Skip to main content
Knowledge4Policy
KNOWLEDGE FOR POLICY

Competence Centre on Behavioural Insights

We support policymaking with evidence on human behaviour

Topic / Tool | Last updated: 09 Jul 2024

Behavioural insights for energy

Clean, affordable and secure energy is fundamental to a carbon-free EU. Understanding European’s energy-related decisions can contribute to better EU energy policy.

Explore further

Why behavioural insights matter

People make numerous decisions around energy consumption. For example, we choose whether to buy a fridge that uses more or less energy, or whether to switch to a green energy contract. In making these decisions, price is just one of the factors we consider, alongside many others (quite often subconsciously).

Behavioural insights can identify these factors and thus improve our understanding of what drives energy-related decisions. For instance

  • We make numerous implicit decisions that consume energy, for instance turning on the lights or commuting by car. These involve daily routines and habits whose energy-use is invisible to us.
  • We often don’t take the time to assess all the available information when we make energy-related decisions. For example, when choosing an energy contract, our attention is limited, and we rely on information that is simple and salient.
  • We save more energy when learning that our neighbours’ use less energy.
  • We’re more likely to choose a green energy contract when it's presented to us as the default option.

Understanding these and other behavioural factors contributes to better energy policy.

 

How behavioural insights can help

Behaviourally-informed energy policy takes note of the relevant factors. For instance

 

Ongoing projects

 

Selected publications

Energy crises and concerns about climate change call for a decisive shift in our daily behaviour at home and work. However, the public policies enabling this change require an accurate understanding of the behavioural factors influencing energy consumption in both spheres and how people respond in different contexts. This report reviews these factors concerning residential and workplace interventions to promote energy savings. It also spotlights the conditions under which interventions targeting one context could spill over to another setting. The analysis highlights the main similarities and differences between promoting energy savings at home and work, such as differences in financial incentives, awareness, cognitive barriers, free-riding problems, and peer interactions. The report also provides recommendations for policies that aim to incorporate spillovers, such as promoting habits, a green identity, and peer influence. However, our review of the academic literature highlights the scope for more empirical studies on these topics.

In order to achieve the goal of the Paris Agreement and reduce energy consumption there is the need for a behavior change in energy end-users. Many studies have demonstrated that by delivering to energy users customized feedback on their energy consumption it can encourage a change in their behavior and support investments in energy efficiency and sustainable energy use. However, the resulting impact on energy consumption can vary largely depending on how, when, and to whom the feedback is delivered. This paper aims to provide an updated overview of the energy savings for the main energy consumptions in residential buildings associated with different types of feedback and against some key determinants, i.e., geographical area, time period, type of medium. This analysis is based on a comprehensive literature review of over 70 studies. Based on the review the paper draws conclusions relevant for policymakers and stakeholders interested in developing feedback strategies and tools for their wide applications. The paper focuses also on the ongoing process implementing the EU Energy Efficiency Directive articles related to billing and metering, which will enable more proactive consumer feedback.

Cover page

On 30 November 2016, the European Commission (EC) presented the Energy Union’s “Clean energy for all Europeans” legislative package. This package has three main goals: 1. Putting energy efficiency first; 2. Achieving global leadership in renewable energies; and 3. Providing a fair deal for consumers. By providing a fair deal for consumers, the EC wants to make sure that every European has access to better information, more possibilities to engage in the energy market and is more in control of their energy costs. It is also central to this goal that consumers can trust the energy policies and services. To this purpose, the EC wants to increase transparency in energy costs and prices. Looking at the proposal for the revised Electricity Directive, Chapter III of this Directive reinforces pre-existing consumer rights and introduces new rights that aim at putting consumers at the heart of the energy markets by ensuring that they are empowered and better protected.

The Study on Residential Prosumers in the European Energy Union aims at gathering evidence and data on the drivers, regulatory aspects and economic performance in the area of small scale self-generation for residential consumers over the life-cycle of investment. The study’s results are presented in the form of overall conclusions with recommendations, intended to inform the European Commission’s related policy and regulatory initiatives. The focus of the study is on solar PV technology in the EU28, Norway and Iceland and it is structered as follows: After setting the background, it first carries out a comparative analyisis of the existing regulatory framework in all target countries, covering procedural aspects, taxation, incentives and other forms of investment support. Then it develops projections, modelling take-up of solar PV by households in each of the target countries over the period to 2030. Furthermore, it offers insights on European consumers’ experience with self-generation, on financial/non-financial drivers affecting their choice, by analysing primary data collected via one in-depth survey and one mystery shopping exercise. Finally, it presents the design of a behavioural experiment aimed at assessing the abilities and skills of consumers to understand the offers for transitioning towards residential self-generation with solar PV, gaining insight into how they can make the best choice. The study has been prepared by the Gfk Belgium-led consortium. Consortium members: Milieu Ltd, Cambridge Econometrics Ltd, Helion Research, COWI A/S, CentERdata.

The 2nd Electricity Market Study investigated electricity market functioning for consumers in the EU, Iceland and Norway. It assessed how market performance has developed since the 1st electricity market study conducted in 2010, and the extent to which consumers have the necessary tools to make rational and empowered choices. Its findings offer a clear insight into consumers' experiences in terms of choice, comparability, billing information, and complaint handling.

The study used a range of tools, including regulatory review, consultation with stakeholders, a consumer survey, mystery shopping, and behavioural experiments to ensure robust findings. A detailed description of the methodology can be found in the annexes.

The results of the study informed the Commission's legislative proposals for the “Clean Energy for All Europeans” package adopted in November 2016.

 

More publications