How to regulate the energy efficiency of systems?

We are well capable of regulating the energy efficiency of products such as refrigerators, motors, boilers and so on. But all these products are used in systems. And it’s in the system that the major energy saving benefits can be achieved. For example, we can make lights more efficient but we can also use lighting systems to ensure that light is only produced when and where it is needed.

However, the efficiency of systems relies on the awareness of energy efficiency during the design, installation and lifetime operation of these systems. Can regulation play any role in this, or should it stop at the product? If regulation can play a role, how could this be achieved? If not, what other mechanisms do we have? Education and training? Energy management systems? Here is a summary of the replies from LE members to the question “How to regulate the energy efficiency of systems?”


There are numerous components involved in efficiency, and it might be better to talk about (and implement) energy optimization of systems. The reasoning is that energy is central to everything we do, but we tend to act as though it is somehow separate from what each and every enterprise is doing. A preferred term might be “energy effectiveness”, which would include everything under the control of the enterprise related to that term. By improving energy effectiveness, we assist the enterprise in improving what they do. This would be comparable to HR professionals helping people in organizations perform better, or IT professionals improving organizational structures and information.

Efficiency was defined as a ratio between the energy provided as input and the output, so is always less than unity. The goal of energy efficiency is to optimize the machine and obtain a level of efficiency as close as possible to unity. At the same time, measures have to be taken to make sure that the efficiency increase is not eaten up by a (probably unnecessary) expansion of the size of the appliance. A typical example would be doubling the diagonal size of a flat-screen, which quadruples its energy consumption.

In a similar vein, managing energy efficiently means not wasting energy in processes, as well as optimizing the power consumption. Energy consumption efficiency would be reduced if all equipment is activated at once, requiring very high power levels. If equipment is connected in a scheduled way, this may decrease power demand. This latter approach clearly has implications not only on our processes, and power hired (and therefore billing), but also on utility capacity planning, as smaller power plants would then be needed.


While education can certainly play a role, it can never reach the entire market: it would clearly be an endless task to continuously train millions of designers, installers and end-users. But consumers still need to be sufficiently educated about the need to reduce energy consumption by changing habits – without significantly affecting comfort.

Currently, energy efficiency efforts tend to be concentrated on products and components, with very little attention on how these combine for overall efficiency. One solution to achieve a system approach would be to teach this in universities, showing how choices of components/products in a system has to be viewed overall. Until this philosophy is established – looking at the car and not with what it was built – it will always be easy to take the more ‘controllable’ approach of specifying efficiency performance of products/components alone rather than assessing the impact of product/component choice on overall system efficiency.


Regarding the thorny issue of regulation, there appears to be a natural/physical barrier to regulating the efficiency of whole systems. The energy conversion of an electric engine is far better than that of an internal combustion engine. But this doesn’t mean that you can regulate cars by imposing the efficiency of electric cars as a benchmark. Each product is a compromise between features (like efficiency) and purchase price. However, a problem is that regulatory approaches are handicapped, especially command-and-control regulation. To whom will one impose the obligation of system efficiency, and how will it be verified?

Energy Management Systems

Could energy management systems provide the solution? They are a systematic way to deal with energy efficiency, to embed it into an organization’s policy, and to appoint a dedicated energy manager. A strong coupling of energy use with energy management, and regulating the PRACTICE of energy management, while also providing financial incentives, might be a viable solution.

As to whether an energy management system should not only be comprehensive but compulsory, with relevant incentives and simultaneous penalties for non-compliance – that might be going too far. But the need is definitely for stronger rather than weaker implementation of energy management systems (e.g. Article 8 of the EED). In short, both pull and push strategies are needed. People will not desire to be educated on their own, but regulations which people neglect to adopt are also not helpful.


Instead of - or alongside - pushing and pulling, could nudging be a feasible alternative? The Nudge Theory is a concept in which positive reinforcement and indirect suggestions can achieve non-forced compliance. Nudging is being increasingly used to influence the motives, incentives and decision-making of groups and individuals at least as effectively – if not more effectively – than direct instruction, legislation, or enforcement.

It’s a growing field of research. Behavioral economics have identified a series of nudges, social norms and other techniques that could help transform the way households use energy. Here are some nudging examples:

Thanks to comments and answers received from Guenther Beck, Sandy McCardell, Herbert Martin, Frank Griffith, Peter John O'Connor and Mehdi Sharif. If you would still like to post an answer or reply to the article above, you can do so by adding a comment on this page.