Energy efficiency in the Italian residential sector: is there a real opportunity or only bar talk?

Energy efficiency is often referred to as a hidden fuel. This definition is based on the assumption that if you are more energy efficient in performing some activities, you have an excess of energy to do other things.

The concept of energy efficiency has a precise date of birth, the year 1973, when there was the so called OPEC embargo, in other words a cut of oil production of the OPEC countries which had the result to provoke a sudden increase of prices in the consuming countries.

This experience showed to the international leaders that the energy policy of their countries was in the hands of external “policy-makers” based in turbulent areas of the world.

The main idea to reduce the degree of dependence was to try to consume less, therefore the energy efficiency concept was introduced.

Today, the discussion is again hot, for both geopolitical reasons (security of supply) and environmental concerns (reduction of carbon emissions), especially in European countries. Moreover, the sustained costs of oil (at least up to a couple of months ago) represented another arrow for the bow of energy efficiency.

According to BPIE, buildings are responsible of up to 40% of the primary energy consumption in EU countries, mainly for heating, therefore large possibilities are envisaged to perform energy conservation measures.

The focal point is to understand if they are self-convenient or it is necessary to adopt an incentive policy. Let’s try to analyze the case of Italy, with reference to natural gas consumed in buildings for heating purposes.

The consumption of natural gas in Italy can be linked to Heating Degree Days (HDDs), gas price and Gross Domestic Product (GDP) per capita. HDDs give a measure of how much gas is necessary to heat dwellings and GDP per capita may be seen as a proxy of the spending capacity of people.

Extrapolation of BAU consumptions in different HDDs scenarios

Extrapolation of BAU consumptions in different HDDs scenarios

On the basis of historical data, it is possible to find the coefficients linking these variables in order to obtain an equation to extrapolate the consumption (click for more details).  This extrapolation represents the so called Business As Usual (BAU) consumption, because, according to the estimations of GDP per capita and HDDs, the demand of natural gas is estimated without taking into account possible future structural changes of the sector (i.e. the implementation of aggressive policies of energy efficiency).

The Italian dwelling stock, for simplicity, is divided in two categories: single houses and flats. Only the portion of the stock fuelled with natural gas is considered (~70% of the total). Then, the specific consumption in kWh/m2 is determined.

Consumption as a function of yearly refurbished dwellings

Consumption as a function of yearly refurbished dwellings

In the present analysis, on top of the BAU estimation, it is evaluated the impact of some measures of energy efficiency, namely substitution of windows and utilization of an improved wall, roof and floor insulation (technical data are taken from Ecofys). The new specific consumption taking into account the efficiency measures is estimated and energy savings are determined.

Furthermore, an economic analysis is developed (cost data are taken from Ecofys) and its results show that pay-back period of the above mentioned actions is over ten years, therefore it seems that incentives are necessary to stimulate the implementations of the measures.

It is possible to conclude that, in Italy, energy efficiency measures can be significant because, by acting on a limited share of the dwelling stock, significant savings can be achieved and the consumption of natural gas may be less than the present one.

(C) Vincenzo Bianco

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