Modelling of electricity savings in the Danish households sector: from the energy system to the end-user

In this paper, we examine the value of investing in energy-efficient household appliances from both an energy system and end-user perspectives. We consider a set of appliance categories constituting the majority of the electricity consumption in the private household sector, and focus on the stock of products which need to be replaced. First, we look at the energy system and investigate whether investing in improved energy efficiency can compete with the cost of electricity supply from existing or new power plants. To assess the analysis, Balmorel, a linear optimization model for the heat and power sectors, has been extended in order to endogenously determine the best possible investments in more efficient home appliances. Second, we propose a method to relate the optimal energy system solution to the end-user choices by incorporating consumer behaviour and electricity price addition due to taxes. The model is non-exclusively tested on the Danish energy system under different scenarios. Computational experiments show that several energy efficiency measures in the household sector should be regarded as valuable investments (e.g. an efficient lighting system) while others would require some form of support to become profitable. The analysis quantifies energy and economic savings from the consumer side and reveals the impacts on the Danish power system and surrounding countries. Compared to a business-as-usual energy scenario, the end-user attains net economic savings in the range of 30-40 EUR per year, and the system can benefit of an annual electricity demand reduction of 140-150 GWh. The paper enriches the existing literature about energy efficiency modelling in households, contributing with novel models, methods, and findings related to the Danish case.