Construction of energy savings cost curves: An application for Denmark

This paper investigate the construction and use of energy saving cost curves. We discuss the various methodologies for calculating costs of savings measures and whether these can be compared across different sectors, end-uses and over time. The costs are fundamentally different if estimated as full cost of a measure, including installation, financing, transaction costs etc. or just the marginal cost of a more energy efficient component, for example type of glass or appliance model. We also highlight the difference in gross measures considered when examing option for residential building or industrial process equipment. Finally we introduce a few examples from Danish cost curves constructed and illustrate how different aggregation would be depending of which categories of costs are used in the construction of the curves.