Snapshot of Energy Efficiency Obligations schemes in Europe: main characteristics and main questions Third European Workshop Meeting of the White Certificates Club Wednesday 27th May, 2015 Editorial Since 2011, the White Certificates Club organizes workshops to promote exchanges among, and with, the practitioners of Energy efficiency Obligations. After the fuel poverty issue in 2011 and the administrative burden in 2013, 2015 had to deal with the impact of article 7 of the Energy Efficiency Directive. There are now 16 countries in Europe that have implemented or are planning to establish Energy Efficiency Obligation (EEO) schemes: Austria, Bulgaria, Croatia, Denmark, Estonia, France, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Poland, Slovenia, Spain, United Kingdom. An Energy Efficiency Obligation scheme is known by practitioners to be complex, with sixteen schemes at minimum, the WCC felt the need for an overview of the main characteristics of the different schemes. Furthermore, as it is, their maturities are very different. Some information are very “volatile” and could only be captured through interviews. Therefore this document is structured with a fact sheet and a one-page interview for each country. For two countries (Lithuania and Spain), the interview was not possible due to on-going discussions or upcoming elections at the national level. This document is only a snapshot at a given moment (April-May 2015), things will evolve, decisions will be taken… The picture will change, maybe strongly in some cases. This document has been elaborated with care by Jean Sébastien Broc from Broc R&C through a contract with ATEE (Technical Association Energy and Environment) hosting the White Certificates Club. It is the result of crossing different sources, mostly official documents but also the ENSPOL reports and discussions with experts. Nevertheless, the information included in this document does not engage the interviewees and has no official value. On behalf of WCC and ATEE, we would like to thank Jean Sébastien Broc for his work, all the interviewees for their so valuable contributions, Elodie Trauchessec from ADEME for helping us with contacts. Daniel CAPPE,Alexandre JEANDEL, Vice président ATEE Chairman WCC page 3 page 4 Summary Austria...................................................................................................... 7 Interview with Heidi Adensam Bulgary......................................................................................................9 Interview with Tsvetomira Kulevska Croatia.....................................................................................................11 Interview with Ivan Šerić Denmark..................................................................................................13 Interview with Peter Bach Estonia.....................................................................................................15 Interview with Madis Laaniste France......................................................................................................17 Interview with Loïc Buffard Ireland.....................................................................................................19 Interview with Josephine Maguire Italy..........................................................................................................21 Interview with Dario Di Santo Latvia.......................................................................................................23 Interview with Andzela Petersone Lithuania.................................................................................................25 Luxembourg............................................................................................27 Interview with Carla Oliveira Malta........................................................................................................29 Interview with Charles Buttigieg Poland......................................................................................................31 Interview with Tadeusz Skoczkowski Slovenia...................................................................................................33 Interview with Mojca Vendramin Spain........................................................................................................35 United Kingdom.....................................................................................37 Interview with Carolina Valsecchi Acronyms and abbreviations.................................................................39 AUSTRIA Status, timeline and current target The energy efficiency obligation scheme has started in January 2015, and substitutes voluntary agreements with energy suppliers in place since 2009. The overall target for the scheme is to deliver 159 PJ over 2015-2020 (51% of the EED art.7 target). The targets of the obligated parties are set annually as 0.6% of the energy sales of the previous year. 40% of the final energy savings have to be achieved for households (housing or transport). Energy savings actions All actions whose final energy savings can be demonstrated (except oil boilers) in all end-use sectors are eligible if they exceed the minimum energy performance requirements set in current regulations, and if they don’t beneficiate from public subsidies. Actions for households in fuel poverty get a bonus factor (*1.5). 30 to 40 standard methods (formula + deemed savings) are already available (more to come). An official methodology will provide guidelines for other types of actions. Responsible authority : Federal Ministry of Science, Research and Economy Managing authority : a monitoring body is to be established (through tendering) Key actors and scope The Ministry of Economy sets the rules and the targets, in agreement with the provinces. The Ministry will delegate to a monitoring body (to be established) the management of scheme (reporting and controlling tasks). The Austrian Energy Agency provides a technical support, in particular in developing standard methods. The obligated parties are almost all energy suppliers (selling more than 25 GWh/a) (likely about 4500 companies). All public and private companies can get an energy savings account, and can transfer their energy savings to obligated parties through civil contracts (no trading/market). Accounting/crediting/validation of the energy savings Energy savings are credited for the 1st year of the action. The ownership of the energy savings goes always first to the final customer. The obligated parties must document their role (advice and/or financial incentive) and provide an attestation form signed by the final customer that transfers the energy savings to the obligated party. The obligated parties can register energy savings with the related evidences (invoices, description of their role, etc.) on an online database along the implementation of their projects/programs. The detailed documentation of the savings must be kept for random controls by the Monitoring Body. The obligated parties must report every year by February 14th their total achievements for the previous year to the Monitoring Body. Specificities of the scheme or context The Austrian scheme can be seen as a reinforcement and extension of the previous voluntary agreements. This experience provided a basis to start with. More detailed guidelines should be defined in the coming months (especially about monitoring & verification). The new scheme has the largest scope possible (all energy types for the targets, high number of obligated parties, all end-use sectors for the actions). This choice is meant to distribute the burden and to offer flexibility. A condition has been set to ensure a minimum share (40%) of energy savings in households, to avoid strategies focused only on large projects in industry or commercial buildings. page 7 Interview with Heidi Adensam Head of the Division Energy Balances and Energy Efficiency Federal Ministry of Science, Research and Economy What are the main expectations of the government (and/or your personal) for this new scheme? The main objective of the government is to deliver energy savings without public budget requirements that would be too cost extensive. The obligation scheme is part of the government program for the current 5-year mandate (started late 2013). It has been heavily discussed, with a strong opposition from stakeholders (including energy companies but not only). The main issue is the fear of increases in energy prices. However, the scheme is supported by the Ministry of Finance that sees it as a costeffective way to achieve energy savings. The scheme has just started (January 2015), so its actual effects are still unknown. One risk may be that it could be too much focused on the low hanging fruits. Meanwhile, the scheme includes small obligated parties, which could favour the development of ESCos. What are the main characteristics of your scheme? All energy suppliers (except the very small ones) and all types of energy sold (including renewable energies) are included in the scheme. This large scope makes that the burden is more distributed. All actions saving final energy are eligible, even if not covered by a standard method. An official methodology makes it possible to evaluate the savings from any type of action, which should support innovation. The scheme includes a “pay to save” option: the obligated parties can achieve their target by contribution to an energy efficiency fund (0.2 €/kWh), which may also support markets for ESCos. Overall, a key guiding principle has been to adopt a straightforward approach. What would be the questions you would like to ask to countries already having a long experience with EE obligation schemes? Key issues for experience sharing are the administration costs of the scheme, the types of actions implemented and their costs, the impacts on energy prices and the involvement of ESCos (and development of related markets). What are the main steps to come or the main stakes for 2015-2020? About 30 to 40 standard methods have already been defined. The obligated parties ask for more, and more generally about what the savings potentials are. This means that capacity building is needed for many obligated parties. Work is also on-going about how to document the actions and programs (Measurement, Reporting & Verification). MRV rules were already used for the previous voluntary agreements. But more detailed guidelines are needed for the obligation scheme. A key question will also be how to set the correct fee level for the “save to pay” option: a too low fee could kill the market, while a too high fee could create increases in energy prices. page 8 BULGARIA Responsible authority : Ministry of Energy Managing authority : SEDA (Sustainable Energy Development Agency ) Status, timeline and current target The scheme first started in 2008, with a target in cumulative terms up to 2016. The period 2014-2016 is a transition to a system with annual targets (currently both targets are combined). For 2014-2020, the annual targets should be 69.38 ktoe/a of final energy savings from new actions every year. 1743.4 GWh/a had been achieved in 2013 (cumulated from actions over 2008-2013), representing 38% of the cumulative target for 2008-2016 (4644 GWh/a in 2016). Key actors and scope The general rules set by the Ministry of Energy, and the scheme is administered by SEDA. The obligated parties are all companies selling more than 75 GWh of energy to final customers, including of all types of energy sold (fuels for transport should be excluded soon). In the previous scheme (up to 2016), obligations were also assigned to large consumers (industrial companies and public authorities). These actors are then also eligible to get energy savings credits. There has not been any possibility of transfer or trading of energy savings so far. But a trading scheme for energy savings certificates is under preparation. Energy savings actions All types of actions (including behavioural actions) in all sectors, (including energy transformation, distribution and transmission) that can achieve demonstrable energy savings. Accounting/crediting/validation of the energy savings The obligated parties must submit the documentation of their projects (most often including the audit report) for validation by SEDA that then credits the 1st-year energy savings (in proportion to the funding brought for the implementation of the action). There is no standardised actions yet. Energy savings are mostly reported through energy audits (before/after comparison). 