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

Nicholas Howarth

Research Fellow Nicholas is an applied economist specializing in economic growth, energy and natural resource and environmental economics. He is currently leading… Nicholas is an applied economist specializing in economic growth, energy and natural resource and environmental economics. He is currently leading KAPSARC research on energy productivity and is a subject matter expert on energy efficiency, industrial strategy and energy pricing with KAPSARC Advisory. He has received several awards for his published work, including recognition for his first book on carbon markets by the American benchmarking journal Choice as a top 25 academic publication in the category of economics in 2010. Nicholas is an experienced policy advisory, thought leader and project manager with strengths in interdisciplinary issues and applied policy gained from working as a ministerial adviser in Australia and in a variety of international roles. He is also an experienced lecturer and public speaker on energy productivity, green growth and sustainable development and has presented work at a range of technical and policy fora including meetings of the International Association of Energy Economists and in support of the G20 Energy and Sustainability Working Group and United Nations Sustainable Development Goals processes.

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

Moncef Krarti

Visiting Researcher Moncef is a visiting researcher with over 30 years of experience in designing, testing, and assessing innovative energy efficiency and… Moncef is a visiting researcher with over 30 years of experience in designing, testing, and assessing innovative energy efficiency and renewable energy technologies applied to buildings. He is a professor and a coordinator of the Building Systems Program, Civil, Environment and Architectural Department at the University of Colorado.

Expertise

Publications See all Moncef Krarti’s publications

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