Transitions in Energy Efficiency and Demand

The Emergence, Diffusion and Impact of Low-Carbon Innovation

Kirsten E.H. Jenkins, Debbie Hopkins, Kirsten E.H. Jenkins, Debbie Hopkins

• Publisher: Routledge
• Year: 2018
• ISBN:
  9781351127240
• Edition: 1
• Topic: Technology & Engineering
• Subtopic: Renewable Power Resources
• Index: Technology & Engineering

The Open Access version of this book, available at http://www.tandfebooks.com/doi/view/10.4324/9781351127264, has been made available under a Creative Commons Attribution-Non Commercial-No Derivatives 4.0 license.

Meeting the goals enshrined in the Paris Agreement and limiting global temperature increases to less than 2°C above pre-industrial levels demands rapid reductions in global carbon dioxide emissions. Reducing energy demand has a central role in achieving this goal, but existing policy initiatives have been largely incremental in terms of the technological and behavioural changes they encourage. Against this background, this book develops a sociotechnical approach to the challenge of reducing energy demand and illustrates this with a number of empirical case studies from the United Kingdom. In doing so, it explores the emergence, diffusion and impact of low-energy innovations, including electric vehicles and smart meters. The book has the dual aim of improving the academic understanding of sociotechnical transitions and energy demand and providing practical recommendations for public policy.

Combining an impressive range of contributions from key thinkers in the field, this book will be of great interest to energy students, scholars and decision-makers.

1 Introduction

New directions in energy demand research

Kirsten E.H. Jenkins, Steve Sorrell, Debbie Hopkins and Cameron Roberts

Introduction

Meeting the goal enshrined in the Paris Agreement of limiting global temperature increases to less than 2°C above pre-industrial levels demands rapid reductions in global carbon dioxide (CO₂) emissions. For example, the International Energy Agency (IEA) estimates that to provide a high likelihood (66 per cent probability) of meeting that target, cumulative global CO₂ emissions between 2015 and 2100 must be less than 880 Giga-tonnes (Gt) (IEA, 2017). For the energy sector alone, the IEA estimate a smaller ‘carbon budget’ of 790 Gt. To put this in perspective, global energy sector emissions stood at 32.5 Gt in 2017 – an increase of 1.4 per cent on the previous year and equivalent to ~4 per cent of the remaining budget (IEA, 2018). If emissions continue at this level, the budget will be exhausted in less than 25 years. Hence, to achieve the 2°C target, energy-related carbon emissions must fall very rapidly. The IEA estimate that emissions must fall by ~70 per cent by 2050¹ – implying a near complete decarbonisation of the electricity sector, retrofitting of the entire existing building stock, a major shift towards low-emission vehicles and an 80 per cent reduction in the carbon intensity of industrial sectors (IEA, 2017). By the end of the century, any residual anthropogenic CO₂ emissions would need to be balanced by CO₂ removals from the atmosphere.

There is no historical precedent for transforming energy systems at this scale and at this speed. Achieving this goal will require the rapid and extensive deployment of low-carbon technologies throughout all sectors of the global economy, with far-reaching implications for markets, infrastructures, institutions, social practices and cultural norms. What is more, emission reduction efforts will simultaneously have to address other concerns, including questions of social justice, energy access and energy security.

There is certainly some degree of political ambition to revolutionise the energy landscape. The 2016 Paris Agreement provides a strong basis for global mitigation efforts and these in turn have encouraged (and have been facilitated by) major improvements and cost reductions in renewable energy, electric vehicles, energy storage and other low-carbon technologies (UNFCC, 2015). Electricity from wind and solar is projected to be cheaper than fossil fuels by the mid-2020s, and global trends show a rapid uptake of these and other low-carbon technologies (Bloomberg New Energy Finance, 2018; IEA, 2017). Modern renewables now provide 10 per cent of global final energy demand and more than a quarter of global electricity generation, with a record 157 gigawatts (GW) being commissioned in 2017 (Frankfurt School–UNEP Centre/BNEF, 2018).

