Energy efficiency networks - what are the processes that make them work?

Energy efficiency networks have received increasing attention over the last few years, not only from national governments (Austria, China, Germany, Sweden, and Switzerland) but also from utilities, consulting engineers, chambers of commerce, and city councils. This paper examines the factors that contribute to the success of such networks by drawing on unique data from two pilot projects involving 34 energy efficiency networks in Germany. The objective is to explain why the companies participating in such networks are much faster at reducing their energy costs than the average in similar businesses. Possible explanations for the success of energy efficiency networks include the following: (1) energy audits make profitable potentials visible; (2) the joint network targets for efficiency and emissions increase the motivation of energy managers, decision-makers, and other staff members; (3) the meetings and site visits of the network participants act like an intensive training course to increase the knowledge of efficient solutions, change decision routines, and lead to trust among the participants; and (4) network participation reduces transaction costs. In our data, we find support for the first, the third, and the fourth explanations, i.e. the audits make profitable potentials visible and networks function as a training course to increase knowledge. And, from the point of view of participants, transaction costs are reduced. The impact of network goals, on the other hand, appears to have both up- and downsides. We conclude that there is the need for further research in order to capture these mechanisms in more detail.