In recent years, the demand for energy has been increasing, due, in part, to the growth in the population, the rise in the standard of living, and economic growth. Increasing use of energy involves the investment of financial resources, exploitation of scarce land resources, and even the intensification of the climate crisis, as the global energy sector accounts for about two-thirds of the total greenhouse gas emissions. For quite some time, there has been a developing trend around the world toward energy efficiency, which is reflected in the rational utilization of energy resources, developing products and economic benefits while reducing energy consumption and maintaining the quality of modern life. Various experts worldwide agree on the immediate need for a fundamental change in the way we produce and consume energy and that this change should occur over the next few years, in order to avoid the daunting effects of the climate crisis. Apart from environmental and health considerations associated with energy production and use, the State of Israel has additional incentives to invest resources and to improve energy consumption, since Israel is an “energy island”. Therefore, the stability of the energy sector in Israel is of the highest security and strategic importance.
Energy efficiency is the fastest and cheapest way to achieve energy security, reduce economic costs, and address environmental challenges. Around the world, savings derived from energy efficiency are considered a “virtual” energy source. For example, increased efficiency by using electrical appliances with a high energy rating reduces the demand for electricity and reduces the need to increase the electricity generation system, without degrading the requested energy services. Energy efficiency (not only in the electricity sector but also in the energy market as a whole) is achieved by reducing waste (proper use) and by consumption management, using energy-efficient appliances and implementing principles for energy efficiency in the design of existing and renovated buildings.
Most of the barriers to promoting energy efficiency are market barriers that reflect economic aspects in practice- such as extreme fluctuations in energy prices, high costs of energy saving technologies, uncertainty regarding the return on investment and market failures. In addition, there are also behavioral barriers erected by the consumer, which are related to lack of interest, lack of information, or inaccurate information that cause the consumer to choose not to save energy and not to become more energy efficient.
Energy-related behaviors in households are divided into two: efficiency-oriented behaviors, which are related to taking measures aimed at energy efficiency, such as purchasing more efficient appliances, sealing and insulation of the house, and green building, and energy-saving behaviors, which are related to the adoption of energy-saving actions. Some of the energy-saving activities involve one-time behaviors, such as adjusting the temperature control in the room’s air conditioning system to economical temperatures, while others include behaviors that require changes in daily activities and lifestyle, such as drying the laundry in the open rather than using a dryer.
The use of technological means to increase energy efficiency is not an all-inclusive solution, because the nature of energy consumption is the result of the difference between people (e.g., their thermal comfort and lifestyle). Furthermore, change in usage habits is especially important when people have already adopted technological measures to optimize consumption but are not using them correctly.
Therefore, in the household sector, alongside recommendations for energy efficiency by replacing appliances such as refrigerators, dishwashers, washing machines, dryers, heating and cooling devices and lighting fixtures, it is also important to raise public awareness of reducing electricity consumption as an important measure and as a major policy tool. The main assumption of the National Program for Energy Efficiency 2016-2030 (submitted by the Ministry of Energy) is that it is possible to save up to 10% of the energy consumption of households by this strategy of raising awareness.
Studies in psychology and behavioral economics point to several reasons why people make decisions contrary to their economic interests (human weaknesses, cognitive biases, information gaps, etc.). The term “nudge” describes how public and private organizations can encourage people to make more informed decisions in various areas of their daily living by “nudging them” or by using explicit or implicit reminders toward engaging in a particular behavior. Studies show that “nudging” can contribute to a reduction in energy consumption by providing social feedback and real-time information, recommendations for savings, or a combination of these. However, the findings of these studies are inconclusive: they vary among different populations, according to their socioeconomic status, political opinions, consumption characteristics, or ability to understand the various messages. A method that will lead to a decrease in consumption in a certain population can lead to an increase in consumption in another. In addition, a combination of methods sometimes detracts from the effect of a single method, and there is significant variance in the duration of the effect of the intervention. Moreover, the frequency of the intervention, its length and even its physical shape (the size of the envelope in which the information is delivered) will influence its effect. Hence, it is very important to design interventions that will suit the target audience.
Households are clearly interested in energy efficiency, whereby they can reduce expenses and increase their disposable income available for other uses. On the other hand, it is quite a challenge to harness the employees in institutions and organizations to the cause of saving and energy efficiency, since the workers not only do not pay the electricity bill, and therefore have no economic interest in saving, but also perceive the saving requirement as another binding task. Therefore, the issue of the impact of psychological intervention on energy efficiency should be examined at the level of both the individual and his or her household and also from the point of view of the employee at his or her place of work.
In addition, the combination of psychological interventions with economic incentives should be examined, and finally the question of whether or not the money saved is invested in projects that improve energy efficiency or directed to other activities that maintain or even increase energy consumption and its negative consequences.
The forum participants agree on the potential of savings that can be achieved by taking into consideration the psychological and behavioral aspects. Some recommendations for action that have been formulated are as follows.
Recommendations:
Identification of the public interest
- The public interest in energy efficiency – economic, environmental, energy security, etc. – must be identified and utilized to influence the psychological/behavioral effect.
Raising awareness
The behavioral aspect of energy efficiency must be addressed. It is recommended that to each public appeal by the government in the field of energy the behavioral aspect be added alongside the technical aspect. This will put the behavioral aspect on the agenda. Emphasis should be placed on the development of economic mechanisms that will reward organizations that invest in energy efficiency.
- It is recommended that a broad and long-term explanatory campaign be developed in order to change the public’s perception of the importance of the issue (similar to the campaign of “Israel is drying up,” following the 2009 water crisis).
- Currently, household electricity consumers are receiving reports both about their own comparative consumption and their consumption as compared to the neighborhood average. It is proposed the impact of this information should be studied empirically, since on the one hand, consumers who consume above the average can be motivated to save as a result of this information, while on the other hand, those who consume below the average may receive a “moral license” to consume more.
Focusing efforts on large consumers
- Significant wasteful consumers should be identified and savings efforts should target those consumers, where a significant savings potential exists. It is recommended that electricity producers be asked by the regulator to submit a report on large consumers, including those in the public sector (when there is no confidentiality issue).
Publication of indices for energy consumption
It is advisable to publish an energy consumption index which will provide each consumer with information as to where he or she stands in relation to consumers with similar characteristics (apartment size, number of persons in household, etc.). Means must be devised to build this index.