11 standard assessment methods (including formulas) are already available. More are under development (and could include deemed savings as well). The obligated parties must also submit to SEDA by 31 March each year a summary report showing their achievements. SEDA is in charge of performing controls of the documentation and of the quality of the implemented actions. Specificities of the scheme or context Up to now, the mechanism for the obligated parties to recover their costs has not been defined. The National Energy Efficiency Action Plan reported by Bulgaria in 2014 has estimated that the investments needed to achieve the target would amount to 1.7 billion euros for 2014-2020. This shows that cost recovery is a key topic for the success of the scheme. page 9 Interview with Tsvetomira Kulevska Chief Expert SEDA (Sustainable Energy Development Agency) What are the main expectations for the new period of the Bulgarian scheme? What are the main steps to come in the implementation of the scheme? The scheme has been implemented since 2008. But its results have not been as expected. This may be partly because no rule had been defined about the cost recovery. There is currently a period of overlap between the previous and the new schemes. This means that there is a double target system (cumulative and annual) for 20142016. The savings from the new target system will be counted for the implementation of the current one. The objective of the new period is to involve more obligated parties (lowering the threshold for obligations) and to strengthen the scheme. What are the main characteristics of the scheme that you would like to point out? The scheme has been recently modified to follow the requirements of the EED article 7. One of the main changes is that the targets are not cumulative anymore (but annual). This means in particular that the obligated parties have now to achieve new savings every year. Initially, the large consumers (municipal authorities and industrial companies) also had obligations. They had to perform an energy audit. And their individual target was meant to be an incentive to implement the actions recommended, possibly with the support of an energy supplier. Another important change to come is that the suppliers of fuels for transport should be soon excluded of the scheme. What are the main stakes for 2014-2020? The first key challenge will be to introduce a white certificates trading scheme by the end of 2015, likely starting in September. The first semester of 2015 has also been a period of intense work to finalise the development of standard assessment methods for 50 action types (with standardised formulas, and possibly reference values or deemed savings). Currently, the energy savings projects are mostly assessed through energy audits. The objective is to progressively increase the use of standard calculation methods. Another specificity is that there is not a list of standardised actions. But this is under consideration. This is one of the reasons why the actions have been so far mostly focused on the industry and service sector. Moreover, this may have created uncertainties for the obligated parties about the assessment of the action lifetimes and of the energy savings. page 10 CROATIA Responsible authority : Ministry of Economy Managing authority : CEI (NKT) (Energy Efficiency Authority) Status, timeline and current target The Croatian Energy Efficiency Obligation scheme is under preparation. The final decisions about its rules and principles are expected by July 2015 for a complete start early 2016. Most of the options are still open. The first period will be 2016-2020. The initial target was set at 54 PJ (final energy), but for 2015-2020. So this target may be revised. The possibility to define annual targets increasing over time is under discussion. The scheme is expected to deliver about 40% of the energy savings for the objective of EED article 7. Key actors and scope The Energy Efficiency Authority (CEI-NKT) is in charge of preparing the scheme, with technical support from consultancies. CEI-NKT submits scenarios of scheme design for decision by the Ministry of Economy. The Obligated Parties (OP) will be the energy distributors (electricity, natural gas and heat). There are few large distributors and many small or medium ones. A possible scenario would then be to start with the largest ones only, and to include more distributors over time. The largest distributor is HEP (state company), representing 51% of the energy distributed. CEI-NKT will manage the scheme (calculation rules, energy savings validation). The energy regulatory agency (HERA) is in charge of the cost recovery mechanism (distributors may be allowed to increase their fees to cover the costs of achieving their target). ESCos will be eligible parties: they can submit their projects to get energy savings credits. Energy savings actions The rules for the energy savings eligibility will be determined by July 2015. One objective is to keep the scheme neutral (as regards the type of actions) to encourage OP to look for most cost-effective actions. Conformity with EED article 7 is also a key consideration. Accounting/crediting/validation of the energy savings In case an OP does not meet its target, an alternative could be to pay a fix amount per kWh to EPEEF (Environmental Protection and Energy Efficiency Fund) (option under discussion). A rulebook is under preparation, setting the M&V process. OP and ESCos will register their data and reports on an online M&V platform. Energy savings are then calculated based on pre-defined algorithms (possibly using reference values when needed). Specificities of the Croatian scheme or context The scheme will use the same online M&V platform as used for monitoring public energy efficiency programmes. This makes possible to handle double counting issues. The platform was also designed to process automatically the data, minimising the administrative burden for CEI. The platform was meant to be transparent, so that customers can check the data reported for the actions implemented at their building or facility. This is especially important for co-owners of multifamily buildings, where energy efficiency actions can be voted upon simple majority. page 11 Interview with Ivan Šerić Senior Advisor CEI – NTK Croatian Energy Efficiency Authority What are the main expectations for the new energy efficiency obligation scheme? There are two main objectives. The first one is to help fulfilling obligations regarding EED article 7. Croatia will combine the obligation scheme with alternative measures. As shown in the Croatian National Energy Efficiency Action Plan (2014), the scheme is expected to deliver about 40% of the energy savings to meet the EED article 7 target for Croatia. The second objective is to set up a trading scheme for energy savings which will boost the ESCo market. A large part of the energy savings potential lies in multifamily buildings (apartment blocks). Public energy efficiency programmes have already promoted their energy renovation, in particular through ESCo-led projects. In parallel, HEP, the main energy utility (state company), holds among its subsidiaries an ESCo dedicated to the industry sector. Therefore, the idea is that the obligation scheme will stimulate the growth of this developing market. Also because energy distributors have not a market-oriented approach, by essence. So ESCos are likely to develop more efficient strategies. An important concern while designing the scheme is to ensure its effectiveness and efficiency. Rules are thought to minimize the administrative burden. And a particular attention is paid so that the scheme really encourages the actors to look for the most cost-effective actions. The automation of the validation process is of upmost importance for CEI – NTK, as the team managing the scheme is small (4 people). What would be the three questions you would like to ask to countries already having a long experience with energy efficiency obligation schemes? The three questions we would be the most interested in having insights about are: 1. Which EE measures are eligible for EED article 7 obligations and have been conducted? 2. Experience with obligated parties – distributors vs retail, regulated vs non regulated 3. Experience with setting up trading schemes – in particular securitization of energy savings and setting up OTC market In general, Croatia is very interested in getting experience feedback from other countries. In particular as the Croatian scheme is under preparation, with many choices still open. The idea is to follow a pragmatic approach by starting simple, with the number of obligated parties and annual targets increasing progressively. Experience sharing is very useful to see how to develop more sophisticated options over time. The more you enter into the details, the more questions arise. For example, combining the obligation scheme with an energy efficiency fund may provide more flexibility for the obligated parties, but could also reduce its effectiveness. Allowing cost recovery on distribution fees helps increasing the investments in energy efficiency by obligated parties, but this increases energy prices (which may be very sensitive for industries, especially if most of the energy savings are achieved in the housing sector). Thinking about possible random controls may raise legal issues, according to the institutional framework. Defining specific subtargets could be an interesting option (especially for alleviating fuel poverty), but this may require specific approaches and monitoring. page 12 DENMARK Status, timeline and current target Electricity distributors have been involved in energy efficiency activities since the 1990’s. The obligation scheme has taken its current form (including an energy savings obligation) from 2006. Annual targets of 12.2 PJ/a (final energy) have been set for the period 2015-2020. 28.8 PJ/a were saved in 2012 from actions over 2008-2012. 8,5 PJ was achieved in 2013, for a total cost of 125 million € (average unitary cost: 5.2 c€/kWh saved the 1st-year). Energy savings actions All actions saving final energy beyond minimum energy performance criteria are eligible (excluding behavioural actions, CFL and appliances after 2009, and oil boilers from 2016). Reduction of losses in transmission and distribution networks and savings related to solar farms for district heating are also eligible (for 2013 to 2015). About 150 standardised actions are defined with deemed savings (mostly for the residential sector, 31% of 2013 savings). Specific calculations (scaled savings) are used for other actions (mainly in industry, 44% of 2013 savings). An approach of “surveyed” savings can be used for market approaches (but rarely used). Responsible authority : Ministry of Climate, Energy and Building Managing authority : DEA (Danish Energy Agency) Key actors and scope The overall target is set by the Ministry after a policy agreement (consensus-seeking process among all political parties). The implementing and supervision body is the DEA. The obligated parties are all the energy distributors (3 for natural gas, 74 for electricity, 417 for district heating and 6 for oil), covering all end-use sectors. The rules and implementation issues are discussed within a technical working group chaired by the DEA and including representatives of the obligated parties. The obligated parties may establish agreements with operators/subcontractors (consultants, energy traders, installers, craftsmen, retailers, banks, etc.) that will implement programmes towards end-users. Accounting/crediting/validation of the energy savings Energy savings are credited for the 1st year of the action, including a weighting factor to take into account the differences in action lifetimes, in impacts on primary energy consumption, and in terms of avoided CO2 emissions (also distinguishing savings inside or outside the ETS scope). There must be an agreement before the actions are implemented, and the final customers must give the right to a given obligated party to notify the savings. Every obligated