A CEA of Energy Conservation - A case study of Katjas Gata 119

Abstract

This paper includes a cost-effectiveness analysis of different energy efforts when renovating a typical building of Miljonprogrammet. We have chosen to proceed from the conditions of a building in Backa Röd, Katjas Gata 119 in Gothenburg, which is owned by Gothenburg’s residential company Poseidon AB. They made an extensive renovation of Katjas Gata 119 in 2009.

We live in a time when energy efficiency is highly on the agenda. The government has for example adopted a vision of net zero emissions until 2050 and in order to reach that, all sectors need to contribute. The residential sector comprises more than 40 % of the final energy use in Sweden today, therefore it is obvious that a variety of interventions in energy efficiency should be implemented and policies, due to this purpose, should be created. Renovating buildings is a once-only change and today it is a window of opportunity to reduce energy use extensively at the same time of the needed renovation.

We have analyzed ten different energy efforts, four of them were implemented on Katjas Gata 119 and the others were actions of our choice. Cost-effectiveness analysis investigates the costs, energy savings (in kWh), savings (in SEK) and the cost-effectiveness ratio for each energy effort.

To decrease the gap between the financial and socio-economic potential some interventions from the government is needed. We discuss different market failures in energy efficiency: information failures like principal agent and uncertainty, and innovative failures. Policies to correct for the market failures are discussed together with the different energy efforts.

According to our analysis, the most cost-effective energy efforts are Windows, Visualising energy use, Walls, Individual Measuring and Charging of Warm Water, Ventilation and Solar cells. There are only a few of these that will be implemented without governmental intervention.