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Evaluating the multiple benefits of
energy efficiency:
Experience and ambition.


Jim Scheer
Policy Analyst
Energy Modelling Group
Sustainable Energy Authority of Ireland
Overview

• Awareness and evaluation to date
• Methodology
     • Employment focus

• Barriers

• Ambition and area of interest
Awareness …


• Traditionally energy (GWh) and CO2 savings
    – firmer focus on € value

• Business competitiveness

    – message clear e.g. Large Industry Energy Network

• Recent CBAs bringing noting the potential for multiple benefits
    – increased comfort, well-being, health, employment,
      competitiveness

• Since recession - Ireland unemployment rate over 14%
   – All about jobs..
Awareness …

Press releases …
   “This scheme will help Ireland meet our climate change targets …
   assist the householder with energy costs …
   increase the re-sale value on their homes.” (April, 2008)

    “Insulation makes homes warmer and more comfortable ...
    Householders can expect (bill) reductions of €700 per annum …
    Construction workers will benefit from the thousands of jobs.”
    (February, 2009)

“Over 5,800 jobs supported in 2011 ...
Reduced energy use of 8,000 GWh by 2020 (1 million buildings) …
Warmer homes with increased health and comfort …
Net societal benefit of €6 billion.”
(May, 2011)
Awareness …



Latest Affordable Energy Strategy (82 pages) has:
    – >25 separate references to „health‟
    – 8 references to „comfort‟
    – 6 references to „wellbeing‟
    – 4 references to „energy savings‟




   “The Better Energy Homes scheme provides assistance to
   homeowners to reduce energy use, costs and greenhouse gas
   emissions and improve the comfort levels within their home.”
Evaluation example: Employment

1. Linked to programme expenditure
  – Government grants of €x leveraging €x from private sector,
    supporting xx jobs in 2012

2. Linked to competitiveness (reduced fuel bills)
3. Linked to companies interacting in programmes
  – „SEAI worked with 1500 SME‟s, employing over 130,000 full time
    employees‟
Methodology: Jobs

Based on increased investment in energy efficiency technologies
• Illustrative example


Total spend (public + private spend)         €100 million         e.g. SEAI programme data

                                             €65 million
Labour spend                                                      Data from receipts/invoices
                                             (65%)

Average wage (construction)                  €39,990              Central Statistics Office

Direct jobs supported                        1,625

Indirect multiplier                          1.5                  (various)

“Jobs supported in construction and                                Direct and indirect - can
                                               ~2,440
related * Now incorporated in to Better Energy Homes http://www.seai.ie/Grants/Better_energy_homes/
        sectors”                                                   also include induced
Employment potential
Ex-post: a survey


   • Comfort gains and energy savings are
     the principal motivators for
     participation
   • 65% believe the value of their home
     has increased after the upgrade
Barriers

• Need for further ex-post assessment
   – Economic events have motivated the need for estimates of
     multiple benefits … now need to shift to evaluative model

• Barriers
   – Resources: Time and funding / priorities
   – Collecting the right data from the start … making policies
     measurable

• Need
   – Practical case studies that we can apply
   – Guidance on what data to collect (indices for jobs, heath
     spend?, survey format?)
Ambition and areas of interest

•   Valuing comfort and health (mortality and morbidity) for low income/fuel poverty
    programmes

•   Recognition of multiple benefits in models and investment decisions

     – least cost modelling (system costs) often not good at accounting for co-
       benefits

•   Data collection – M&V required as condition of funding support – expand to data
    collection for multiple benefits (examples?)

•   Getting the message through – from research/energy experts to policy makers

     – Developing literature on health benefits (valuation) … acceptability?
     – Thirst for more „feathers in the cap‟ … often linked to political focus of the day
     – Taking care in early evaluation presentation … credibility
     – Interaction of multiple benefits … double counting comfort/health/well-being?
Thank you.

Jim Scheer
Policy Analyst
Energy Modelling Group
Sustainable Energy Authority of Ireland



email: emg@seai.ie
Selected references

Reports mentioned in this presentation
Department of Communications, Energy and Natural Resources. (2011). Warmer Homes: A Strategy for Affordable Energy in
Ireland. Dublin: DCENR.

Sustainable Energy Authority of Ireland (2011). J. Scheer and B. Motherway. Economic Analysis of Residential and Small-
Business Energy Efficiency Improvements.

SEAI. (2010). Bringing Energy Home - Understanding how people think about energy in their homes. Dublin: Sustainable Energy
Authority of Ireland.

Health/EE link
Ezratty, V. and Ormandy, D. (2011), “The Health Benefits of Energy Efficiency”, presented at the IEA workshop on evaluating the
co‐benefits of low‐income weatherisation, 27‐28 January 2011, Dublin.

Clinch, J. P., & Healy, J. D. (2000, September). Housing Standards and Excess Winter Mortality. Journal of Epidemiology &
Community Health, 54(9), 719-720.

Chapman R, Howden-Chapman P, Viggers H, O‟Dea D, Kennedy M. Retrofitting housing with insulation: a cost-benefit analysis
of a randomised community trial. Journal of Epidemiology and Community Health 2009;63:271– 277.

Green, G., & Gilbertson, J. (2008). Warm Front Better Health: Health impact evaluation. Sheffield Hallam University, Centre for
Regional, Economic and Social Research.

Cost benefit including health and others
Clinch, J. P., & Healy, J. D. (2001). Cost-benefit analysis of domestic energy efficiency. Energy Policy, 29, 113 - 124.