party must submit a report annually, including an audit report (done by an external auditor every other year). The obligated parties shall implement quality assurance. Documentation of savings does not need to be submitted to the DEA, but must be kept by obligated parties for 5 years, for random checks supervised by the DEA (including on-site inspections as well as surveys of intermediaries and final consumers). The overall administration costs of the scheme are about 540 k€/a. Specificities of the scheme or context The consensus-seeking approach is key in the processes for setting the targets and defining the rules of the scheme. The overall and multi-year policy agreement offers a stability, which is very important for the obligated parties to develop their strategies. A bonus factor (1.5) is applied to priority actions, mainly in line with the national objective of phasing out from fossil fuels for space heating. page 13 Interview with Peter Bach Chief adviser on energy efficiency Danish Energy Agency What would have you done differently? There is still an on-going debate about whether the obligated parties should be the energy distributors or energy traders. Overall, the scheme has been a success, especially thanks to the cooperation between the public authorities and the obligated parties. What are the main characteristics of your scheme? The guiding principle has always been to make the rules as simple as possible. The current scheme was built on the experience gained since the 1990’s. The electricity (and later gas) distributors had to propose energy advice or audits to their customers. This expertise is one of the reason why more than half of the energy savings have been achieved in the industry. The Danish way is based on a culture of the consensus. The scheme is an agreement where the energy distributors commit themselves. It is then seen as an opportunity. Another key point is the monitoring approach, based on quality assurance by the obligated parties complemented by random controls. This has made possible to reduce the administration costs. action types from the scheme (behavioural actions, CFL, appliances). A new evaluation of the scheme has just been finalised. The conclusions are that overall the scheme works well and that the actors are happy with it. The evaluation also raised some questions, especially about the quality and additionality of the savings in households and that shifting the obligation to energy traders could be more effective. Discussions are on-going for the next update of the scheme’s rules (to be finalised in 2015). One of the key topics is the development of the actions on transports, in order to involve more the oil companies. Another topic is the strengthening of requirements for certain types of actions (e.g., heat pumps). Another issue is the increasing share of programmes just giving subsidies. Adjustments to the rules may then be needed to increase the involvement of energy consultants, especially for a better targeting. What are the main recent changes (or to come)? A previous evaluation had shown that the additionality of the scheme was lower than expected, which led to increase the annual targets from 2010, and to remove certain page 14 ESTONIA Status, timeline and current target Estonia planned to make use of an energy efficiency obligation in addition to alternative measures to meet its target for the EED article 7. Due to the election of a new government in March 2015, the law for energy efficiency is still to be voted (likely by June 2015). The alternative measures (energy and CO2 taxes, and funding schemes) are expected to deliver 91% (6479 GWh over 2014-2020) of the article 7 target. The remaining energy savings to be achieved by the obligation scheme would then amount to about 622 GWh over 2014-2020 (which could also be done by amending energy taxes and/or funding schemes). Responsible authority : Ministry of Economic Affairs and Communication Managing authority : to be decided (could be the Competition Authority) Key actors and scope The public authority in charge of the EED implementation is the Ministry of Economic Affairs and Communication that would also be the responsible authority for the obligation scheme. The obligated parties would be the energy distributors (electricity, natural gas and district heating). They would be allowed to contribute to an energy efficiency fund and/or to implement their own programs or in cooperation with third parties. The Competition Authority, that regulates the energy markets, would be in charge of supervising and monitoring the scheme. As the energy distributors have little experience in energy efficiency activities (on the demand-side), it is very likely that third parties (such as financial institutions, ESCos, etc.) would be involved as partners or contractors of the obligated parties. Energy savings actions In a first phase, the obligated parties would likely meet their obligations through contributions to the national energy efficiency fund. Accounting/crediting/validation of the energy savings About the evaluation of energy savings, the main stakes for Estonia will be to assess and integrate the impacts of the alternative measures (especially combining results from energy taxes and funding schemes). Restrictions of the eligible energy efficiency actions are under consideration. The obligated would like the possibility to achieve part of their target by improving their infrastructures. About the obligation scheme, the obligated parties would need to submit annual reports to the Competition Authority that would monitor the overall achievements and the performance of the scheme. These reports would need to be verified by an independent qualified expert. Specificities of the scheme or context A detailed study has supported the Estonian response to EED article 7, examining the different possible options1. The study also highlights that district heating networks supply heat for about 60% of the population. And the use of non-commercial biomass represented about 5% of the final energy consumption (1.7 TWh/a out of 33.4 TWh/a). A large share of the funding for energy efficiency programs comes from the EU structural funds (and also carbon credits), operated by several state companies or foundations (such as the financial institution KredEx). One of the priorities is the refurbishment of the building stock. 1 See http://ec.europa.eu/energy/sites/ener/files/documents/article7_en_estonia_annexa.pdf page 15 Interview with Madis Laaniste Strategic Planning Manager Energy Department Ministry of Economic Affairs and Communication What are the main expectations of the government (and/or your personal) for this new scheme? The main objective is to find resources that would not be dependent of the public budget (subject to possible variations), in order to promote energy efficiency activities. A market approach could indeed be more effective, but Estonian energy companies have not been involved in energy efficiency activities so far. Therefore, the feedback of the energy companies about the upcoming obligation scheme was rather negative. They would prefer a scheme based on an energy efficiency fund. There are already independent ESCos in some sectors (commercial and service buildings, shopping centres, retail). But there is a need for developing energy efficiency markets for the residential sector (especially for renovations). What would be the main questions you would like to ask to countries already having a long experience with energy efficiency obligation schemes? What are the main steps to come in the implementation of the scheme? A new government has been elected early March 2015. The law to implement the Energy Efficiency Directive (the Organisation of Energy Management Act) should be discussed by June 2015. Therefore, the first step is to get the Energy Efficiency law approved, which will set general decisions. One of the main issues to be discussed is the level of flexibility between an energy efficiency obligation scheme and an energy efficiency fund. Another issue is that energy companies argue that energy efficiency on the supply-side (energy generation and transport/distribution) would be more efficient than on the demand-side (actions towards energy consumers). Then, one of the main difficulties is that all implementing texts have to be regulations (approved by the Ministry through a legislative process). The priority will thus be to go from general decisions to detailed guidelines. The first topic would be about setting possible limitations for the scope of actions. The second topic would be about evaluation and calculation of energy savings (and in particular about the definition of baselines). page 16 FRANCE Status, timeline and current target The French scheme has started in July 2006. The targets are usually set for 3year periods. They are expressed in kWh cumac, lifetime cumulateddiscounted final energy savings. The current target is 700 TWh cumac for 2015-2017 (90% of the target for the EED article 7). Issued certificates from July 2006 to 31 January 2015 amount to 634,9 TWh cumac, while the sum of the targets over 2006-2014 amounts to 514 TWh cumac. Overachievements can be transferred to the next period. Energy savings actions Actions are eligible in all end-use sectors (except consumption covered by the ETS), under performance and/or quality requirements. 109 standardised operations are currently eligible (more to be updated) (94% of CEE issued so far). Other actions can be assessed according to an official methodology (mostly for large actions in industry, 6% of the CEE). From 2006 to January 2015, 70% of the CEE have been issued for actions in residential buildings, 14% in commercial buildings, 8.5% in industry, 2% in networks, 2% in agriculture and 3.5% in transport. Responsible authority : Ministry of Ecology, Sustainable Development and Energy Managing authority : National Pole for White Certificates (also part of the Ministry) Key actors and scope The Ministry (DGEC, General Directorate for Energy and Climate) sets the rules, targets and penalties. A dedicated service of the Ministry (PNCEE, National Pole for White Certificates) administers the scheme. The French Energy Agency (ADEME) provides a technical support. The obligated parties are the energy suppliers of electricity, natural gas, oil, heat (district heating) in the residential and service sectors and in transports. They can achieve their targets by directly gaining energy savings certificates (CEE) or by buying CEE on the market (trading scheme). Local authorities, national agency for housing and social housing authorities are also eligible to get CEE. Accounting/crediting/validation of the energy savings The validation process has been simplified for the new period (2015-2017). All justifying documents are no longer transmitted to the administration, but kept (for 6 years) by the party applying for certificates, at disposal for control purposes. Obligated or eligible parties submit standard files (including an attestation by the final customers) to the PNCEE that issues the certificates, once for the whole lifetime energy savings (hence the 4% discount rate). An official registry monitors the certificates issued and traded. It is directly used to verify the target achievements at the end of the 3-year period (no additional reporting). The PNCEE will perform controls on samples of files. In case of non-compliance, the certificates are cancelled and sanctions may be applied (4 c€/kWh cumac). In case of nonachievement of its target, the obligated party must pay penalties in full discharge (2 c€/kWh cumac). Specificities of the scheme or context The priority policy objective is the refurbishment of the building stock. The rules of the scheme also favours the development of energy services through special bonuses. Special accounting rules are also applied to specific programs selected by the Ministry based on given policy objectives (e.g., alleviating fuel poverty), with a fix rate of kWh cumac per € invested in the programs (they are not accounted for the achievement of the target of the EED article 7). A key output of the scheme is the catalogue of about 300 standardised operations defined since 2004 within working groups supervised by ATEE2 in partnership with ADEME. 