Swiss Energy Strategy and research projects concerning behavior change

Dr. Aurelio Fetz, Market Regulation, Swiss Federal Office of Energy

Workshop IEA DSM Task 24, 15.10.2013

Why is Energy Strategy 2050 necessary?

Infrastructure

Supply security

Prices and markets

Climate change

Environment, nature,

2

Energy Strategy 2050

Population growth

Infrastructure nature, landscape

Withdrawal from nuclear energy

Energy policy milestones since Fukushima

• On 25 May 2011, Federal Council

announces decision to withdraw from

nuclear energy.

• Parliament subsequently adopts this

resolution.

3

resolution.

• Initial package of Energy Strategy 2050

measures has been submitted to

Parliament at its 2013 autumn session.

Energy Strategy 2050: key elements (1/2)

1. No new nuclear power plants

2. Promotion of energy efficiency

3. Increased use of renewable energy

• Hydropower: + 3.2 TWh(+ pump storage for integration of new

4

(+ pump storage for integration of new renewable energy forms)

• New renewable energy: exploitation of sustainably utilisable potentials (24.2 TWh)

4. Remaining demand to be met through:

• Fossil-fuelled electricity production (primarily gas and steam)

• Imports

5. Expansion of electricity networks

• Optimisation, renovation and expansion of

transmission and distribution networks

• Reorientation in direction of smart grids

6. Intensified energy research

Energy Strategy 2050: key elements (2/2)

5

6. Intensified energy research

7. Federal government to act as role model

8. Strengthening of SwissEnergy programme

9. Intensification of international cooperation

in the energy sector

Energy Strategy 2050: overview

Energy Strategy 2050

Phase 1 Phase 2

(from 2021)

Initial package of Transition from

promotion system to

Coordinated Energy

Research action

plan

2050 energy

6

Initial package of

measurespromotion system to

steering mechanism

Electricity

networks

strategy

2050 energy

perspectives

Parliamen-

tary

initiative

12.400

Negotiations with the EU on

electricity agreement Revision of

Electricity

Supply Act

Second stage of

market

liberalisation

Effects of initial package of measures:

end-energy use and electricity consumption, 1950-2050

100

150

200

250

400

500

600

700

800

900

TWhPJ

45 %

208 PJ

EEV

7

Szenarien:

WWB = Business as Usual

POM = Political Measures of the Federal

Council

NEP = New Energy Policy

Other abbreviations:

EEV = end-energy consumption

0

50

100

0

100

200

300

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Vergangenheit WWB POM NEP

(c) Prognos AG 2012

51 %

58 PJElektrizitätsnachfrageElectricity demand

Past

Effects of initial package of measures:

development of total energy consumption & energy mix

150

200

250

600

700

800

900

TWhPJ Hydrogen

Biogas as fuel

Gas as fuel

Liquid biofuels

Aviation fuels

Diesel

Petrol

Biogas, sewage gas

8

0

50

100

150

0

100

200

300

400

500

1960 1970 2000 2010 2020 2035 2050

Biogas, sewage gas

Ambient heat

Solar heat

(Industrial) Waste

Wood

District heat*

Coal

Gas

Other oil products

Heating oil products or fuels

Electricity*

(c) Prognos AG 2012

Effects of initial package of measures:

development of electricity supply and demand

60

70

80

90

100

110

TWh

9

Electricity supply, “Political Measures” scenario, option “C&E”

0

10

20

30

40

50

60

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

bestehende Wasserkraftwerke neue Wasserkraftwerke bestehende Kernkraftwerke

bestehende fossile KW bestehende Bezugsrechte bestehende Erneuerbare*

neue fossile WKK neue Erneuerbare* neue Kombikraftwerke

neue Kernkraftwerke neue Importe Bruttonachfrage

Hydrologisches Jahr*) gekoppelt und ungekoppelt

(c) Prognos 2012

Existing hydropower plants

Existing fossil-fuelled power plants

New fossil-fuelled power plants

New nuclear power plants

New hydropower plants

Existing purchase rights

New renewable energy

New imports

Existing nuclear power plants

Existing renewable energy

New cogeneration plants

Gross demand

coupled and uncoupled Hydrological year

Measures relating to energy efficiency:

key elements

Buildings Industry and

services

Mobility Electrical

appliances

Electricity

suppliers

Increase in

CO2fee

and

Target

agreements in

accordance

More

stringent

Efficiency

and

Efficiency

target for

10

Informative

measure:

