How to make Europe
Number 1 in Energy Efficiency
Key results from the Energy–Efficiency–Watch–Project
Co-funded by the Intelligent Energy Europe
Programme of the European Union
Imprint
Brochure presented by the Energy-Efficiency-Watch project
Coordinated by
EUFORES a.i.s.b.l.
European Forum for Renewable Energy Sources
Renewable Energy House
Rue d’Arlon 63-65
B – 1040 Brussels, Belgium
Dr. Jan Geiss
Lucia Bayer
Roxane Eva Rosa Roth
Based on the screening and in-depth analysis of
National Energy Efficiency Action Plans (NEEAPs) and on
energy efficiency expert surveys and interviews
Wuppertal Institute GmbH
Stefan Thomas
Felix Suerkemper
Thomas Adisorn
Dorothea Hauptstock
Carolin Schäfer-Sparenberg
Lena Tholen
Florin Vondung
O.Ö. Energiesparverband (ESV)
Christiane Egger (OÖ Energiesparverband)
Reinhold Priewasser (University of Linz)
Johanna Rumpl (University of Linz)
Megan Gignac (OÖ Energiesparverband)
Ecofys Germany GmbH
Daniel Becker
Lucie Tesniere
Sonja Förster
With contributions by
Nils Borg (eceee), Jason Erwin (eceee), Ylva Blume (eceee),
Dominique Bourges (Fedarene), Emma Eid (Fedarene),
Marjolaine Pont (Fedarene)
Brussels, Wuppertal, Berlin, Cologne, Linz, Stockholm,
April 2016
*The sole responsibility for the content of this brochure lies with the authors. It does not necessarily reflect the opinion of the European Union. Neither the EASME nor the European Commission
are responsible for any use that may be made of the information contained therein.
Source page 1: enbw, canstockphoto, fotolia (2)
Graphics: www.digitale-gestaltung.de
2
How to make Europe Number 1 in Energy Efficiency
Foreword
Claude Turmes
EUFORES President
Member of the European
Parliament
Energy efficiency as an engine for innovation and economic
growth.
Energy efficiency can save EU consumers around EUR 78
billion annually by 2020 according to estimates by the European Investment Bank. Energy saving opportunities exist
in all Member States and across all economic sectors while
beneficiaries of energy efficiency can be found at all levels
of society. They range from vulnerable households impacted
by the burden of high energy bills, professionals in the energy service industries, to small, medium and multinational
businesses that can save billions thanks to energy efficiency.
When countries strengthen their energy efficiency policies,
they are not only significantly contributing to the realisation
of the 2020 Strategy but also investing in the future, paving
the way for Europe to become an economy based on knowledge and innovation which is resource-efficient, green and
more competitive.
The Energy Efficiency Watch project started in 2007 with the
aim to support the implementation process of the Energy
Services Directive. Since then, it has continued to analyse
the National Energy Efficiency Actions plans submitted regularly by all Member States and assists in the implementation of the Energy Efficiency Directive, which replaced the
Energy Services Directive in 2012.
Theresa Griffin
EUFORES Vice-President
Member of the European
Parliament
The Energy Efficiency Watch project thereby has and continues to deliver practical evidence on where the implementation of EU energy efficiency policies stands, what is working
well, what less - and why this is the case.
This brochure highlights good examples of implemented
energy efficiency policies. These polices combine innovative
approaches and proven policy practices that significantly
contribute to energy savings.
Jeppe Kofod,
Eufores Vice-President,
Member of the European
Parliament
How to make Europe Number 1 in Energy Efficiency
3
Co-funded by the Intelligent Energy Europe
Programme of the European Union
Key results from the
Energy-Efficiency-Watch-Project
2006 was the starting point of EU energy efficiency policies
with the Directive on Energy End-use Efficiency and Energy
Services (“ESD”). The Directive sets an indicative energy saving target of 9 % by 2016. It also required national authorities
to procure energy efficiency products and promote energy
efficiency and energy services. Furthermore, Member States
have to submit National Energy Efficiency Action Plans (NEEAPs), scheduled for 2007 and 2011. This Directive has been
repealed by the Energy Efficiency Directive in 2012, which
requires the publication of NEEAPs by Member States starting in 2014, and every three years thereafter. It furthermore
introduced new requirements for Member States, most notably the target to save 1.5% of final energy each year until
2020 through energy efficiency obligation schemes or alternative measures. The Energy Efficiency Watch Project (EEW)
aims to facilitate the implementation of the Energy Efficiency Directive. This Intelligent Energy Europe project portrays
the progress made in the implementation of energy efficiency policies since the publication of the last NEEAPs in 2011
(www.energy-efficiency-watch.org).
