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Progress on energy efficiency: a tale of four countries年四月 2014

By guest writer: Andrew J DeGuire, Johnson Controls Inc.

United States

The shale gas boom means stable electricity prices are forecasted for the next 20 years, limiting incentives for efficiency improvements. The slow recovery after the economic downturn of 2008-09 has caused owners to hesitate to finance efficiency projects, even though appropriate legal and financial frameworks are in place. In this climate, building executives’ attention to energy efficiency remained steady in 2013 versus 2012, according to the Institute for Building Efficiency’s 2013 Energy Efficiency Indicator (EEI) survey (Figure 1).


Figure 1: Attention to Energy Efficiency: 2012 vs. 2013. Source: Institute for Building Efficiency (click image to zoom)
With stable energy prices and relatively little government incentive, building owners did not pursue energy efficiency as aggressively as in the past. However, innovations like PACE financing options may remove the barrier to capital for energy efficiency investment that has slowed North American investment in recent years. Building executives in the EEI survey expect advanced lighting and smart building technologies to achieve the greatest increase in market adoption in the next 10 years, followed by advanced building materials and electric and plug-in vehicles.

United Kingdom

Electricity prices today are higher in the UK than in the United States (Figure 2), although the nation’s Office of Gas and Electricity Markets (Ofgem) forecasts prices to fall modestly in the coming years. Reasons include policies to increase supply-side competition and reduced wholesale energy costs, and European Union (EU) minimum energy efficiency standards expected to reduce demand. However, electricity prices could increase if the EU Emissions Trading Scheme allows the price of coal to rise. The Carbon Reduction Commitment (CRC) Energy Efficiency Scheme required large energy users to develop carbon reduction plans by March 2011; it applies to more than 5,000 organizations. An added efficiency incentive is a building labelling program that requires public disclosure of whole-building energy performance.


Figure 2: Electricity Prices (2012). Source: NUS Consulting Group-Electricity Trends, Shenzen Government Online , EIA, Ofgem (click image to zoom)
The 2013 EEI survey showed attention to energy efficiency declining: 40 percent of UK executives were paying “a lot more attention” to energy efficiency, versus 47 percent in 2012. Large-scale efficiency retrofits are hindered by legal and regulatory barriers, lack of capital amid challenges facing Europe’s economy, and uncertainty about whether such projects can yield the energy savings promised. As a result, building executives are focused on quick-payback technologies with low capital needs. For example, 40 percent of UK executives in the EEI survey expect advanced lighting technologies to have the greatest increase in adoption in the next 10 years.

China

Steadily increasing demand for electricity continues to push electricity prices slowly upward. The national government’s 12th Five Year Plan, launched in 2012, included targets to continue cutting energy consumption per unit of GDP by 16 percent. As a result, building owners’ attention to energy efficiency more than doubled: 61 percent of EEI respondents said they were paying “a lot more attention” to energy efficiency, versus 26 percent in 2012. Energy efficiency is also being driven by concern for public health related to air pollution from coal-fired power plants.

Opportunity for whole-building retrofits is limited because a large share of China’s building stock is new and the building efficiency industry is in its infancy. Accordingly, the focus is on energy efficient components that can be deployed in buildings regardless of size. In the EEI survey, technologies expected to see the greatest increase in adoption were smart building technologies such as sensors and smart meters, and solar thermal and photovoltaic systems. China leads the world in expectations around the market penetration of solar energy.

Australia

Australia forecasts the largest increase in electricity prices among the four countries, mainly because of a transition from coal-based generation to cleaner natural gas, now being piped from remote parts of the country. The economic downturn affected Australia less than most developed nations, and meanwhile the country has installed innovative energy efficiency regulations, including a progressive PACE financing program.

A government program that requires owners of buildings larger than 2,000 square metres to provide a Building Energy Efficiency Certificate is creating competitive pressure to increase efficiency. The government also established a $9 billion Clean Fund to support a range of clean energy and energy efficiency programs. Private- and public-sector energy retrofits are being embraced, and utilities sponsor various demand response programs. Technologies expected to see the greatest market adoption include high-efficiency lighting, advanced building materials, and solar energy.

Conclusion

Building executives need to understand global energy efficiency trends but must also consider what energy improvements make sense for them in light of local energy prices, government policies, and economic conditions. Resources and motivations differ greatly. In Australia and China, the central governments are aggressively driving efficiency into the building stock; the U.S. and UK are taking more decentralized approaches. Chinese companies can access subsidies to help pay for efficiency components; U.S. government building managers explore whole-building retrofits because their operating budgets are being cut. Irrespective of energy prices and regulatory schemes, the basic fact remains that energy efficiency is the highest returning investment for buildings globally – and it can be adapted to meet each building’s local needs.