2 Association of stakeholders active in the energy and environment fields that provides a forum where all actors involved in the obligation scheme can share views and experiences. See http://www.atee.fr/c2e page 17 Interview with Loïc Buffard Deputy Head of the Energy Efficiency and Air Quality Division DGEC, Ministry of Ecology, Sustainable Development and Energy What would have you done differently? Using multiannual periods gives time for actors to operate, but may also create uncertainties during possible transitions between two periods, due to the time needed to prepare each new period. The public means to review the CEE applications turned out to be insufficient when the target increased, despite the creation of a dedicated service (PNCEE). This has created a bottleneck. The initial procedures proved to be cumbersome while the number of applications increased drastically. The experience of a simplified process through registered action plans during 2011-2014 has paved the way for further simplifications for the new period. An earlier change could have avoided the current stock of applications awaiting validation. What are the main characteristics of the French scheme? The obligation of results lets the obligated parties free to define their strategies. The scheme has been adapted to take into account the experience feedback and increased ambitions, but always keeping the same general principles. This is important to give stability and readability. The scope has been progressively increased (more obligated parties, more actions eligible) in order to cover and realise most of the energy savings potentials. What are the main recent changes (or to come)? In the previous period, lower targets were set for suppliers of fuels for transports as they were new in the scheme. The definition of the individual targets has now been harmonised. An extensive revision of the standardised operations’ specifications has been done for the new period, to take account of market trends and of the rules defined in the EED. The CEE application process has been simplified to overcome the bottleneck issue. Only a few key pieces are now needed when applying, most of the documentation being kept by the applicants in case of control. Most of the application process is already dematerialized. Work is ongoing to enhance even more the level of dematerialization. What are the main stakes for 2014-2020? The main stake is to further accelerate the energy savings pace in order to meet the ambitious targets for 2020 and 2030. The scheme has proved to be well designed to deliver actions in the residential and service sectors. The energy savings potentials in buildings remain large. A key challenge will be to trigger energy savings works in a macroeconomic context where private actors are still relatively reluctant to invest, and with relatively low energy prices. The situation is more complex for transports, as the energy consumption is function of numerous factors upon which it is not easy to act through an obligation scheme: technology innovation, urban planning, management of the public transport infrastructure, etc. A global strategy is needed, where the obligation scheme can be a support for long term and structuring public policies. page 18 IRELAND Status, timeline and current target Ireland has moved from a voluntary agreement (2011-2013) to an obligation scheme starting in January 2014, for a 3-year period (2014-2016). The target is set in terms of new annual primary energy savings of 550 GWh/a. Relative sub-targets (in shares of the total target) have been set to ensure a minimum share of savings in housing: 75% for non-residential sectors, 20% for the residential sector and 5% for within the “fuel poverty” scope. Energy savings actions 44 standardised actions3 are defined for the residential sector, with deemed savings estimated by modelling a typical average dwelling. These actions shall be implemented by qualified contractors. New action types can be submitted according to a template. Actions in other sectors are considered on a project-by-project basis, with no particular restriction (except saving energy). The resulting “scaled” savings are assessed using SEAI assessment tools (standardised algorithms) or engineering measurements in case of non-standard actions. Projects may also use metered savings. Responsible authority : DCENR (Department of Communications, Energy & Natural Resources) Managing authority : SEAI (Sustainable Energy Authority of Ireland) Key actors and scope The Ministry (DCENR) enforces the rules of the scheme, and SEAI is the implementing body. All energy types and sectors are included. The obligated parties are all energy suppliers selling more than 600 GWh/a (10 electricity and/or gas suppliers + 1 entity representing the 6 oil companies). The public authorities and the obligated parties meet within the Quarterly Governance Forum to discuss implementation issues. The obligated party can use partnerships with third parties (service providers, local authorities, etc.). Accounting/crediting/validation of the energy savings The obligated parties must have in place an agreement (including services in kind or monetary contributions) either directly or through a third party to final customers prior to any energy savings being realised. For the non-residential sector, the obligated parties shall submit a report to SEAI for each project (or by group for similar small projects), according to SEAI template. A given % of projects (function of project size) shall implement Measurement & Verification according to IPMVP. An online energy savings crediting system has been set for actions in the residential sector. The energy savings are credited only for the year where the action is reported (savings must come from new actions each year). A discounting factor is applied to energy savings from actions where the savings will not persist to 2020. Specificities of the scheme or context • The obligated parties may buyout up to 30% of their total cumulative target (fees defined by the Ministry each year). Trading is also allowed between obligated parties (no market yet, but recent launch of a website to allow auctions of future projects by third parties). • Detailed rules about what share of projects and how projects have to be audited + use of the IPMVP as a reference for the assessment of projects in the non-residential sectors. • Specific provisions aiming at ensuring the quality of the actions. In particular, building professionals need to get a certification and to sign the Code of practice for retrofit to be registered by SEAI. • Energy suppliers under the obligation threshold may be covered by voluntary agreements. 3 See http://www.seai.ie/EEOS/Energy-Saving-Credits-Table.pdf page 19 Interview with Josephine Maguire National Coordinator of Better Energy Sustainable Energy Authority of Ireland What are the main expectations of the Irish government (or of your Ministry) for the new scheme? The first objective is achieving the target for the EED article 7. Then the scheme is expected to increase the competitiveness of Irish companies, as well as the jobs in the energy efficiency markets (in particular for the construction sector facing high unemployment). The aims are also to improve the energy efficiency of the building stock and to reduce the reliance on imported fossil fuels, which is a critical issue for the Irish energy policy. What are the main characteristics of your scheme? The main objective while preparing the scheme was to make rules clear and to provide the obligated parties (OP) with the best guidance possible. A key concern was also to ensure a collaborative process, with strong links between the public authorities and the OP, by facilitating regular consultations (Quarterly Governance Forum) and with SEAI being available for frequent bilateral contacts with the OP. Another key component is the sub-targets. The experience with the voluntary agreements (2011-2013) has shown that actions were cheaper to implement in the non-residential sectors. The sub-targets were then set to ensure that a minimum share of energy savings is achieved in the residential sector and for alleviating fuel poverty. Actions for the fuel poverty target are mostly implemented through involvement of the obligated parties in SEAI programmes together with partnerships with local authorities (area-based community programmes). What would be the key questions you would like to ask to countries already having a long experience with energy efficiency obligation schemes? This would be about Measurement & Verification issues, as the documentation available about other schemes does not often provide details about that. Experience sharing about the particular issues raised in EED Annex V (“additionality and materiality”) would also be useful, as their practical application is not very clear, still now despite the helpful technical line organised by the European Commission. Experience about cost-effective ways to implement controls on statistically representative samples and details about administration costs would also be welcome. What are the main changes to come? New processes for Quality Assurance are under development, with a shift to a wider perspective. The principle would be to audit the obligated parties’ quality processes instead of auditing the projects. The objective is to adopt a risk-based approach and to look at the right evidence, in order to optimise the management of the scheme. A recent market based addition to the scheme has been broker auctions for projects proposed by third parties. page 20 ITALY Responsible authority : Ministry of Economic Development & Ministry of Environment Managing authority : GSE (Gestore dei servizi energetici) Status, timeline and current target The scheme started in 2005. Annual targets are defined within multi-year period (currently 2013-2016). The targets are expressed in both annual primary energy savings (in Mtoe/a) and in number of certificates (in Mtee/a, distinct unit due to the tau coefficient and supply-side actions eligible for the targets in Mtoe but not for certificates). Annual targets for 2013-2016: 2013: 4.6 Mtoe/a ; 5.5 Mtee/a 2014: 6.2 Mtoe/a ; 6.8 Mtee/a 2015 : 6.6 Mtoe/a ; 7.8 Mtee/a 2016: 7.6 Mtoe/a ; 9.5 Mtee/a Key actors and scope The Ministries (Economy and Environment) set the general rules of scheme and the annual energy savings obligations. GSE (public body in charge of stimulating energy services) manages the scheme, and in particular the monitoring & verification tasks, with the technical support from ENEA (Italian Energy Agency) and RSE (technical centre owned by GSE). AEEGSI (Regulator of the energy markets) sets the penalties and DSO tariff allowance. The obligated parties are the distributors of electricity (13) and natural gas (50) with more than 50 000 customers. They can directly implement project, have bilateral contracts with operators or buy energy savings via the trading platform managed by GME. 97% of the certificates have been issued to eligible (non-obligated) parties (72% to ESCos). For 2005-2014, 28.1Mtee were issued (against an overall target of 27.9 Mtee). Many associations or federations of stakeholders are also active (e.g., FIRE for promoting energy services). Energy savings actions Actions are eligible in all end-use sectors, under additionality criteria. 28 types of standard projects (with deemed savings) are currently eligible (mainly for the residential sector). Certificates can also be obtained through analytical projects (10 standard calculation methods) or monitoring plan projects (subject to pre-validation by GSE, and then certificates issued based on measured data). Accounting/crediting/validation of the energy savings Obligated or eligible parties can submit online application files. GSE reviews their documentation and validates (after technical evaluation by ENEA and/or RSE when needed) within 60 to 90 days, then GME issues the corresponding certificates. 