Integrating multiple impacts and lifecycle assessment in the evaluation of energy efficiency funding programs

Abstract

Investments in energy efficiency are widely recognized as a cornerstone of sustainable energy strategies and climate change mitigation efforts, offering not only environmental benefits but also delivering substantial socio-economic gains. However, conventional evaluation frameworks tend to focus predominantly on operational energy savings, often neglecting broader lifecycle effects associated with manufacturing, packaging, installation, and maintenance phases. These include wealth and job creation, as well as embodied energy and emissions. This study introduces a comprehensive approach that integrates the Hybrid Input–Output Lifecycle Assessment methodology into Portugal’s 2021 Energy Consumption Efficiency Promotion Plan framework. By incorporating Gross Value Added, Impact on the Public Budget and embodied energy and greenhouse gases emissions this approach extends conventional Primary Energy Savings, Net Present Value and Benefit–Cost Ratio calculations typically employed in cost-effectiveness analysis, allowing a comparative evaluation of the results. The findings reveal significant variations in evaluation outcomes, with Net Present Value rising by over 4,000%, Benefit–Cost Ratio increasing by more than 34%, and two measures changing position in the funding priority ranking. These results highlight the transformative potential of the proposed methodology for guiding energy policy, supporting a more equitable and effective allocation of public funds. By incorporating broader lifecycle impacts and societal benefits, the approach also enhances the robustness of energy efficiency evaluations, paving the way for improved decision-making in national and international energy programs.