Energy efficiency may encourage greater demand

Heightened demand offset roughly a third of the usage reductions achieved by Europe's strengthened efficiency standards, according to new research.
By Brooks Hays  |  Jan. 13, 2016 at 12:41 PM
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TILBURG, Netherlands, Jan. 13 (UPI) -- Conserving energy may not be as simple as boosting energy efficiency standards. According to new research by Dutch economist Erdal Aydin, lower energy bills lead to higher demand -- complicating the push to shrink consumption.

The research is Aydin's PhD thesis and yet to be peer-reviewed or published, but the findings follow basic macroeconomic logic.

Aydin, a postdoctoral candidate at Tilburg University, arrived at his conclusions after analyzing the effects of the European Union's two main energy efficiency policies -- strengthened efficiency standards for appliances and home insulation.

To do so, Aydin analyzed energy use in 13 European nations over the course of three decades.

"To that end, I used data on energy consumption and energy efficiency policies in the residential sector in Europe between 1980 and 2009," Aydin said in a press release. "I was able to show that the mandatory energy labels for household appliances as well as the stricter building regulations have led to a decrease in energy consumption."

But consumption is different than demand.

Further analysis revealed a phenomenon known as the rebound effect, whereby people use their energy efficient appliances more often or turn the thermostat in their newly insulated home up higher -- thus, offsetting energy efficiency gains.

In surveying energy-use behaviors among Dutch homeowners and apartment-renters, Aydin found a strong rebound effect, offsetting roughly a third of the usage reductions achieved by strengthened efficiency standards.

"Homeowners are more economical than people who are renting," Aydin pointed out. "Homeowners showed a rebound effect of 26.7 percent; for tenants, it was 41.3 percent."

"The rebound effect is larger for low incomes than for high incomes," he added. "Moreover, this effect is larger in households whose energy consumption was above average to start with."

Aydin hopes his work will be used to more accurately predict the effects of new energy policies.

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