Energy-efficient technologies and barriers to energy efficiency in manufacturing SMEs

Energy has become a global concern on the public agenda, due to a large increase of primary energy demand and GHG emissions. The up to date European policies are producing contradictory results: with current trends, the 20% reduction of GHG emissions and 20% increase of share by renewables seem to be achievable, but not the reduction of 20% of energy consumption. Indeed, with current trends, only 10% will be reached. An important role will thus be played by energy efficiency, in particular within the industry, responsible of about 50% of the total energy delivered, and for which energy efficiency could not only represent a viable solution for reducing energy costs, rather than an opportunity connected to its competitiveness. Focusing on the structure of the industrial sector, firstly, it can be observed that is largely composed (>99% in almost all countries) of Small and Medium Enterprises (then SMEs), that also cover a consistent portion of the domestic industrial consumption (in some cases, as from elaborations from the most recent estimations in Italy, more than 60%). Secondly, in industry, the non-energy intensive manufacturing activities, as showed by recent estimates, cover about 40% of the industrial consumption. Thirdly, according to recent studies, SMEs are quite energy-inefficient, since only 4% of the European SME has in place a comprehensive system for energy efficiency. As a consequence, in order to promote the most effective and successful policies to enhance industrial energy efficiency, it is crucial on one side to understand the critical areas for energy efficiency within SMEs, identifying and characterizing the enhancement opportunities – in terms both of technologies but also practices -, on the other side to understand the obstacles to the adoption of such technologies, i.e. the barriers. The need for a clear and punctual identification, characterization and evaluation of the BAT/Ps at the base for a methodology able to measure energy efficiency within SMEs has arisen from considering the characteristics of those enterprises. In particular, SMEs do not own an internal structure able to be focused on energy consumptions. Rather, from the large number of energy assessments conducted, it is possible to confirm that in SMEs the entrepreneur is usually in charge of different activities, ranging from being responsible of the operations, of safety, administration, sales, marketing, planning, etc.. As a consequence, energy is just one of the issues, and the time devoted to energy efficiency activities is usually quite limited. Moreover, compared to LEs, SMEs have a limited access to the know-how of energy efficiency management and practices, easily represented by much more limited economic resources devoted to energy efficiency analyses and measures. In addition to that, from the empirical investigation it has been possible to confirm that usually pay-back-times (PBTs) of more than 2-3 years are considered as prohibitive for SMEs, while generally LEs can afford investments for even more than 8-10 years. And, finally, SMEs, just for their structure – small and medium – do present a variety of situations (in terms of technologies and processes adopted) much more extended with respect to LEs. As a consequence, SMEs prefer the technological transfer of Best Available Technologies/Practices (BAT/Ps) respect to full innovation measures, since BAT/Ps have been successfully (in terms of costs and benefits) implemented somewhere, thus with an accessible (also from an economic point-of-view) know-how. Furthermore, solely the implementation of BAT/Ps is able to guarantee the best level of energy efficiency effectively available in the market. Considering these characteristics, the methodology proposed in this dissertation strongly relies on the identification and characterization of the BAT/Ps. The identification of the BAT/Ps to be suggested to SMEs required a well-based statistical approach, thus a robust database of energy efficiency interventions able to guarantee the information provided. In this sense, a wide available database allowed on one side to characterize the BAT/Ps in terms of, e.g., area of intervention, energy savings by energy source, monetary savings, implementation costs, etc., on the other side to shape the parameters of the BAT/Ps on enterprises’ characteristics (in terms of sector, firm’s size, technology, etc.), in order to provide a more precise and reliable information. Once the BAT/Ps have been characterized, it had been necessary to evaluate the effective implementation among enterprises. Thanks to a thorough analysis of the BAT/s, it was possible to identify, for each BAT/P, several levels of possible implementation. As a consequence, the development of checklists based on the identified BAT/Ps and their possible levels of implementation – with one checklist for each area of intervention –, allowed to determine what are the opportunities of energy saving in each area of the enterprise, thus quantifying the distance, from an energy efficiency perspective, of the enterprise from the best available solutions. Once obtained a measure of the gap of the enterprise from energy efficiency, it was important to highlight the most relevant areas of consumption and intervention. Indeed, the distance on energy efficiency would not be important if the