Investment in energy efficiency: do the characteristics of investments matter?

Cooremans, Catherine

doi:10.1007/s12053-012-9154-x

Cited by 118 publications

(173 citation statements)

References 40 publications

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“…However, this is not necessarily the case in practice. Only half of the firms included in a Swiss study had an investment category for energy-efficiency investments (Cooremans, 2012). Dutch findings presented an even lower share; although the firms included were energy intensive, only 10 per cent of their investments were pure energy-efficiency investments (De Groot et al, 2001).…”

Section: Investment Categorisationmentioning

confidence: 97%

“…For example, Fleiter et al (2012) and Trianni et al (2014) incorporated non-energy benefits as one attribute to consider when classifying energyefficiency investments. However, energy-efficiency investments are not necessarily categorised as investments in energy efficiency as such; previous research indicates that not all firms apply this categorisation (Cooremans, 2012). Moreover, improved energy efficiency does not seem the primary motive for these investments; rather, they are motivated by factors such as productivity improvements (Pye and McKane, 2000).…”

Section: Introductionmentioning

confidence: 99%

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How do firms consider non-energy benefits? Empirical findings on energy-efficiency investments in Swedish industry

Nehler

Rasmussen

2016

Journal of Cleaner Production

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When industrial firms invest in energy efficiency, the effect may go beyond energy cost savings and produce additional non-energy benefits as well. However, there is a lack of knowledge regarding experiences in non-energy benefits and the extent to which these are acknowledged by industry. This study attempts to explore firms' perspectives on non-energy benefits of industrial energy-efficiency investments and if and how non-energy benefits are considered in the investment process. Moreover, this study also explores investment motives and critical aspects of adopting energy-efficiency investments. Based on a questionnaire and interviews with representatives of Swedish industrial firms, the results indicate that energy efficiency seems to be an important issue for the firms, but profitability and payoff appear to be the most important factors for adopting an investment, implying that it is often difficult to meet the payoff requirements with energy cost savings alone. In the meantime, various non-energy benefits are observed, but there seems to be a lack of knowledge of how these should be quantified and monetised. To facilitate such an assessment of non-energy benefits and to include them in the investment analysis, a measurement framework is provided. It is concluded that including nonenergy benefits in the investment analysis can contribute to a framing of energy-efficiency investments that can meet the firms' requirements for profitability assessment, which can further enhance opportunities for energy-efficiency investments in industry. Thus, the study contributes with new insights into the energy-efficiency investment process and the extent to which nonenergy benefits are considered, along with the methods for measuring them.

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Section: Investment Categorisationmentioning

confidence: 97%

Section: Introductionmentioning

confidence: 99%

How do firms consider non-energy benefits? Empirical findings on energy-efficiency investments in Swedish industry

Nehler

Rasmussen

2016

Journal of Cleaner Production

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“…Additionally, as shown by IEA, benefits can be experienced at different levels, from industry to society as a whole (IEA, 2014). Therefore improved energy efficiency is strategic for industrial competitiveness (Cooremans, 2011), and international as well as domestic and local policies should be properly shaped in this direction.…”

Section: Introductionmentioning

confidence: 99%

International study on energy end-use data among industrial SMEs (small and medium-sized enterprises) and energy end-use efficiency improvement opportunities

Thollander

Paramonova

Cornelis

et al. 2015

Journal of Cleaner Production

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The industrial sector is important to study in terms of improved energy efficiency, being one of the major energy-using sectors and responsible for a major share of CO2 emissions.The energy end-use (EEU) in the industrial sector is complex in general as processes are intertwined and interrelated. Moreover, bottom-up data of EEU on an aggregated level is scarce.Data for total energy supply like electricity, oil, coal, and natural gas exists but bottom-up data of what processes these energy carriers are used in, and moreover, where the major potential for implementation of energy efficiency measures (EEMs) exists, is less prevalent.This holds in particular for industrial small and medium-sized enterprises (SMEs). This makes policy formulation and design for industry a great challenge. Knowledge on where and how energy is used, as well as where opportunities for improvement exist, may provide good support for developing the most effective policies. Therefore, the aim of this study has been to present and compare available bottom-up energy data for industrial SMEs in four countries, namely Belgium, Italy, Japan and Sweden. Results show that the existence and quality of bottom-up EEU data differs largely between the countries and the development of a general taxonomy of structuring EEU data as well as EEMs is needed. Without the development of such a general taxonomy, the deployment level of EEMs and carbon dioxide emission reductions is unlikely to ever reach its full potential as knowledge is missing on how large the potential is, in which processes the major potential is found, how far industry has reached in terms of deployment levels, and in which areas future energy policies are needed. In conclusion, this paper of EEU and EEM in industrial SMEs addresses the high importance of future research in creating a harmonized data categorization, as this will greatly support the transition towards sustainable industrial energy systems.

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“…Generally, the relatively young field of behavioral corporate finance research suggests that, due to various psychological factors, managers as well as investors act at least partly irrationally [23]. For energy efficiency investments of companies Cooremans [24] developed a model of the investment process, stating that it is applicable to all investment decisions. In this model the choice between different investments options, where the neo-classical perspective usually focuses on, is only one out of several steps of decision-making and in reality may or may not be based on rational tools for profit maximization like Internal Rate of Return (IRR) or Net Present Value (NPV).…”

Section: The Market As An Efficiency Maximizermentioning

confidence: 99%

“…In this model the choice between different investments options, where the neo-classical perspective usually focuses on, is only one out of several steps of decision-making and in reality may or may not be based on rational tools for profit maximization like Internal Rate of Return (IRR) or Net Present Value (NPV). All steps are embedded in a bigger societal (environmental) and organizational context [24]. A study for the British Department of Energy & Climate Change [25] elaborates this model further defining a space of four dimensions in which a company makes its choices: "material", "regulatory-policy", "market" and "social-cultural".…”

Section: The Market As An Efficiency Maximizermentioning

confidence: 99%

Security of Supply in European Electricity Markets—Determinants of Investment Decisions and the European Energy Union

et al. 2015

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Abstract:The European Union and its Member States are seeking to decarbonize their energy systems, including the electricity sector and, at the same time, pursue market integration. However, renewable energy (RE) deployment and the liberalization of the energy-only market have raised concerns at the national level about the security of electricity supplies in the future. Some actors consider the lack of sufficient investments in generation capacities a threat to supply security. As a consequence, it was proposed that capacity markets solve these problems. The underlying assumption is that the market design is the only determining factor for investments in security of supply options. In this article, we question this narrow view and identify further determinants of the investment decisions of electricity market participants. Based on the insights of institutional sociology and economics, we understand the market to be a social institution that structures the behavioural expectations of market participants. Derived from the theoretical conceptualization and based on qualitative literature review and own work, we find four determinants for investment behaviour beyond the formal market design: Material opportunities, strategic actor behavior and identity, focusing events and discursive expectations about the future. With this perspective, we discuss the introduction of a European Energy Union as a possible tool that might have a great impact on the more informal determinants such as expectations about the future and the construction of a European energy narrative. OPEN ACCESSEnergies 2015, 8 5199

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Investment in energy efficiency: do the characteristics of investments matter?

Cited by 118 publications

References 40 publications

How do firms consider non-energy benefits? Empirical findings on energy-efficiency investments in Swedish industry

How do firms consider non-energy benefits? Empirical findings on energy-efficiency investments in Swedish industry

International study on energy end-use data among industrial SMEs (small and medium-sized enterprises) and energy end-use efficiency improvement opportunities

Security of Supply in European Electricity Markets—Determinants of Investment Decisions and the European Energy Union

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