2005-2009: 88% of the certificates for standard projects (large share of CFL) 2010-2013: about 90% for analytical or monitoring plan projects (mostly in industry, with an increasing share of large Monitoring Plan Projects). Certificates are credited on an annual basis for 5 years (8 for building envelope, 10 for high efficiency co-generation), applying the tau coefficient calculated as the ratio between the discounted (2%) lifetime and the certificates accreditation period (5, 8 or 10 years). GSE monitors target achievement annually, based on reports by the obligated parties. GSE also randomly checks ex-post whether the implemented project complies with the approved project and conducts on-site inspections during the implementation or useful lifetime of the project. Annual programme of controls must include on-site inspections for projects with energy savings > 3 000 toe/a. Specificities of the scheme or context Most of the white certificates are traded. The scheme has been a push for the ESCos markets. Since 2013, not possible to cumulate a national public incentive and white certificates + premiums for large-scale and innovative projects. From 2016, ESCos and energy managers will have to be certified for projects to be eligible for certificates. page 21 Interview with Dario Di Santo Managing Director FIRE (Federazione Italiana per l'uso Razionale dell'Energia) What could have be done differently? Key lessons learnt after 10 years are: 1) It is important to consider a budget for training & information activities. For example, preparing and reporting an energy efficiency project require capacity building. 2) Initially, the controls were mainly focused on checking documentation. Risks of frauds and non-compliance have raised the need for on-site inspections. 3) The issues of baseline & additionality can be complex, especially for monitoring plan projects, both for the project holder that has to define it and for GSE that has to evaluate it (finding a relevant expert). 4) Due to the adaptation of the scheme, there has been some confusion between ESCos and consultancies, which may have hinder the development of the markets for “real” ESCos. What are the main characteristics of the Italian scheme? 1) The capability to promote EE projects, from easy ones (CFL, etc.) at the beginning to complex industrial projects now. The monitoring plan projects have improved the quality of the actions, with measured savings. 2) The capability to collect a lot of useful information about the actions, especially through the detailed descriptions of the projects and the measured savings. This provides agencies and policy makers with rich data about energy savings potentials, in particular in industry. 3) A design promoting the development of the ESCo market and related financial services. 4) Any EEO scheme needs time and finetuning before fully delivering its potential. The overall monitoring has been very important for adapting the scheme along the experience gained and anticipating the changes needed. What are the main recent/coming changes? The Decree of 28/12/2012 brought significant changes to the scheme. The move from AEEG to GSE for its management led to an increased attention paid to controls. Premiums have been introduced for largescale/innovative projects. Actions getting public incentives are not eligible anymore. Certification of ESCos and experts will be required from 2016. A general revision is on-going to prepare the next period, raising important discussions about key rules (tau coefficient, baseline, etc.) that can impact strongly on the scheme. What are the main stakes for 2014-2020? The coming changes of rules may be a key challenge. Changing baselines may affect what kind of actions are eligible. Then the tau coefficient is under criticism because it may be difficult to manage (e.g., in case of noncompliance observed some years later) and it is considered too high for particular solutions. The possible introduction of requirements (liability and financial guarantees) for ESCos due to the risks related to large projects could restrict the number of actors. The increase in the DSO tariffs is also close to the maximum considered in the national strategy. This is mostly due to other impacts (renewable, nuclear decommissioning), but this could push to decrease the price of the white certificates (to limit the refunds to DSO). page 22 LATVIA Responsible authority : Ministry of Economics Managing authority : Ministry of Economics Status, timeline and current target The Latvian Energy Efficiency Obligation scheme is under preparation. While the general principle of an obligation scheme has been set by the Government Concept at the end of 2013, the decisions about its features have been delayed due to a change of government in October 2014 and to negotiations with the stakeholders. The scheme is expected to start in 2016, with a target to be set for 20162020. Due to this late launch, a large share of the target for the EED article 7 will likely be achieved through alternative measures. Key actors and scope The Energy Efficiency Division of the Ministry of Economics is in charge of preparing the scheme. The Cabinet of the Ministers will take the final decisions. Energy savings actions All actions that can demonstrate energy savings for the final customers are eligible (all end-use sectors). A catalogue of standardised actions4 has been developed by working groups including representatives of parties involved in Energy Efficiency Obligation scheme and external experts, also using the Danish experience and taking account of the specificities of the Latvian context. Other actions should be eligible, provided their energy savings are documented (likely through energy audits). Accounting/crediting/validation of the energy savings The baselines for the standardised actions are based on current regulations. The detailed crediting and validation rules have not been decided yet. The approach could be similar to the one used for the ETS (Emission Trading Scheme), based on annual reports by the obligated parties. The reports should cover past achievements as well as planned activities. For time being, the scope of obligated parties has not be totally defined yet. None of potential parties are excluded but it is visible, that the gas monopoly, the main electricity companies and district heating companies would be included. Discussions are on-going about the inclusion of other energy types and defining thresholds. The Association of Municipalities plays an active role in the discussions because the municipalities own most of the heating companies, and also because they are expecting renovation programmes for their territory. The Monitoring & Verification system should be adapted from the one used to report for the Energy Services Directive, and should include random controls by independent auditors. Conformity with EED article 7 is also a key consideration. Specificities of the Latvian scheme or context Key aspects about the background of the Latvian scheme are: 1) The fear of increasing energy prices (especially for heating) due to the introduction of the scheme. 2) The conflicting position between the public authority aiming to keep the scheme simple with a small number of obligated parties at the beginning, while the largest companies want all energy companies to be included (to share the burden and to avoid possible market distortion, e.g. for heating). 3) The involvement of municipalities willing to keep the investments induced by the scheme within their own territory. Some intend to create municipal ESCos or energy efficiency funds. 4) The broad involvement of district heating companies which act locally as monopolies at the same time ensuring public service as well as social functions. Therefore the business (cash flow and profit) is affected by local conditions such as consumer`s ability to pay and municipal political considerations. 4 https://www.em.gov.lv/lv/nozares_politika/energoefektivitate_un_siltumapgade/energoefektivitate/energijas_ietau pijumu_katalogs/ page 23 Interview with Andzela Petersone Deputy Head of Energy Efficiency Division Renewable Energy and Energy efficiency department Ministry of Economics of the Republic of Latvia What are the main expectations of the Latvian government (or of your Ministry) for this new scheme? The basic reason for the introduction of the scheme is the need to meet the national mandatory energy efficiency target for the article 7 of the Energy Efficiency Directive. In addition, and based on the experience of existing schemes, we expect that the businesses will implement measures in a more cost-effective manner than the publicfunded programs (on average). We also expect that the scheme will encourage greater involvement of energy companies towards their customers, creating greater confidence and improving the services delivered. The current situation is however different. According to the latest political positions, the main part of the EED article 7 target must be achieved by alternative measures. The obligation scheme could be introduced only in the case when alternative measures would not deliver the expected results. What would be the key questions you would like to ask to countries already having a long experience with energy efficiency obligation schemes? 3. How have the measurement, control and verification systems for statistically significant proportion of energy efficiency measures been set? 4. What are the easiest type of actions to implement by parties involved in EEOS and which of them deliver the highest energy savings? What are the main steps to come? The process is set in the Latvian legislative procedure. The government first took a conceptual decision on how the EED should be implemented, based on an assessment of both the potential for energy savings and financial terms. In parallel, the Ministry commissioned a study on the main elements of the scheme (such as whether it is appropriate to introduce a trading system, proposals for benchmarks, etc.). This is followed by the development of laws and regulations. Legislative process involves ministries and stakeholders. After that, the law is adopted by the parliament. The planned order of the discussions is: • • 1. Are there cases where obligated parties fail to comply with their obligations? What are the procedure and penalties then? 2. What type of information and communication is the most effective to convince the public that it is appropriate to introduce a scheme? How to achieve support for the implementation of the scheme from the policy-makers and businesses involved? • • First of all – political agreement on energy sectors to be included in EEOS (biomass retailers) Then make a clarifying calculation on the planned savings from alternative measures and savings that need to be achieved by the obligation scheme Obligations distribution principle and order MRV system and rules page 24 LITHUANIA Responsible authority : Ministry of Energy Managing authority : Lithuanian Energy Agency Status, timeline and current target A few energy companies (1 electricity distributor and 8 district heating companies) have signed voluntary agreements with the Energy Agency since 2010. The law enforcing the new obligation scheme is under discussion. The scheme is expected to start in 2015. Key actors and scope The Ministry of Energy coordinates the scheme, especially by setting the general rules and targets (global and for each obligated party). The Lithuanian Energy Agency is in charge of defining the standardised actions and calculation methods, monitoring and verifying the achievements. Planned targets are 45.92 ktoe for 2014-2016, then 183.68 ktoe for 20172020 (this would represent 80% of the Lithuanian target for the EED article 7). The obligated parties are the energy distributors (the two main ones for electricity, the main one for natural gas, and the district heating companies that sell more than 90 GWh of heat/a). The obligations cover the final energy consumption of the buildings (residential and services) and the industry. Energy savings actions The priority is on buildings and industry. But all end-use sectors will be eligible. Accounting/crediting/validation of the energy savings The obligated parties will have to report to the Energy Agency about the actions they have supported (scope, costs, energy savings). A catalogue of standardised actions is under preparation by the Energy Agency, as well as a general calculation methodology for non-standardised actions. The obligated parties can propose new types of actions for the catalogue. The Energy Agency is in charge of the monitoring, verification and controls. The detailed guidelines are under