area, from the energy consumption viewpoint, would not be relevant. In this respect, the analysis of the BAT/Ps allowed to have a clearer picture of what might be the most critical areas of an enterprise (from the point of view of energy consumption, and, thus, for energy efficiency); moreover, thanks to the analysis of the energy flows within the enterprise, it has been possible to draw a map of the most interesting areas to be effectively investigated. As a result of the combination of importance and opportunities for increasing energy efficiency, the developed methodology allowed to point out immediately the most profitable areas of intervention, providing not only the punctual identification of the opportunities of energy saving, but also a preliminary monetary estimation of savings and implementation costs. The application of the methodology within several manufacturing SMEs has provided good results, since the outputs, although obtained with a walkthrough audit, are more similar to those coming from mini-audits. Moreover, the effectiveness of the methodology can be observed from several perspectives. Firstly, the low time necessary to perform an energy audit, from gathering off-line data to the report publication, has been particularly appreciated both by enterprises and assessors, with an evident reduction of the disturbance on firm’s activities. Secondly, related to the time, the costs for the audit seem to decrease: this represents a very important issue for SMEs, for which the costs of the energy audit, if compared to the needed investments, are not negligible. Thirdly, the thorough analysis and strong reliance of proven BAT/Ps allowed to be reasonably confident that, with the proposed methodology, the best opportunities for energy savings within SMEs have been identified. With respect to this, having more detailed data to make projections and performing more punctual analysis seems the preferred means to evaluate how the information provided are precise. Fourthly, basing the methodology on close checklists and on a stable theoretical approach, in which the BAT/Ps have been identified, classified and characterized from a large database of interventions, and the checklists generated on the base of the processes effectively in place in the enterprise, has allowed the results to be not heavily influenced or distorted by the expertise and skills of the assessor. This can be considered as a very important result, since it is able to guarantee the objectiveness of the results, whilst the current approaches strongly rely on the capabilities of the assessors. Considering the enterprises in which the methodology has been tested, several of them have already implemented with success some of the proposed interventions (it is reasonable to expect to not have all of them implemented, since some interventions might not be coherent with other problems of the enterprises). Nonetheless, it is not possible here to draw any statistical conclusion, but the effective validation of the methodology, that represents a future issue to be addressed, will require a long time, and will be subject to several other variables (e.g. change in energy prices, change in the regulatory system, etc.). Future research should be also devoted in comparing the proposed methodology with other available. Nonetheless, from what emerged from the energy assessments, and what said above, the Quick-E-Scan seems to be not heavily dependent on the expertise and skills of the auditors, whilst other walkthrough and mini- energy audit methodologies strongly rely on them, with results that would be hardly repeatable. As a consequence, the comparison would result quite difficult, requiring, as a precondition, the application of other methodologies by different assessors. The process has been preliminary followed with an existing energy audit methodology: nonetheless, a large sample in a large time should be needed for performing a reliable comparison. In conclusion, the methodology developed seems to represent an effective means to promote the technological transfer of BAT/Ps to SMEs. Nonetheless, the methodology could not be so effective without the identification and characterization of the BAT/Ps, to which the dissertation devoted a large part of the research. In particular, thanks to several research projects, 217 energy audits within SMEs have been performed. The energy audits have been conducted by a group of energy efficiency experts – coming from different experience, i.e. some academics, some professionals – with an expertise of several years on the topic, able to cover all the energy efficiency issues both from an operational viewpoint – i.e. technological and organizational issues of production and ancillary systems, and even single technologies – , both from an administrative viewpoint, e.g. in terms of energy tariffs. Thanks to the energy audits, it has been possible to create a database containing about 2,000 energy saving opportunities (ESOs). Each of them has been identified, described in terms of type of ESO (e.g. restoring, optimizing or innovating the equipment) and area of intervention, and characterized according to energy savings by energy source, monetary savings, implementation costs, and pay-back time of the intervention. Moreover, each ESO has been enriched by several information about the enterprise (type of activity according to the classification ISIC rev.4, firm’s size