How can policy makers benefit from a systems approach towards energy efficiency?

Climate change represents a systemic shift on a global scale, and it is obvious that fighting this shift requires a systems view of the global economy’s energy use. The energy transition from fossil fuels provides a perfect example of a systems approach.

That said, this general vision needs to be broken down all the way to policies and regulations at the practical level of the components in the energy system. At this level, the context in which these components operate is sometimes not fully taken into account. When it concerns energy-using equipment in buildings and industry, this context comprises the functional system in which the equipment is being used. Not taking this system into account can lead to missed opportunities and a sub-optimal regulatory approach towards energy efficiency.

• Some cost-efficient energy saving opportunities remain out of sight because of a too narrow view of individual energy-using devices, ignoring the systems within which they operate. Examples include the energy efficiency of intermediate elements such as cables and connectors, efficiency gains arising from the interaction between various devices, and opportunities resulting from optimising control systems.
• Other opportunities can seem beneficial when considering the device level only but can turn out to be sub-optimal when the entire system is put under scrutiny. Examples include devices that turn out to be over-dimensioned once all the savings measures downstream from the energy flow are put in place, or missed opportunities for a technology switch which could result in substantial and cost-efficient energy efficiency improvements.

A systems approach can help to overcome both issues. 

Finally, a systems approach to energy efficiency regulation can also reveal conflicts of interest with other policy goals, such as emissions control or the circular economy. Bringing them to light is a first step towards solving these conflicts.