Yet despite these encouraging trends the rate of progress remains too slow, particularly in relation to improving energy efficiency and reducing energy demand. Global primary energy intensity (the ratio of primary energy consumption to GDP) fell by 1.2 per cent in 2017, but this is less than half the rate required to meet the 2°C target (IEA, 2017). While a business as usual scenario suggests a ~40 per cent increase in global primary energy demand by 2050, a 2°C scenario suggests practically no increase – unless negative emission technologies are deployed (IEA, 2017). There are a growing number of policy initiatives targeting energy demand, but many of these focus upon incremental technological improvements (e.g. insulation) and necessitate only modest changes in energy-related behaviour. But to meet the emission reduction targets, we must achieve radical changes in energy demand throughout all sectors of the global economy. Since only limited increases in global energy demand appear compatible with ambitious climate targets (Loftus et al., 2015), developing countries must follow very different development paths than have been observed historically – leapfrogging to highly energy-efficient technologies and providing high levels of human welfare with much lower energy consumption that has been required in the past (Steckel et al., 2013). And to allow space for increased energy demand in the developing world, there will need to be absolute reductions in energy demand in the developed world. Few countries have achieved this in the past, and it is likely to prove very challenging.

Reducing energy demand

The IEA estimates that improved energy efficiency and reduced energy demand could contribute up to half of the reductions in global carbon emissions over the next few decades (IEA, 2012a; IEA, 2015). In other words, changes in energy demand could contribute as much carbon abatement as all the low-carbon energy supply options combined. Similarly, the United Kingdom (UK) government has recognised that reducing energy demand can be a highly cost-effective approach to reaching climate targets, and positions both energy demand reduction and increased energy efficiency as core policy goals (DTI, 2003, 2007; DECC, 2011). But questions remain on how best to achieve these goals.

The demand for energy is driven by the demand for energy services, such as thermal comfort, illumination and mobility. Energy services form the last stage of an energy chain that begins with primary energy sources such as crude oil and nuclear power, continues through secondary energy carriers such as gasoline and electricity and then through end-use conversion devices such as boilers, furnaces, motors and lightbulbs. These conversion devices provide ‘useful energy’ such as low- and high-temperature heat, mechanical power and electromagnetic radiation, which in turn is preserved or trapped within ‘passive systems’ for a period of time to produce final energy services (Cullen and Allwood, 2010). So, for example, the heat delivered from a boiler (conversion device) is held within a building (passive system) for a period of time to provide thermal comfort (energy service).

It follows that there are three ways to reduce energy demand:

1 Improve conversion efficiencies and reduce transmission losses at all stages of the energy chain, including from primary to final energy (e.g. more efficient power stations) and from final to useful energy (e.g. more efficient boilers, engines and refrigerators).

2 Improve the ability of passive systems to trap energy for periods of time (e.g. more aerodynamic vehicles, better insulated buildings).

3 Reduce demand for energy services, such as heating, lighting and cooling, (e.g. lower internal temperatures, fewer overseas flights).

These changes can be achieved through a combination of retrofitting existing technologies (e.g. insulating a house), investing in new technologies (e.g. installing a condensing boiler) and changing energy-related behaviour (e.g. turning off lights when not in use). The latter in turn may involve either restraint (e.g. turning the thermostat down, giving up flying) or substitution by less energy-intensive services (e.g. shifting from cars to buses). Large improvements in energy efficiency are often associated with simultaneous shifts towards different energy carriers – such as replacing gas boilers with (more efficient) electric heat pumps or replacing gasoline cars with (more efficient) battery–electric vehicles. But much of the potential for reducing energy demand requires inter-linked changes in all of these areas. More fundamentally, radical reductions in energy demand are likely to require transitions to entirely new systems for providing energy services – such as intermodal transport, compact cities, and smart homes.

None of these options are straightforward and the complexity of the processes involved can easily be underestimated. Sorrell (2015) notes, for instance, that previous attempts to reduce energy demand have often proved unsuccessful; the assumptions on which policy interventions are based do not always reflect either the challenge involved or the factors shaping individual and organisational decision-making; and the complexity of economic systems can undermine the success of even well-designed interventions. There are numerous stumbling blocks on the road to energy demand reductions:

• Reducing energy demand is complex: Historically, economic growth has been closely linked to increased energy consumption, and few countries have achieved ‘absolute decoupling’ of primary energy consumption from gross domestic product (GDP) (see Chapter 8). The expectation that improved energy efficiency will lead to proportional reductions in energy demand can be misleading (Sorrell, 2009). The links between efficiency and demand are complex and rebound effects – in which consumers increase their consumption of energy services to take advantage of the fact that these services are now cheaper – can partly offset and sometimes completely eliminate the associated energy savings. In this regard, projections of the impact of policy instruments on energy demand often rely upon oversimplified assumptions (Wilhite et al., 2000; Sorrell, 2015).

