Benefits and Costs of Smart Meter

Consumer savings (Based on avg. bill £512 per year)• Better Information on real time consumption

(2.8% reduction in energy) £14.34• Multi-tariff metering (Time of Use)

(20% take up, 5% peak shift, 3% off electricity bill) £15.36Supplier Savings passed on to Consumers (per meter per year):

• Avoid need of on-site meter readings £6.75• Customer service overhead (call center savings) £2.20• Remote switching £0.50

Total Savings (per year): £39.15Costs (per unit):

Display and meter £58.00Network £16.00Installation £29.00

Total Cost : (per unit) £103.00Source: DECC, 2009, Impact Assessment of Smart Meter Rollout


Potential Benefits and Costs of Smart Meter

•Consumer savings (Based on avg. bill £512 per year)• Better Information on real time consumption

– (2.8% reduction in energy) £14.34• Multi-tariff metering (Time of Use)

(20% take up, 5% peak shift, 3% off electricity bill) £15.36•Supplier Savings passed on to Consumers (per meter per year):

• Avoid need of on-site meter readings £6.75• Customer service overhead (call center savings) £2.20• Remote switching £0.50

•Total Savings (per year): £39.15•Costs (per unit):• Display and meter £58.00

Network £16.00• Installation £29.00•Total Cost :(per unit) £103.00•Source: DECC, 2009, Impact Assessment of Smart Meter Rollout

It could pay for itself in less than 3 years…


Potential Concerns

Privacy?... Confidentiality?... Fraud?...Has derailed mandatory Smart Meter rollout in Netherlands

Why is it a concern?Personal Information not previously obtainableNew mechanism for obtaining private information

Area of concernNetwork Privacy (Consumer – to – Utility)Data Access Privacy (Energy provider, third party, criminals…)

But…Have been able to successfully safeguard sensitive data:

Bank accounts, Phone records, Health records…



8. If electricity costs you twice as much 6-8pm would you rather:

1 2 3 4 5

5%

60%

10%

5%

20%

1. Not change your daily habits

2. Delay using some appliances until after 8pm

3. Get Smart Appliances and preset them with timer

4. Get Smart Appliances and let your supplier manage them (less to worry about?..)

5. Demand switching to flat tariff


Source: www.engaget.com


Smart Appliance Deployment ScenariosA. Information is provided through signal from supplier

when the renewable energy is available.B. Direct Load Control through signal from supplier

1: Preset to start at certain time, or when renewable energy is available.(Ex. Use washing machine, dryer, dish-washer after 9PM)

2: Interruptions(Ex. refrigerator, freezer interrupted for 2-3 minutes)

3: Cycle is delayed/extended (Ex. washing machine, dryer taking longer)

4: Restricted usage at times of peak (Ex. Limit use of cooker for 30min intervals a few times a year)


20%

40%

60%

80%

Sha

re o

f Res

pond

ents

Acc

eptin

g D

isco

unt

0 1% 2% 5% 10% 20%Discount Offered

Wet Appl. Run Longer White Appl.InterruptWet Appl. Preset Cooker Capped

Source: EPRG Survey of UK Households

Cumulative Share of Respondents that AcceptModifications to Appliance Use in Exchange for Discount


What influences acceptance?

• Habits: Acceptance highest for measures that do not involve significant lifestyle changes

• Convenience: Supply interruptions, even if they are planned have the lowest acceptance rates

• Savings: However stated acceptance rates are high, even for low discounts on bills

• Values: Those expressing concern for environment had higher acceptance rates

• Information…• Preferences…• Lifestyles…


…Afterthought

Laura PlatchkovFaculty of Economics



9. Congratulations! Thanks to your smart meter & energy efficiency measures, you have saved £300 on your energy bills!

How will you spend the money?

1 2 3 4 5

48%

9% 9%

17%17%

1. Save the money/spend it on other bills/ donate to an environmental charity

2. Put the thermostat higher

3. Pub/restaurant

4. Travel

5. Shopping (clothes, shoes, home fabric, sports equipment, books)


Energy abatement & energy efficiency measures => lower CO2

emissions/energy AND implicit price of energy services =

YOU SAVE MONEY!

•you reallocate your consumption and partially offset the savings=>rebound•you reallocate your consumption and negate the savings=> backfire

Rebound estimates in developed nations - Summary

Source: Jenkins et al. (2011)

energy service estimates best guess degree of confidenceautomotive transport 5‐87% 10‐30% highspace heating 1.4‐60% 10‐30% mediumspace cooling 0‐50% 1‐26% lowwater heating 10‐40% ? very lowother consumer energy services 0‐49% <20% low


Average tCO2/person in the UK =15.42tCO2

Source: http://www.guardian.co.uk/environment/interactive/2009/oct/20/guardian-quick-carbon-calculator

Your CO2 savings

-2

-1.5

-1

-0.5

0

0.5

1

1.5

2

save or donate

clothes pub & restaurant

other shopping

warmer home

books gadgets flying

tonn

esof

CO

2 s

aved


Do you have any questions?


Thank You

too smart by half? reducing household energy … too smart by half? reducing household energy...

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