preparation. The detailed guidelines for monitoring, reporting and verification are to be defined. Until then, the obligated parties may use the current rules applied for energy efficiency policies and programs (for example the rules for energy audits, etc.). Specificities of the scheme or context The launch of the obligation scheme has been delayed due to a change of Energy Minister and important discussions along the legislative process (in particular about the cost recovery mechanism). page 25 page 26 LUXEMBOURG Status, timeline and current target The scheme has started in January 2015, for a period up to the end of 2020. The overall target has been set to achieve 100% of the target for the EED article 7: 5 993 GWh of final energy savings cumulated over 2015-2020. The individual targets are set annually (level of about 285 GWh/a of new energy savings). Responsible and managing authority : Ministry of the Economy Key actors and scope The Ministry has the full responsibility of the scheme, including its administration and management. The Energy Regulator applies the sanctions after decisions by the Ministry. The agency MyEnergy provides a technical support. The obligated parties are all the electricity (about 28) and gas (about 9) suppliers, based on their sales in the residential, service and industry sectors. No trading is included, but bilateral transfer of energy savings may be possible between obligated parties. Energy savings projects can be led by third parties (installers, energy advisors, etc.), but they have to be directly subcontrated by the obligated parties (through call for projects, bilateral contracts or simple negotiations). Energy savings actions Actions are eligible in all end-use sectors to save all types of energy. The baseline is defined according to given minimum energy performance requirements. Behavioural actions may be eligible under conditions. A catalogue of 34 standardised actions (including deemed savings) has been prepared. A calculation methodology is available for other types of actions. The results are counted in 1st-year savings for the achievement of the target, taking into account that the actions have to deliver energy savings in 2020. Accounting/crediting/validation of the energy savings The process follows the approach of the Danish scheme. Obligated parties have to report their energy savings each year (before March). Actions are reported according to a standard template defined by the Ministry of the Economy. Complementary details have to be documented and kept for 10 years in case of control (especially the documentation of the type of intervention with the final customer and the attestation of anteriority). Independent consultancies will perform annual random controls of a representative sample of actions, under the supervision of the Ministry of Economy. Penalties may be applied in case of non-achievement of the target, but the penalties are not in full discharge (the missing energy savings have to be achieved the next year). Specificities of the scheme or context The obligated parties may recover their costs on energy prices. To avoid distortion between energy types, non-obligated suppliers might in the future be obliged to pay a special tax. The obligation is defined as a mission of public service. This allows the scheme to be partly funded by the State budget. page 27 Interview with Carla Oliveira Policy Advisor at General Directorate for Energy Ministry of the Economy What are the main expectations of the government for this new scheme? One of the main objectives is to comply with the EED article 7. The Directive has been the trigger for implementing the scheme. Furthermore the scheme is meant to strengthen and boost the promotion of energy efficiency, as a complement of existing policies and measures. What would be the three questions you would like to ask to countries already having a long experience with energy efficiency obligation schemes? We reviewed the existing schemes when preparing the one for Luxembourg. In particular, we had contacts with Denmark, and a Danish consultancy took part in the preparatory works. The questions we would like to know more would be about the key factors for making a scheme successful, as we could see differences in the achievements according to the countries. Then additionality is also an interesting issue for experience sharing, as there is no harmonised definition among countries. It is sometimes defined according to energy performance levels, for example by taking into account market averages. Or it could also be defined in terms of policy measures, meaning that actions receiving other public incentives cannot be eligible for the obligation scheme. What is your experience feedback in launching a new scheme? The preparation and launch of the scheme went mostly fine. It has been generally accepted by the obligated parties, because they were included and consulted along the preparatory works, especially when defining the standardised actions. What are the main steps to come in the implementation of the scheme? The main step to come is the vote of the law in the coming weeks. The scheme has already officially started (measures realised from 2015 on are countable). But the legal basis has still to come into force. Then a grand ducal regulation will set the practical details. page 28 MALTA Responsible authority : Ministry for Energy and Health Managing authority : Malta Resources Authority Status, timeline and current target The Maltese scheme is based on the smart meters roll-out (for electricity) completed between 2009 and 2015. Enemalta has then been required to implement complementary measures for raising households’ awareness about their electricity consumption and savings potentials. These measures are expected to deliver 111.5 GWh of electricity savings over 2014-2020 (14.4% of the Maltese target for the EED article 7). Energy savings actions There are two categories of mandatory measures (with expected savings over 2014-2020): • actions linked to smart meters: information activities (including voluntary audits for residences) and use appropriate messages from 2016 (63.8 GWh), and additional specific energy advice or services from 2018 (19.1 GWh) • electricity pricing: rising block tariff (16.5 GWh) and an "ecomechanism" rewarding lower consumption levels (12.1 GWh) Key actors and scope The scheme has been defined by the Ministry for Energy and Health, setting the obligation on Enemalta, the single Maltese electricity distributor and supplier. The scheme is focused on electricity consumption in households. The Ministry for Energy is in charge of setting the team that will monitor and evaluate the achievements. This team, to be led by the National Statistics Office, will include representatives of relevant authorities and entities (e.g. Institute for Sustainable Energy of the University, Malta Intelligent Energy Management Agency). Enemalta’s activities are also subject to the National Audit Office and are regulated by the Malta Resources Authority. Accounting/crediting/validation of the energy savings Enemalta has to report to the responsible and managing authority about the initiatives implemented. The expected savings for actions related to smart meters are based on literature. The monitoring team will supervise research to investigate the actual energy savings. The scheme is meant to serve as a laboratory for energy efficiency initiatives related to smart meters. The savings related to electricity pricing have estimated by an econometric study (by external consultants) to be updated every year. Specificities of the scheme or context As an island State, Malta gives a high priority to resource conservation (in particular for energy and water). The major measures about electricity have been the renewal of the electricity plants and an interconnection with Sicily. In parallel, Malta intends to be a platform for innovations related to smart electricity systems. Smart meters are also meant to detect fraud, by controlling excessive electricity use which usually accompanies electricity theft. An exercise to detect this phenomenon has much intensified in the past years as presented by Enemalta upon its website in 20145. 5 http://www.enemalta.com.mt/newsDetails.aspx?id=18099 page 29 Interview with Charles Buttigieg Senior Policy Officer Sustainable Energy and Water Conservation Unit Ministry for Energy and Health What are the main expectations of the government (and/or your personal) for this new scheme? The main objective is to increase consumer awareness of their electricity consumption, by using two main approaches: information activities related to smart meters, and electricity pricing. What are the three main characteristics of your scheme that you would like to point out? The three main components of the scheme are 1) the roll out of smart meters, 2) using these smart meters for promoting energy efficiency, and 3) rewarding electricity consumers according to their level of consumption. What would be the three questions you would like to ask to countries already having a long experience with energy efficiency obligation schemes? 1) What are the main administrative burden for the public authorities and the obligated parties? (And how to minimize them?) 2) How are the obligations related to energy efficiency and to renewable energy sources coordinated? 3) What are the methodologies used for quantifying and verifying energy saved through energy efficiency obligations? What are the main steps to come in the implementation of the scheme? The roll out of smart meters is almost completed, and the progressive electricity tariff is already implemented. The next step is now further information on the use of the smart meters by the consumers, so that they can reduce their electricity consumption. page 30 POLAND Responsible authority : Ministry of Economy Managing authority : URE (Energy Regulatory Office) Status, timeline and current target The scheme started in January 2013 for a period up to 31 December 2016. The overall target is linked to the EED article 7, as Poland chose to meet the related target (14.7 Mtoe for 20142020) fully through its obligation scheme. Individual targets are set annually as a % of the energy sales to end-users (with possible exemptions): 1%/a in 2013, then 1.5%/a from 2014. 1st tender (2013): 20.5 ktoe/a (3.7% of the targeted amount of 550 ktoe/a) Energy savings actions There is no catalogue with deemed savings but an official list of eligible general types of action (covering households, services, industry, network losses, and “self-generation” of heat or electricity). Actions that receives a State or European incentive are not eligible. The energy savings calculations are based on ex-ante energy audits (simplified or comprehensive according to the type of action). The energy savings are accounted for in annual primary energy savings. Key actors and scope The Ministry of Economy sets the rules of the scheme and the targets. URE administers the scheme. The obligated parties are the energy suppliers selling electricity, heat, or natural gas to end users (and energy traders). They can achieve their target through obtaining energy efficiency certificates for actions on their own asset, buying certificates (on the Polish Power Exchange or through OTC transactions), or paying substitution fees (250€/toe) to a fund managed by the Ministry of Environment. Any actor reporting a project saving more than 10 toe/a (primary energy) may obtain certificates. 