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Title:
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Barriers to investments in energy saving technologies. Case study for the industry
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Author(s):
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Masselink, D.J.
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Published by:
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Publication date:
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ECN
Policy Studies
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1-8-2008
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ECN report number:
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Document type:
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ECN-E--08-057
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ECN publication
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Number of pages:
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Full text:
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65
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Download PDF
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Abstract:
To realise future energy saving targets, the government needs to increase energy reduction rates. One option to increase energy savings is found in removing barriers to investments in cost-effective energy saving technologies. Many technologies save energy and are at the same time cost-effective. The low adoption of these technologies by the industry is embedded in the ‘en-ergy efficiency gap’ discussion. While technologies are (apparently) cost-effective, different barriers obstruct, or limit, their implementation.
This study identifies five clusters of barriers that limit investments in costs-effective energy sav-ing technologies, regarding the viewpoint of an industrial firm. The first group of barriers originated from increased uncertainties for energy saving technologies. Different barriers increase the risk perception of a company, thereby decreasing investments in energy saving technology. A second cluster of barriers embeds hidden costs. Whereas the investments costs often overlook typical (hidden) costs, inclusion of these costs negatively influences an investment decision. Lack of information and problems with applying the information are laid down in the third cluster of barriers. While information about possible energy saving technologies and internal energy use is often lacking, or companies are not able to handle the information, investments can be lower. A fourth group of barriers is the result of the way an organization is structured and the prevailed culture. These aspects may act as an obstacle to investments in energy saving technologies. The last cluster of barriers is related to the availability and allocation of capital. A company can simply lack financial funds or internal budgeting restrictions inhibit investments. Figure 4.1 presents a complete overview of the identified barriers (page 27).
The overview of factors that may occur as barriers to energy saving technologies is used as in-put for the second part of the study. Eleven respondents ranked the barriers on the base of their importance in explaining the energy efficiency gap. ‘Availability and allocation of capital’ showed up as most important hurdle for investments. Companies often have other investment priorities, or the current machines are still sufficient. In addition, ‘risk and uncertainties’ is indicated as important group of barriers as well. Whereas the overall economic trend influence the rate of investments, also uncertainties about the cooperation of the new technology with other machines in the process is an important barrier.
While the results of the interviews increased insight in the energy gap discussion, the study points out the difficulty of identifying the most important barriers. The individual respondents all had a clear view on the relevance of the barriers, however the agreement among the respondent is very poor. It is expected that the background and characteristics of the respondents largely determines his/her viewpoint. Nevertheless, the many different insights in the ‘energy efficiency gap’ discussion, exposes the complexity of the problem. Creating one-best solutions to overcome the barriers is therefore impossible, a mixture of measures is needed to take away the most obvious and concrete barriers.
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