Reducing the Price of Development: The Global Potential of Efficiency Standards in the Residential Electricity Sector
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The last two decades have witnessed the development of minimum efficiency performance standards (MEPS) for appliances and lighting equipment as an effective policy for market transformation in the residential sector. In industrialized countries, government portfolios of standards programs promulgated to date will have a significant effect on sector consumption. For example, standards already written into law in the United States are expected to reduce energy sector consumption and carbon dioxide emissions by 8-9% by 2020. Although in recent years the development of MEPS has spread throughout the globe, including many developing economies, the full potential of these programs is far from realized. Since much of the growth in global energy consumption over the next decades will come from the developing world, a global estimate of the potential impacts of standards programs that includes these countries is critical for prioritizing policy options.
This paper presents a step forward in the assessment of the global impacts of efficiency standard programs. Unlike previous assessments, it uses a bottom-up methodology to forecast residential end use consumption and evaluate the policy potential for each end use individually. Electricity consumption growth in developing countries over the next 20-30 years will be driven by households acquiring new appliances, in contrast to industrialized countries, where appliance markets are saturated. Currently, many households in developing countries do not have access to electricity, or may use electricity only for lighting and one or two appliances. As household incomes grow, however, more and more will purchase energy consuming equipment. Electricity consumption and the potential of mitigation by standards therefore depend on the affordability and purchase order of each end use. Unlike models that forecast total electricity consumption in proportion to per capita GDP, we forecast household electricity consumption by modeling ownership of individual appliances using an econometric parameterization calibrated to household survey data. By applying estimates of efficiency improvement for each end use according to current best practices, we then calculate the potential for mitigation of electricity consumption and related carbon dioxide emissions from standards programs. We believe this to be the first study to make such an evaluation with a global scope and at the end use level of detail.
Authors: Michael A. McNeil, Virginie E. Letschert and Stephen Wiel