int

http://dx.doi.org/10.1016/j.enconman.2014.07.081

3
4
5

corresponding author: Tel. +39 010 353 2872.

-pr

E-mail address: vincenzo.bianco@unige.it, vbianco@libero.it

Abstract

The aim of the present paper is to evaluate the future consumption of natural gas in the Italian

residential sector. The historical pattern of the consumption is reported and analyzed in order to

10

identify the consumption drivers. It is found that natural gas consumption is influenced by gross

11

domestic product per capita (GDP per capita), gas price and heating degree days (HDD); therefore

12

an equation linking these parameters is estimated by means of a linear regression analysis. The GDP

13

per capita, gas price and HDD short and long run elasticities of consumption have been estimated,

14

showing that the larger influence is due to HDD (i.e. climatic factor). On the basis of the evolution

15

of the explaining variables, a business as usual (BAU) trend of consumption is estimated,

16

showing that, in 2030, natural gas consumption in the residential sector is expected to double that of

17

1990. Finally, the effect of energy saving measures in the sector of buildings heating is evaluated,

18

showing that consumption might be reduced of ~20% with respect to BAU consumption, if the 15%

19

of flats and 5% of single houses are properly insulated.

20

Keywords: energy consumption; natural gas; energy efficiency; forecasting.

pre

Nomenclature

22

surface, m2

23

natural gas consumption, bcm

24

GDP

gross domestic product, bn

25

HDD

heating degree days, C

26

thermal dispersing element index

27

LE_GDPPC

long run elasticity of consumption with respect to GDP per capita

28

LE_ HDD

long run elasticity of consumption with respect to HDD

29

LE_Pres

long run elasticity of consumption with respect to price

30

year index

31

number of thermal dispersing elements

32

number of years

33

Pres

natural gas price for residential customer, /GJ HHV

34

Pgas

import price of natural gas, $/Mbtu

35

Poil

oil price, $/bbl

36

heating demand, kWh m-2

37

38

WAC

39

Greek Letters

40

41

42

43

short run elasticity of consumption with respect to GDP per capita

44

4-5

regression coefficients

45

ratio between area of heat exchange toward external environment of i-th elements and floor area

46

thermal dispersing surface ratio

pre

-pr

int

21

thermal conductance, W m-2 K-1

weather adjusting coefficient

regression coefficient

short run elasticity of consumption with respect to HDD

short run elasticity of consumption with respect to Pres

global efficiency of heating system

48

Subscripts

49

avg

average

50

estimated

51

heating

52

refers to the i-th heat exchange surface

53

pc

per-capita

54

res

residential

55

refers to year t

56

int

47

1.0 Introduction

58

Italy is one of the main consumers of natural gas within European Union. With its total

59

consumption of ~69 bcm in 2012 [1], it is the largest European consumer of natural gas after UK

60

and Germany. Natural gas is widely utilized in Italy for different purposes such as industrial

61

processes, offices heating, power generation and residential activities, in particular heating, cooking

62

and sanitary water production.

63

Industrial & services, power generation and residential sectors approximately present the same

64

amount of consumption [2,3], therefore it is of paramount importance to study the evolution of

65

natural gas consumption in each of these three sectors, in order to manage the future energy supply

66

and the implementation of energy efficiency measures in a correct way.

67

The study of energy consumption models has attracted the interest of many researchers, because

68

primary energy demand has been steadily growing for the last twenty years (+2.1% per year from

69

1992 until 2012 [1]), but the resources to satisfy the demand are finite and an average increase of

70

their price is regularly detected (+6.5% per year for oil, +7.9% per year for natural gas,+4.5% per

71

year for coal from 1992 until 2012 [1]). Anyway, it is to be mentioned that in the last years natural

72

gas market has been subjected to drastic changes, because a large oversupply is detected on the

pre

-pr

57

European market due to the decrease of the internal demand and to the utilization of shale gas in

74

USA. In fact, USA was an importing country, but after the shale gas technical breakthrough they

75

become an exporting countries and all the LNG which was supposed to be shipped to USA is now

76

diverted towards European and Asian markets, causing a strong oversupply with a consequent

77

decrease of prices.

78

Numerous researchers have analyzed various energy issues and focused on developing appropriate

79

energy demand models; but, while electricity demand has been the focus of the research

80

community, studies on natural gas demand modeling and forecasting have not been reported in the

81

scientific literature to the same extent. In fact, quite recently different authors proposed interesting

82

studies concerning the estimation of future natural gas consumption in different countries, taking

83

into account various economic sectors and time horizons [3-10].

84

Sabo et al. [4] introduced an analytical model to predict natural gas consumption in Croatia. Their

85

analysis is referred to the short term prediction (i.e. hourly) of natural gas demand by introducing

86

models with linear and nonlinear functions. These functions correlate the expected future

87

consumption to the past consumption and to the historical and forecasted temperature data. The

88

model is successfully validated on historical data. Such a kind of model is useful for the operation

89

of gas distribution network (i.e. to implement sophisticated control strategies) or to support energy

90

traders on real time markets. Similarly, Soldo et al. [5] studied the influence of solar radiation on

91

forecasting residential natural gas consumption. They proposed various forecasting models, linear

92

and non-linear, with one day ahead forecasting horizon, showing that solar radiation clearly

93

influences natural gas consumption.

94

Taspinar et al. [6] presented a multilayer artificial neural network model with time series approach

95

to forecast short-term natural gas consumption in the Sakarya province in Turkey. By means of this

96

methodology, they were able to correlate natural gas consumption to meteorological parameters,

97

which are identified as the main driver of consumption in the short run.

pre

-pr

int

73

98

Snchez-beda and Berzosa [7] proposed a model to forecast natural gas consumption in the

99

Spanish industrial sector. They considered a longer forecasting horizon with respect to [3-6], in fact
their model is intended to forecast natural gas consumption in the medium term (i.e. one-three

101

years) with daily forecasting resolution. Their approach is based on the decomposition

102

methodology, according to which the historical series of consumption is broken in a series of sub-

103

series (i.e. the subseries of the Monday values, the time subseries of the Tuesday values, and so

104

forth) and each sub-series is modeled independently. In particular, each sub-series is split into two

105

parts: the irregular (i.e. random) and deterministic components. The irregular component is assumed

106

to be white noise, whereas the deterministic component is determined as a function of weather and

107

socio-economic variables, such as HDD, wind speed, humidity, GDP, population and so on. The

108

main applications of this model are in the field of market operations, in particular as a support tool

109

for the forecasting of spot and future prices, or in the area of network management, where it is

110

fundamental to study the future balance between demand and supply [7].

111

Forouzanfar et al. [8] studied natural gas consumption of the Iranian commercial and residential

112

sector by using a logistic based approach in combination with non-linear programming and genetic

113

algorithms. They used a historical series of ten years to build a model to predict the consumption

114

three years ahead. This model utilizes only the historical consumption of natural gas as input,

115

therefore it is not possible to study the effect that other parameters, such as GDP, population,

116

climatic data, etc., have on the consumption. For this reason, it is suitable to forecast the

117

consumption in the short or medium term, where it is assumed a limited variation of the above

118

mentioned factors.

