Benefits of Energy Efficiency

The short- and long-term benefits of EE are given in Table 5.1. In households, improving the efficiency of energy use resulting in reduced energy requirement to provide a given amount of lighting, cooking, heating and other services is equivalent to an increase in income on account of

1 Dr Eric Ferguson 2003 (personal communication).

Table 5.1 Positive Aspects of Energy Efficiency

Short-term benefits

Long-term benefits

Reduces load, peak demand and energy use

Less oil wells, refineries, forests, land,

water, etc.

Reduces market prices for all consumers

Less subject to security risks and


Often less costly and more cost effective

Creates jobs and improves the economy

Less subject to market and fuel price

Less subject to market and fuel price



No transportation and distribution costs

Improve economic development

Short gestation periods

Less transport (fuels to the energy

generating places)

Fuel is saved

Less health impacts

Plantations are saved

Reduced environmental impacts

(a) Local pollutants

(b) Global pollutants

(c) Water use

Reduces local pollutants

Increases energy security

Improved quality of service

Source: Authors.

reduced expenditure. In the long run, households enjoy the benefit of lower expenditures on energy, while increasing their comfort and well-being. For commercial and industrial sectors, using energy more efficiently reduces the cost of producing goods and services. This in turn can translate into lower production costs, higher output and more profits in the short term. The lower product price results in increased sales. This means that these sectors employ more workers to satisfy the increased demand for their products. The increased employment, of course, improves the performance of the local economy. The governments can also benefit from energy efficiency improvements as government-owned buildings can use less electricity, oil, gas and water. They can also use less electricity for street lighting. The local transport system that uses petrol and diesel fuel will save significant amounts of money if EETs are used. Similarly, reducing congestion and other measures can have a marked impact on local environmental conditions if a community currently relies on automobiles for local transportation. Global environmental conditions can improve to the extent that local energy efficiency improvements will reduce consumption of energy sources that produce greenhouse gases (GHGs). There is also an opportunity cost involved in the increase of EE. The increase in the efficiency results in reducing the resource utilization. The governments can use these resources to reduce taxes or increase spending on other goods and services. Local and global environmental conditions can improve if households, business enterprises and governments use energy more efficiently.

EE programmes have widespread and diverse environmental impacts that go beyond GHG impacts. The environmental benefits associated with EE programmes can be just as important as the global warming benefits. Potential environmental impacts that need to be considered are presented in Box 5.1. Direct and indirect programme impacts need to be examined, as well as 'avoided negative environmental impacts' (for example, the deferral of the construction of a new power plant). Both gross and net impacts need to be evaluated.

Box 5.1 Energy Efficiency and the Indoor Environment

In developing countries, fuels are often burned in inefficient stoves, with inadequate or in many cases non-existent chimneys. The resulting indoor air pollution exposes families to particulates, carbon monoxide and other products of combustion. The costs of the failure to recognize the energy development linkage is evident in the nations' health statistics. Studies indicate high risk, such as acute respiratory infections (ARI), chronic obstructive pulmonary disease (COPD), lung cancer and also tuberculosis (TB), asthma and blindness. In India, conservative estimates indicate that some 400—550 thousand premature deaths can be attributed annually to the use of biomass fuels in these population groups. Using a disability-adjusted lost life-year approach, the total is 4—6 per cent of the Indian national burden of disease, placing indoor air pollution as a major risk factor in the country. In a more recent study, respiratory diseases across all age groups cost the South African Department of Health USD 75 million in treatment costs alone. In addition to these costs, there are productivity and quality of life losses which are more difficult to quantify, but could conceivably add up to tens of millions of dollars equivalent per year. Substituting efficient fuel wood stoves in place of inefficient stoves or shifting from fuel wood to LPG can solve these problems.

Source: Reddy and Srinivas 2009.

Renewable Energy Eco Friendly

Renewable Energy Eco Friendly

Renewable energy is energy that is generated from sunlight, rain, tides, geothermal heat and wind. These sources are naturally and constantly replenished, which is why they are deemed as renewable.

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