Workshop: The future of the Energy Efficiency Directive 18 July 2016, Slovak Permanent Representation to the EU, Brussels A workshop supported by the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety.
9:30 Welcome. Marian Husarik , Head of Energy Unit, Permanent Representation of Slovakia 9:40 Introductions and expectations. Moderated by Stefan Scheuer , The Coalition for Energy Savings 10:00 Setting the scene Findings on the implementation of Article 7 resulting from studies commissioned by the European Parliament and Commission, Jan Rosenow , Consultant and Researcher Different policy options on Article 7 and impacts on energy savings, Frances Bean , The Coalition for Energy Savings 11:00 Coffee break 11:20 Open discussion. Moderated by Stefan Scheuer, The Coalition for Energy Savings 12:20 Closing remarks . Marian Husarik , Head of Energy Unit, Permanent Representation of Slovakia 12:30 Lunch A workshop supported by the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety.
Introductions and expectations
Expectations Objective of the workshop is to foster a well informed revision of the EED, focus on Article 7 Therefore we provide Findings and views on the EED implementation by an independent expert Illustration of the impact of EED issues on the delivery Stakeholder perspectives and expertise From participants we expect Active contribution Open exchange of experiences and ideas on the way forward Chatham-House-Rule applies
Who we are 31 industry, NGO, consumers, workers, professional and local authorities • associations 500 associations, 200 companies 2 million workers, 15 million supporters 2,500 cities and towns in 30 countries in Europe Advisory members: 5
Energy Efficiency Directive in motion
Driving savings beyond 2020 - Article 7 Tapping the cost-effective potential
Energy efficiency first An abiding motto and guiding principle To treat energy efficiency as an energy source on its own right To prioritise energy efficiency where it is cost-effective, considering its multiple benefits To remove a systemic bias for increasing supply How? Examples Energy and climate plans Internal Energy Market Design State aid exemptions & Eurostat rules on public debt and deficit
Implementation of Article 7 so far – what do we know? Workshop on the future of the Energy Efficiency Directive Dr Jan Rosenow Senior Associate, Regulatory Assistance Project Senior Research Fellow, Sussex University Honorary Research Fellow, Oxford University Brussels, July 18, 2016
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Evidence base: 3 major studies for European Parliament and European Commission 11
Presentation Outline 1. What is Article 7? 2. How have Member States responded? 3. Critical evaluation 4. Conclusions 5. Further reading 12
1. What is Article 7? 13
What is Article 7? Target : 1.5% of final energy sales per annum; i.e. 10.5% in 2020 BUT: after exclusions and exemptions: only ~0.75% Policy instruments: choice between Energy Efficiency Obligations (EEOs) and alternative measures or a combination Calculation method: detailed requirements to account for additionality, materiality, double counting etc. (Annex V) Monitoring & Verification : detailed requirements including statistically representative sample, audit protocols, independence etc. (Annex V) 14
Future developments • ongoing: major review of Article 7, amendments to be published in early October 2016 • at the same time review of Energy Performance in Buildings Directive (EPBD) which drives building codes in Europe 15
2. How have Member States responded? 16
How have Member States responded? >7,000 pages of plans submitted to the European Commission 479 policy instruments planned 17
Targets – exclusions lower the sum of all targets by 1/3 Source: Rosenow and Fawcett (2016) 18
Targets – exemptions lower the sum of all targets by 24% Source: Rosenow and Fawcett (2016) 19
Number of policy instruments Source: Rosenow and Fawcett (2016) 20
Significant policy heterogeneity across Member States – alternative measures 8. Other measures 100% 1 1 1 1 1 1 1 1 1 1 1 1 3 90% 3 1 6 3 3 7. National Energy 1 4 1 3 3 Efficiency Funds 80% 1 1 1 14 4 19 5 2 70% 3 6. Training and education 2 44 1 6 1 programmes 60% 4 5. Energy labelling schemes 3 4 2 1 0 8 1 11 1 2 50% 16 1 4 3 8 7 1 2 40% 14 4. Standards and norms for 7 14 efficiency products (beyond 30% 6 5 5 4 4 existing EU legislation) 2 14 20% 3. Regulations or voluntary 2 1 2 21 agreements 3 2 4 2 4 10% 1 2 1 1 1 1 2 1 2 2. Financing/ fiscal 0% schemes 1. Energy/CO2 taxes *Lack of information about certain measures ** Lack of information about the majority of the measures for those countries 21
