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31 August 2011
Energy Consumption and the Effects of Energy Efficiency Measures Based on Analysis of NEED Data
DECC
Project Team Daniel Radov Dr Orjan Sandewall Martina Lindovska Samuel Brown Dr Kenneth Train Dr Gregory Leonard
NERA Economic Consulting 15 Stratford Place London W1C 1BE United Kingdom Tel: +44 20 7659 8500 Fax: +44 20 7659 8501 www.nera.com
Analysis of NEED Data
Contents
Contents Executive Summary
i
1.
Introduction
1
1.1. 1.2.
Introduction to NEED Dataset Project Background
1 1
2.
Methodological Overview
3
2.1. 2.2.
Conditional Demand Models & Treatment Effects Household Characteristics and Energy Demand
3 7
3.
NEED: A Description of the Dataset
9
3.1. 3.2.
Data and Data Sources Basic Descriptive Statistics
4.
Simple Univariate Analysis of Treatment Effects
4.1. 4.2. 4.3. 4.4.
In-year Analysis Across-Year Analysis: Simple Difference in Differences Relationship between Future Treatment and Energy Use Summary
5.
Panel Analysis of Treatment Effects
5.1. 5.2. 5.3. 5.4.
Panel Specifications Confidence intervals Other Sensitivities Summary and Concluding Remarks
6.
Non-Parametric Analysis
6.1. 6.2. 6.3. 6.4.
Overview Sample and Treatment Density Consumption Treatment Effects
7.
Relationship Between Household Characteristics and Energy Consumption
7.1. 7.2. 7.3. 7.4. 7.5.
Overview Motivation of Specifications Considered Demand Results – Two-Stage Estimation Alternative Specifications Other variants
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9 17
34 34 41 47 52
55 55 64 66 71
73 73 74 75 76
89 89 89 92 97 99
Analysis of NEED Data
7.6.
Summary
8.
Summary and Conclusions
8.1. 8.2. 8.3.
Treatment Effects Derived from NEED Data Modelling Household Energy Consumption Suggestions for Further Research: Enhancing the NEED database
Contents
100
101 101 106 108
Appendix A. Treatment Density
112
Appendix B. Treatment Effects, Non-Parametric Estimates
116
Appendix C. Results for Non-MECE Panel Estimations
120
Appendix D. Explanatory Power of Household Characteristic Data
125
Appendix E. Comparison of VOA Sub-Samples
129
Appendix F. Investigation of Electric Heating
133
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Analysis of NEED Data
List of Tables
List of Tables Table 3.1 Numbers of Selected Measures Installed in NEED (thousands), 2004-2008 Table 5.1 Panel Regression Results for Gas Consumption in Logarithms, Without Income Interaction Effects Table 5.2 Panel Regression Results for Gas Consumption in Levels, Without Income Interaction Effects Table 5.3 Panel Regression Results for Gas Consumption in Logarithms, Including Income Interaction Effects Table 5.4 Panel Regression Results for Gas Consumption in Levels, Including Income Interaction Effects Table 7.1 Results of Two-Stage Demand Estimation Regression (Levels) Table 7.2 Alternative Specifications – OLS and Random Effects vs. Two-Stage
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26 58 59 67 68 93 98
Analysis of NEED Data
List of Figures
List of Figures Figure 3.1 Biased Estimates of Treatment Effect when Treatment is Not Observed Figure 3.2 Share of Properties with Gas Consumption (2004-2008) Figure 3.3 Gas Consumption Figure 3.4 Electricity Consumption, 2004-2008 Figure 3.5 Electricity Consumption, Excluding Gas Users Figure 3.6 Average Gas Consumption, 2007, by Type of Household Figure 3.7 Distribution of Measures, by Household Characteristics Figure 3.8 Energy Prices and Consumption, 2000-2010 Figure 4.1 Univariate Results, Treatment Effects 2004-2008 Figure 4.2 Simple Treatment Effect, by Household Characteristics (from Experian), 2007 Figure 4.3 Difference in Differences Treatment Effects, 2005-2007, Full Sample Figure 4.4 Treatment Effects - Impact on Gas Consumption, 2006 Figure 4.5 Treatment Effects: Cavity Wall Insulation Figure 4.6 Comparison of “Pre-Treatment” and “Never Treated” Gas Consumption, 2005 Figure 4.7 Treatment Effects, "Simple" Estimates, 2004-2008 Figure 5.1 Confidence Intervals for Treatment Effects (kWh) Figure 5.2 Confidence Intervals for Treatment Effects (%) Figure 5.3 Relationship of Income to Treatment Effect, Full Sample (2004-2008) Figure 5.4 Relationship of Income to Treatment Effect, Three-Bed Semis (2004-2008) Figure 5.5 Summary Panel Treatment Effects—Absolute Savings (kWh) Figure 5.6 Summary Panel Treatment Effects—Relative Savings (%) Figure 6.1 Definition of Bins for Non-Parametric Analysis Figure 6.2 Density of Population, 2007 (number of observations) Figure 6.3 Density of CWI Treatments (2007) Figure 6.4 Gas Consumption by Bin, 2007 (kWh) Figure 6.5 Treatment Effect of Cavity Wall Insulation Only, by Bin, 2007 (kWh) Figure 6.6 Treatment Effect of Cavity Wall Insulation Only, by Bin, 2007, Excluding Bins with