119

Huntington [9], instead, further extend the horizon of the analysis and proposed a statistical model

120

based on regression analysis to forecast natural gas consumption in the USA industrial sector over a

121

period of twenty years. Natural gas consumption is estimated as a function of natural gas price,

122

distillate oil price, heating degree days and natural gas consumption of the previous year. The main

pre

-pr

int

100

purpose of this model is to help policy and corporate planners to analyze important factors that

124

could influence future trends of consumption in the industrial sector.

125

Similarly, Li et al. [10] proposed a model to forecast long term consumption of natural gas in China.

126

They utilized a system dynamics model to create a possible outlook and show that in the future the

127

consumption will increase and there will be a coal to gas substitution.

128

It can be noticed that the models presented in [3-10] refer to different forecasting horizon, therefore

129

they utilize different modeling strategies.

130

Despite of the fundamental importance of energy supply in Italy and the central role of natural gas

131

in the Italian energy mix, the scientific literature on these topics is rather scarce and only a few

132

papers are available [3, 11-13].

133

Bianco et al. [11-12] proposed two studies on the forecasting of electricity demand, whereas Gori

134

and Takanen [13] introduced an econometric model to forecast energy demand in Italy by taking

135

into account also inter-fuels substitution. These papers discuss the effect of some relevant variables,

136

namely GDP, electricity price and population, on the future consumption and provide ready to

137

use models to estimate future outlooks.

138

Very recently, Bianco et al. [3] analyzed nonresidential gas consumption in Italy and suggested a

139

scenarios approach to take into account the impact of the variation of the considered consumption

140

drivers, namely GDP per capita, natural gas price and minimum temperature. With reference to the

141

evolution of the consumption drivers, different scenarios are analyzed, in order to quantify the

142

variation of the consumption in the case of specific events (i.e. cold winter, low oil price, high GDP

143

growth and so on).

144

A comprehensive review of the literature on energy models for demand forecasting can be found in

145

Suganthi and Samuel [14] and Soldo [15]. In particular, reference [15] is devoted to the forecasting

146

of natural gas consumption.

147

Forecasting of energy demand is gaining importance, because some countries (i.e. EU) have started

148

to support the reduction of primary energy consumptions by promoting energy efficiency policies,

pre

-pr

int

123

therefore it is necessary to set up appropriate saving measures, in order to reach the proposed target

150

and, to do this, an accurate prediction of future consumption is mandatory.

151

In the last years, EU focused on the energy efficiency in buildings; in fact, two important directives

152

on this topic, namely 2010/31/EU [16] and 2012/27/EU [17], were emanated.

153

Buildings are considered as a sector which offers considerable possibilities for energy savings, in

154

fact the Directive 2010/31/EU is specifically devoted to them. It establishes a series of specific

155

minimum requirements in terms of consumption for various classes of buildings and introduced a

156

mechanism of certification in order to assess their energy performance. Moreover, the directive also

157

imposes to the member states to develop the National Efficiency Action Plan, where it is explained

158

how to reach the energy efficiency targets.

159

The Directive 2012/27/EU on energy efficiency [17] strengthens the fact that there is a relevant

160

potential to reduce primary energy consumption in buildings and, therefore, the residential sector is

161

considered one of the strategic areas to reach the EU target of the reduction of 20% of primary

162

energy consumption in 2020. To stimulate the implementation of energy efficiency measure in

163

buildings, the directive set a mandatory target on the buildings owned and occupied by the central

164

government. In fact, it is prescribed that each year the 3% of the surface of these buildings have to

165

meet, at least, the minimum energy performance requirements in accordance with Article 4 of

166

Directive 2010/31/EU.

167

Italy, in quality of EU member, is obliged to be compliant with the above mentioned directives,

168

therefore a National Efficiency Action Plan (NEAP) is available [18], where it is reported the

169

proposed strategy to achieve the efficiency target. As observed in [19], Italian NEAP [18] reports

170

some information regarding the financial support on actions to enhance energy performance of

171

residential buildings, but there is a lack on the long term strategy and experts are comparatively

172

critical towards the Italian policy package, which is considered inconclusive (i.e. there is not an

173

estimation of the absolute saving) and concerns are expressed regarding the achievement of the

174

national efficiency target [19].

pre

-pr

int

149

It is authors opinion that in order to study the feasibility of any efficiency target, it is necessary to

176

estimate the future consumption in a business as usual (BAU) scenario and then to analyze the

177

potential impact of possible efficiency measures.

178

The object of the present paper is to analyze residential natural gas consumption in Italy, estimating

179

the consumption equation by means of a linear regression model, in order to perform a forecasting

180

of future consumption on the basis of significant explaining variables. The second target is to

181

analyze the impact of some efficiency measures on future consumption, in order to assess the

182

possibility to achieve a saving of about 20% with respect to the BAU consumption level.

183

It is believed that the information contained in this paper is useful for energy managers and policy

184

makers, in order to design appropriate supply/consumption strategies and energy policies.

185

For example the knowledge of price elasticities helps the distributors to set up adequate pricing

186

policies, whereas the projections of consumption are important to pursue correct supply strategies.

-pr

int

175

187

2.0 Description of data series

189

In order to develop the forecasting model, different data series are necessary. The data series

190

considered in the present analysis are: population, gross domestic product (GDP), heating degree

191

days (HDD), natural gas consumption in the residential sector and its price.

192

All the data range from 1990 up to 2012 and they are taken from official sources, freely available

193

on line [2, 20-21]. Table 1 summarizes the data and all the respective sources.

pre

188

194
195

2.1 Economic and climatic data

196

Figure 1(a) shows the trend of GDP and GDP per capita (i.e. the ratio between GDP and

197

population) and it highlights that from 1990 up to 2008, a nearly linear growth trend can be

198

observed, whereas from 2008 up 2012 a fluctuating behavior is detected, mainly due to the

199

economic downturn.

Figure 1(b) displays the population profile, showing an interesting pattern, where there is practically

201

no growth from 1990 up to 2000 and then a linear growth trend is detected. The first part of the

202

profile maybe explained with the fact that between 1990 and 2000 there was an equilibrium

203

between birth rate and death rate causing the stability of population, whereas from 2000 onward the

204

growth of the population is mainly explained with immigration from other countries [11-12].

205

Figure 1(c) shows the price of residential natural gas in Italy. An irregular pattern is detected from

206

the figure, which is mainly linked to the fluctuations of the oil market, because natural gas price and

207

oil price are strictly connected as discussed in [3]. Moreover, natural gas prices for final users

208

incorporates different kinds of taxations imposed by the Italian authorities, therefore the price is

209

influenced also by tax policies, which varies in the time.

210

Figure 1(d) reports the historical series of HDD, which are to be considered as a proxy of climatic

211

conditions. They are of relevant importance, because the level of usage of heating systems depends

212

on HDD value, therefore they influence a large share of natural gas consumption in the Italian

213

residential sector.

