Why Consumer Behaviour Change Is Key To Improving Energy Efficiency

The oil crises in the 1970s triggered the need for policy initiatives in the space of alternative energy sources. Global conventions saw countries getting together towards taking a joint step towards low carbon emissions going hand in hand with development. History stands testimony to the fact that to ensure a low carbon future, the change must be organic.

There is no denying that energy demands are on the rise and are expected to be so. The last decade itself has seen years where energy demands rise by as much as 2.3% (in 2018) with a commensurate increase in global incomes and population.

Given the need to expand development goals and energy conservation needs go hand in hand, enhancing efficiency of energy systems seem to be the most plausible bridge to this gap.

In recent years, policy makers have been increasingly citing the critical role of innovation to meet long-term energy and climate targets. However, introduction of technology only addresses a part of the issue. While the world races to come up with faster scale-up of low-carbon technologies for clean energy transitions, what needs to be remembered is that not all available technologies are suited for the markets where they are needed the most. Improvements, especially in performance and cost and adapting these technologies to local needs and specificities, particularly in emerging economies, will be necessary in ensuring their up-take.

While energy efficiency measures rely heavily on policy interventions and technological innovations, energy consumption behaviour also has an equally important role to play. Evidence shows that policy decisions need to be cognisant of consumption practices. Being heavily influenced by social norms, consumption practices tend to lock consumers into patterns that are energy and resource intensive. Moreover, energy customers demonstrate a resistance towards adoption of any new technology. For example, inspite of the presence of energy efficient cooking solutions, rural customers in developing nations still demonstrate a preference for traditional cooking medium. Thus, for policy initiative and technology innovations to be more effective, a thorough understanding of adoption barriers and mobilisers need to be developed to facilitate better uptake.

There is vast literature that point out economic considerations limiting adoption of energy efficient technology. We have seen customers weighing towards cheaper devices (with higher consumption) than opting for the costlier but more efficient devices. A reason for this might be the lack of information on how the operating costs pan out differently for both types of devices. Feedback could be a critical element in helping consumers understand their energy consumption pattern. There is now a growing body of research on different ways to provide feedback to energy consumers. Direct feedback could include information on consumers’ energy consumption received through smart meters and real time displays. The in-building of displays could be critical for enabling behaviour change. Smart meters can also identify what time of the day is cheaper to run certain equipment, notably white goods, to reduce peak consumption and cost. 

Indirect feedback could include more informative and frequent bills containing disaggregated feedback as well as historical and/or comparative information (comparison with similar households) on energy consumption. Feedback and interaction mechanisms would also help individual consumers to set energy-saving targets for themselves. Understanding and responding to the relationship between feedback measures, demand response and energy efficiency interventions could be key to designing a responsive energy efficiency policy.

The global consensus and acceptance of the need to reduce emissions have been heartening. Unlike the Kyoto Protocol of 1997 which put countries under legal binding, the Paris Agreement of 2015 saw most of them agreeing to reduction targets. With the world set on a path to make amends for earlier wrongs, the COVID-19 pandemic acted as a major roadblock, dismantling steady progress and innovation efforts made in recent years towards energy efficiency. The health crisis has forced governments to shift their immediate priorities to purely emergency measures, resulting in a lack of financing available for expanding and improving energy efficiency endeavours. While this could be only a temporary set-back to global efforts, a lot still remains to be done in developing/testing energy efficiency measures and programmes. Evidence and data on consumer demographics, preferences, technological developments and economic considerations could help bridge the gap in our understanding of energy consumption and efficiency.