according to the European classification of SMEs, technologies addressed, processes addressed, etc.). Even if the Italian database has seemed to be quite detailed, nonetheless due to its small size the issue of enlarging the data source, looking at the availability of other sources, arose. Therefore, a comparison with a database of ESOs from the American industrial sector allowed to verify the statistical correspondence of the energy efficiency practices between United States and Italy, with respect to several criteria of analysis, such as diffusion, maximum savings achievable, and return of the investment. This result, beyond the preliminary purpose of the study, seems to represent the most interesting result, since, from an analysis of the ESOs for single factors, the characteristics and parameters of the ESOs seem to be quite similar. This result opens the research to a wider, more detailed and (statistical) significant analysis of the correspondence, within Western industrialized countries, of the energy efficiency practices. To do this, it seems important to perform two recommendations: on one side enlarging the factors considered and the detail of the analysis are needed; on the other side it should be taken into account that the variety and width of the sample might consistently affect the results. When looking with higher detail to the specific ESOs emerged in the analyses for SMEs, it is possible to find several interventions that do not require innovation in the technologies: rather, in some cases, with almost null (direct) implementation costs and relevant savings, there are even “good practices” for managing the operations, thus proving the still existence of obstacles within SMEs to the adoption of the BAT/Ps. Moreover, a preliminary empirical analysis of the American database has showed that the highest energy saving suggested ESOs are not effectively those implemented. If, on one side, it is reasonable to hypothesize that there are some reasons for a lack of implementation of those ESOs, on the other it reasonably proves again the existence of barriers. As a consequence, a large part of the research has been devoted to the second research stream, aiming at studying in detail the barriers towards energy efficiency in SMEs. Considering the existing studies on barriers on energy efficiency, and in particular on taxonomies aiming at classifying them, through a detailed and thorough analysis of the literature, it has been possible to highlight three main issues that still needed to be addressed. Firstly, the existing taxonomies on barriers seemed to not encompass all the elements already pointed out in the literature. Secondly, in the taxonomies overlaps between the theoretical barriers can be found, causing an incorrect and misleading classification of the barriers. This is even more relevant for the effective capability of the existing taxonomies from an operational perspective – i.e., when empirically investigating the theoretical taxonomies – , obtaining, as a result, a disguised comprehension of the barriers. And, thirdly, the existence of implicit interactions between the barriers, that, without being fully and thoroughly analyzed, would not allow a correct comprehension of the mechanisms and dynamics of the barriers. Moreover, very few studies had been explicitly devoted to investigate barriers to energy efficiency within SMEs. Therefore, a preliminary investigation of the practical issues SMEs have to face when undertaking the process of investing resources in energy efficiency interventions has been performed, providing two main results. Firstly, particular attention should be devoted when considering SMEs as homogeneous, when it is likely not correct. Indeed, for several barriers investigated, such as lack of time, lack of internal skills, lack of personnel awareness, and difficulty in implementing either management or technical interventions, it has been possible to observe different behaviors among sub-sizes. This is an important contribution to the literature, which, as now, has tended to consider those three different kinds of enterprises, with respect to the barriers to energy efficiency, as a whole. In particular, it has been observed that MLEs suffer from the lack of time or lack of internal skills less than SMEs, due to a more structured organization, e.g. people usually in charge of activities for enhancing energy efficiency. Moreover, it can be argued that SEs and MEs have a more agile internal structure, that reduces the difficulties in implementing both management and technical energy efficiency interventions, and allows to more closely control the operations of the personnel, developing into it the awareness of the importance of an energy-efficient behavior. Likewise, but the study represents one of the first contributions in the field, it has been observed a significant difference in the sample according to the sector and previous experience of enterprises with respect to energy efficiency. Secondly, thanks to an analysis of correlation of the barriers, it has been possible to appreciate not only the different results in terms of absolute values, but also different trends in the responses, implying the existence of different dynamics of the barriers. The latter seemed to represent an element particularly relevant for the research, since, thanks to a more detailed analysis of the effects, it could provide a clearer picture of how