More stringent

model energy

provisions of the

cantons

and

strengthening

of buildings

programme

accordance

with

Parliamentary

Initiative 12.400

stringent

CO2 emission

regulations

and

consumption

regulation

target for

electricity

suppliers

• All voluntary activities and measures aimed at supporting energy

efficiency and use of renewable energy in Energy Strategy 2050

to be placed under the umbrella of SwissEnergy.

• Expansion and promotion of programme

• Training initiative: training and further education in the energy

sector

SwissEnergy: measures

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sector

• Promotion of technology transfer

• Quality assurance in renewable energy systems

• SwissEnergy for municipalities

“Coordinated Energy Research” action plan

Focus of support in 4 main areas:

1. Increase in capacity for energy research (teams)

2. Development of the Swiss Competence Centres for Energy

Research (SCCER)

(including efficiency, networks, electricity and heat storage, electricity

from renewable energy, mobility, biomass)

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from renewable energy, mobility, biomass)

3. Competitive funding for research projects (Commission for

Technology and Innovation, CTI)

4. Promotional activities of the Swiss National Science Foundation

(SNSF) (National Research Programmes, National Centres of

Competence in Research, SNSF professorships)

� Adopted by Parliament in spring 2013.

Socio-economic interdisciplinary research program

Energy-Economy-Society (EWG)

� Efficient use of research budget (approx. 1.5 Mio CHF/a)

� Support of socio-economic studies

� Applied research to develop new models and methods

in energy economics

� Policy-oriented research as a basis for regulation

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� Policy-oriented research as a basis for regulation

� Individual, close project supervision

� Close coordination with other research programs and

institutions

� Communication, discussion and networking events

� Connect information and people

A multiplicity of:

• Target groups

Federal state,

Cantons,

municipalities

Organisations,

energy

industry

Politicians,

journalists,

stakeholders

EWG - From Theory to Policies and Practice

14

Researcher

• Target groups

• Requirements

• Communication

channels

EWG-

ResearcherSCCER,

SNSF, CTI,

EF-ZH

� Published in 2012

� 13 authors und 8 institutions

� Technical, economical and legal

assessment

� Support from 2 research programs and 1

Example: Smart Metering Impact Assessment

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� Support from 2 research programs and 1

employee from the BFE section “Grids”

Interdisciplinary report which discusses the

important issues regarding smart metering

rollout and draws clear conclusions.

Input for the Electricity Networks Strategy and

the Smart Grid Roadmap.

Adaptive and time-of-use pricing schemes for smart

technology integration: prospective study in the Leman region

• Research questions:

– What are the available time-varying electricity pricing schemes in the context of

a development of smart-grid technologies?

– What is the potential for these tariffs to realise load-shifting and/or load-shedding?

– Would these tariffs encourage the penetration of battery and plug-in hybrid

electric vehicles?

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electric vehicles?

• Methodology:

– Conjoint analysis, game theory, bottom-up multi-energy techno-economic model

• Expected contributions (by mid 2014):

– Survey to evaluate the attitude of households concerning their future

participation to demand-response mechanisms and their appetence for storage

in plug-in electric vehicles.

– Quantifying the effects of integrating a behavioural component in techno-

economic models. Case study in the Leman region energy sector.

– First explorations of nodal pricing schemes.

Flexi: Potential for a flexible electricity demand

• Research questions:

– What is the potential for a flexible electricity demand of the households

in order to maximise the local consumption of PV generation

– How can consumption be influenced by increasing the demand between

11-15 when PV production is high?

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– How can household consumption be affected by the provision of

information on consumption and by monetary incentives?

