D ETERMINANTS OF ENERGY CONSUMPTION

Determinants of energy consumption can be defined as the numerous factors that may affect energy consumption in the residential sector. This section explores the existing backbone of research with the aim to better define the problem to which the research carried by this dissertation contributes to solve and highlight.

Households do consume energy to provide end-uses services delivered by energy. The consumption of energy to deliver energy services is embedded within an extremely complex system involving elements of technical (e.g., equipment efficiency), economic (e.g., energy prices), social (e.g., gender), cultural (e.g., cooking practices), and psychosocial origin.

According to Kowsary and Zerriffi (2011), all these determinants are interrelated and the study of energy consumption in the residential sector should take these interdependencies into account, as well as the physical environment (e.g., climate) (Masera et al., 1997). In the residential sector, population and households are key; but to be able to significantly reduce energy consumption in households while fulfilling the demand for energy services, we have to know not only about the households’ physical characteristics, but also how the various family members use the available equipment.

Understanding the determinants that govern energy consumption has been the subject of abundant international literature for more than 30 years (Cayla et al., 2011). Van Raaij and Verhallen (1983) in their research in the 1980s, recognized several factors that drive household electricity consumption behavior, such as energy-related attitudes, personality, socio- demographic factors, building characteristics, energy prices, feedback and general information about energy use.

Already in the 1970s, but mainly from the late 1980s, literature has demonstrated and some authors estimated the effect of factors that could not be explained by technology (e.g. Wei et al., 2007; Gram-Hanssen, 2011). Early in 1978, Socolow showed that identical homes in Princeton, equal in terms of building characteristics, design, size, and equipment, with the same technological set-up, had different energy consumption levels (Socolow, 1978). Several other authors presented similar findings for other locations: Gram-Hanssen (2011)) for Denmark concluded that for heat consumption in technically completely identical houses, the consumption can vary by a factor of three. Santin et al. (2009) for the Netherlands showed that occupant characteristics and behavior significantly affect energy use (4.2%), but building characteristics still determine a large part of the energy use in a dwelling (42%); thus, indicating

that user practices are important though only to a limited degree are determined by objective occupant characteristics (Larsen et al., 2010).

A study of Abrahamse (2007) unveiled that household energy consumption is related to socio- demographic variables which are completely different from the drivers of energy savings. For instance, households with higher incomes or larger in size often use more energy, while psychological variables are less adequate to explain energy consumption patterns, since the latter are determined by socioeconomic barriers and opportunities.

Housing characteristics such as size, type, density and envelope affect energy consumption. It has been posited that low density development, along with associated increase in housing area, increasing number of energy consuming appliances have contributed to rapid growth in energy consumption, even while efficiency standards have been tightening (Kaza, 2010), both at the household level and electrical equipment.

Dilaver (2009), in a study for Turkey, suggests that household total final consumption expenditure and real energy prices are important drivers of residential electricity demand.

Despite it, Summerfield et al. (2010), for the UK, mentioned that energy prices are relatively inelastic with an estimated elasticity of 0.20. Azevedo et al. (2011) corroborate these findings suggesting that, given their analysis of the price inelastic behavior in EU regions, public policies aimed at fostering a transition to a more sustainable energy system will require more than an increase in electricity retail price if they are to induce needed conservation efforts and the adoption of more efficient technologies by households.

Kelly (2011) identified for England the number of household occupants, floor area, household income, dwelling efficiency, household heating patterns and living room temperature as the main drivers behind residential energy consumption. For Germany, Gruber and Scholmann (2006) showed that electricity consumption is strongly influenced by the number of existing equipment, household area and annual income. Bartiaux and Gram-Hanssen (2005) exposed for Belgium and Denmark that family size; household area and number of equipment are strong determinants for electricity consumption. Rhodes et al. (2014) work indicated that variables such as working from home, hours of television watched per week, and education levels have significant correlations with average profile shape, but might vary across seasons.

Ndiaye and Gabriel (2011) applied a principal component analysis to 221 households in Canada, found the main factors affecting household electricity consumption were: the number of occupants; the type of ownership; the average number of weeks of vacation away from the house; and the type of fuel used in space heating and air conditioning. Jones et al. (2015) focused their research in determining socio-economic and dwelling factors that contribute to electrical energy demand in UK residential buildings, highlighting higher consumption in

households with more children and teenagers and in households with high annual incomes.

Ürge-Vorsatz et al. (2015) based on a Kaya identity approach disclosed the number of households, persons per household, floor space per capita, and specific energy consumption as drivers for residential heating and cooling.

According to Foster et al. (2000) social and cultural factors such as cooking habits and household characteristics may make households behave contrary to economic predictions based on income and relative fuel prices. There are; therefore, a range of non-economic variables that are important in explaining household decisions regarding energy use.