214

-pr

int

200

2.2 Analysis and historical evolution of residential natural gas consumption

216

Figure 2(a) reports the historical trend, from 1990 up to 2012, of natural gas consumption in the

217

residential sector. It can be observed that many fluctuations are present in the consumption pattern

218

and they are largely due to the variation of the climatic conditions year by year.

219

In order to filter climatic effects, data have been weather adjusted to highlight any possible trend

220

not dependent from climatic conditions.

221

To adjust the consumption data, the methodology suggested in [22] is applied. It consists in the

222

calculation of a coefficient on the basis of the actual and historical average of the HDD:

223

WACt=HDDavg/HDDt

224

HDDavg represents the average value of the heating degree days of the considered period (i.e. 1990-

225

2012, as reported in figure 1(d)), whereas HDDt represents the value of heating degree days in year

pre

215

(1)

t. By applying Eq. (1), it is possible to obtain the weather adjusting coefficient (WAC) for each year

227

and, thus, by multiplying WACt for the consumption in year t, it is possible to get the weather

228

adjusted consumption. Data reported in Fig. 1(d) represent the official HDDs value for Italy, as

229

given in [2]. Of course it can be noticed that they are a country average, because Italy, due to its

230

particular geographical morphology, has very different climatic areas (i.e. from Alpine to

231

Mediterranean climates), where huge differences in terms of HDDs are detected (i.e. from ~4000

232

HDDs in Trentino to ~1000 HDDs in Sicily).

233

Weather adjusted consumption of residential natural gas is shown in Fig. 2(a). It highlights a steady

234

growth of consumptions from 1990 until the beginning of 2000s. This trend is to be explained

235

according to the energy policy pursued in Italy; in fact, in those years there was the development of

236

a very efficient and widespread natural gas distribution network. The availability of such a network

237

pushed residential users to utilize natural gas to fuel their heating systems, rather than heating fuel

238

oil or gasoil. In fact, heating fuel oil/gasoil consumption represented the 29% of the total (calculated

239

on the basis of weather adjusted data) in 2001 versus the 45% of 1990, whereas natural gas

240

consumption represented the 71% of the total in 2001 versus the 55% of 1990 [2]. Therefore, it can

241

be said that in those years the fuel switching played an important role in the increase of natural gas

242

consumption in the residential sector. After 2001, the consumption results to be stable around 20.5

243

bcm (weather adjusted), with a slightly increasing trend.

244

Most of the utilization of natural gas in the residential sector, ~82%, is due to space heating,

245

whereas sanitary water accounts for ~11% and the remaining part, ~7%, is represented by

246

consumption for cooking [20]. These shares were substantially stable in the period 1990-2012.

247

Figure 2(b) reports the patterns of energy intensity per capita (i.e. the ratio between gas

248

consumption in the residential sector and the population), in the case of raw and weather

249

adjusted data. The figure highlights that temperature effects are relevant, in fact, raw energy

250

intensity data are characterized by strong fluctuations, whereas the weather adjusted data show a

251

more regular pattern.

pre

-pr

int

226

10

252

Weather adjusted energy intensities follow a trend similar to the consumption, with a strong

253

increase from 1990 up to the beginning of 2000s, but afterwards a more regular behavior is

254

observed, with a slight decrease in the last four years.

255
256

3.0 Methodology

int

257

3.1 Estimation of the forecasting model

259

In order to estimate future consumption of natural gas in the Italian residential sector, it is necessary

260

to build an equation which links all the relevant variables. In the following, it is proposed an

261

equation linking natural gas consumption to three explaining variables, namely GDP per capita,

262

natural gas price and heating degree days.

263

The model is expressed as a linear logarithmic function and it assumes the form of a standard

264

dynamic constant elasticity function of the consumption [23, 24]:

-pr

258

265
266

Log(Cres,e)= +1Log(HDD)+2Log(Pres)+3Log(GDPPC)+4Log(Cres,t-1) + 5Log(Pres,t-1)

pre

267

(2)

268

Where Cres represents the domestic gas consumption in bcm, HDD are the annual average heating

269

degree days in C-days, Pres is the average gas price for residential customers in /GJ HHV (high

270

heating value) and GDPPC represents the GDP per capita in per inhabitant, and i are the

271

regression coefficients and the subscript t-i refers to the lag term (i.e. lag 1 in the present case).

272

The coefficients 1, 2 and 3 are very important, because they respectively indicate HDD, price and

273

GDP per capita short run elasticities of residential gas consumption.

274

In order to check the consistency of Eq. (2), one should expect a positive sign for 1, because at the

275

increase of HDD (i.e. cold climatic conditions) more natural gas for space heating is necessary, instead 2

276

should have a negative sign in agreement with the economic law of demand and offer (i.e. the higher is the

277

price, the lower is the consumption) and, finally, 3 is supposed to have a positive sign, because a higher
11

278

level of economic activity is expected to accelerate gas consumption. In fact, GDP per capita might be seen

279

as a proxy of the average income of the population and, when income growths, there is the tendency to ask

280

for more services (i.e. higher level of usage of heating system), the opposite happens when the income

281

decreases.

282

From the short run elasticities, it is possible to determine long run elasticities by dividing them for

283

(1- 4) [23-24]:

284

LE_Pres= 2/(1- 4)

285

LE_GDPPC= 3/(1- 4)

286

LE_ HDD= 1/(1- 4)

287

Where LE_Pres , LE_GDPPC and LE_ HDD are the long run price, GDP per capita and heating

288

degree days elasticities of residential gas consumption in Italy.

289

Results of the estimation of Eq. (2-5) are reported in Table 2.

290

Eq. (2) is estimated by means of ordinary least squares (OLS) approach and there might be the

291

possibility that results are misleading due to the presence of heteroskedasticity and serial

292

correlations [23, 25-26], therefore it is necessary to assess for the correctness of the estimation.

293

To this scope, White heteroskedasticity test is performed and since Whites test statistic value of

294

2.20 is smaller than 95% critical 2 value of 5.99, it is possible to confirm the null hypothesis of no

295

heteroskedasticity. Instead, the BreuschGodfrey Serial Correlation LM test [25-26] is applied to

296

the model to check for the presence of serial correlation. Since BreuschGodfreys test statistic

297

value of 3.61 is smaller than the 95% critical 2 value of 7.81, it is possible to confirm the null

298

hypothesis of no serial correlation in the residuals.

299

According to the above mentioned statistical tests and to the coefficient signs reported in Table 2, it

300

is possible to conclude that the model is well specified; but before using it to perform forecasting

301

analysis, it is necessary to check for the existence of unit roots [25-26].

302

In order to do this, Augmented Dickey Fuller (ADF) [25-26] test is used to test for the presence of

303

unit roots and to establish the order of integration of the considered variables (i.e. natural logarithm

int

(3)
(4)

pre

-pr

(5)

12

of Cres, HDD, Pres and GDPPC). On the basis of ADF statistics, reported in Table 3, the null

305

hypothesis of a unit root cannot be rejected at 10% level of significance for the series Pres.

