The optimum mix of conservation and substitution: An example from retrofitting of old buildings

The competition between conservation and substitution for scarce resources like skilled manpower and capital is an important policy issue augmented by the fact that the bulk of the investments for the two oil reducing options will occur at different points in time. Using a simple additive approximation to describe the available conservation options in old buildings in Sweden (retrofitting), the optimum mix of conservation and substitution for satisfying the useful energy demand in those buildings has been investigated with a multiperiod LP-model (MARKAL). the optimization is made over 1980-2020 in nine five-year periods considering substitution technologies in the whole energy system. Different objective functions have been used. an analysis of the results shows clear differences in the implementation of identical conservation measures in single and multifamily houses. This is due to the fact that oil is substituted by different technologies in the two sectors.