An energy utility’s resources, customer access and technical know-how means that it is in a unique position to design and deliver effective low-cost energy savings. Government incentives for utilities to take such energy efficiency actions have largely been successful. Over time, these schemes can deliver sustained energy savings, which result in significantly lower energy intensities among the targeted end-users than nontargeted ones.
Utility schemes often combine a requirement to meet energy efficiency with the use of market-based instruments to enable utilities to trade savings obligations and to allow competition in the delivery of energy services towards savings targets. Through properly structured schemes, utilities can recover costs and maintain revenues and profits by sharing the costs and benefits with the final consumer. This gives utilities a large incentive to ensure energy savings are delivered at least cost.