All the referred examples are illustrative of the need of looking to the variety of factors that may be responsible to high energy consumption in households. Notwithstanding these factors are deeply context dependent, which means that applied research in concrete cases is crucial to understand not only the behavior and role of these factors but also to deepening the knowledge on the combination and interrelations between these factors.

Table 1.1 presents an extensive revision of the existing literature on factors affecting household energy consumption covered by several authors for different world regions. Although these factors are presented in isolation from each other, in the real world they are closely interrelated.

According to Kowsari and Zerrifi (2011), the determining factors of household energy use can only be found at the household level (i.e. micro-level). The aggregated level of energy demand is made up of day-to-day decisions at the household level that are affected by a variety of socioeconomic factors. Where micro-level data is used, it has often no sufficient quality, necessary to answer many of the questions, since much of the research on household energy use in this area is based on disaggregated data taken from large-scale surveys.

Table 1.1 – Determinants behind residential energy consumption

Categories Determinants Authors

Endogenous Factors (household characteristics)

Economic

Characteristics Income, expenditure

ESMAP (2003); Leiwen and O’Neill (2003); Elias and Victor, (2005); Zachariadis and Pashourtidou (2007) Kaza (2010);

Nguyen-Van (2010), Raty and Carlsson-Kanyama (2010); Cayla et al., 2011; Kowsari and Zerriffi (2011); Lescaroux (2011);

Wiesmann et al. (2011); Brounen et al. (2012). Vassileva et al.

(2012), Rhodes et al. (2014); Pablo-Romero et al. (2016)

Non-Economic Characteristics

Household size, type and year of construction;

Occupants gender, age, education, household composition, Information, job or occupation, family dimension

ESMAP (2003); Leiwen and O’Neill (2003); Myors et al., 2005;

Heltberg (2004); Gruber and Scholmann (2006); Guptaa and Kohlin (2006); Farsi et al. (2007); Antunes (2008); Ewing and Rong (2008); Schlag and Zuzarte (2008); Larsen et al. (2010);

Kaza, (2010); Paço and Varejão (2010), Raty and Carlsson- Kanyama (2010); Rue du Can et al. (2010); Cayla et al. (2011);

Ellegård and Palm (2011); Energaia et al. (2011); Gram-Hanssen (2011); Hamza and Gilroy (2011); Kelly (2011); Kowsari and Zerriffi (2011); Ndiaye and Gabriel (2011); Wiesmann et al.

(2011); Brounen et al. (2012); Hojjati and Wade (2012);

Vassileva et al. (2012); Bedir et al. (2013); Rhodes et al. (2014);

Jones et al. (2015); Huebner et al. (2015); Ürge-Vorsatz et al.

(2015); Risch and Salmon (2017); Seebauer and Wolf (2017);

Yoo et al. (2017)

Behavioral and Cultural Characteristics

Preferences, personality, practices, attitude, lifestyle, social status, religion, ethnicity, environmental awareness and concern, values

Socolow (1978); Lutzenhiser (1993); Kempton and Schipper (1994); Wei et al. (2007); Gram-Hanssen (2008); Oikonomou et al. (2009); Urge-Vorsatz et al. (2009); Santin et al. (2009); Raw and Varnham (2010), Larsen et al., (2010); Gram-Hanssen (2011); Kowsari and Zerriffi (2011); Sutterlin et al. (2011); Yun and Steemers (2011); Carlo and Ahamada (2012); Vassileva et al. (2012): Kavousian et al. (2013); Blight et al. (2013); Bartiaux et al. (2016), Sonnberger and Zwick (2016); Huebner and Schipworth (2017); O’Neill and Xiu (2017)

Exogenous Factors (external conditions)

Physical Environment

Geographic location, urbanization level, climatic condition

Bhatt and Sachan (2004); Elias and Victor (2005); Halicioglu (2007); Zachariadis and Pashourtidou (2007); Filippín and Larsen (2009); Kaza (2010); Raty and Carlsson-Kanyama (2010); Rue du Can et al. (2010), Steemers (2011); Lescaroux (2011); Wiesmann et al. (2011); Hojjati and Wade, (2012); Zhao et al. (2012), Kavousian et al. (2013)

Policies and Energy Supply Factors

Energy policies, environmental policies, subsidies, market and trade policies; Prices and affordability, availability, accessibility, reliability of energy supply.

Van Raaij and Verhallen (1983); Guptaa and Kohlin (2006);

Halicioglu (2007); Herter et al. (2007); Zachariadis and Pashourtidou (2007); Schlag and Zuzarte (2008); Alberini and Filippini (2011); Azevedo et al. (2011); Filippini (2011);

Lescaroux (2011); Butler (2016); Yoo et al. (2017)

Technology Characteristics

Conversion efficiency, cost and payment method, complexity of operation

Kelly (2011); Lescaroux (2011); Jones et al. (2015)