Res-IRF, modeling the savings potential in the French residential sector
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1) The document summarizes a residential sector model called Res-IRF that models the potential energy savings in the French residential sector from improvements in energy efficiency and sufficiency. 2) The model finds potential savings of 37% are possible through efficiency improvements alone, with additional possible savings of 10% through increased energy sufficiency and conservation behaviors. 3) Policy simulations show that while subsidies and regulations can increase adoption of efficiency technologies, a carbon tax is more effective at meeting long-term emissions targets since it also encourages energy sufficiency behaviors.
Res-IRF, modeling the savings potential in the French residential sector
- 1. Res-IRF, modeling the savings potential in the French residential sector Louis-Gaëtan Giraudet, Céline Guivarch and Philippe Quirion CIRED (www.centre-cired.fr)
- 2. Outline Res-IRF: Residential module of Imaclim-R France 1. Model description 2. Dynamics in the reference scenario 3. Policy simulations 2
- 4. Res-IRF: technological features • Energy consumption covered – Space heating (2/3 of French household demand) – Electricity, natural gas & fuel oil (+ wood in new version) • Energy efficiency improvements (including fuel switch) – New constructions (standard/low energy/passive) – Retrofitting of existing dwellings G F E D C B A G F E D C B A 4
- 5. Res-IRF: microeconomic features LCCi , f PRi , f LCCi ,h h i LCCi , f CINVi , f CENER f ICi , f Barriers to energy efficiency Tentative representation in Res-IRF (non-exhaustive list) (parameterized according to expert elicitation) Market Uncertainty Myopic expectation CENER barriers Hidden costs Fixed intangible costs a . IC Heterogeneity Heterogeneity parameter ν Market Split incentives Heterogeneous discount rates (7%...50%) CENER failures Information externalities Decreasing intangible costs (1-a) IC Innovation externalities Learning-by-doing functions CINV 5
- 6. Efficiency, ‘Sufficiency’ and the rebound effect Unrestrictive behavior Data: EDF R&D (see Cayre et al., 2011, ECEEE Proceedings) LE/A B C Sufficiency D Restrictive behavior E F G Energy efficiency Energy price 6
- 7. Dynamics in the reference scenario
- 8. Endogenous retrofitting dynamics Adoption spillovers prevail (self-reinforcing) ‘Natural’ exhaustion prevails 65% 90% 8
- 9. Potential for energy conservation in existing dwellings Reference savings: -37% « Sufficiency » gap: -10% « Private efficiency » gap: -4% « Social efficiency » gap: -8% NB: subject to slightly increasing energy price (~0.5% p.a.) 9
- 11. Policy simulation Income tax credits 2009-2020 • Subsidy of 30% of investment cost • Capped at €8,000 per dwelling Zero rate loans 2009-2020 • Subsidy equal to the interests of a 10-year loan at 4% • Base capped at €30,000 per dwelling 2010 2020 2030 2040 2050 Carbon tax • €32/tCO2 in 2010 • Increasing by 5.8% pa until 2030, 4% afterwards Retrofitting obligation for each occupancy change • Dwellings rated below class C must upgrade to minimum class C • Incremental implementation, from class G in 2016…to class D in 2028 11
- 12. Ineffectiveness of the policy packages assessed €200/tCO2 in 2010 National Target -38% 12
- 13. Policy impacts on existing dwellings in 2050 13
- 14. Why in the end, tax outperforms Rebound Sufficiency 14
- 15. Conclusions • Policy ranking – Subsidies & regulations increase efficiency, thus adoption externalities (pro) and the rebound effect (con) – Tax: low impact on efficiency, but encourages sufficiency – both necessary – Despite unrepresented measures (information policies) and technologies (fuel-wood, district heating), French targets hard to meet • New developments and perspectives – Fuel-wood – Uncertainty analysis – Econometric estimation 15
- 16. Thanks for your attention contact: quirion@centre-cired.fr Giraudet, L.-G., C. Guivarch, P. Quirion, 2011: • Comparing and combining energy saving policies. Will proposed residential sector policies meet French official targets? Energy Journal, 32(SI1): 213-242 • Exploring the potential for energy conservation in French households through hybrid modelling, Energy Economics, doi:10.1016/j.eneco.2011.07.010 16