Policy paradigms for optimal residential heat savings in a transition to 100% renewable energy systems

Abstract In a transition to 100% renewable energy (RE) systems we move from a sector-based to an energy system-based heat conservation paradigm. This implies both liberation from the institutional path dependencies of the present heat sector approach and the creation of the new institutional conditions for heat conservation in integrated (RE) systems. In these systems it is much more important than in fossil fuel systems to synchronize the right amount, in time and of the right types of investments in heat conservation with investments in the energy supply system. The key findings firstly are that this synchronization is not happening in the Danish case due to institutional path dependencies in the shape of high fixed tariffs, low subsidies, split incentives and renovation codes that can be evaded. Secondly that this synchronization can be implemented by means of tariffs that reflect levelized costs of future supply systems in combination with a public guaranty for long-term low-interest loans when following the advice of certified energy consultants. Thirdly tariff philosophy should change to include the long term energy system benefits of heat conservation. The principles behind these findings are of generic interest for heat supply and heat conservation planning in the EU.