17 Energy Efficiency Within Sustainable Development in Asia …
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achievement of desired outcomes as such, while cost-effectiveness considers the
resources required and actually spent in achieving a given objective.
In traditional models and approaches, technology and behavior are somewhat
separated when they are being related to energy-efficient machinery or equipment,
and the conservation of energy. Conservation of energy is seen primarily as the
responsibility of management, with curtailment aimed at reducing either energy
usage or costs in general. Such a scenario is not structured so as to gain insight into
how members of society, whether they be individuals, households or organizations,
perceive energy, or how they plan and actually purchase energy and energy-producing
equipment. Nor does it tell us how they perceive energy use per se. Models and
approaches that define and study energy efficiency employing economic concepts
related to costs, benefits, and economic agents are usually chosen due to their
analytical simplicity and usefulness in addressing empirical problems. In particular,
adjusted models taking into account the bounded rationality of people (cf. (Simon
1996)) and market imperfections helped to conceptualize so-called market barrier
models. Although these approaches are capable of partially integrating some aspects
of the technical, social, and economic dimensions, they are still quite limited when
it comes to answering questions related to understanding the perception, purchase
and use of energy (see also discussions in (Otto 2014; Gillingham et al. 2009; Sorrell
2015; Patterson 1996; Sorrel et al. 2004)).
17.2.2 Historical Perspective and the Asian Context
To a large part, energy efficiency is implemented in practice through the ESCO
concept, with energy auditing as one of its central services. It has the potential to
provide a significant contribution to energy efficiency realized as a direct transaction
between economic actors. From an historical viewpoint, the beginnings of the ESCO
concept lie within the development of energy saving businesses in North America in
the late 1970s. Although this was directly occasioned by the oil crisis, the origins of
this concept can be traced back even further (see (Hansen and Brown 2004)). With an
increased presence of ESCOs in the energy service market, the business model and
concept of an energy saving project, together with a performance contract, as typically
provided, became more widely known and accepted among potential clients. Despite
its legacy and success, the ESCO concept arrived surprisingly late in developing Asia.
For example, in China the first ESCOs were created in 1998 and such organizations
are referred to there as energy management companies (EMCs, see also (Zhang et al.
2008; Wang et al. 2013)). In other Asian countries with developing economies or
economies in transition, such as Thailand and India, the first ESCOs were created in
1999 and 1995, respectively. For a more detailed review of the development of ESCO
markets and activities, especially in Asia, see (Vine 2005; Okay and Akman 2010;
Murakoshi and Nakagami 2009; Kostka and Shin 2013; Sun et al. 2011; Langlois
and Hansen 2012; Panev et al. 2014).
257
achievement of desired outcomes as such, while cost-effectiveness considers the
resources required and actually spent in achieving a given objective.
In traditional models and approaches, technology and behavior are somewhat
separated when they are being related to energy-efficient machinery or equipment,
and the conservation of energy. Conservation of energy is seen primarily as the
responsibility of management, with curtailment aimed at reducing either energy
usage or costs in general. Such a scenario is not structured so as to gain insight into
how members of society, whether they be individuals, households or organizations,
perceive energy, or how they plan and actually purchase energy and energy-producing
equipment. Nor does it tell us how they perceive energy use per se. Models and
approaches that define and study energy efficiency employing economic concepts
related to costs, benefits, and economic agents are usually chosen due to their
analytical simplicity and usefulness in addressing empirical problems. In particular,
adjusted models taking into account the bounded rationality of people (cf. (Simon
1996)) and market imperfections helped to conceptualize so-called market barrier
models. Although these approaches are capable of partially integrating some aspects
of the technical, social, and economic dimensions, they are still quite limited when
it comes to answering questions related to understanding the perception, purchase
and use of energy (see also discussions in (Otto 2014; Gillingham et al. 2009; Sorrell
2015; Patterson 1996; Sorrel et al. 2004)).
17.2.2 Historical Perspective and the Asian Context
To a large part, energy efficiency is implemented in practice through the ESCO
concept, with energy auditing as one of its central services. It has the potential to
provide a significant contribution to energy efficiency realized as a direct transaction
between economic actors. From an historical viewpoint, the beginnings of the ESCO
concept lie within the development of energy saving businesses in North America in
the late 1970s. Although this was directly occasioned by the oil crisis, the origins of
this concept can be traced back even further (see (Hansen and Brown 2004)). With an
increased presence of ESCOs in the energy service market, the business model and
concept of an energy saving project, together with a performance contract, as typically
provided, became more widely known and accepted among potential clients. Despite
its legacy and success, the ESCO concept arrived surprisingly late in developing Asia.
For example, in China the first ESCOs were created in 1998 and such organizations
are referred to there as energy management companies (EMCs, see also (Zhang et al.
2008; Wang et al. 2013)). In other Asian countries with developing economies or
economies in transition, such as Thailand and India, the first ESCOs were created in
1999 and 1995, respectively. For a more detailed review of the development of ESCO
markets and activities, especially in Asia, see (Vine 2005; Okay and Akman 2010;
Murakoshi and Nakagami 2009; Kostka and Shin 2013; Sun et al. 2011; Langlois
and Hansen 2012; Panev et al. 2014).