Share of expected savings by policy instrument type [ktoe] Source: Rosenow and Fawcett (2016) 22
11 out of 16 EEOs in the EU are new, many of them to deliver significant savings 100.00% 90.00% 80.00% <65% EEO Less than contribution <40% EEO 3. Alternatives 70.00% >40% share 60.00% 50.00% 2. EEOs No White Certificates 40.00% 30.00% 1. EEOs White Certificates 20.00% 10.00% 0.00% Note: some of these figures may have been updated in later plans 23
Share of savings by sector Source: Rosenow and Fawcett (2016) 24
Examples of innovative policy instruments • German Energy Efficiency Tender : started in June 2016, 300 million Euro over 2016-18 • UK Green Deal : on-bill financing mechanism; UK government stopped funding in 2015 25
3. Critical evaluation 26
Expected savings compared to expectations Source: Rosenow and Fawcett (2016) 27
Rules to ensure credibility of savings Rule Description Eligibility policy measures that are primarily intended to support policy objectives other than energy efficiency are excluded Additionality only savings achieved in addition to existing EU-wide standards can be counted Materiality any financial contributions needs to be significant enough in order to realistically trigger the investment decision Double counting overlap between policy instruments needs to be accounted for 28
Credibility of savings – only 14% of all savings fully compliant Source: Rosenow and Fawcett (2016) 29
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4. Suggestions for policy reform 31
Selected suggestions for policy reform Problem area Current issues Potential solutions Additionality difficult to calculate and simplify rules e.g. allow prove, particularly with all renovations to count regard to EPBD fully but none of the savings from new buildings M&V inconsistent approach to improve guidance and M&V leads to Annex V, develop high considerable level principles at EU uncertainties level Reporting significant differences in develop reporting quality and quantity of template reporting Source: Regulatory Assistance Project (2016) 32
5. Conclusions 33
Conclusions 1) Article 7 is a complex and ambitious piece of legislation. 2) Policy evaluation is very challenging, due to: heterogeneity of policies, amount of documentation (over 7,000 pages to date, and rising), and lack of standard reporting formats. 3) Member States should be on course to deliver savings close to those envisaged, if the ‘paper’ savings materialise in real life. 4) Current legal framework led in some cases to unintended interpretations. 5) There are considerable uncertainties around the reliability of energy savings estimates. Lack of additionality and the risk of non- delivery are key concerns. 6) M&V major challenge going forward. 34
6. Further reading 35
Further reading • Rosenow, J., Fawcett, T., Leguijt, C., Pató, Z. (2016): Evaluating the Implementation of Article 7 of the Energy Efficiency Directive. IEPPEC conference, Amsterdam, 7-9 June 2016 • Regulatory Assistance Project (2016): Toolkit for Energy Efficiency Obligations ENSPOL (2015): Report on existing and planned EEOs in the EU – Part • I: Evaluation of existing schemes Fawcett, T., Rosenow, J. (2016): The Member States’ plans and • achievements towards the implementation of Article 7 of the Energy Efficiency Directive. Report for European Parliament • Rosenow, J., Forster, D., Kampman, B., Leguijt, C., Pato, Z., Kaar, A.-L., Eyre, N. (2015): Study evaluating the national policy measures and methodologies to implement Article 7 of the Energy Efficiency Directive. Study for the European Commission 36
Thank you for your attention Dr Jan Rosenow email: jrosenow@raponline.org web: eng.janrosenow.com 37
Setting the scene Enlightening Article 7 Frances Bean
Impact on energy savings Study commissioned by Climate Action Network Europe
Recommendations To strengthen the objective of Article: Remove the 2020 sunset clause to Boost investor and industry certainty; Foster long-term high quality measures; and Unleash energy efficiency markets. Remove obscure and obsolete target reductions to Prevent the target from being reduced; and Deliver at least 1.5% savings per year.
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