Applying a systems approach to behind-the-meter energy efficiency

“Systems approach” and “systems thinking” are terms used in a variety of contexts, including such diverse fields as psychology, game theory, marketing, information technology and sustainable development. The terminology is also given many different definitions, as is often the case with abstract concepts. It is therefore no luxury to start off by describing the domain it is applied to in this website, and the meaning it will carry.

In the context of the energy transition, the most common use of the concept of systems thinking is at utility scale. Systems thinking is always needed to manage the electricity network, given the sheer scale and complexity of the European grid, as well as the fact that supply and demand need to be equal at all times. The concept is also used in theories where the choice between different energy carriers and their potential interaction is discussed. In most of these cases, the goal of the systems approach is to facilitate the transition to carbon neutral energy sources and, in particular, the proliferation of renewable energy systems with variable output.

On this website we focus on a systems approach to energy use located behind-the-meter, namely in residential and non-residential buildings and in industry. The main goal of such an approach is to improve energy efficiency in a cost-efficient manner. Consequently, what we mean by a systems approach here is to diverge from seeing an energy consuming device as an inert, autonomous planet, but instead to consider its energy use and efficiency as being dependent on the system in which the device functions. Interdependent energy using devices and the context in which they are used constitute a system for which the energy efficiency optimization can differ from that achieved by just combining optimized components.

But we would not be faithful to the philosophy of systems thinking if we did not at the same time take a look beyond the boundary we have only just drawn. In particular, we will include the utility side when discussing the flexibility of electricity consumption and demand side management (DSM), which is by definition a matter that belongs to both sides and that serves both goals – compensating variable renewables as well as energy efficiency. We will also look beyond the boundary of the energy efficiency objective to include other arguments such as material use and environmental impact, as well as safety, production quality and user comfort.