306

In light of this, the ADF test is executed on the first difference of the variable, indicating that the

307

series Pres is integrated of order 1, I(1) in nature. As given in [23, 25-27] if, after running the ADF

308

test on the first difference of the considered variables, stationarity is obtained, then Eq. (2) may be

309

regarded as a valid long run equilibrium relation, if the resulting residuals are stationary, I(0).

310

Table 4 shows the ADF test on the first differences of all the considered variables, confirming that

311

they are stationary and the ADF test performed on the residuals, known as AEG (Augmented Engle

312

Grenger) [28], of Eq. (2) confirms that they are I(0). Therefore, it can be concluded that the

313

variables are co-integrated and the estimated equation may be considered as a valid expression to

314

forecast gas consumption [28].

-pr

int

304

315

3.2 Error analysis and model validation

317

In order to verify the modeling and prediction accuracy of Eq. (2) an error analysis is developed. To

318

measure the performance of the proposed model four error indicators are taken into account, namely

319

mean absolute percentage error (MAPE), mean absolute deviation (MAD), mean square error

320

(MSE) and root mean square error (RMSE) [29].

321

MAPE is a percentage measure of the prediction accuracy, whereas MAD and MSE are two

322

indicators of the average magnitude of absolute forecasted errors, but the latter imposes a greater

323

penalty on a large error rather than several small deviations and RMSE is a measure of the average

324

distance of estimated points from the real data. As MSE, RMSE is mostly influenced by large

325

errors. The four indicators are defined as follows:

326

MAPE %

327

MAD

pre

316

1 n C res ,e k C res k

n k 1
C res k

(6)

1 n
C res,e (k ) C res (k )
n k 1

(7)
13

1 n
C res ,e k C res k 2

n k 1

328

MSE

329

RMSE

330

To validate the model, Eq. (2) is estimated on data ranging from 1990 up to 2008, thus the

331

remaining four years (i.e. 2009-2012) are utilized for the model validation on new data.

332

In this way, it is possible to establish the forecasting accuracy of the proposed approach.

333

It is important to notice that the coefficients of the equation estimated on such time horizon are

334

slightly different from those reported in Table 2, because years 2009-2012 are now excluded from

335

the estimation.

336

For comparison purposes two simpler forecasting models are also implemented. One is represented

337

by the simple linear fitting of the consumption over time (i.e. 1990-2008), whereas the other one is

338

based on the energy intensity. In particular, the average energy intensity per capita of the last five

339

years (i.e. 2004-2008) is taken into account and total consumption is obtained by multiplying this

340

value for the population.

341

This testing procedure allows to validate the model and to justify the modeling effort.

342

Table 5 reports the estimations based on the above mentioned methodologies and it shows that

343

straight line fitting is not adequate to forecast residential natural gas consumption, whereas the other

344

two methods result to be more appropriate.

345

In support of this conclusion, table 6 shows the error indicators for all the three forecasting

346

approaches taken into account and it highlights that Eq. (2) furnishes the most accurate results,

347

whereas the linear fitting presents higher deviations, instead the energy intensity methodology has a

348

satisfactory level of accuracy, especially if compared to the simplicity of the method, but it is less

349

accurate than Eq. (2).

350

Therefore, it can be concluded that Eq. (2) represents a valid and sufficiently accurate approach to

351

forecast natural gas consumption in the Italian residential sector.

(8)

1 n
C res ,e k C res k 2

n k 1

pre

-pr

int

(9)

14

4.0 Projection of the consumption drivers

353

In order to forecast the residential natural gas consumption, it is necessary to have a future outlook

354

of the explaining variables utilized in Eq. (2), namely GDP per capita, natural gas price and HDD.

355

The outlook of GDP per capita is built by utilizing the projections of population growth, Fig. 3(a),

356

given in [21] and the expected GDP trend reported in [30]; thus the evolution of GDP per capita is

357

obtained, Fig. 3(b).

358

The GDP growth rates given in [30] are in real values and to get nominal values a consumer price

359

index (CPI) of 2.1% is hypothesized, corresponding to the average of the CPI in the last ten years

360

(i.e. 2003-2012) [17].

361

As for the natural gas price, a correlation between BAFA gas price (i.e. gas prices published by the

362

German Federal Office of Economics and Export Control) and oil price is studied.

363

BAFA price is considered as a reference for the EU market; it represents an average of the German

364

oil indexed gas supply contracts. In the last years other price references aroused in EU (i.e. liquid

365

gas hubs such as NBP, TTF and Zee),but BAFA is considered to be a valid reference for this study

366

for two main reasons.

367

The first one consists in the fact that the largest share of gas is transacted on the basis of oil indexed

368

long term contracts of which BAFA is considered a good proxy at EU level.

369

The second reason is represented by the fact that the elasticity of gas consumption in the residential

370

sector with respect to the price is quite limited, therefore a variation of the average price, due to the

371

effect of hubs pricing mechanisms, causes a modest reaction in terms of consumption.

372

As shown in Fig. 4(a), historical prices of BAFA and oil are strongly related to each other and a

373

linear correlation is determined. Thus, to estimate future natural gas price, oil price projections

374

given in [31] are considered, Fig. 4(b).

375

Fig. 4(c) reports natural gas price projections, hypothesizing that the cost of the commodity will

376

represent the 33% [32] of the final user price for residential customers, in accordance with the

377

historical average.

pre

-pr

int

352

15

Finally, it is necessary to make an assumption on the expected HDDs scenario. For the sake of

379

simplicity three scenarios of HDDs are considered. In particular, a first scenario considers the

380

average HDDs from 1990 up to 2012, 1879 C-days, and it is representative of average weather

381

conditions. Whereas the other two considered scenarios can be considered as extreme, because in

382

one case the minimum HDDs from 1990 up to 2012, 1695 C-days, and in the other case maximum

383

HDDs, 2234 C-days, are taken into account. In this way, it is possible to give the best estimation of

384

reasonable minimum and maximum amount of consumption.

385

int

378

5.0 Energy efficiency measures

387

Italian residential sector has a huge potential to decrease the consumption of natural gas. Main

388

opportunities to implement energy efficiency measures are available in the field of space heating,

389

which represents the main source of consumption, accounting for ~82% of natural gas consumption.

390

This incidence is assumed to be kept constant also for the future, because the historical trend shows

391

that it was practically constant from 1990 until 2012.

392

The consumption of natural gas for heating purposes can be estimated in the following way for a

393

generic dwelling:

394

Qh

395

Where Q is the heating demand in kWh/m2 per year, i and Ui are the thermal dispersing surface

396

ratio and heat transfer coefficient of thermal dispersing elements, whereas is the global

397

efficiency of the heating system. i is a non-dimensional quantity, called thermal dispersing surface

398

ratio and it is defined as:

399

pre

-pr

386

HDD
24 m
i U i
1000 i 1

(11)

i 1

(10)

400

Where i is the non-dimensional area of heat exchange of the i-th dispersing elements (i.e. walls,

401

windows, etc.) toward the external environment:

16

Ai
A floor

402

403

In the present paper dispersions through external walls, windows, floor and roof are taken into

404

account.