• Methodology:

– Questionnaire and econometric analysis

– Field study with 300 households in Cernier

• Expected contributions (by end of 2015):

– Quantification how much of the household electricity demand can be

covered with local PV generation by the use of smart technologies

– Cost-benefit-analysis of a flexible demand for the integration of solar

energy into the grid

An Evaluation of the Impact of Energy Efficiency Policies

on Residential Electricity Demand in Switzerland

• Research questions:

– How responsive is the residential electricity demand, at the aggregated

and disaggregated levels, to a change in the electricity price?

– What is the impact of different energy efficiency programmes on

electricity demand?

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electricity demand?

• Methodology:

– Unique household survey and a survey of Swiss utilities

– Econometric methods, demand estimation including, e.g. instrumental

variables and difference-in-differences (policy evaluation)

• Expected contributions (by end of 2014):

– An updated estimate of the price elasticity of residential electricity

demand at the disaggregated and aggregated levels

– Evaluation of demand-side management programmes and their impact

on electricity demand

Rebound Effects

• Research question:

– What types of economic, socio-psychologic and regulatory factors lead to a

change in energy consumption?

– In what areas do politically enforced energetic measures lead to socio-psychological

and behavioural relevant dynamic effects that influence energy consumption?

– In what areas do rebound-effects occur? What causes them?

– What rebound-risks could arise due to the implementation of the energy strategy

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– What rebound-risks could arise due to the implementation of the energy strategy

2050?

– Is there a need for action? Are there additional measures needed?

• Methodology:

– Literature analysis, Analysis of energy-saving measures in the energy strategy 2050

• Expected contributions (by autumn 2013):

– A comprehensive analysis about behavioural-economic and socio-psychological

potentials and risks related to the policy measures as outlined in the energy strategy

2050

– Recommendations for further actions to control rebound-effects

Energy Elasticities and the Rebound Effect

• Research question:

– How do energy use patterns look like in Switzerland?

– More precisely, what are:

• Substitution and cross-price elasticities (elasticities between energy

and other factors and elasticities between different energy sources /

services)

• Own-price and income elasticities of different energy sources / services

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• Energy efficiency elasticities� rebound effect (efficiency elasticities of

selected energy services)

• Methodology:

– Econometric estimations using a translog cost function and a logistic

function to present factor shares

• Expected contributions (by early 2015):

– A comprehensive assessment of energy use patterns in Switzerland

– A method based on econometric analysis to estimate rebound effects via

efficiency elasticities of selected energy services in Switzerland

Energy-Using Durables: Driving Forces of Purchase Decisions/

Development of a decision model explaining purchase of energy consuming

durables

• Research questions:

– How do people proceed when they decide to purchase electric devices?

– How strongly do consumers take energy consumption and energy labels into

account? What do consumers say about energy labeling?

– Do consumers of energy-using durables in fact misoptimize?

– What are the driving forces of misoptimization?

– Which one of the potential forces, imperfect information, inattention, or

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– Which one of the potential forces, imperfect information, inattention, or

credit constraints, is the most important cause of misoptimization?

– Are there observable consumers’ characteristics that correlate with the degree

of misoptimization?

• Methodology:

– Survey at the point of sale, concomitant online experiment

• Expected contributions (by early 2015):

– A better understanding of what drives purchasing decisions of energy

consuming durables

– Provision of new insights in how purchase behavior of durable goods should be

modeled

Conclusions

• The promotion of energy efficiency is one of the key elements of

the energy strategy 2050

• There is a need for behavioural change in order to reach the energy

efficiency goals

• Behavioural change within the energy strategy 2050 can be reached

by:

– awareness raising (labelling, information, consulting �

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– awareness raising (labelling, information, consulting �

SwissEnergy)

– financial incentives (such as CO2 tax, target agreements,

steering mechanisms, building program)

– obligations (such as white certificates)

– standards (regarding CO2 emissions and electric appliances)

• Energy research is intensified and supports policy measures and

technological change in order to reach the targets of the energy

strategy 2050

Thank you for your attention!

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BACK-UP

Energy policy: main objectives

Supply security

Technical safety

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Environmental compatibility Economic viability

Distribution of tasks and responsibilities in the

energy sector

Energy policy (Article 89, Swiss Federal Constitution):

• Federal government and cantons are responsible for energy supply and for economic and efficient energy use.

• Federal government specifies the principles governing the use of domestic and renewable energy and energy consumption.

