Conceptual approach
Methodologically, the project follows a three-step approach, consisting of a very large household/consumer survey (micro-level), followed by bottom-up modelling on the meso- and macro-levels. The survey was conducted in the form of discrete choice experiments (DCEs) and covered 18,000 subjects in eight Member States deemed to be representative for the EU as a whole .For the modelling at the meso-level, both an agent-based model (EMLab-Consumer) as well as two energy demand models covering appliances (FORECAST) and buildings (Invert/EE-lab) were applied. For the modelling at the macro-level, the macro-economic model ASTRA was used.
Main results
At the micro level – individual households – the policy implications are derived from the empirically observed decision making behaviour in demographically representative Discrete Choice Experiments (DCEs) in eight EU countries. The survey results allow the research team to derive overarching policy implications such as the importance of building trust, the importance of transparent policy-making and an open discourse to foster understanding of direct and indirect long-term costs and benefits. Furthermore, the importance of enabling consumers to make informed decisions by increasing energy literacy as well as by providing relevant information (such as monetary savings) in an accessible manner became apparent.
At the meso-level – the energy system – the modelling results have to be distinguished between electrical appliances and buildings. For appliances, the results show that the current design of the EU Ecodesign and Labelling requirements delivers distinct energy savings by the year 2030. These savings can be boosted further by tightening the mandatory minimum energy performance requirements associated with the Ecodesign Directive. However, this induces substantial additional costs to households, at least in the short term. Rebates, disbursed particularly to low-income households, can mitigate some of the financial burden imposed through stricter regulation. In addition, policy effectiveness depends on the degree of compliance with ecodesign requirements in retail sales. For buildings, the modelling results clearly indicate that significant energy savings in the residential heating sector can be achieved only through ambitious building refurbishment. The adoption of thermostats/heat control devices can help reduce the energy consumption, with the projected impact however being modest. The modelling results indicate that particularly low-income households may not be able to raise the investments required for deep refurbishments. This may lead to a significant drop in refurbishment rates in the long term. Thus, enhanced financial support for low income households across member states should be taken into consideration. Furthermore, in order to trigger refurbishment activities in rented apartment buildings, the landlord-tenant’s dilemma still needs to be addressed.
At the macro-level – the economy as a whole – the CHEETAH results show that the investments in residential energy efficiency are projected to have at least modest positive economic impacts for the EU. A combination of energy savings and rebates is able to compensate for negative consumption impulses resulting from investment expenditures. This leads to a slightly positive effect on overall consumption in the EU. Different income groups are affected in slightly different ways by the energy efficiency measures considered and the ensuing macroeconomic dynamics. However, it appears unnecessary to introduce allocative measures on top of (partially) targeted rebates, since macroeconomic dynamics counteract regressive tendencies. But it is very important to look at the long-term dynamic impacts that would arise after investments are paid off. And last but not least energy efficiency policies also make a contribution to the new European Green Deal by significantly reducing residential GHG emissions without negative impacts on the labour market.
