Economic Appraisal of Introducing Energy Efficiency in the Public Sector: Overview of Existing Economic Methods with Ex-post Application to Sustainable Energy Management Program in Croatia

Abstract

Sustainable energy management system is an important prerequisite for making informed choices about which buildings to retrofit, choosing from the entire existing building stock. However, the system itself does not say anything about the economic potential of the retrofit, what economic methods to use for appraising buildings and what indicators to look at if the aim is the highest monetary savings. This paper demonstrates to local and national governments as owners of public buildings; (1) how they can use existing data from energy management information system (EMIS) to achieve highest monetary savings; and (2) it is economically justified to implement EMIS to benefit from the highest monetary savings when choosing buildings for retrofit. The hypothesis was tested on a stock of 602 public buildings from Zagreb, Croatia. Through an Intelligent Energy Efficiency project ZagEE, Zagreb city administration chose 87 buildings for energy retrofit. The estimated economic savings were compared to a scenario where optimal 87 buildings would be chosen. The difference in savings justifies the additional cost of performing energy audits of the entire building stock. Although monetary savings are only one of the reasons for choosing the order of buildings to be retrofitted, the authors argue that additional savings can result in such greater savings that additional buildings can then be retrofitted, and other objectives achieved. The intention is to raise awareness of the savings potential that is exposed when investing into an efficient EMIS and properly using its results to decide which buildings to retrofit.