• Federal government specifies regulations governing energy consumption of systems, vehicles and appliances.

• Measures relating to consumption of energy in buildings are primarily the responsibility of the cantons.

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• Measures relating to consumption of energy in buildings are primarily the responsibility of the cantons.

Energy industry: Energy industry is responsible for the country’s energy supply (Article 4, paragraph 2, Swiss Federal Energy Act).

Nuclear energy: Federal government is responsible for legislation governing nuclear energy (Article 90, Swiss Federal Constitution).

2050 energy perspectives: three scenarios

"Business as

Usual" scenario

• Continuation of previous policy

• Autonomous technological progress

similar to that of the past 30 years

"Political

Measures of the

Federal Council"

scenario

• Depiction of political measures of the

Federal Council

= initial package of measures

• Utilisation of existing technologies

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scenario • Utilisation of existing technologies

"New Energy

Policy" scenario

• Target: per capita energy consumption to

result in maximum of 1.5 tonnes CO2 in

2050

• This target is in line with international

consensus regarding energy policy

priorities

Initial package of Energy Strategy 2050 measures:

key elements

1. Consumption and expansion targets in Federal Energy Act

2. Measures relating to energy efficiency

3. Measures relating to renewable energy

4. Measures relating to fossil-fuelled power plants

5. Measures relating to electricity networks

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5. Measures relating to electricity networks(others to follow in new electricity networks strategy)

6. Continuation of pilot and demonstration programmeIntroduction of flagship programme

7. Strengthening of SwissEnergy programme

8. No more licence applications for nuclear power plants

9. Ban on reprocessing of spent fuel elements

Some elements to be prioritised through Parliamentary

Initiative 12.400

Parliamentary initiative launched by CESPE-N (Committee for

Environment, Spatial Planning and Energy of the National Council)

• Expected to enter into force on 1 January 2014

(subject to referendum)

Main amendments to Federal Energy Act

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Main amendments to Federal Energy Act

• Increase in maximum network surcharge to 1.5 cents/kWh

• Partial to full refund for electricity-intensive companies

(electricity costs ≥ 5%)

• Own use (explicitly) laid down in Energy Act

• One-time remuneration for small photovoltaic systems below 10

kW; free choice of system for photovoltaic facilities between 10

and 30 kW

SwissEnergy programme to support effectiveness of

initial package of measures

SwissEnergy:

• To function as information and advice platform in the

energy sector; also as mechanism for networking

know-how owners, intermediaries and users in the

energy sector

• To act as lever for good projects to be developed to

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• To act as lever for good projects to be developed to

market maturity – and as a platform for new ideas

• To function as a further education hub in the energy

sector

Elimination of non-price-related obstacles and associated

transaction costs

Increase in SwissEnergy budget (from 26 million Swiss francs a

year to 55 million)

SwissEnergy as an integral component of the

Energy Strategy 2050

• All voluntary and other measures aimed at supporting

energy efficiency and use of renewable energy in Energy

Strategy 2050 to be placed under the umbrella of

SwissEnergy.

• SwissEnergy is the central platform for networking of all

partners (trade and industry, environment, consumption,

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partners (trade and industry, environment, consumption,

public sector [cantons, cities, municipalities]).

• Focus is on sensitisation, information, advice, training and

further education, quality assurance.

• Programme budget therefore to be increased (from 26 to 55

million Swiss francs per annum).

Socio-economic interdisciplinary research program

Energy-Economy-Society (EWG)

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Current EWG-projects concerning behavioural change

• Adaptive and time-of-use pricing schemes for smart technology

integration: prospective study in the Leman region (Ordecsys)

• Flexi: Potential for a flexible power demand (Planair, University of

Neuchatel, EPFL)

• An Evaluation of the Impact of Energy Efficiency Policies on

Residential Electricity Demand in Switzerland (CEPE, ETH Zurich)

• Rebound Effects (econcept)

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• Rebound Effects (econcept)

• Energy Elasticities and the Rebound Effect (University of Basel)

• Energy-Using Durables: Driving Forces of Purchase Decisions/

Development of a decision model explaining purchase of energy

consuming durables (ETH Zürich)