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Energy efficiency in the EU
May 29, 2013
Short overview on legislation and implementation with a focus on the Energy Efficiency Directive
Monique Voogt
[email protected], +31-6-175.00.196
Agenda
Energy efficiency development in Europe
EU Policy Package Energy & Climate
Legislative framework on EE in EU - timeframe,
choices and the decision making process
Zoom-in on product labelling and the EED
Implementation (selected examples)
Strengths and Weaknesses
Conclusions
EE development in Europe
On a global scale the EU energy intensity is relatively low.
Source: IEA, world energy outlook 2012
But recent developments have been slow
Source: European Environment Agency,
January 2013
And there is quite some variation across EU Member States
Average EU
All new MS! Variation of final energy intensity in EU and EEA countries, 1990-2010
Source: European Environment Agency, January 2013
Energy & Climate Policy Package
Overarching EU framework on energy and climate objectives “20-20-20”
20% reduction in EU greenhouse
gas emissions from 1990 levels
Increase of renewable energy to
20% (share of total consumption)
20% improvement in the EU's
energy efficiency
Emissions trading with obligatory
targets at installation level (a.o)
Directive with obligatory targets at
country level
Set of Directives with guidance,
policy directions and soft targets
Longer term policy framework includes a road map towards 2050 and a green
paper on 2030 objectives
EU Heads of State: “EE measures can make a significant contribution to
reversing current trends in energy prices and costs” (Council Conclusions,
22/05/2013)
Legislative framework EE in EU
Household Appliances
• Labeling and standard product information – 1992 & 2010 Directives
• Minimum energy performance standards (Eco-design) – 2005 & 2009 Directives
• 2009 Legislation on banning
incandescent bulbs
Office equipment
• 2001 and 2008 Energy Star regulation
Overall
• 2000 Action Plan to Improve EE • 2006 Energy Efficiency Action Plan • 2011 Energy Efficiency Plan
Buildings
• 2002 & 2010 Energy Performance of Buildings Directive
• 2012 Supplement with methodology framework to determine EPBD cost-optimal levels
Supply-side efficiency
• 2004 CHP Directive
Demand-side efficiency
• 1993 Save Directive • 2006 Energy Services Directive
Tyres
• 2012 Labelling of tyres
Financing energy efficiency
• Wide set of financing measures incl. 265M€ EE fund and research funds
2012 EED 2012 EED
Product labeling
• Household dishwashers
• Household washing machines
• Household refrigeration appliances
• Televisions
• Refrigerators, freezers and their combinations
• Washing machines, dryers and their combinations
• Dishwashers
• Ovens
• Lighting sources
• Air-conditioning appliances
• Tyres
The framework Directive on product labeling is
complemented by a large set of implementing
regulations for a range of products
Energy Efficiency Directive (EED)
The final part of the overall EU
Climate & Energy policy package
“The last piece of the puzzle”
As for any new Directive adoption
required acceptance from
• The European Parliament
• The European Council
Relatively fast process:
• Proposal dated June 2011
• Directive adopted October 2012
But the route to adoption was
difficult and compromises had to be
made
Main elements of the EED
Obligation for Member States
• Obligatory renovation of 3% of the public buildings => “Setting an example”
• Draw up a roadmap to make entire buildings sector more EE by 2050;
• Report each year to the EC on the progress towards meeting the national EE
target (first report deadline 30 April 2013);
Obligation for energy companies
• Energy savings target of 1.5% per year (of annual energy sales);
• Requirement of energy audits and management plans for large companies.
