The need for comprehensive and well targeted instrument mixes to stimulate energy transitions: The case of energy efficiency policy

Abstract

A B S T R A C TTo meet global climate goals an energy transition is needed. However, energy transitions are complex and longterm processes and require a variety of public policy interventions to steer their direction and speed to achieve global climate change mitigation targets. One area where policy support is required is energy efficiency, which offers a high potential for carbon savings. It is widely acknowledged that energy efficiency improvements will need to be faster and deeper than is currently the case and this requires policy instrument mixes to support both those energy efficiency measures that are simple and cost-effective as well as more complex and costly technologies. In other words, policy mixes need to be well-targeted and comprehensive. In this paper, we address the issue of comprehensiveness in terms of technology-specificity and the level of complexity and costliness of energy efficiency measures. We use an existing dataset produced as part of a pan-European effort to understand instrument mixes in 14 EU Member States in the area of energy efficiency. Based on the empirical analysis and our segmentation of instrument types and their role in the overall mix, we illustrate the need for using a comprehensive instrument mix rather than single instruments.

Analysing energy innovation portfolios from a systemic perspective

“…Portfolios or mixes of policy instruments respond to a diverse set of technical, political, institutional and economic uncertainties and constraints (Flanagan et al, 2011;Grubb et al, 2017). A comprehensive mix of policy instruments may include technology-push, market-pull, and systemic instruments (which address innovation system failures such as weak actor networks) (Costantini et al, 2017), as well as instruments of different types (e.g., regulation, market-based, and RD&D), and both technology-neutral and technology-specific instruments (Rosenow et al, 2017). Durability and stability in the policy environment provide clear signals to innovators and reduce regulatory risk (Barradale, 2009;Löfgren et al, 2008;Johnstone, 2011).…”

Re-scaling IPE: local government, sustainable energy and change

“…The third, and increasingly important, sustainable energy policy category is demand reduction which includes energy efficiency policies as well as those aimed at improving demand side response and management (Rosenow, Kern, & Rogge, 2017). Energy efficiency policies are often understood to contribute toward reductions in energy poverty and with support for more vulnerable gas and electricity users (ibid).…”

Key Factors for Successful Implementation of Energy Efficiency Policy Instruments: A Theoretical Study and the Case of Latvia

“…Although obligation schemes for utility companies represent a seemingly easy way to solve end user energy efficiency, gains and potential down sides should be analysed in the context of local market conditions prior to deciding to implement an obligation scheme for utilities [8]. The upside includes availability of own financing, existing cooperation with end users (go-to market, existing billing systems and energy consumption data), recognisability (provided the reputation is good), existing spectrum of services and delivery ne twork (in respective license areas), responsibility for forecasting energy consumption and demand compensation.…”

“…Policy instruments shall preferably be used, which best suit the local market conditions [5] as such policy instruments will be best to overcome existing barriers and to strengthen also those market forces, which ensure achieving the desired result [8]. It is important in this context to identify and assess factors either hampering or fostering the efficiency of mutual interaction of energy efficiency policy instruments.…”