4
How to make Europe Number 1 in Energy Efficiency
This brochure presents key EEW3 projects results:
Energy Efficiency as a Driving Force
A European Overview of the Implementation
of EU Energy Efficiency Policies
Five Case Studies of Highly Effective
Energy Efficiency Policy-Making
Specific Recommendations on Energy Efficiency Policies
from the Business Community
Key Policy Recommendations on Future European Energy
Efficiency Policies
Source: fotolia
1. Energy Efficiency as Driving Force
Energy efficiency is an engine for innovation and economic
growth in Europe
Asset
value
Energy
savings
Disposable
income
GHG
emissions
Energy
security
Public
budgets
Energy
delivery
Energy
Efficiency
Improvement
Resource
management
Energy
prices
Local air
pollution
MacroEconomic
impacts
Employment
Health and
Well-being
Poverty
alleviation
Industrial
productivity
Energy efficiency brings about benefits across all sectors.
The European Investment Bank estimates that increasing
energy efficiency can save EU consumers ca. EUR 78 billion
annually by 20201. Additionally, the implementation of energy efficiency measures is labour-intensive, especially at the
local level, which will increase net employment by 400,000
jobs by 20202. Energy efficiency also strengthens competitiveness and energy security by reducing energy costs and
exposure to volatile energy prices. Net benefits over EUR
239 billion could be generated by households and industry
by 2030. A large potential for further innovation also exists
across sectors for energy efficient technologies and business
models.
EU Policies have beneficial impacts
EU directives on energy efficiency have positive effects on
Member States. The Energy Labelling and Ecodesign Directives alone have achieved about 175 million tonnes of oil
equivalent in primary energy savings every year, comparable
to the energy use of 60 million households3. Moreover, the
EU final energy consumption has also decreased by 15% in
the industrial sector, 3% in the residential sector, and by 6%
in the transport sector from 2005 to 20134.
Figure 1: Benefits of Energy Efficiency (Source: IEA 2014)*
1
2
3
4
*
EIB (2013): Benefits of Energy Efficiency. http://www.eib.org/epec/ee/documents/factsheets-energy-efficiency-en.pdf.
Fraunhofer ISI (2012): Concrete Paths of the European Union to the 2ºC Scenario.
European Commission (2015): Making energy efficiency clearer: Commission proposes a single ‘A to G’ energy label and a digital database for products.
For further analysis see: Report from the Commission to the European Parliament and the Council. Assessment of progress made by
Member States towards the national energy efficiency targets for 2020 and towards the implementation for the Energy Efficiency Directive.
IEA (2014): Capturing the Multiple Benefits of Energy Efficiency. http://www.iea.org/publications/freepublications/publication/Captur_the_MultiplBenef_ofEnergyEficiency.pdf.
How to make Europe Number 1 in Energy Efficiency
5
Source: fotolia
2. European Overview of Implementation of EU
Energy Efficiency Policies
A. Overview of EU Energy Efficiency Policies
In October 2014, the European Council agreed on an indicative
energy efficiency target of 27% by 2030 with the possibility
of raising it to 30% in 20205. Four EU directives describe the
framework of EU energy efficiency policy. These are transposed into national law.
The Energy Efficiency Directive (2012/27/EU, EED) aims to reduce the EU primary energy consumption by 20% by 2020.
Article 7 of the EED puts an obligation on each Member State
to achieve final energy savings of 1.5% annually by using energy efficiency obligation schemes or other targeted policy
measures to improve energy efficiency in households, industries and transport sectors. Additionally, large enterprises are
obliged to carry out an energy audit, with a first energy audit
at the latest by December 2015. Member States need to submit in line with Article 24 of the Directive triannual National
Energy Efficiency Action Plans (NEEAPs).
The Energy Performance of Buildings Directive (2010/31/
EU, EPBD) regulates energy efficiency in the building stock.
In order to increase energy efficiency, Member States must
implement minimum energy performance requirements for
new and existing buildings. Additionally, energy performance
A
B
How to make Europe Number 1 in Energy Efficiency
D
E
F
G
Figure 2: Energy performance labels of buildings
(Source: European Commission 2015) 6
certificates have to be included in all sales or rental advertisements of buildings. Member States are furthermore required
to ensure that all new buildings are ‘nearly zero-energy’ by
2021.
The Ecodesign Directive (2009/125/EG, ED) sets minimum energy
efficiency standards for products and appliances. These standards
are set EU-wide, which means that manufacturers do not have
to comply with disparate national legislations. This strengthens
intra-EU trade. Energy efficiency standards are developed through
extensive product studies, examining market data, technological status and recommendations for the European Commission.
Stakeholders are actively included in the product studies.
5 European Council (2014): European Council Conclusions (23 and 24 October). 2030 Climate and Energy Policy Framework.
6 http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/145397.pdf.