Valuing comfort
Clinch, J. P., & Healy, J. D. (2003). Valuing improvements in comfort from domestic energy-efficiency retrofits using a trade-off
simulation model. Energy Economics, 25, 565 - 583.

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Evaluating the multiple benefits of energy efficiency: Experience and ambition

  • 1. Evaluating the multiple benefits of energy efficiency: Experience and ambition. Jim Scheer Policy Analyst Energy Modelling Group Sustainable Energy Authority of Ireland
  • 2. Overview • Awareness and evaluation to date • Methodology • Employment focus • Barriers • Ambition and area of interest
  • 3. Awareness … • Traditionally energy (GWh) and CO2 savings – firmer focus on € value • Business competitiveness – message clear e.g. Large Industry Energy Network • Recent CBAs bringing noting the potential for multiple benefits – increased comfort, well-being, health, employment, competitiveness • Since recession - Ireland unemployment rate over 14% – All about jobs..
  • 4. Awareness … Press releases … “This scheme will help Ireland meet our climate change targets … assist the householder with energy costs … increase the re-sale value on their homes.” (April, 2008) “Insulation makes homes warmer and more comfortable ... Householders can expect (bill) reductions of €700 per annum … Construction workers will benefit from the thousands of jobs.” (February, 2009) “Over 5,800 jobs supported in 2011 ... Reduced energy use of 8,000 GWh by 2020 (1 million buildings) … Warmer homes with increased health and comfort … Net societal benefit of €6 billion.” (May, 2011)
  • 5. Awareness … Latest Affordable Energy Strategy (82 pages) has: – >25 separate references to „health‟ – 8 references to „comfort‟ – 6 references to „wellbeing‟ – 4 references to „energy savings‟ “The Better Energy Homes scheme provides assistance to homeowners to reduce energy use, costs and greenhouse gas emissions and improve the comfort levels within their home.”
  • 6. Evaluation example: Employment 1. Linked to programme expenditure – Government grants of €x leveraging €x from private sector, supporting xx jobs in 2012 2. Linked to competitiveness (reduced fuel bills) 3. Linked to companies interacting in programmes – „SEAI worked with 1500 SME‟s, employing over 130,000 full time employees‟
  • 7. Methodology: Jobs Based on increased investment in energy efficiency technologies • Illustrative example Total spend (public + private spend) €100 million e.g. SEAI programme data €65 million Labour spend Data from receipts/invoices (65%) Average wage (construction) €39,990 Central Statistics Office Direct jobs supported 1,625 Indirect multiplier 1.5 (various) “Jobs supported in construction and Direct and indirect - can ~2,440 related * Now incorporated in to Better Energy Homes http://www.seai.ie/Grants/Better_energy_homes/ sectors” also include induced
  • 9. Ex-post: a survey • Comfort gains and energy savings are the principal motivators for participation • 65% believe the value of their home has increased after the upgrade
  • 10. Barriers • Need for further ex-post assessment – Economic events have motivated the need for estimates of multiple benefits … now need to shift to evaluative model • Barriers – Resources: Time and funding / priorities – Collecting the right data from the start … making policies measurable • Need – Practical case studies that we can apply – Guidance on what data to collect (indices for jobs, heath spend?, survey format?)
  • 11. Ambition and areas of interest • Valuing comfort and health (mortality and morbidity) for low income/fuel poverty programmes • Recognition of multiple benefits in models and investment decisions – least cost modelling (system costs) often not good at accounting for co- benefits • Data collection – M&V required as condition of funding support – expand to data collection for multiple benefits (examples?) • Getting the message through – from research/energy experts to policy makers – Developing literature on health benefits (valuation) … acceptability? – Thirst for more „feathers in the cap‟ … often linked to political focus of the day – Taking care in early evaluation presentation … credibility – Interaction of multiple benefits … double counting comfort/health/well-being?
  • 12. Thank you. Jim Scheer Policy Analyst Energy Modelling Group Sustainable Energy Authority of Ireland email: emg@seai.ie
  • 13. Selected references Reports mentioned in this presentation Department of Communications, Energy and Natural Resources. (2011). Warmer Homes: A Strategy for Affordable Energy in Ireland. Dublin: DCENR. Sustainable Energy Authority of Ireland (2011). J. Scheer and B. Motherway. Economic Analysis of Residential and Small- Business Energy Efficiency Improvements. SEAI. (2010). Bringing Energy Home - Understanding how people think about energy in their homes. Dublin: Sustainable Energy Authority of Ireland. Health/EE link Ezratty, V. and Ormandy, D. (2011), “The Health Benefits of Energy Efficiency”, presented at the IEA workshop on evaluating the co‐benefits of low‐income weatherisation, 27‐28 January 2011, Dublin. Clinch, J. P., & Healy, J. D. (2000, September). Housing Standards and Excess Winter Mortality. Journal of Epidemiology & Community Health, 54(9), 719-720. Chapman R, Howden-Chapman P, Viggers H, O‟Dea D, Kennedy M. Retrofitting housing with insulation: a cost-benefit analysis of a randomised community trial. Journal of Epidemiology and Community Health 2009;63:271– 277. Green, G., & Gilbertson, J. (2008). Warm Front Better Health: Health impact evaluation. Sheffield Hallam University, Centre for Regional, Economic and Social Research. Cost benefit including health and others Clinch, J. P., & Healy, J. D. (2001). Cost-benefit analysis of domestic energy efficiency. Energy Policy, 29, 113 - 124. Valuing comfort Clinch, J. P., & Healy, J. D. (2003). Valuing improvements in comfort from domestic energy-efficiency retrofits using a trade-off simulation model. Energy Economics, 25, 565 - 583.