405

To estimate the specific energy (i.e. per square meter) demand for heating, the building stock is

406

divided in two main categories, namely flats and single houses. According to [33], the 75% of

407

dwellings is represented by flats and 25% by single houses; these shares are supposed to be constant

408

for all the analysis horizon.

409

Table 7 and 8 report the specific characteristics of the two classes of buildings considered in the

410

present paper.

411

The implementation of energy efficiency measures have the scope to reduce the value of U, which

412

means to increase the thermal resistance of walls, windows, floor and roof; for example, by

413

introducing an optimized insulation layer [36]. In order to be implemented, such measures must be

414

cost effective and the more convenient they are, the higher is their implementation rate.

415

By means of Eq. (10), it is possible to calculate the specific savings of gas consumption due to the

416

implementation of energy efficiency measures and thus it is possible to estimate the amount of

417

energy saving as a function of the implementation rate. For example, it can be determined how

418

much should be the implementation rate in order to reach a determined energy saving target.

pre

-pr

int

(12)

419
420

6.0 Results and discussion

421

6.1 Estimated elasticities and expected consumption

422

To analyze the structure of natural gas consumption in the residential sector, Eq. (2) is built and it is

423

found that residential consumption of natural gas is affected by GDP per capita, users price and

424

climatic factors (i.e. HDDs in the present study).

17

The long term elasticities of all the explaining variables, namely LE_Pres, LE_GDPPC, and LE_

426

HDDs, have been determined and they assume the following respective values -0.1993, 0.6090 and

427

1.0659.

428

The expected signs of elasticities seem to be consistent; in fact long run price elasticity has a

429

negative sign in agreement with the fact that at the increase of price corresponds a decrease of

430

consumption, whereas GDP per capita has a positive elasticity explained by the fact that a higher

431

level of economic activity and spending capacity tends to stimulate consumption and, finally, at the

432

increase of HDDs (i.e. more rigid climatic conditions) corresponds a growth of consumption.

433

As for the values of the elasticities, it can be observed that LE_Pres has the lowest absolute value,

434

showing that price variations have a limited impact on consumption (i.e. gas consumption is

435

inelastic to price). This can be explained with the fact that the technical options to react to the

436

increase of price are quite limited, in fact only two possible solutions appear to be realistic: the

437

implementation of energy efficiency measures (i.e. improvement of building insulation, reduction of

438

ventilation losses, etc.) or the substitution of the primary fuel of the heating plant.

439

However, the implementation of these measures has a cost and until the price level does not make

440

them financially convenient, with a short pay-back period, they are not taken into account.

441

It should be observed that the evaluation of these investments is rather complex, because natural gas

442

price is fluctuating, therefore it is difficult to understand if a variation in price is due to a random

443

phenomenon or to a structural change that will last in the time, making possible an investment [3].

444

This situation is analogous to that of the residential electricity sector, as reported in [11].

445

As for LE_GDPPC, it has a higher absolute value with respect to LE_Pres, but less than LE_ HDD.

446

LE_GDPPC shows that at the increase of the GDP per capita, which might be regarded as a proxy of

447

the spending capacity per capita, corresponds an increase of the consumption. This means that at the

448

increase of their spending capacity, users are encouraged to consume more, rather than investing in

449

energy saving. Therefore, to promote energy saving policies, it is necessary to stimulate the users by

pre

-pr

int

425

18

encouraging a more efficient usage of primary energy resources, as is the case of EU [16-17], where

451

a directive was emanated to set mandatory targets in terms of energy saving.

452

The analysis of elasticity values shows that LE_ HDD has the highest value. This means that

453

climatic conditions strongly affect natural gas consumption in the Italian residential sector.

454

This result can be explained by the fact that most of the natural gas consumption is due to heating

455

systems [20]. An increase of HDDs provokes a large growth of natural gas consumption, which, in

456

turn, may result in a complex practical management of the supply network. In fact, climatic

457

conditions are very difficult to be forecasted long time in advance with a relevant degree of

458

accuracy, therefore it is necessary the utilization of a storage system to satisfy the sudden peak

459

demand of gas determined by rigid climatic conditions.

460

The outlook of future natural gas consumption is reported in Figure 5, which shows the amount of

461

natural gas consumed in three different scenarios of yearly HDDs, namely rigid (2234 C),

462

average (1879 C) and warm (1695 C), corresponding to rigid, average and warm climatic

463

conditions. The figure highlights that the impact of HDDs is relevant, as already noticed by

464

analyzing the large value of elasticity, and in the rigid scenario the consumption is about 20%

465

higher with respect to the average one, whereas the warm scenario presents consumptions about

466

10% lower with respect to the average case. In terms of consumption, it means that if, for

467

example, in 2030 there will be a rigid winter the consumption will result ~6 bcm higher with respect

468

to an average one.

469

The knowledge of this parameter is of fundamental importance for supply network managers,

470

because it represents a necessary input for the correct design of natural gas storages, which, as

471

previously stated, are necessary to manage unexpected conditions, such as rigid winter. On the

472

contrary, a warm winter would lead to a decrease of consumption of ~3 bcm in 2030.

473

These estimations might result of relevant importance also for companies involved in the supply of

474

natural gas to residential customers, because in this way they can manage their position on the

475

market.

pre

-pr

int

450

19

In fact, for example, suppliers know that, in the case of a warm winter, the market will be long with

477

respect to the average and they necessitate a strategy to divert this quantity in excess towards other

478

markets (i.e. other countries or other sectors). The opposite happens in the case of cold winter.

479

Figure 6 reports the historical pattern of weather adjusted consumption and the future outlook,

480

showing that in 2030 the expected consumption will double the consumption of 1990. This means

481

that natural gas will increase its importance as primary energy source in the residential sector,

482

therefore it is necessary to manage accurately its sourcing by adequately mixing all the available

483

sources (i.e. pipelines, LNG, biogas, etc.) and to develop an adequate infrastructure to guarantee

484

the correct distribution to all the customers.

485

The figure also reports the trend of the energy intensity per capita, which is expected to double in

486

2030 with respect to 1990.

487

The outlook of the consumption of natural gas in the residential sector and of its energy intensity

488

per capita (Figs. 5-6) maybe regarded as business as usual (BAU) estimations.

489

In other words, they represent the projections of consumption by assuming that the policies

490

currently in place will be kept until the end of the forecasting period and users habits are

491

extrapolated on the basis of historical data, therefore the impact of new energy policies and different

492

users behavior is not taken into account.

pre

-pr

int

476

493
494

6.2 Impact of energy efficiency measures

495

According to [16-17], EU has set the target of 20% of saving of primary energy in the building

496

sector with respect to BAU projection. In order to reach this target, it is necessary to implement

497

energy saving measures which contribute to reduce energy consumption.