European Commissions (2015): Buildings. https://ec.europa.eu/energy/en/topics/energy-efficiency/buildings.
6
C
I
II
A +++
A++
A+
A
B
C
D
A+
XYZ
kg
VWXYZ
Y,Z
YZdB
YZdB
2010/1061
The Energy Labelling Directive
(2010/30/EU, ELD) introduced
a coloured EU Energy Efficiency
Label to inform consumers and
increase energy efficiency understanding of energy-related
products. The Directive covers
in principle all energy-related
products. Included products
are home appliances, as well
as products for commercial applications and products who
themselves do not consume
energy, but significantly influence energy consumption (e.g.
windows). Since the introduction of the scheme, the EU energy label is mandatory for 14
products.
Figure 3: Energy efficiency label
(Source: EU Energy Labels 2015)7
The following pages look at the implementation of energy efficiency policies across sectors in the EU-28.
B. Implementation of Energy Efficiency policies in the EU
The EEW3 portrays the progress made in the implementation of energy efficiency policies since the publication of the
last NEEAPs in 2011. Results are presented in Country Reports
for each of the 28 Member States (www.energy-efficiencywatch.org).
One key activity of the EEW3 was a screening of the NEEAPs of
2014 and other relevant documents (e.g. communications by
Member States on the implementation of important articles
of the Energy Efficiency Directive) as well as the ODYSSEEMURE database.
Key findings include:
There are more new and improved than abandoned
or weakened policies since 2011. This indicates a
clear positive impact of EU policies, especially the
Energy Efficiency Directive and the Energy Performance of Buildings Directive. However, it is unclear
whether this improvement in policy implementation will be enough to achieve the energy efficiency
or savings targets of Art. 7 and Art. 3 of the Energy
Efficiency Directive.
The analysis confirmed the well-known fact that
Energy Efficiency Obligation schemes take time to
implement and increase to levels required to meet
the 1.5 % energy savings target per year of Art. 7.
Alternative measures to meet the 1.5 % target and
in general, all policy implementation appear to suffer from a lack of funding and staff resources. The
document analysis presents little evidence on what
could be the reason for this. It may be that energy
efficiency policy is still seen by many policy-makers
as a burden “imposed by Brussels”, instead of the
investment that it actually is, yielding the benefits
mentioned above. It may also be that the debt crisis
of the years since 2008 has affected budgets for energy efficiency policies in some Member States, and
the financial stability pact may have had the same
effect in others.
Another key activity of the EEW3 project was an extensive
survey on the implementation results of the second NEEAPs
in the 28 Member States.
The aim of the survey, carried out by OÖ Energiesparverband,
was to learn from stakeholders and experts how they see the
progress of energy efficiency policies and their implementation. In total, more than 1,100 experts from all 28 EU Member
States completed questionnaires and interviews (3 experts
were interviewed in each Member State).
As a part of the survey, questions were asked about the energy efficiency policy instruments mentioned in the Directive
on Energy End-use Efficiency and Energy Services or the Energy Performance of Buildings Directive. One aspect was the
perception of the effectiveness of these instruments (“How
effective are the following policy instruments in your country?”).
Overall, energy efficiency requirements for new and renovated buildings and labelling of products are the instruments
with the highest positive impact. Between 87 and 78 % of the
experts agree that they are at least partly effective. On the
other end of the spectrum, more than a third of the experts
considers the inspection of heating and air-conditioning systems as not effective. This shows that some of the long established regulatory instruments in the building sector are seen
as the most effective policy instruments.
7 EU Energy Labels (2015): http://www.euenergylabels.com/.
How to make Europe Number 1 in Energy Efficiency
7
Source: fotolia
EU 28: degree of effectiveness of different policy instruments
Headline
0%
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
EE requirements for new buildings
EE requirements for renovated buildings
Energy certification of buildings
Inspection heating/air-conditioning systems
Financial incentives for private households
Financial incentives for SMEs
Energy audits for companies
Targeted advice for households
Smart Metering
Energy taxation
Energy labelling of products
Programmes for local energy planning
very effective
partly effective
Even though the overall effectiveness of energy efficiency policies is high, experts were also asked in which sector they see
the most important gap in the energy efficiency policies in
their respective country (“In which sector is energy efficiency
policy the weakest in your country?”).
On average across EU countries, transport ranks lowest (38 %
see the largest gaps in this field), followed by the residential
sector with 21 %. The same question was asked in a 2012 survey, which shows that there has been no change in these per-
8
How to make Europe Number 1 in Energy Efficiency
not effective at all
not implemented
ceived gaps. There are however significant differences across
countries. By far the largest gap is found in the transport sector in Denmark and in Austria. In both countries, 73 % see energy efficiency in transport as the most important policy gap.
