Sitra Hans Nilsson FourFact 2012-6-7


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Hans Nilssonin esitys Sitran Energiaohjelman päätösseminarissa 7.6.2012

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Sitra Hans Nilsson FourFact 2012-6-7

  1. 1. Energizing Communities to Sustainability Hans Nilsson FourFact AB eceee IEA DSM Programme 1
  2. 2. Mean temperature increase 10Mean global temperature increase 9 8 7 6 Today (degrees) 5 CO2 CO2eq. Likely 4 Low end 3 High end 2 1 0 300 400 500 600 700 800 900 1000 1100 1200 Safe side GHG Concentration ppm (CO2-eq.) 350 ppm IEA WEO 450 ppm 2 Source: IPCC Fourth Assessment Report, WG I, Chapter 10, Table 10.8
  3. 3. Means for decarbonising till 2030 compared to BAU Source: IEA WEO 3 2009
  4. 4. 4
  5. 5. The EU Challenges -2009 •Internal market Lisbon •Interconnections CompetitivnessSustainable Security ofDevelopment supply •Dialogue Kyoto •Renewables Moscow •Storage •Efficiency •Diversification 5
  6. 6. A modest proposal 6
  7. 7. With high impact 7
  8. 8. À la recherche du temps perduOilcrisis (1973-Act 1: SAVE OIL AT ANY PRICEGOVERNEMENTS RESPONSIBILITY Efficiency (1985- Act 2: THE MARKET WORKS (ALONE) (The invisible hand with a green thumb) Sustainability (2000- Act 3: ACTIVE LEADERSHIP (But who ?) 8
  9. 9. 9
  10. 10. The potential for energy savings 10Source:
  11. 11. The potential is > 50%• Over an investment cycle (Buildings – long (decades); Industry – short (decade); Transport – Medium)• Benefit is normally underestimated (comfort, security, robustness is not accounted for)• Costs are normally overestimated (market learning, routine development is seldom regarded)• Planning is normally absent (Building declarations, Management Systems) since it is not required or stringently applied 11
  12. 12. Not difficult, but complicated What the customer wants! Energy Light, (kWh) Installation Power, Heat What the customer ought to get! Light, Less Energy A different Power, (fewer kWh) Installation Heat Comptences to make the changes Insulation, ventilation, cooling, heating, building, electricity, 12 lighting, plumbing, solar shading, compressed air, control, ICT, etc.
  13. 13. Focus and Perseverance More and more efficient takes you to energy efficiency step by stepEnergy TIME Audit 13
  14. 14. Where (in the pipe) should we act? In the pipe: Efficiency and renewablesBefore the pipe: At the end of the pipe:Sufficiency CCS and cleaning Beyond the pipe: Geo-engineering 14
  15. 15. Creating Markets with Experience MASSIVE DEPLOYMENT 15
  16. 16. Lessons Learned in technology deployment policies THE TRIANGULATION MODEL Industry Strategy (R&D funding) R&D-D Model Risk, Cost Niche Markets Barrier MT Model Model Information,Market Framework Marketing Customer/Distributor(Rules, regulations) (Understand, Address) 16
  17. 17. R&D-DModel The message of the learning curve• Price (Cost) is reduced Price by 10-25% by each Challenging New Technology doubling in cumulative volume/sales Incumbent old technology (LR=Learning Rate)• The new technology might reach a break even and be competitive to the old technology 1 2 Cumulative Sales Learning curves are straight lines in a double Logarithmic scale 17
  18. 18. 1. The learning investments have toR&D-DModel be covered and recovered• Learning investments Price are not subsidies IF Challenging New Technology A they can be Learning investments anticipated to yield future profit …and ditto profit B• Someone has to start C the process• It takes TIME to reach break even• The investments Cumulative Sales might be HUGE 18
  19. 19. 4. There is always someone to share R&D-D Model the bill• (I) Government and companies that have a Price Challenging New Technology “first-mover” interest• (II) Private sector (users) I Willingness to pay on niche markets who have a worse II III alternative• (III) Private sector (users) who have an interest in showing leadership Cumulative Sales 19
  20. 20. Comparison of supply side technologies 20
  21. 21. Both Effectiveness and Efficiency Policies to be EfficientPolicies tobeEffective 21 Källa: IEA. Deploying Renewables. Principles for Effective Policies
  22. 22. New Technologies will change business More ICT New (smaller) generation units New applications 22 Source: An EPRI Initiative to Advance the Efficient and Effective Use of Energy
  23. 23. Local resources change the view Primary energy Energy sold><Primary energy > > Energy sold> Energy used Energy used Distribu- ted gen. PV, wind etc. Energy used Transfor- Installa- (W)Primary mation tion ---energy Generation Energy sold (Wk) (custom.) (custom.) Service (Wp) (N) Local heat source (G) 23
  24. 24. 24Source: Energistyrelsen, Denmark
  25. 25. The Potentials are there – go for the Acceptance Result (Efficiency) = Potential technology, time * Acceptance time; exposure
  26. 26. Market TransformationMarket Penetration Preferred Case Base case Aggregated proc. (AP) & Labels White Cert. Technology Standards Procurement (TP) & Norms Product Performance
  27. 27. The Issue…Is not…. Is….• Awareness (People • Empowerment know that we are wasting (People do NOT know HOW energy and roughly also to do it) where)• Motivation (People want to save energy) Measures and prospects have to be framed according to how people think and act. 27
  28. 28. Perspectives on the market Standard (Neo)-classical model Behavioural economics model ECONS HUMANS• Preferences are constant • Preferences are changing• The prices contain the • Decisions are biased by the necessary information way we are treating• Customers have access to all information necessary information on • Offers need to be designed performance and prices (choice architecture) Good model to estimate Necessary to decide on po- the potential licies for implementation
  29. 29. Mental accounting of losses and gains Gv 1000 1000 Lv 29
  30. 30. Soft measures to leverage the hard 30Source:
  31. 31. Soft Measures• Visioning: setting up long-term energy & climate local strategies and targets• Implementation of innovative technologies: uptake of sustainable energy technologies• Financial innovation: implementation of innovative financial instruments, setting up new business models• Social innovation: inventing and implementing new local governance, communication, ways of mobilizing local actors & citizens, changing behaviour, etc.• Networking: new ways of exchanging knowledge & innovative practices, taking multi-level actions, etc. 31
  32. 32. Pulling the pieces together?• Technology performance (from BAD to BAT to BAT+)• Technology integration (supply and demand side)• Address the customer perception of changes• Planning of changes (macro and micro perspectives)• Industry learning and applications (business models)• Policy instruments, both effective and efficientCheck also Concerto: 32
  33. 33. 33
  34. 34. We all have our personal doomsday scenarios with respect to an extremely “energy hungry” world Year 1900 Year 1800 Year 2000 CFLYear 2050 ? 34 Year 2020, LED
  35. 35. And finally…THANKS FORLISTENING ! 35