Economics of energy-conservation measures in Greece

A method is developed for analysing the cost-effectiveness of energy-conservation measures. The method reconciles social preferences with the profit-seeking objectives of private investors. An important externality to the energy system is environmental protection, which is considered through the avoided cost approach. An LP-model is used to examine structural changes to the primary supply side of the system. The employment of an energy engineer (EE), who will implement energy housekeeping procedures for Greek industry, is an example of application of the method. The results show that the measure offers very short payback periods, making its adoption an attractive investment.