C ASE S TUDY

This research was supported by Portugal as a case study, and the municipality of Évora in particular. As portrayed in Section 1.1.3, total and residential final energy consumption and energy intensities development, show very distinct past trends and current situation across EU countries. This calls for the need to look into different countries in the EU policy context, through case based approaches that are able to accommodate the particularities of the residential sector. The specificities of the residential energy consumption depend on distinct factors, as explained before. Notwithstanding, case based approaches can span multiple scales both spatial and temporal, since it can give insights to similar contexts. Portugal represents a proper case study due to different reasons that are described below.

First of all, Portugal has an effective potential to become a low carbon economy, already relying on a strong renewable power system and with increasing expectations due to its untapped potential specially for solar energy, which may have impact on households’ energy consumption profiles. Electricity consumption in the country was fully covered by hydro, wind and solar power during 107-hour run in 2016. Besides this, there is an expected convergence to achieve comparable energy per capita to other EU28 countries. In EU, there is a large regional disparity in annual per capita residential consumption. Despite a significant increase in the last decades, from 49.8 in 1990 to 64.9 GJ in 2015 for total final energy (30% increase) and 6.5 GJ to 7.6 GJ in 2015 (17% increase) for residential sector energy consumption, Portugal has still a relatively low per capita consumption of energy (PORDATA, 2016). Albeit this growth, and as seen in Figure 1.2, Portugal had in 2015, a per capita energy consumption (both total and residential), below almost all EU countries (27% and 66% respectively below EU28 average), even when compared to countries with similar climate conditions like Spain and Italy.

As in other EU countries, last decades’ energy consumption trends are very irregular, which calls for a better understanding of consumers’ behavior. Since 1990, total Portuguese final energy consumption grew about 1.3% per annum, with 0.5%/year specifically in the residential buildings (PORDATA, 2016) (Figure 1.6). Though, in the last 10 years we have seen a significant reduction. Portuguese residential sector had consistently raised its final energy consumption between 1990 and 2005 (i.e. 33%). After this period, the final energy consumption has gone through a stabilization period and more recently (i.e. 2010-2015) through a significant decrease (-2.3%/year). The consumption growth followed an increase of energy services demand due to: 1) higher purchasing power that raised the standards of basic comfort and level of amenities, 2) the widespread utilization of relatively new types of loads whose penetration and use has experienced a very significant growth (Almeida, 2008) and 3) a higher number of households with larger areas and fewer people, demanding more equipment (Bertoldi and Atanasiu, 2007). The recent trends might be explained by increase energy efficiency, reduced thermal comfort levels inside households induced by higher energy prices and lower available income for energy expenses, still justified by the economic and financial crisis.

Figure 1.6 – Final Energy Consumption (Total and Residential) per capita in 2015 for selected EU countries (PORDATA, 2016)

Another important reason is the significant electrification trend. Portugal has increased its electricity consumption per capita 90% since 1990, while the average EU28 only increased near 20%. The Portuguese residential sector has also seen a shift in the mix of energy supply. In 1990, electricity accounted for 21% of energy consumption and natural gas was not yet consumed in Portugal. In 2015, the share of electricity increased to 41% and the natural gas share increased to 32% since its introduction in 1998. These resulted in increased efficiency in energy use but also demonstrates the recent national trends of a society of consumption with higher ownership of electrical equipment. The rising weight of electricity in residential energy consumption also justify the increased importance of analysis using electricity smart meters’

data.

Despite being a warm southern EU country with mild winters, several facts point Portugal as severely endangered by fuel poverty issues;with a widespread lack of thermal comfort inside households (both for heating and cooling) across the country (e.g. Magalhães and Leal (2014), Palma (2017)). As a result, around 30% of the population receives social tariff support for the payment electricity and natural gas bills. These issues will be further investigated in Chapter 3.1.

Further convergence of EU patterns of living could also be expected. In 2005, Portugal had a living space per person of around 37 m², similar to United Kingdom value in 1991 (Boardman et al., 2005) showing large possibilities of increasing. This determinant factor is difficult to be influenced by policy; nevertheless, trends have to be taken into consideration when the goals of a policy are formulated since they have a strong impact on demand.

On the other hand, being located in the Iberian Peninsula, targeted as one of the most likely climate impacted regions on heating and cooling energy needs, with probable impacts on energy consumption and increased uncertainty in energy services demand projections. Portugal is among one of the warmest countries in Europe with high temperatures in the summer, and generally longer summers, where heating consumptions for buildings are, on the whole, much lower than in other European countries. According to Santos et al. (2006), a generalized increase of monthly cooling energy demand and a reduction of monthly heating energy demand, as well as a reduction of the heating season and a consequent extension of the cooling season is likely for Portugal due to expected climate change.

Lastly, it presents high costs of energy for families. According to IEA (2016a), electricity prices in Portugal are relatively high by IEA standards and they have been increasing significantly over the past decade. From 2008 to 2013, final electricity prices increased annually on average by 8.8% for household customer. Electricity and natural gas prices for families with all taxes and levies included, were in 2016, 13% and 38%, respectively, higher compared to EU28 average (PORDATA, 2016). Much of the price increase for household customers was the result of an increase in taxes and levies, in particular with the increase of value added tax (VAT) (from 6% to 23% as from October 2011), but also the result of a set of subsidies to ordinary producers, namely compensation for stranded costs due to the liberalization process and payment of feed- in tariffs for renewables and combined heat and power (IEA, 2016b). This increase in energy prices in conjunction with the depletion of families’ private consumption, explains also part of the decrease of electricity consumption observed recently in households (Azevedo et al., 2011).

For all these reasons, Portugal was considered as a case study for this research, using the municipality of Évora for an in-depth analysis. This city has a smart grid project with 31 000 smart meters with registries of 15 minutes’ electricity consumption (EDP Distribuição, 2016) and high solar PV potential both from rooftop (Moreira, 2016) and utility scale (Lourenço, 2014). These represent important raw data that could be analyzed and combined in order to obtain detailed information and produce knowledge to support policy development and implementation.

As stated before, residential energy sector consumption is derived from a combination of discrete and continuous choices from consumers. This work intends to address the problem of better understanding the determinants that drive energy consumption patterns at different levels in a southern European country, while acknowledging the existing bottleneck between the need for increased energy services demand fulfilment (specially for space heating and cooling) and the reduction of energy consumption through increased energy efficiency.