498

In this section it is discussed how the implementation of some efficiency measures, namely

499

insulation of external walls, roof and floor and substitution of windows, might allow to reach this

500

target for the Italian residential sector.

501

Table 9 reports the main parameters of the energy efficiency measures taken into account.
20

By applying Eq. (10), assuming HDDs=1879 C and ~80% [37], it is possible to estimate the

503

specific energy consumption due to the considered measures, obtaining a value of 30 kWh/m2 per

504

year in the case of flats and ~26 kWh/m2 per year in the case of single houses. These figures,

505

according to the Italian Legislative Decree 22/11/2012 [38], correspond to have flats with energy

506

performance of class B (i.e. energy consumption between 31-50 kWh/m2 per year) and single

507

houses of class A (i.e. energy consumption between 15-30 kWh/m2 per year).

508

To evaluate the convenience of such measures, the Net Present Value (NPV) methodology is

509

employed and the results are reported in Table 10.

510

The cash flow stream for the NPV calculation is represented by the value of the saving of primary

511

energy (i.e. energy saving for space heating multiplied by natural gas price), whereas the investment

512

is represented by the costs of installation of insulation substrates and of substitution of windows.

513

Table 10 reports a positive NPV for a flat and a single house, therefore the implementation of the

514

proposed efficiency measures is cost effective, but the payback period is quite long and this may

515

discourage the investment.

516

If in 2020, the 15% of the flats and 5% of single houses implement the measures reported in Table

517

9, the consumption of natural gas for heating purposes in the Italian residential sector will be

518

reduced of ~21%. Furthermore, if in 2030 the 28% of flats and 9% of single houses meet the criteria

519

of Table 9, a saving of 41% of natural gas will be obtained. The complete trend is reported in Figure

520

7.

521

It is authors opinion that, in order to reach these levels of saving, it is necessary to implement

522

policies which support investments in energy efficiency with the target to cut the pay-back period.

523

As suggested in [39], a criterion to rank different investments in energy efficiency eligible for a

524

public support might be to analyze the net social benefit that they guarantee.

525

It may be interesting to notice that, apart from specific measures that can be applied to the single

526

building, it might be considered the possibility to apply the total site integration theory [40-42] to

527

improve the general efficiency of the building sector. For example, if one enlarges the control

pre

-pr

int

502

21

volume of its analysis, building systems could be integrated with industrial processes, in order to

529

exploit waste heat from the production processes. Of course such kind of approach can be seen as

530

site specific, because it is necessary to have a waste heat availability and a neighboring heat

531

demand, in order to contain infrastructural costs. Anyway, the feasibility of these projects have to

532

be carefully assessed.

533

In our opinion, this is an area which can offer interesting opportunities for future researches

534

regarding energy efficiency in buildings. At moment this methodology is applied to industrial

535

systems and research projects, such as EFENIS [43], are currently under development.

536

int

528

7.0 Conclusions

538

The present paper proposes an analysis of natural gas consumption in the Italian residential sector.

539

To the best of authors knowledge, it represents the first contribution of this kind available in the

540

open literature.

541

The historical pattern of consumption is reported and analyzed in terms of weather adjusted trend,

542

in order to highlight possible behaviors not explainable with weather conditions. Then,

543

consumption drivers are identified and a single equation demand model is introduced.

544

The demand equation takes the form of a standard dynamic constant elasticity function of the

545

consumption and it is successfully validated on the basis of historical data.

546

Elasticities values have been calculated, showing that natural gas consumption is largely influenced

547

by HDDs (i.e. weather conditions), whereas it is not too much sensitive to price variations. This is

548

probably due to the limited amount of options available for the users to switch towards other forms

549

of primary energy or to use different kind of systems.

550

Evolutions of explaining variables are considered in order to determine the BAU projection of

551

natural gas consumption in the residential sector. According to the BAU projection, consumption of

552

natural gas is expected to double in 2030 with respect to the value of 1990.

pre

-pr

537

22

Finally, the effect of some energy efficiency measures for space heating is evaluated, demonstrating

554

that they result to be cost effective, therefore there is convenience in implementing them, even

555

though the pay-back period is quite long.

556

The paper highlights that if in 2020 the 15% of flats and 5% of single houses implement the

557

proposed efficiency measures, there will be a reduction in natural gas consumption of ~21% with

558

respect to BAU value, whereas in 2030 if the 28% of flats and 9% of houses implement the

559

considered efficiency measures, there will be a saving of natural gas consumption of ~41% with

560

respect to BAU.

561

It is authors opinion that the models and the comments contained in this paper will result helpful

562

for energy analysts and policy makers in building appropriate scenarios of consumption.

563

Particularly, the effect of energy saving incentives on BAU consumption might be deeply analyzed.

-pr

564

int

553

565

Acknowledgements

566

The authors want to express their gratitude to three anonymous reviewers who provided useful

567

comments to improve the quality of the present paper..

pre

568
569
570
571
572
573
574
575
576
577
578

23

References

580

[1] BP Statistical Review of World Energy, June 2013.

581

http://www.bp.com/en/global/corporate/about-bp/statistical-review-of-world-energy-2013.html

582

Accessed on 27/05/2014

583

[2] EUROSTAT. European Statistical Office, October 2013.

584

http://epp.eurostat.ec.europa.eu/portal/page/portal/energy/data/database. Accessed on 27/05/2014

585

[3] Bianco V, Scarpa F, Tagliafico LA. Scenario analysis of nonresidential natural gas consumption

586

in Italy. Applied Energy 2014;113:392-403.

587

[4] Sabo K, Scitovski R, Vazler I, Zekic-Suac M. Mathematical models of natural gas

588

consumption. Energy Conversion and Management 2011;52:17211727.

589

[5] Soldo B, Potonik P, imunovi G, ari T, Govekar E. Improving the residential natural gas

590

consumption forecasting models by using solar radiation. Energy and Buildings 2014;69:498-506

591

[6] Tapinar F, elebi N, Tutkun N. Forecasting of daily natural gas consumption on regional basis

592

in Turkey using various computational methods. Energy and Buildings 2013;56:23-31

593

[7] Snchez-beda EF, Berzosa A.Modeling and forecasting industrial end-use natural gas

594

consumption. Energy Economics 2007;29:710742.

595

[8] Forouzanfar M, Doustmohammadi A, Bagher Menhaj M, Hasanzadeh S. Modeling and

596

estimation of the natural gas consumption for residential and commercial sectors in Iran. Applied

597

Energy 2010;87:268274

598

[9] Huntington HG. Industrial natural gas consumption in the United States: An empirical model for

599

evaluating future trends.Energy Economics 2007;29:743759.

600

[10] Li J, Dong X, Shangguan, J, Hook M. Forecasting the growth of China's natural gas

601

consumption.Energy 2011; 36: 1380-1385

602

[11] Bianco V, Manca O, Nardini S. Electricity consumption forecasting in Italy using linear

603

regression models. Energy 2009;34:1413-1421.

pre

-pr

int

579

24

[12] Bianco V, Manca O, Nardini S. Linear regression models to forecast electricity consumption

605

in Italy. Energy Sources, Part B: Economics, Planning and Policy 2012;8:86-93.

