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Production & Consumption

The major energy users in industrial societies are residential and commercial buildings, industry, transportation, and electric power generators as well as individual citizens. The production and consumption of goods and services encompass a vast part of all activities in any given society – and therefore also release a large share of global carbon dioxide emissions. Choices in production and consumption can be targeted via various measures, either directed at citizens directly or at companies. In many cities, the industrial sector plays a major role in reducing greenhouse gas emissions via improved energy efficiency of processes. City officials have a chance to influence both citizens and the industry in choosing for example more energy efficient transport modes and public purchases.

What actions can increase energy efficiency connected to production and consumption? How should you communicate? Read about what to consider when choosing actions to increase energy efficiency below.

Technology

Local governments across the world are facing ever increasing budgetary challenges. When seeking new and innovative ways to cut costs and reduce financial risk, one option creates so much value it can’t be ignored: public-private partnerships.

Public-private partnerships

While there is no international consensus on what constitutes a public-private partnership (PPP). Broadly, PPP refers to arrangements, typically medium to long term, between the public and private sectors whereby some of the services that fall under the responsibilities of the public sector are provided by the private sector, with clear agreement on shared objectives for delivery of public infrastructure and/or public services.

There are usually two fundamental drivers for PPPs:
  1. PPPs are claimed to enable the public sector to harness the expertise and efficiencies that the private sector can bring to the delivery of certain facilities and services traditionally procured and delivered by the public sector.
  2. A PPP is structured so that the public sector body seeking to make a capital investment does not incur any borrowing. Rather, the PPP borrowing is incurred by the private sector vehicle implementing the project and therefore, from the public sector’s perspective, a PPP is an “off balance sheet” method of financing the delivery of new or refurbished public sector assets.

Great success has been obtained in cities of the PLEEC project and similar ones, with the ESCO (Energy Service Companies) public-private partnership model, where a private enterprise takes responsibility for an energy saving project in a public asset, for instance a building, the public transport system or the waste management. The private enterprise finances and implements suitable energy saving technology in the asset and carries the whole risk for the project. The public partner pays for the investment with money earned from reduced energy consumption.

A partnership with the private sector can provide cities and their citizens with a number of benefits including lower costs for services and protection from fiscal liabilities such as pensions, workers compensation benefits, and workforce management. Creating a partnership is not without uncertainties, but by being informed and asking the right questions, much of the risk can be mitigated. The following are seven things to consider before entering into a public-private partnership, to reduce the risk while maximizing the benefits.

  1. Existing Employees
  2. Liability management
  3. Regulatory compliance
  4. Service agreements
  5. Future expansion
  6. Exit strategy
  7. Trends

For more technologies to improve energy efficiency please read PLEEC WP3 Technical State of the art innovative solutions (D3.1) and WP3 Improving energy efficiency through technology – Case studies (D3.2).

Contact: Erik Dahlquist, Technical University of Mälardalen, Sweden

Structure

Spatial planning can provide certain structures and conditions for our behaviour. However, how those structures are used can only be influenced indirectly. An example is increasing commuting caused by the functional integration of cities. Even if each of the cities is compact and provides employment as well as housing opportunities, the increased daily mobility overrules that. Also, certain energy efficient urban development, as e.g. implied by compact city development, can have potential adverse effects. Those include e.g. some increased need of transportation and big infrastructure due to the reduced potential of on-site activities, e.g. farming on-site, waste treatment on-site, local water run-off or recreation on-site. In the conclusion section of the WP4 Thematic Report (D4.3) we reflect on some potential trade-offs and rebound effects.

However, these trade-offs are not fully explored and subject to concrete planning measures because of their local complexity. Besides that there are though several measures in urban planning which can be done to increase the more efficient use of energy and resources. Usually this is done in connection to other goals.

The WP4 Summary Report (D4.4) outlines spatial planning measures which can support that and summarizes the efforts in the six cities.

Contact: Christian Fertner, Copenhagen University, Denmark

Fuel poverty in Stoke-on-Trent

In England the use of energy for heating has become a question of financial situation. They talk about fuel poverty when describing the situation where the cost of heating is a substantial part of a family’s budget. Stoke-on-Trent tackles the issue of fuel poverty with specific renovation measures (see WP4 Case study report on Stoke-on-Trent (D4.2)).

Reusing material and energy in Jyväskylä

Promoting energy efficiency sets different demands on the communication depending on who is the recipient. Are you approaching citizens, industry or the service sector? Jyväskylä influence others by setting a good example. The city supports the reuse of material and energy in industrial processes, in combination with public services as district heating (see WP4 Case study report on Jyväskylä (D4.2) and chapter 3 in WP4 Thematic Report (D4.3)).

Behavior

As consumers, citizens have the possibility – and the responsibility – to cut back on emissions via the consumption choices they make. Industrial energy use from the production of these goods and services can also be influenced indirectly via consumption choices.

For companies/industries, energy efficiency is often a rational choice as it means money saved via decreased energy costs. Disincentives exist, however, and financial constraints, economic parameters, market imperfections, and organizational and human related factors may inhibit energy efficiency investments.

According to research, the following conclusions can be made about the behavioral aspect of choices in energy efficient production and consumption:

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People tend to discount future energy savings and instead focus on short term gains. Combined with the aversion to engage in seemingly arduous installing of energy efficiency measures, people’s willingness to take action may be hindered. The appeal of longer term improvements to properties can be increased by including an upfront incentive as part of the installation of the energy efficiency measure.

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Feedback is an integral element of effective learning, raising energy awareness and changing consumer’s attitudes to energy consumption. With no appropriate frame of reference, the consumer has no means of determining whether their use of energy is excessive or not. In order to make a conscious effort to reduce one’s energy consumption, the energy end user needs to receive timely and accurate information on how much energy is consumed by different functions.

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The rebound effect is one of the main risks when initiating/realizing energy efficiency investments. Sometimes money saved in one energy efficiency measure may lead to increased energy use elsewhere. Therefore possible rebound effects should always be carefully considered when planning to implement energy efficiency investments.

When it comes to influencing consumption choices and energy efficiency investments, cities and city planners should:

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Apply measures that utilize peer pressure both in the home and at the workplace

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Provide feedback – timely and personalized information and guidance on energy consumption

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Emphasize the long-term benefits of investments and provide upfront incentives for more costly energy efficiency measures

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Always pay attention to possible rebound effects when planning for energy efficiency policies and interventions

For more information about the case studies and about the importance of behavioral aspects in energy efficiency work see PLEEC WP5 Case Study reports (D5.1) and WP5 Final report (D5.5).

Contact: Annika Kunnasvirta, Turku University of Applied Sciences, Finland