the decision-making process affects the viability of the investment. The suggestions emerged from the preliminary investigation helped to refine how the issues emerged in the literature had to be addressed in a novel holistic (i.e. theory and practice) approach to barriers to energy efficiency. Considering the first issue, i.e. that the existing taxonomies on barriers seemed to not encompass all the elements already pointed out in the literature, a novel approach has been proposed, that aims at encompassing all the relevant contributions in this topic. In order to validate the completeness of the new approach, several preliminary case-studies and a larger investigation within SMEs have been conducted. Since all the barriers emerged in the case-studies and the large investigation have been referred to the elements of the taxonomy, it is possible to say, at least as preliminary result, that the objective has been achieved. Nonetheless, a future larger application of the taxonomy could provide the counter prove of the completeness of the new approach proposed. The second issue arisen from the analysis of the literature is the presence of overlaps between the theoretical barriers, causing an incorrect and misleading classification of the barriers. This is even more relevant for the effective capability of the existing taxonomies from an operational perspective – i.e., when empirically investigating from enterprises’ perspective the theoretical taxonomies – , obtaining, as a result, a disguised comprehension of the barriers. The new proposed taxonomy has tried to reduce the barriers to the minimum independent terms. The validation of the second issue both through a preliminary test in few case studies and a larger investigation within SMEs brought positive results, with usually low correlations between the barriers. In this regard, I think that future research will be needed in validating the independence of the terms, but the objective seems to be achieved. The third issue emerged in the literature is the existence of implicit interactions between the barriers, that, without being fully and thoroughly analyzed, would not allow a correct comprehension of the mechanisms and dynamics of the barriers. The problem, already simplified through the reduction of the overlaps, has led to the identification of some existing relationships between the barriers, i.e. causal relationship, composite effect and hidden effect. To do this, the experience obtained through the preliminary investigation within enterprises allowed to formulate the need of a clear distinction between the real and perceived values of the barriers. Therefore, undertaking an investment in energy-efficient technologies might be completely affected by a distorted perception of the barriers. Indeed, during the preliminary investigation, I have noticed that the enterprises took the decisions on investments based on the values of barriers they seemed to suffer from (perceived), but, by the fact, they suffered from other (real)barriers. As an example, although some enterprises blamed the lack of capital for not undertaking energy-efficient investments, it seemed apparent that, in general, they downgraded energy efficiency to a marginal aspect, they were not committed in reducing their energy consumption, and they did not even know how to do it. Moreover, it seemed apparent that the enterprises did not had a clue about some important issues on energy efficiency, i.e. they could not report the real barriers affecting other actors involved in the energy efficiency market. Therefore, a taxonomy able to be effectively investigated and provide the viewpoint of enterprises could not avoid to perform a distinction between barriers originated outside or within the firm, and to understand the extent of the influence of a single barrier. The validation of the taxonomy in the preliminary case-studies and the larger investigation within SMEs allowed to get confirmation of the existence of mechanisms and dynamics between the barriers. Nonetheless, future research in this field is needed, in order to counter prove the relationships hypothesized and get more evidences, since, e.g., the mechanisms of how a barrier has been originated could take a long time, with consequent appropriate timespan needed for observing the enterprise. The suggestions coming from the preliminary investigation about the differences between perceived and real barriers have been confirmed by the study of the taxonomy adapted to be investigated within SMEs. Indeed, by considering the whole sample the major perceived barriers are represented by economic barriers (in terms of high Investment Costs, Hidden Costs and Intervention no -Sufficiently Profitable) and Information barriers (as Information Issues on Energy Contracts, Information not clear by Technology Suppliers and Lack of Information on Costs and Benefits). Moreover, the study allowed to appreciate that that the behavioural barriers are ranked in the lowest positions, thus showing that the enterprises perceive themselves as pro-active with respect to the topic. Nonetheless, the analysis of the real barriers, where possible, allowed to draw an interesting picture: if on one side the enterprises had an almost perfect knowledge of their difficulties in obtaining the needed capital for financing the investments, they presented much higher real barriers for the Lack of Interest and Other