Report on the non-energy impacts of energy efficiency in the industry sector

Abstract

Energy efficiency (EE) plays a key role in the ongoing efforts for a clean energy transition in the industry sector and for meeting the global climate and sustainability goals. So far, analyses of energy efficiency measures and technologies focus mostly on the direct energy saving and the greenhouse gas (GHG) saving potentials. However, many of these energy efficiency measures except for reducing final energy use they can also provide other benefits, non-energy benefits (NEBs), which can play a definitive role for the uptake of energy efficiency in industries. For the industrial sector, the quantification and monetisation of non-energy benefits and their inclusion in cost-benefit analyses can lead to significant increase in profitability and reduced payback periods (IEA, 2014). In addition, according to survey responses, when stakeholders make investment decisions, the NEBs of energy efficiency and not the direct energy savings may, in certain cases, be the most important decision parameters (Reinaud et al., 2012). In a cost analysis made for the iron and steel industry, the inclusion of enhanced productivity was shown to significantly affect the profitability of the investments, doubling the overall cost-effective savings potential and cutting by half the payback period (from about 4 years to less than 2) for the measures that increase productivity (Worrell et al., 2004). Thus, incorporating NEBs of energy efficiency measures in the cost assessments can strengthen the incentives for their adoption. In this analysis, we aim to translate the energy efficiency potentials identified in Deliverable 3.6 (Kermeli and Crijns-Graus, 2020) to the NEB potentials for the EU 28 industry. Because the individual NEBS, are industry and measure specific and hard to quantify, we limited this analysis into creating a list with the most important NEBs per industry specific measure for two industrial sectors, the iron and steel and the cement industries. Instead of the term NEBs we use the term “non-energy impacts”. This is to demonstrate and to capture, where possible, that some measures might also have some drawbacks (e.g. increase of a certain pollutant or increased maintenance costs).