75% of the applications submitted to the 1st tender (2013) involved district heating companies. Accounting/crediting/validation of the energy savings Energy savings certificates can only be gained through open public tenders organised by URE (at least once a year), that sets the maximum amount of certificates to be awarded in each bid. Projects are submitted including their audit report. They are selected based on a cost-efficiency criterion, considering all or only part of the energy savings of a project. The certificates are issued for the awarded energy savings, once the applicant confirms the project implementation. Ex-post audits (by a different auditor) is required for projects saving more than 100 toe/a. URE verifies annually the individual target achievements, organises random controls (possibly including on-site inspections) and decides penalties when needed. Specificities of the scheme or context Poland had implemented certificates schemes for renewable energy sources and cogeneration, which supported the choice of white certificates as the main policy instrument for energy efficiency (assuming it would limit the need for public resources). The tender procedure is complex and strict: only 102 out of the 212 bids submitted to the 1st tender (2013) were selected, mostly due to formal reasons (while only 3.7% of the possible amount of certificates were awarded). page 31 Interview with Tadeusz Skoczkowski Professor, Head of the Chair of Rational Use of Energy Warsaw University of Technology What are the main expectations for the Polish energy efficiency obligation scheme? The scheme has been established as the main instrument for improving energy efficiency, in line with the approaches used to promote renewable energy technologies and cogeneration, aiming at minimising the needs in public funding to meet energy savings goals. It was first expected to deliver half of the national energy efficiency target set for 2016, according to the Energy Services Directive. It is now meant to achieve 100% of the target for the EED article 7. These are high expectations. What are the main characteristics of the Polish scheme? The main specificity is that energy efficiency certificates can only be obtained through public tenders, which turned to be a complicated process. About 40 to 50% of the projects submitted have been rejected due to administrative details (while the projects may deliver energy savings). This shows that more flexibility would be needed. This approach also generated higher administrative costs than expected, in particular because there is no automation in the evaluation of the projects (all performed “manually”). Moreover, this was a completely new topic for URE that had no previous experience in the field of energy efficiency. What would be the main questions you would like to ask to countries already having a long experience with energy efficiency obligation schemes? Key topics for experience sharing are the minimisation of administration costs (methods for measuring & verifying the savings, what projects should be controlled, use of IT systems), action eligibility, the characterisation of action types per cost and saving potential in order to better define possible substitution fees, the understanding of costs related to the actions (as the price of certificates does not reflect the “real” costs) What are the main stakes for 2014-2020? The current period ends by December 2016. A new law will be needed to extend the scheme. But it is very unlikely that decisions be taken before coming elections (of the President in May then of the Parliament this autumn). This may create difficulties as the end of the current period will come quickly (compared to the time needed for legislative process). A draft law was prepared in 2014, proposing in particular to remove the tender process and to go for a simpler approach with direct validation of the projects. But it has been rejected so far. A key challenge will then be to simplify the administrative system. Another important issue is to assess the overall costs for the national budget, as well as the actual impact on energy prices. Additionality should also be paid more attention. It is not really considered so far. Energy savings are calculated based on a “before”/”after” comparison. Therefore, energy efficiency certificates may be awarded to actions that do not have an energy performance above the current regulations or the market average. page 32 SLOVENIA Responsible authority : Ministry of Infrastructure Managing authority : Slovenian Energy Agency Status, timeline and current target The obligation scheme is built on a previous scheme started in 2010. It has been linked to an energy efficiency contribution (fees on energy prices) that was used to award funding to the public Eco Fund (mostly for soft loans) or to energy suppliers for implementing energy efficiency programs. From March 2014, suppliers must implement programs on their own expenses. Key actors and scope The government (Ministry of Infrastructure) set the rules. The implementation of scheme will be supervised by the Slovenian Energy Agency (authority regulating the energy markets) that needs to set up a new team dedicated to monitoring and verification. The Centre for Energy Efficiency of the Jožef Stefan Institute provides a technical support (especially in the development of the calculation methods). The obligated parties are the suppliers of electricity, natural gas, heat (district heating), and liquid and solid fuels to final customers in all end-use sectors (with a lower target for transports: 0.1%/a). Targets are set annually from 2014 to 2020, as a % of the energy sales in the previous year: 0.25%/a for 2014-2015, 0.5%/a for 2016-2017, and 0.75%/a for 2018-2020 (0.75%/a would represent about 260 GWh/a) The scheme also aims at stimulating markets for energy efficiency, but the way ESCos could be involved in the scheme is not defined yet. Energy savings actions Eligible actions are defined by decree (about 40 standardised actions with deemed savings, more to come), with the aim to cover all end-use sectors. Other actions can be reported through energy audits. Actions improving the efficiency of district heating, cogeneration and cooling installations could also be eligible. Accounting/crediting/validation of the energy savings Obligated parties will have to report annually their achievements to the Energy Agency. The Ministry will set the rules defining the form and content of the report. Surplus of energy savings can be transferred over the next three years. Actions must exceed the minimum requirements set in current regulations (especially the ones from the EcoDesign Directive 2009/125/EC). The scheme does not include a trading market. But the obligated parties may fulfil their obligations by making a payment to Eco Fund (fee = average costs (per kWh saved) as observed for Eco Fund programmes). The Energy Agency will verify at least a statistically significant proportion and representative sample of measures to improve energy efficiency implemented by obligated parties (mainly based on energy consumption data collected by the obligated parties). This could be used to update the deemed savings. Energy savings are accounted for the 1st year of the actions that are still delivering energy savings in 2020. Specificities of the scheme or context Eco Fund has been proposing financial incentives (mainly soft loans, but also grants) since 2002. This has provided a basis to involve progressively the energy suppliers in energy efficiency activities. The option of achieving the target by contributing to Eco Fund at the average costs of Eco Fund programmes can be seen either as an incentive for the obligated parties to find more cost-effective ways, or as a way to ensure that energy efficiency projects will be implemented anyhow. page 33 Interview with Mojca Vendramin Head of the Energy Efficiency and Renewable Energy Unit Directorate for Energy Ministry of Infrastructure What are the main expectations of the government (and/or your personal) for this new scheme? A key objective is to implement the article 7 of the EED and to meet the global energy efficiency target for 2020. Alternative measures are expected to achieve energy savings of 0.75%/a, especially through a public fund focused on energy efficiency in households and financed through a special energy efficiency contribution on energy prices (about 40 million euros/a). The obligations on energy suppliers are expected to deliver an increasing share of energy savings (0.25%/a for 2014-2015, 0.5%/a for 2016-2018 and 0.75%/a for 20192020). The scheme has started in 2010. The utilities could implement programs with funds from the energy efficiency contribution until March 2014. They have now to fund their programs on their own expenses. Due to an ageing building stock, there is a high demand for refurbishments. In the previous period, the activities were mostly information programmes (soft measures) that are not eligible anymore. The utilities have now to promote technical actions (hard measures). What would be the main questions you would like to ask to countries already having a long experience with energy efficiency obligation schemes? The main questions would be about economic aspects: what is the average price of energy savings? Is there an impact of the scheme on energy prices? What costs are transferred to the final customers (and how)? What are the main steps to come in the implementation of the scheme? The special fee for energy efficiency has been increased to have enough money for the public fund. In parallel, a current objective is to develop the markets for energy services. An important topic is also the supervision of the scheme and the monitoring & verification of the achievements. About 40 standardised calculation methods have already been defined. New methods (especially for actions in transports) are under preparation as well as a verification methodology. Another change is that small-scale renewable energy systems are not eligible anymore. What are the main stakes for 2015-2020? One of the main challenges is that energy efficiency represent new markets that are not mature yet, and could need time to develop. Another key issue is that any new policy measure means new administrative burden, for both the government and the utilities. The EED comes with a lot of requirements and reporting, while Slovenia has not a dedicated agency for energy efficiency. The EED implementation represents too much work for the small team in charge of it at the Ministry. And the current restrictions on public budget do not make it possible to have more staff or to create an agency. This makes the situation difficult, while expectations about energy efficiency are high. page 34 SPAIN Responsible authority : Ministry of Industry, Energy and Tourism Managing authority : IDAE (Institute for Diversification and Saving of Energy) Status, timeline and current target The energy efficiency obligation scheme has started in July 2014. In a first phase, the obligations will be achieved only through payments to a new National Energy Efficiency Fund. In a second phase, the scheme may include tradable energy savings certificates (but this will likely depend on political decisions to be taken after the general elections at the end of 2015). The overall energy savings target for 2014-2020 amounts to 6 356 ktoe over 2014-2020 (as estimated in the revised version of the report for the EED art.7). Energy savings actions A catalogue of standardised actions (with deemed savings) is under preparation by the IDAE, that could be used in the possible second phase. The catalogue aims at covering all end-use sectors. Targets for the two first years: 131 ktoe (1 523 GWh, 0.17% rate) for 2014, 262 ktoe (3 046.51 GWh, 0.395% rate) for 2015. The total contribution to the Fund amounted to 103 million € in 2014 and to 207 million € in 2015. The contribution fee has been set to about 68€/MWh in 2014 and 2015. Key actors and scope The Ministry of Industry, Energy and Tourism set the general principles, targets and rules of the scheme and has established the National Energy Efficiency Fund. The IDAE will manage the Fund, under the supervision of a Steering Committee including different ministries. The obligated parties are the suppliers of electricity and natural gas, and wholesale retailers of oil products and LPG. In the first phase, they have to report each year about their energy sales (in GWh) to all their final customers (all sectors except agriculture and fishery) the previous year (about 771 TWh in 2013), and then to pay in the year “n” in proportion to their energy sales in the year “n-2”. When the second phase may start, ESCos could be allowed to register for submitting projects to get energy savings certificates. Accounting/crediting/validation of the energy savings The obligations and contribution fee are set annually, taking into account the overall target for 2014-2020 and the estimated average costs for energy savings from the activities of the Fund. In a second phase, an energy savings trading scheme could be put in place (the option of contributing