Rajesh Gupta 5/8/2015

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Hi Taylor,

Can I apply Cost of Saved Energy (CSE) method when efficiency improvements occur by switching from one branch to another (rather changing the energy intensity of a particular device)? For example, efficiency improvements that take place by switching to CFLs in efficient scenario from incandescent in reference scenario. The way I approach this, first I calculate CSE value from external study then assign this value to reference device (incandescent) to obtain the cost of achieving the efficient scenario. My precise question is - if this is an appropriate way of calculating the cost using CSE method in this particular case? Many thanks for considering to answer this. Best, Rajesh

Taylor Binnington 5/14/2015
 

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Hi Rajesh,

Very sorry for the delay - it's been a busy few weeks.

This is a good question. The current implementation of the cost of saved energy method will incur costs whenever energy is saved at the level of a particular technology branch. However, it will not work if you assign a cost of saved energy in the Demand Cost variable of a category (folder), which contains different categories or technologies that may be switched between.

In this case, you could assign a cost of saved energy to each of the technology branches among which you are switching. Some of the individual branches will incur a negative cost (if they consume more energy than in the reference scenario), while others will incur a positive cost for saving energy. However, when viewed using LEAP's results view for the category containing each of these technologies, the social cost results will yield the correct aggregate value.

Another option would be to use the Activity Cost method for each technology, which may be more transparent when switching among technologies.

Hope this helps,

Taylor

Rajesh Gupta 5/18/2015
 

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Thanks so much Taylor for this information. Activity cost method is not preferred simply because it doesn't account for fuel savings. I tried the way you guide to apply CSE method in my lighting category that has only two technologies, incandescent and CFLs and it works fine as I yield the correct aggregate value of social cost. I can verify the result by multiplying CSE value to the energy savings.

However applying the same way in my cooking category that has four devices/technologies (fuelwood, charcoal, kerosene, and LPG stoves) is not straightforward and still leaves a question. In this case LPG is the only clean/efficient device that the rest three devices switch to in the efficient scenario. I do not understand what CSE value I assign to the LPG stove since it is the one that the rest three devices switch to in the efficient scenario. My question is if I assign none or a zero cost of saved energy to the LPG, would I still get a correct aggregate value of social cost? How can I verify my results if they are correct in this case. Please let me know if I can send you my LEAP file if that helps you to answer? Thank you very much for your patience in answering this; this is really important for me to know if I can apply CSE method in my cooking category. Please also let me know if I need to refine my question in case it is not clear.

Taylor Binnington 6/1/2015
 

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Hi Rajesh,

I don't think that the situation of switching among four devices is conceptually different than switching between two devices. In either case, you would specify the operating cost of the technology, prefixed with a negative sign (so that you are really entering the cost of saved energy). As less energy is consumed by fuelwood, charcoal and kerosene, you will incur a savings, while simultaneously incurring a positive cost from the LPG branch.

I do want to caution you about including fuel costs in the Demand Cost variable. If you have entered costs in the resources branches (using the Indigenous or Imported Cost variables), then any scenario which consumes more/less of any fuel will show an additional cost/savings when compared to BAU, originating from the Resources branches of the tree. In such a case, your total social cost-benefit analysis would double-count the fuel costs or savings from your fuel switching measure on the demand side.

With this in mind, I still think that using the Activity Cost method might be more appropriate for the situation you're describing. If you go this route, you would specify the annual cost of owning each cooking device as a Demand Cost, while differences in fuel costs will emerge from the resource accounting at the bottom of the tree.

Hope this helps,
Taylor