• Large-scale, rapid change is required: Previous energy transitions (e.g. from localised wood use to centralised fossil fuels) have generally been long and arduous affairs (Smil, 2010). There may be some hope here, as past transitions have generally not been the result of deliberate government intervention (Geels et al., 2017). Yet the urgency of the climate change agenda means that we require larger, faster and more pervasive changes than have been achieved before, supported by policy efforts that have not existed in previous energy transitions (Sovacool, 2016). Such efforts will require substantial and sustained political commitment, combined with global cooperation in the face of powerful incentives to defect and free ride.

• Energy demand is rising: Even if the most optimistic forecasts for the upscaling of low-carbon energy supply are exceeded, increases in energy consumption will blunt their impact. Decarbonisation of energy supply must be combined with a break with the historically observed relationship between energy consumption and economic growth. If the rate of decarbonising energy supply is less than anticipated by the more optimistic scenarios, climate targets will only be achieved through greater efforts to reduce energy demand or the deployment of negative emission technologies. Given the uncertainties associated with the latter (Anderson and Peters, 2016), reducing energy demand must be a priority.

• Societies are disinclined to change: Energy demand is shaped by large-scale, capital-intensive and long-lived technologies and infrastructures (e.g. transport systems, buildings) that constrain the feasible rate of change. This inertia is reinforced by the entrenched habits and social practices that develop alongside these technologies and infrastructures, together with powerful political interests that resist change (Rosenbloom and Meadowcroft, 2014). For example, policies aimed at reducing automobile dependence face a backlash from motorists whose work and leisure patterns are built around the private car, and from motor and fossil fuel industries whose economic interests are threatened (Dudley and Chatterjee, 2011). For this reason, energy- and carbon-intensive forms of energy service provision continues to dominate and will be difficult to dislodge.

• Carbon pricing is insufficient: Carbon pricing can encourage reductions in energy demand and carbon emissions but is unlikely to be sufficient by itself. Carbon prices remain much lower than required to meet ambitious climate targets and attempts to raise them must overcome formidable political obstacles (Loftus et al., 2015). Carbon pricing can encourage organisations and individuals to pursue energy efficiency, but many are locked in to energy-inefficient systems and practices, with the costs of switching to more efficient systems frequently offsetting the financial benefits of lower energy consumption (see Gillingham et al., 2012). Moreover, the economic theories underpinning carbon pricing provide a poor guide to real-world individual and organisational behaviour (Brown, 2001; Wilson and Dowlatabadi, 2007).

• Current policies neglect innovation: Energy demand reduction requires rising energy/carbon prices alongside policies to reduce the economic barriers to improved energy efficiency (Sorrell et al., 2004). It requires interventions that encourage individuals and households to adopt existing energy-efficient technologies and practices, alongside support for new energy-efficient technologies throughout all stages of the innovation chain. But many policy measures are underrepresented in the current policy mix (e.g. innovation support) while others are confined to relatively incremental improvements (e.g. insulation). Thus, in the face of multiple barriers, current policy approaches appear insufficient.

Two things are clear from the preceding discussion. First, to reach our climate change targets, we must significantly reduce energy demand relative to business-as-usual scenarios, and possibly also in absolute terms. Second, the pathways to doing so defy simple or straightforward solutions. This brings us to the challenge of finding the most effective approach, and to the contribution of a ‘sociotechnical’ perspective on energy demand.

Perspectives on reducing energy demand: the sociotechnical approach

The challenge of reducing energy demand has been approached from many different theoretical perspectives including neoclassical economics (focusing on economic barriers to energy efficiency), social psychology (focusing on cognitive, emotional and affective influences on energy-related choices) and social practice theory (focusing on how habitual behaviour and social norms shape energy demand). Each approach offers valuable insights, but also has blind spots and weaknesses – particularly in relation to achieving more radical reductions in energy demand. This book therefore proposes a complementary sociotechnical perspective that can overcome some of these limitations. The sociotechnical approach is well established in the academic literature but has rarely been applied to energy demand.

A distinguishing feature of the sociotechnical approach is the expansion of the unit of analysis from individual technologies to the sociotechnical systems that provide energy services such as thermal comfort and mobility. Sociotechnical systems are understood as the interdependent mix of social and technical entities that function collectively to deliver specific energy services. They include physical artefacts (e.g. infrastructures, conversion technologi...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Table of Contents
• List of figures
• List of tables
• Notes on contributors
• Preface
• 1 Introduction: new directions in energy demand research
• PART I: Analytical perspectives
• PART II: The emergence and diffusion of innovations
• PART III: Societal impacts and co-benefits
• PART IV: Policy mixes and implications
• PART V: Conclusion
• Index