606

[13] Gori F, Takanen C. Forecast of energy consumption of industry and household & services in

607

Italy. International Journal of Heat and Technology 2004;22:115-121.

608

[14] Suganthi L, Samuel AA. Energy models for demand forecastingA review. Renewable and

609

Sustainable Energy Reviews 2012;16:1223124.

610

[15] Soldo B. Forecasting natural gas consumption. Applied Energy 2012;92:26-37.

611

[16] Directive 2010/31/EU, Official Journal of the European Union 2010; L153:13-35

612

[17] Directive 2012/27/EU, Official Journal of the European Union 2012; 55:1-56

613

[18] Italian Energy Efficiency Action Plan, 2011

614

(http://ec.europa.eu/energy/renewables/action_plan_en.htm Accessed on 27/05/2014)

615

[19] Energy Efficiency in Europe Country report Italy. Energy Efficiency Watch 2013.

616

(http://www.energy-efficiency-watch.org/index.php?id=5 Accessed on 27/05/2014)

617

[20] MISE. Italian Ministry of Economic Development, December 2012.

618

http://dgerm.sviluppoeconomico.gov.it/dgerm/consumigasannuali.asp. Accessed on 27/05/2014 (in

619

Italian)

620

[21] ISTAT, Italian Institute of Statistics. http://dati.istat.it/. Accessed on 27/05/2014 (in Italian)

621

[22] EIA, U.S. Energy Information Administration.

622

http://www.eia.gov/emeu/efficiency/ee_app_a.htm. Accessed on 27/05/2014

623

[23] Erdogdu E. Electricity demand analysis using cointegration and ARIMA modelling: a case

624

study of Turkey. Energy Policy 2007;35:11291146.

625

[24] Haas R, Schipper L. Residential energy demand in OECD-countries and the role of irreversible

626

efficiency improvements. Energy Economics 1998;20:421442.

627

[25] Gujarati DN. Basic econometrics. New York: McGraw Hill;2004.

628

[26] Wooldridge JM. Introductory econometrics: a modern approach. New York: South Western,

629

Division of Thomson Learning;2005.

pre

-pr

int

604

25

[27] Amarawickrama HA, Hunt LC. Electricity demand for Sri Lanka: a time series analysis.

631

Energy 2008;33:724739.

632

[28] Engle RF, Granger CWJ. Co-integration and error correction: representation, estimation and

633

testing. Econometrica 1987;55:251276.

634

[29] Wilson JH, Keating B. Business forecasting. New York: McGraw-Hill;2009.

635

[30] OECD Economic Outlook 2012; 91(1) Table 4.1. http://www.oecd-

636

ilibrary.org/economics/oecd-economic-outlook-volume-2012-issue-1_eco_outlook-v2012-1-en

637

Accessed on 27/05/2014

638

[31] DECC Fossil Fuel Price Projections, July 2013 edition.

639

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/212521/130718_dec

640

c-fossil-fuel-price-projections.pdf Accessed on 27/05/2014

641

[32] Italian Authority for Electricity and Gas (in Italian).

642

http://www.autorita.energia.it/it/dati/elenco_dati.htm Accessed on 27/05/2014

643

[33] Statistiche Catastali 2011 (in Italian). National Agency of Territory.

644

http://wwwt.agenziaentrate.gov.it/mt/osservatorio/Tabelle%20statistiche/Statistiche_Catastali_2011

645

.pdf Accessed on 27/05/2014

646

[34] Corrado V, Ballarini I, Corgnati SP, Tal N. Building Typology Brochure Italy, December

647

2011 (in Italian).

648

http://www.building-typology.eu/downloads/public/docs/brochure/IT_TABULA_TypologyBrochure_POLITO.pdf

649

Accessed on 27/05/2014

650

[35] Ballarini I, Corgnati SP, Corrado V. Use of reference buildings to assess the energy saving

651

potentials of the residential building stock: The experience of TABULA project. Energy Policy

652

2014;68:273284.

653

[36] Boji M, Mileti M, Boji L. Optimization of thermal insulation to achieve energy savings in

654

low energy house (refurbishment). Energy Conversion and Management 2014; 84: 681-690

pre

-pr

int

630

26

[37] Cost Effective Climate Protection in the EU Building Stock. Report established by Ecofys for

656

EURIMA, February 2005.

657

[38] Italian Legislative Decree 22/11/2012

658

http://www.gazzettaufficiale.it/atto/serie_generale/caricaDettaglioAtto/originario?atto.dataPubblica

659

zioneGazzetta=2013-01-25&atto.codiceRedazionale=13A00571&elenco30Giorni=false Accessed

660

on 27/05/2014 (in Italian)

661

[39] Mirasgedis S, Georgopoulou E, Sarafidis Y, Balaras C, Gaglia A, Lalas DP. CO2 emission

662

reduction policies in the greek residential sector: A methodological framework for their economic

663

evaluation. Energy Conversion and Management 2004;45: 537-557

664

[40] Khoshgoftar Manesh MH, Navid P, Baghestani M, Khamis Abadi S, Rosen MA, Blanco AM,

665

Amidpour M. Exergoeconomic and exergoenvironmental evaluation of the coupling of a gas fired

666

steam power plant with a total site utility system. Energy Conversion and Management 2014; 77:

667

469-483

668

[41] Khoshgoftar Manesha MH, Ghalamib H, Amidpoura M. A new targeting method for combined

669

heat, power and desalinated water production in total site. Desalination Volume 2012;307:5160

670

[42] Hackl R, Andersson E, Harvey S. Targeting for energy efficiency and improved energy

671

collaboration between different companies using total site analysis (TSA). Energy 2011;36:4609

672

4615

673

[43] EFENIS research project. http://efenis.uni-pannon.hu/author/efenis/

pre

-pr

int

655

674
675
676
677
678
679
680

27

Figures

-pr

int

681

682
683
684

Figure 1. Historical series of relevant variables for Italy: (a) Gross Domestic Product, (b)
population, (c) gas price for residential customers and (d) heating degrees days

pre

685

686
687
688
689

Figure 2. Historical series of relevant indicators of natural gas consumption in the Italian residential
sector: (a) absolute and weather adjusted natural gas consumption, (b) absolute and weather
adjusted energy intensity per capita

690
28

691

Figure 3. Projections of population (a) and Gross Domestic Product (b) for Italy

int

692

pre

-pr

693

694
695
696

Figure 4. Projections of energy price: (a) correlation between BAFA long term contract and oil
price, (b) outlook of oil price, (c) forecasting of import and final user gas price for Italian customers

697

29

int

698
699
700

Figure 5. Forecasting of business as usual gas consumption in the Italian residential sector as
function of climatic conditions

pre

-pr

701

702
703
704

Figure 6. Historical pattern and future outlook of weather adjusted consumption and energy
intensity for the Italian residential sector.