Key weakness: Member States may choose a minimalistic approach
towards achieving EE targets
Key opportunity: the framework is adopted; EC will review the Directive
in 2014 and in 2016 with the possibility to strengthen the requirements
The challenging route to the EED
Various complexities arose while aiming to find agreement
• Combining demand-side and supply-side matters
• Wish for more stringent target setting (Parliament) versus wish for some
leniency and following “own measures” (Council)
• Consumer protection versus individual (smart) meters
• Economic crisis making parties reluctant to “lead the way” (governments),
accepting e-saving targets (energy companies) and investing in energy
services (all)
• EC aiming to support ESCO activities following Danish successes but many
parties fear loosing market share while the crisis already hits the sector hard
Many compromises had to be made, reducing the likely impact but
establishing a framework that allows strengthening over time
Implementation: energy obligation (1)
Costs in Denmark (2006-2009) 0.04 DKK/kWh (~ 0.01 USD/kWh)
This is quite low, but comparable to first-period results in other countries
• Main European systems in the UK,
Denmark, France, Italy and Belgium
• Poland decided on system, but not
fully operational yet
• Most savings achieved to date were
in the built environment
• The systems led to a growth of
commercial ESCOs on the European
market
Design features of obligation systems differ largely
1. Obligation: obligation on distribution companies in Denmark and Italy; other
countries have put the obligation on energy suppliers
2. Obligation: electricity and gas companies (most), electricity only in Belgium
3. Target/period/unit: very diverse. Period from 3-year to 7-year; primary or final
energy consumption; cumulated over life-time or annual savings; ….
4. Sector coverage: differs widely, from only residential (UK) to all (Italy)
5. Trading: target trading in UK; certificate market in Italy and France; no trade in
Belgium and Denmark
6. MRV: most countries mainly use an ex-ante deemed savings approach;
Denmark mainly uses ex-post engineering approach
7. Type of projects: mostly savings in the built environment and mostly one-off
repetitive actions (lighting, heating). In Denmark larger saving projects with
multiple components (e.g. renovation of multiple buildings)
Implementation: energy obligation (2)
Implementation: ESCOs in the EU (1)
Europe has a wide variation in ESCOs, which originated from various
drivers:
• As a response to legislation such as mandatory audits and energy
obligation systems
• As a mechanism to boost own product sales, mainly by control equipment
manufacturers and retailers (f.ex. Siemens, Honeywell)
• As an add-on to energy supply services to retain/win customers
• Initiated by grants from EU (such as TACIS programme) or national
governments (f.ex. Set-up of FEDESCO in Belgium)
• Set up with sovereign loans (f.ex. EBRD loan for Ukraine)
Implementation: ESCOs in the EU (2)
The majority of ESCO services is offered through one of the three main
types of offers:
• Energy Performance Contracting – ESCO invests in an energy saving
activity. This investment is repaid by the savings from a contractually agreed
level of energy efficiency improvement at the beneficiary
• Delivery contracting - Outsourcing of energy supply with guaranteed
services; payment based on existing energy bill minus % of savings
• Build-Own-Operate-Transfer (BOOT) contracts – ESCO designs, builds,
funds and operates an energy system for a beneficiary for a certain period. The
ownership of the energy system is transferred after a certain period of time
Strengths and weaknesses of EE framework & conclusions
The framework is quite complete and detailed.
What is needed and expected is a further strengthening within a stable
framework that provides clear market signals and facilitates achieving
the targets set
Key strengths
The set of Directives covers a very large part of what EE entails
Addresses all players in energy chain
And addresses all main areas with saving potential
Offers a framework of regular strenghtening of requirements
Main weaknesses
No legally binding objectives/targets and no penalty on non-achievement
Imposes only soft measures
Large variation in Member State commit-ment (to set targets and measures)
Consequently high uncertainty for market players
Thank you for your attention!
For questions or suggestions please contact:
Monique Voogt
+31-6-175.00.196
Details on the speaker
SQ Consult B.V. Monique Voogt
• Founded in 2009 • International scope • Focus on energy &
climate
• Co-founder SQ Consult • European energy and
climate policy • Market mechanisms • Project management
• Mostly senior experts with 15-35 years of
experience in our core areas
• Current presence in 9 countries in Europe
and the Americas. Some previously based in
Asia.
• Projects around the world
• Clients include multinationals (esp. energy
sector), European Commission, World Bank,
Development Banks, UN bodies and NGOs.
• Renewable energy target achievement and
choice of support mechanism (Dutch Ministry
of Economic Affairs)
• NIMs – evaluating all 3rd phase allocation
plans for the EU-ETS (European Comm.)
• Strategy design, insights in policy development
and CSR reporting for international utilities
• Project mananagement impact assessment of
the Energy Efficiency Directive (Eur. Comm.)