Does energy efficiency reduce inequalities? Impact of policies in residential sector on household budget

Panel: 5A. Cutting the energy use of buildings: Projects and technologies

This is a peer-reviewed paper.

Authors:
Jean-Michel Cayla, EDF R&D, France
Dominique Osso, EDF R&D, France

Abstract

The European energy and political context suggests that households will have to face up to making significant reductions of their energy consumption over the coming decades. Indeed European Union has adopted a 20% reduction in energy consumption by 2020 in its climate energy package. The aim of this paper is not only to study the refurbishment and technological changes implied by such targets but also to show its impact on household budget as this ambitious target may imply strong efforts from households.

Studies that deal with efficiency of policy tools generally adopt a global economic point of view and rarely consider distributional impacts on final consumers and if so, do not consider possible differences in consumer behavior patterns regarding energy use. How can we therefore assess the suitability of such policies without clearly anticipating their repercussions on households, whose behavior is obviously heterogeneous? In order to provide useful insights about the impact of such policies on residential sector, it appears crucial to capture both household heterogeneity and household behaviour in long-term planning models.

Our analysis relies on the TIMES-Households model which is a bottom-up optimization model from the MARKAL/TIMES family of energy models that allows for a very significant disaggregation of demand and technological processes. The building stock and its inhabitants are then represented in a very detailed manner considering both technical and socio-demographic characteristics. Moreover, thanks to analyses picked from a detailed household survey we are then able to differentiate access to technologies, level of energy demand and equipment purchasing behaviour according to household characteristics (income, size, type of housing, occupation status). We show the impact on household budget of the 38% reduction target of primary energy consumption in residential building stock by 2020 adopted by the French government.