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Costs and benefits of Energy Efficiency Obligations: A review of European programmes

Journal Article

The economics of energy efficiency programmes have been subject to considerable academic debate lasting well over three decades now. In this paper, we contribute to this debate by reviewing the costs and benefits of a specific type of policy+ instrument that recently gained significant traction in Europe – Energy Efficiency Obligations – EEOs. Following the introduction of the EU Energy Efficiency Directive in 2012 the number of EEOs in Europe has grown from five schemes to now 16 EEOs in operation or planned across the EU. There is an emerging body of evidence on the costs and benefits of Energy Efficiency Obligations covering a wider range of EU countries, which offers an opportunity to improve our understanding of the economics of Energy Efficiency Obligations. In this paper, we draw on this new data and provide a) a comparative analysis of the costs and benefits of EEOs in a number of European countries, b) discuss the uncertainties and challenges around calculating the costs and benefits of Energy Efficiency Obligations, and c) provide a categorisation of the multiple benefits often overlooked in cost-benefit-analyses.