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Energy company obligations: Examples of delivering energy efficiency in buildings and future trends

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Today there is an urgent need to scale up progress towards energy efficiency in buildings. Energy efficiency is also one of the pillars of a climate mitigation strategy and a critical element to meeting the Global Sustainable Development Goals. It is acknowledged how energy consumption in buildings is an important contributor to global emissions of greenhouse gases and harmful pollutants. Indeed, in 2017 buildings and appliances accounted for around 30% of global final energy use.


The Efficient World Scenario, presented in the IEA’s 2018 Energy Efficiency Market Report, demonstrates how increasing the global rate of energy efficiency from 1.6% per year to 2.2% per year can result in flat energy demand in the buildings sector, despite a projected 60% increase in floor area. It is clear that building codes and appliance standards are fundamental drivers of increased energy efficiency, and that continued progress – and expansion of coverage – will be a priority. At the same time, these policies alone are unlikely to deliver the level of savings needed.


In this context, it is important to consider the role that market-based instruments can play in improving the energy efficiency of buildings.


The paper addresses the following questions:


  • To what extent have energy company obligations delivered energy efficiency in buildings?
  • What is the experience with energy company obligations in delivering more cost-effective, targeted or comprehensive savings?
  • What role have energy company obligations played in the broader framework of federal and state building codes, appliance standards, “best in class” programmes, and other incentive policies and programmes?
  • What emerging opportunities are technology and innovation enabling to further advance energy efficiency in buildings through energy company obligations?

The paper focuses on the experience in delivering energy savings in buildings through energy company funded programmes in the UK, Portugal, Canada (Ontario and Nova Scotia), and emerging opportunities from the United States (Illinois, Texas, New York and California).

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