705
706

30

int

707
708
709

Figure 7. Effect of the implementation of energy efficiency measures on the natural gas
consumption for heating usage in the Italian residential sector

710

-pr

711
712
713
714
715
716

pre

717
718
719
720
721
722
723
724
725
726
727
728
729
730
731
732
733
734
735
736

31

743
744
745
746
747

Table 1. Sources of historical data used in the analysis.

Variable
Years
Natural Gas Consumption
1990-2011
Natural Gas Consumption

2012

Natural Gas Price

Gross Domestic Product
(GDP)
Population
Heating Degree Days

1990-2012
1990-2012

int

1990-2012
1990-2012

Source
European Statistical Office
(Eurostat) [2]
Italian Ministry of Economic
Development [20]
Eurostat [2]
Italian Statistical Office
(ISTAT) [21]
ISTAT [21]
European Statistical Office
(Eurostat) [2]

Table 2. Summary of coefficients and statistics (t statistics are reported in parenthesis) over the
period 1990-2012 for Equation 2.
-8.57 (-8.78)
LE_HDD
1.07
1 0.82 (8.01)
LE_Pres
-0.20
2 -0.15 (-1.88)
LE_GDPPC
0.61
3 0.47 (6.15)
R2
0.963
2
4 0.23 (2.03)
Adj. R
0.951
5 0.16 (1.66)
F
82.5

-pr

740
741
742

Tables

Table 3. Augmented Dickey Fuller (ADF) unit root test on the considered variables.
It can be detected that for Pres the null hypothesis of a unit root cannot be rejected at 10% level of
significance.
Variable
ADF Test Statistic
Critical Value 90%
Test Equation
Log(Cres)
-3.3338
-3.2547
Trend+Intercept
Log(GDPPC)
-3.0824
-2.6422
Intercept
Log (Pres)
0.5341
-2.6422
Intercept
Log (HDD)
-3.9283
-2.6422
Intercept

748
749
750
751
752
753

754
755
756
757
758
759

pre

737
738
739

Table 4. Augmented Dickey Fuller (ADF) unit root test on the first difference of the considered
variables.
It can be detected that for all the variables null hypothesis of a unit root can be rejected at least at
10% level of significance.
Variable
ADF Test Statistic
Critical Value 90%
Test Equation
Log (Cres)
-6.0555
-2.6461
Intercept
Log (GDPPC)
-1.9422
-1.6078
Level
Log (Pres)
-3.7449
-2.6461
Intercept
Log (HDD)
-9.0823
-2.6461
Intercept

32

Table 6. Comparative analysis of forecasting errors

Error Measure
Equation 2
Energy Intensity
Forecasting
MAPE
0.6%
2.7%
MAD
0.108 bcm
0.585 bcm
MSE
0.309 bcm2
0.365 bcm2
RMSE
0.556 bcm
0.604 bcm

Simple linear fit

Forecasting
3.81%
0.792 bcm
1.390 bcm2
1.179 bcm

Table 7. Construction characteristics of the two considered classes of buildings.

The flat is assumed to belong to a building block of 5 floors with 4 apartments per floor [33-35].
Assumptions
Single
Variable
Flat
Houses
Flat
Single Houses
Assumed that all the
Wall to building
=0.62
=1.10
Assumed that two of the
four walls exchange
footprint ratio
=50.8%
=33.3% four dwelling walls
heat with the external
exchange heat with the
environment As
external environment. As
reference data, it can be
reference data, it can be
assumed a net surface of
assumed a net surface of
2
~90m and walls height of ~120m2 and walls
3 m [33].
height of 3 m [33].
Windows to
=0.20
=0.20
Windows represent 20% of the dwelling surface
building
=16%
=6.1%
according to common construction practice in Italy
footprint ratio
Roof to building
=0.20
=1.00
An equivalent floor
Roof surface equal to
footprint ratio
=16%
=30.3% surface per apartment is
building footprint
calculated by dividing the
total floor surface for the
number of apartments (e.g.
20).
Floor to
=0.20
=1.00
Same hypothesis as roof
Floor surface equal to
building
=16%
=30.3% to building footprint ratio building footprint
footprint ratio
Total equivalent
=1.22
=3.30
thermal
=100%
=100%
dispersing
surface

pre

765
766
767
768

int

762
763
764

Table 5. Observed and forecasted natural gas consumption. Relative Errors (RE) are reported in
Parenthesis.
Year
Observed
Equation 2
Energy Intensity
Simple
Values
Forecasting
Forecasting
linear fit
(bcm)
(bcm)
(bcm)
Forecasting
(bcm)
2009
20.5
20.8 (+1.5%)
21.1 (+2.9%)
22.0 (+7.2%)
2010
22.8
22.5 (-1.6%)
23.3 (+1.9%)
22.4 (-2.0%)
2011
21.0
21.9 (+4.3%)
21.8 (+3.9%)
22.8 (+8.3%)
2012
22.7
22.3 (-1.8%)
23.2 (+2.1%)
23.1 (+1.7%)

-pr

760
761

769
33

Table 9. Main parameters of implemented energy measures on flats and single houses.
Data are estimated on the basis of the values reported in [36].
External Walls
Windows
Roof
Flat
Insulation Thermal
0.04
n.a.
0.04
Conductivity [W/(m K)]
Insulation Thickness [cm]
2.0
n.a.
4.0
2
Ui [W/(m K)]
0.66
2.71
0.62
Uii [W/(m2K)]
0.33
0.44
0.10
2
Cost [/m ]
20.8
142
8.0
Costi [/m2 of floor]
10.6
23.3
1.3
Single House
Insulator Thermal
0.04
n.a.
0.04
Conductivity [W/(m K)]
Insulator Thickness [cm]
2.0
n.a.
8.0
2
Ui [W/(m K)]
0.55
2.71
0.32
2
Uii [W/(m K)]
0.18
0.16
0.10
Cost [/m2]
20.8
142
16.0
Costi [/m2 of floor]
6.9
8.6
4.8

776
777

pre

-pr

772
773
774
775

Table 8. U values for existing residential buildings in Italy. Data are determined on the basis of
values reported in [34-35].
Flat
Single House
Building Element
Ui
Uii
Absolute Value
Equivalent
[W/(m2K)]
[W/(m2K)]
Value
Walls
0.98
0.50
0.76
0.25
Windows
3.40
0.56
3.40
0.21
Roof
1.70
0.28
0.95
0.29
Floor
1.24
0.20
0.98
0.30

int

770
771

Table 10. Economic valuation of considered energy efficiency measures.

Flat
Discount Factor
6%
2
Total Investment [/m of floor]
36.0
NPV @ 2030 [/m2 of floor]
7.4
Pay Back [years]
15

778
779

34

Floor
0.04

2.0
0.76
0.12
5.2
0.9
0.04

5.0
0.43
0.13
13.0
3.9

Single House
6%
24.3
13.8
11