Energy efficiency vs. economic efficiency - balance or pressure?

Panel: Panel 1: Energy Efficiency policies, programmes and their links

Author:
A. Gomes Martins, Dept. Electrical Engineering, University of Coimbra, INESC

Abstract

The paper discusses the consequences to the promotion of energy efficient use of the present trend to emphasise economic efficiency in electric energy markets.

More than 20 years have passed since a great awareness to energy and environment related issues has emerged in developed countries. Several energy policy transformations have taken place during this period. Regulation has played an important role in the promotion of energy efficiency, to a large extent unquestioned up to the mid-eighties. Meanwhile, evolution of background economic policies in the most developed countries determined transformations in energy policies in general. Unbundling and deregulation have lately struck many electric utilities, most of the times at the expense of previously successful DSM programs. Economic efficiency, presented as the main objective of utilities restructuring and also as the panacea for the eventual dissatisfaction of their customers, has been the driving force behind recent transformations. Yet, in Europe there are many different realities in what concerns promotion of efficient use of energy, either by utilities or other entities. In many cases, DSM policies either do not yet exist or are incipient. Different natures of ownership exist for utilities with also different management orientations and different states of development of distribution networks and different levels of access of citizens to electric energy. The paper discusses the degree of fitness to the European reality of the present trend to emphasise economic efficiency as a universally applicable recipe. Particular emphasis is given to the consequences of such orientation in what concerns the efficiency of energy use. Portugal is used as a case-study country to discuss the role of regulation in the context of the recent restructuring of the electricity market.