Priorities. Actually, they presumed to be interested in energy efficiency, but they were not, downgrading energy efficiency to a marginal aspect of the operations. Moreover, the need of avoiding bundling SMEs could be observed also here, both in terms of perceived and real barriers. Therefore, a future suggestion to policy-makers would be to look with attention to this difference when promoting future energy policies for overcoming the barriers to industrial energy efficiency. Nonetheless, the empirical evidences on the new taxonomy are, at the moment, limited to the evaluation of the internal (with respect to the firm) and general (i.e. related to any investment) barriers to industrial energy efficiency within SMEs. Therefore, it is quite interesting to explore this misalignment between perceived and real barriers, in order to get a more detailed and precise picture of the barriers, since the full comprehension and analysis of the barriers represent a first step towards the development and deployment of effective policies to have a widespread adoption of the energy-efficient technologies and practices in the industry. Indeed, I would suggest to pursue the research in the following directions: I. analyzing the barriers originated by other actors, i.e. technology providers and suppliers, energy suppliers, energy service contractors, etc.; II. exploring the barriers that are intervention-dependent. To do that, a shift in the approach to the empirical investigation is also needed: it would be of fundamental importance to select one single intervention (or, a very limited category of interventions), trying to categorize it by the possible barriers, and evaluate them. Another very interesting finding of the research comes from the preliminary analysis of several other factors related to the complexity of the enterprises, i.e. complexity of the production, demand variability and strength of competitors. In this respect, the presence of high or very high complexity of the production, high variability of the demand and strong competitors seems to have an effect of lowering the real barriers. This result seems to be quite relevant for policy-makers, since it shows that there might be internal (with respect the firm) factors, and not just external forces or pressures, moving enterprises to overcome the barriers and thus adopting energy-efficient technologies, opening new research streams. Firstly, further research should be performed to understand and evaluate the “specifically devoted” drivers to promote energy efficiency within the firm, thus bounding the benefits exclusively from an energy-saving perspective. Secondly, it seems interesting and challenging to explore the possible connection between the processes of increasing energy efficiency and performing innovation, trying to grasp possible synergies between the two processes. In particular, the research could point out and evaluate the possible indirect benefits coming from the adoption of energy-efficient technologies, in terms of productivity, quality of products and processes, reliability and availability of the equipment and of the production system, etc., thus affecting the firm’s performance and competitiveness. To do that, it is again of fundamental importance to select a limited set of the most effective energy-efficient technologies, trying to categorize them according to the possible indirect benefits and, through case studies and surveys, evaluate them. In conclusion, it is apparent that a thorough comprehension and evaluation of the barriers on one side, and of the drivers on the other side, constitute, at the end, the two pillars for effective policies for a widespread adoption of energy-efficient technologies within SMEs.

La crescente domanda di energia primaria e l’aumento considerevole di emissioni di gas serra, di particolare rilevanza nei Paesi in via di sviluppo, ha portato all’attenzione degli enti legislativi nazionali ed internazionali il problema della limitatezza e di un miglior uso delle risorse energetiche disponibili. In particolare, in Italia abbiamo assistito ad un notevole sforzo per aumentare la quota di generazione di energia elettrica da fonti energetiche rinnovabili, ottenendo delle previsioni confortanti in merito alla quota di produzione da fonti rinnovabili e alla riduzione dei gas serra. Molto meno confortanti sono invece le previsioni per l’aumento del 20% dell’efficienza energetica, in quanto i trend attuali evidenziano la necessità di un significativo cambiamento di rotta. Al fine di raggiungere l’obiettivo richiesto, il comparto industriale, che copre circa il 50% dell’energia delivered, assume primaria importanza. Tuttavia, recenti studi mostrando l’esistenza di barriere interne ed esterne all’azienda che limitano l’implementazione delle tecnologie più innovative ed energeticamente efficienti e delle buone pratiche di gestione dell’energia. Il presente lavoro di dottorato presenta lo sviluppo di innovativi approcci teorici ed empirici per l’individuazione, caratterizzazione e valutazione da un lato di tecnologie e pratiche per il miglioramento dell’efficienza energetica industriale, dall’altro delle problematiche che si frappongono all’adozione di tali tecnologie, con particolare attenzione alle piccole e medie imprese del comparto manifatturiero, al fine di individuare i migliori strumenti per ridurre i costi di produzione e migliorare la competitività dei sistemi produttivi.