to the fund would likely still be allowed). IDAE has been in charge of preparing this option. Detailed guidelines would have to be specified. The implementing text (Decreto-ley 8/2014) has defined detailed rules about the types and levels of infringements, sanctions/penalties and related procedures. They cover the possible situations of false declarations, frauds, noncompliance and non-achievements of the targets. Specificities of the scheme or context The revised report for the EED article 7 mentions (p.36) that the new National Energy Efficiency Fund “will be the main instrument supporting Government action aimed at meeting the savings targets”. It will be focused in priority on building renovations and energy efficiency in transports. It will be funded by the State budget, the contributions from the obligated parties and EU Structural Funds. The Fund is meant to finance schemes providing financial incentives (direct aids and other financing instruments), technical support, training and/or information. page 35 page 36 UNITED KINGDOM Status, timeline and current target The first energy savings obligation started in 2002 (after obligation of means from 1994). The current scheme (Energy Company Obligation 2) runs from 1 April 2015 to 31 March 2017. ECO2 includes 3 distinct targets: CERO (Carbon Emissions Reduction Obligation, 12.4MtCO2 in lifetime carbon savings), CSCO (Carbon Savings Community Obligation, 6MtCO2) and HHCRO (Home Heating Cost Reduction Obligation, £3.7 billion in costs savings) (+ sub-targets for rural areas and solid wall insulation). ECO2 is expected to deliver new savings of about 0.7 TWh each year. Energy savings actions ECO is focused on the residential sector. Eligible actions are divided into “primary measures” (wall and roof insulation measures, relevant district heating connection) and “secondary measures” (other insulation measures), installed at the same premises as a primary measure. In addition, boilers are eligible for HHCRO (only). Except for district heating measures, the actions must be recommended by an energy assessment by a certified advisor, and installed by a certified professional according to current regulations/standards. Distribution for Jan2013-Jan2015 (in % of number of the 1.3 million actions installed): cavity wall insulation (38%), loft insulation (26,9%), boilers (21,6%), other heating (6,6%), solid wall insulation (5,8%). Responsible authority : DECC (Department of Energy and Climate Change) Managing authority : Ofgem (Office of Gas and Electricity Markets) Key actors and scope The Ministry (DECC) sets the general rules and the overall targets. The scheme is administered by the energy regulator Ofgem. The obligated parties are the 11 electricity and/or gas suppliers above given thresholds of customers and energy sales, based on energy sales in the residential sector. The obligated parties can conclude partnerships or agreements with third parties (e.g., social housing associations, local authorities, retailers, manufacturers) to deliver actions, or they can buy projects through a brokerage system. There is no market/trading of actions, but transfers between obligated parties are possible under approval by Ofgem. Accounting/crediting/validation of the energy savings Obligated suppliers must use standardised energy assessments to provide carbon and costs savings when notifying each action (once installed) in the ECO Register. The information are reviewed by Ofgem that then approves the action in the register, where the obligated parties can check its status. Obligated suppliers must report monthly their number of actions. Ofgem also requires obligated suppliers to conduct technical monitoring (by a qualified and independent third party) of a sample (5%) of notified actions. Ofgem will conduct audits of a sample of actions (checking their documentation).The achievement of the different targets will be checked at the end of the period (2017). Ofgem administration costs are about 3 million €/a (covered by fees paid by the obligated parties). Total costs for obligated parties are estimated to amount between 1 to 1.5 billion €/a. Specificities of the scheme or context First national energy savings obligation scheme in Europe (since 2002). Scope limited to the residential sector. Special focus with area-based and “energy poverty” targets. ECO initially designed to be complementary to the Green Deal scheme (aimed at more cost-effective actions, while ECO aimed at “hard-to-treat” actions). page 37 Interview with Carolina Valsecchi Energy Company Obligation Team Department of Energy and Climate Change What are the main characteristics of your scheme? Warmth, a deflator for replacement gas boilers has been introduced. There has been a succession of obligation schemes for about 15 years. The current scheme (ECO, Energy Company Obligation) includes three main targets: CERO (Carbon Emissions Reduction Obligation) aimed at insulation measures, CSCO (Carbon Savings Community Obligation) aimed at local areas and low income (with a sub-target for rural areas) and HHCRO (Home Heating Cost Reduction Obligation) aimed at low income and vulnerable households. We already start thinking about the post2017 period, especially considering the feasibility of a trading scheme (white certificates). Experience sharing with countries already implementing this option, such as Italy and France, would be very interesting. An important addition of the current period is the brokerage system (for auctions of future energy efficiency projects) that offers more flexibility and favours new partnerships (double-blind system). What are the main recent changes (or to come)? The main driver of the recent changes is the impact of the obligations on energy prices that became a political issue by late 2013. The reform made in 2014 aims at reducing this impact by reducing the CERO target by 33% and by allowing less expensive actions (in particular cavity wall and loft insulation) compared to the initial focus on Solid Wall Insulation (SWI). A new phase (ECO2) has thus started on the 1st of April 2015 until March 2017, including a minimum target for SWI (100 000 dwellings). In addition, incentives have been defined for actions in non-gas fuelled dwellings (uplifts applied to insulation measures when combined to boilers) and, to rebalance delivery towards insulation under Affordable What would have you done differently? The stakeholders are insisting on the length of the scheme and the need for certainty, in particular to establish partnerships. Setting rules for 5-year periods would provide more stability and avoid ups&downs for the supply chain. The rules set for 2013 had negative impacts on the supply chain, which has been addressed by committing additional funding (through the Green Deal Home Improvement Fund). Another concern is about the costs to identify eligible customers (e.g., for HHCRO), so we are looking for options about data sharing to make it easier. The use of assessment on each property instead of deemed savings have also increased administrative complexity and costs, and made more difficult for the obligated parties to assess beforehand the incentives they could offer to the households. The brokerage system has proved to be promising, but could be improved. For example, by amending the standard contract that underpins all trades to require more information on work carried out before payment, to give more confidence to the buyers. page 38 Acronyms and abbreviations ADEME: French Agency for the Environment and Energy Management AEEGSI (formerly AEEG): Italian Regulator of the energy markets Art.7: article 7 of the Energy Efficiency Directive (2012/27/EU) ATEE: Technical Association for Energy and Environment (France) CEE: Energy Savings Certificates (France) CEI-NKT: Croatian Energy Efficiency Authority CERO: Carbon Emissions Reduction Obligation (Great Britain) CFL: Compact Fluorescent Lightbulbs CSCO: Carbon Savings Community Obligation (Great Britain) DCENR: Department of Communications, Energy & Natural Resources (Ireland) DEA: Danish Energy Agency DECC: Department of Energy and Climate Change (UK) DGEC: General Directorate for Energy and Climate (France) DSO: Distribution System Operator ECO: Energy Company Obligation (Great Britain) EE: Energy Efficiency EED: Energy Efficiency Directive (2012/27/EU) EEOS: Energy Efficiency Obligation Scheme ENEA: Italian Energy Agency EPEEF: Environmental Protection and Energy Efficiency Fund (Croatia) ESCo: Energy Services Companies ETS: Emission Trading Scheme of the European Union (for CO2 emissions) EU: European Union FIRE: Federazione Italiana per l'uso Razionale dell'Energia GSE: Gestore dei servizi energetici (Italy) HERA: Croatian Energy Regulatory Agency HHCRO: Home Heating Cost Reduction Obligation (Great Britain) IDAE: Institute for Diversification and Saving of Energy (Spain) IPMVP: International Performance Measurement and Verification Protocol IT: Information Technologies M&V: monitoring and verification MRV: Monitoring, Reporting and Verification Ofgem: Office of Gas and Electricity Markets (UK) OP: Obligated Parties OTC: Over-The-Counter PNCEE: National Pole for White Certificates (France) RSE: technical centre owned by GSE (Italy) SEAI: Sustainable Energy Authority of Ireland SEDA: Sustainable Energy Development Agency (Bulgaria) SWI: Solid Wall Insulation tau coefficient: special coefficient used in the Italian scheme to take into account the action lifetime URE: Polish Energy Regulatory Office page 39 The ATEE (Association Technique Energie Environnement) is committed to the advancement of controlled energy use and reduced greenhouse gas emissions. The purpose of the Association is to promote better energy control in companies and communities and, more generally, to help energy users understand what they can do to better manage their energy consumption and make savings. In this way, they can contribute to achieving the national greenhouse gas reduction objectives whilst improving their own profitability. The Association has 2100 members. ATEE brings together the participants in the energy supply and consumption chain to exchange views and capitalise on feedback. It introduces people from different backgrounds who share similar concerns, making everyone better informed and more efficient. ATEE is a national network organised into regional groups. It provides its members with a forum for discussion and thought. Operating in a network reinforces the capability to conduct multiple actions at the grassroots level and to work in partnership with other players. ATEE monitors economic indicators and technological innovations to inform, raise awareness, and motivate. To help its members increase their knowledge and optimise their management and decision-making processes, the Association supplies concrete information in a succinct form. ATEE works for the general interest. The Association’s particularity is to rise above the specific interests of each member, as different members sometimes have conflicting interests, and to seek common ground, for the good of all. In this transparent, consensual approach for the common good, ATEE mobilises the skill and experience of its members to draw up proposals and hold discussions with public authorities to identify the measures that will promote energy control whilst limiting the greenhouse effect. This means that the Association gives its members access to explanations and clarifications to put new policies and measures into perspective right from their preparation phase. At the same time, it allows the public authorities to view their plans in the light of the realities out in the field. There are four Clubs within the Association: - The Cogeneration Club, - The C2E Club, involved in the practical implementation of the Energy Saving Certificate scheme, - The Biogas Club, which aims to promote the development of biogas production and use, - The Energy Storage Club. Every year with its regional delegations, the Association organises more than 50 colloquia and tours of technical facilities all over France. ATEE publishes ENERGIE PLUS, the bimonthly energy control magazine. Find out more by visiting: www.atee.fr or www.energie-plus.com ATEE - 47 AVENUE LAPLACE - 94117 ARCUEIL - Tél. 01 46 56 91 43 - www.atee.fr
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