Abstract

This report quantifies the direct and key indirect benefits of energy efficiency investment in buildings in Gulf Cooperation Council (GCC) countries. It summarizes the key insights from individual country studies conducted as part of KAPSARC’s energy productivity project. This analysis indicates that a strong case can be made for public energy efficiency programs that would encourage building owners to invest in the socially optimal amount of energy efficiency:

  • Driven by population growth, rapid development and low domestic energy prices, energy consumption from buildings across the GCC has risen by over 200% on average since 2000 in both absolute and per capita terms, posing sustainability concerns.
  • Even with the GCC’s relatively low electricity prices, the most basic energy efficiency investment options such as programmable thermostats, LED lighting and stopping air leakage have payback periods of less than five years for the consumer.
  • Some energy efficiency retrofits, including more efficient air-conditioners and replacing windows and insulation, have longer paybacks periods.
  • The investment case for increasingly ambitious energy efficiency actions becomes more compelling once the broader system benefits are included, such as reducing the need for new electricity generation capacity, avoided carbon emissions and creating new jobs and investment.
  • A deep energy efficiency retrofit has a payback period for investors of between 11 and 70 years, depending on electricity prices; by incorporating the wider system benefits, this payback period improves to between 7 and 23 years on average across the GCC.
  • This analysis provides a strong case for public energy efficiency programs, without which building owners are unlikely to invest in the socially optimal amount of energy efficiency.

 

Authors

Kankana Dubey

Kankana Dubey

Kankana is a former KAPSARC senior research associate focused on energy productivity, energy efficiency and developing policy toolkits for government…

Nicholas Howarth

Nicholas Howarth

Research Fellow Nicholas is an applied economist specializing in economic growth, energy and natural resource and environmental economics. He is currently leading…

Expertise

  • Energy and climate economics and policy
  • energy efficiency
  • energy productivity
  • technology
  • innovation
  • finance
  • investment
  • industrial policy and sustainable development

Publications See all Nicholas Howarth’s publications

How does Saudi Arabia’s recent energy performance compare with other G20 countries?

How does Saudi Arabia’s recent energy performance compare with other G20 countries?

This report quantifies the direct and key indirect benefits of energy efficiency investment in buildings in…

August 20, 2019
Estimating the Multiple Benefits of Building Energy Efficiency in GCC Countries Using an Energy Productivity Framework

Estimating the Multiple Benefits of Building Energy Efficiency in GCC Countries Using an Energy Productivity Framework

This report quantifies the direct and key indirect benefits of energy efficiency investment in buildings in…

January 14, 2019
Moncef Krarti

Moncef Krarti

Visiting Researcher Moncef is a visiting researcher with over 30 years of experience in designing, testing, and assessing innovative energy efficiency and…

Expertise

Publications See all Moncef Krarti’s publications

Estimating the Multiple Benefits of Building Energy Efficiency in GCC Countries Using an Energy Productivity Framework

Estimating the Multiple Benefits of Building Energy Efficiency in GCC Countries Using an Energy Productivity Framework

This report quantifies the direct and key indirect benefits of energy efficiency investment in buildings in…

January 14, 2019

Benefits of energy efficiency programs for residential buildings in Bahrain

This report quantifies the direct and key indirect benefits of energy efficiency investment in buildings in…

June 1, 2018
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