MBA Renewables

Mia Dragovic

Master's thesis

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

Professional background

Energy efficiency expert working on:

- energy efficiency legislative groundwork, consultancy on energy efficiency

- cost-effectiveness of small renewables and ESCO’s for the private sector

- developing sustainable projects (IPA, IEE, HORIZON).

Main area of expertise: energy efficiency policy, cost-benefit analysis, planning and measurement and verification of EE measures.

Advice for
future students

"The workload is manageable and the programme is worth doing, just make sure you do set aside time for work all along the year, not only before the due dates. And definitely make use of group work and ability to meet many wonderful experts among your peers".

Experience with the MBA Renewables

"I am glad I chose RENAC and BEUTH for my master’s study. Both the people I met, the professors, and all the classes were very valuable to me. The program is designed in such a way that it is necessary to work in groups and get to know other peers, which means organizing skype calls with people all around the world and sharing different views on RE and sustainability matters. It was a great experience and aided me in my work".

Abstract of the thesis:
Often times, energy efficiency projects in the public sector are being done ad-hoc, evaluating cost-effectiveness on the project level instead of the program or portfolio level. This leads to disregarded administrative costs and missing the opportunity to achieve greatest economic and energy savings. Chosen measures are usually not straightforward; the ambiguity develops from identifying which economic methods to use, which costs and benefits to regard or disregard and how to quantify them, what energy indicators to rely on, what savings methods to use and when to measure the savings, as well as what reference scenario to compare the savings with. This research tackles these questions and addresses this unsystematic and less effective approach to introducing energy efficiency in public buildings, by proving that it is more beneficial to approach energy efficiency measure implementation on a program rather than project level. Public sector was chosen because implementing programs in the public sector influences all sectors and can serve as an example of best practice for citizens to apply in their homes. Public buildings usually make up a largest portion of public sector energy costs, and carry a potential for great energy savings.
Both literature review presented in chapter 1, and cost effectiveness test descried in chapter 2 and performed in chapter 4, prove that it is beneficial to introduce energy management of entire building stock before choosing which buildings to refurbish; administrative costs of introducing a comprehensive energy management of entire building stock significantly outweigh the additional costs. Different existing economic appraisal methods for measuring overall program cost-effectiveness of energy efficiency public programs are discussed, and a Total resource cost test was applied to a test set of simulated data on the City of Zagreb, Croatia. The research results in methodology (chapter 4.1) for taking a systematic approach when choosing optimal public buildings for refurbishment.
Findings of this research are important as a strong indicator that energy efficiency measures have a significant positive impact on the development of local government, and the theoretical part gives starting ground for a public body implementing energy efficiency measures. The results of this research could be a starting ground for developing more accurate methods of quantifying both direct and indirect energy efficiency benefits in the public sector.