Again, no change since 2012 can be seen. Also, large gaps in
the residential sector are reported from Hungary (60 %) and
Bulgaria (54 %). In a number of countries, the percentage for
the residential sector as the weakest sector in energy efficiency policies has decreased.
Source: fotolia
EU 28: most important gaps in energy efficiency policies
0%
10%
20%
30%
40%
50%
EU 28
Austria
Belgium
Bulgaria
Croatia
Cyprus
Czech R.
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Lux
Malta
NL
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Sweden
UK
residential sector
public sector
industry & service sector
The graph above shows that numerous policies are regarded
as very effective. To learn from these examples and to close
the remaining gaps, the EEW3 has identified best practice ex-
60%
70%
80%
90%
100%
Headline
transport sector
energy sector
amples of energy efficiency polices that can be used as examples for other countries. These are presented in the next
section.
How to make Europe Number 1 in Energy Efficiency
9
Source: canstockphoto
3. Five Case Studies on Highly Effective Energy
Efficiency Policies
This section presents five good practice examples of implemented energy efficiency polices:
The Energy Manager Obligation and White Certificate
Scheme in Italy
The Energy Efficiency Obligation Scheme in Denmark
The KfW Programme in Germany
The Slovak Energy Efficiency and Renewable Energy Finance Facility (SlovSEFF)
The Car Registration Tax in Latvia
All policies have been in place for several years. Their combination of innovative approaches and proven policy practices
have significantly contributed to energy savings.
3.1 The Energy Manager Obligation and White Certificate
Scheme in Italy
Italy is one of the largest emitters of
greenhouse gases in the EU. In the
1990s, the industry sector was responsible for approximately one third of the
energy consumption in Italy. To address this issue, an obligation scheme for the industrial sector has been implemented.
After a slow start, the obligation scheme has helped to bring
about new energy efficiency actors, namely project developers that are now active in the Italian market.
Since 1991, it is mandatory for companies with an energy
8 Ministerial Decrees of 20 July 2004.
9 Italian Energy Efficiency Action Plan 2014.
10
How to make Europe Number 1 in Energy Efficiency
consumption of more than 10,000 tonnes of oil equivalents
(toe) per year to appoint an energy manager. For other organisations, such as public administrations, the threshold is
1,000 toe per year. The energy manager’s task is to monitor
and control the energy consumption, to establish an energy
balance and to reduce the energy demand. The managers receive regular training. In 2010, the number of energy managers reached 2,650. According to FIRE, an Italian organisation
representing the interest of the energy managers, it is possible for companies to save 10-15% of energy simply with an
intelligent organisation of operations. However, in the past,
it was often difficult for energy managers to get approval for
investments in energy efficiency.
In 2004, Italy introduced (as the first country worldwide) the
White Certificate Scheme8, a special form of an Energy Efficiency Obligation scheme. Today, all distribution network operators of electricity and natural gas with more than 50,000
connected consumers are obliged to reach quantitative goals
of primary energy savings, expressed in toe. Distribution companies can meet the targets either by implementing energy
efficiency projects that benefit their customers, or through
the purchase of White Certificates produced by other participants. The certificates are not only given to the obligated
parties, but also to voluntary participants. These are distributors with less than 50 000 customers, energy service companies, entities required to appoint an energy manager, entities
which have voluntarily appointed an energy manager or entities that have implemented an energy management system
conforming with ISO 50001.9
The total expected energy savings by 2020 for 2011-2020 are
5.45 Mtoe per year.10 To achieve the savings, a large number of
projects are eligible. The aim is to increase energy efficiency
with technical improvements, to replace old and inefficient
products and to use the best available technologies (BAT). An
implementing body must approve the projects. Projects are
i.e. the replacement of the lighting system, the insulation of
walls and the promotion of combined heat and power generation systems (CHP systems).
Through the promotion of BAT, manufacturers have an incentive to develop and produce energy efficient products. According to the Ministry of Economic Development, from 1 January
to 31 October 2013, more than 14 000 projects were completed
and 5 million White Certificates were issued. From 2005 until
2014, 6 Mtoe of additional savings were delivered at a cost
of EUR 600 million per year.11 Particularly in the years 2013
and 2014, the total impact more than doubled due to design
changes made. The majority of savings and certificates now
originate from the industrial sector. This is the unique feature
of the Italian White Certificate Scheme: it achieves synergies
by closely linking the two obligation schemes, the White Certificate Scheme for energy companies and the energy manager obligation for medium and large energy consumers.
The next figure shows the annual primary energy savings
achieved since the introduction of the scheme and those forecast up to 2020.
Annual primary energy savings
12
9.7
10
7.6
8
6.2
6
4
2.9
0.3
0
3
3.9
8.7
6.6
4.6
2
2
3.3
7.8
8.2
1
0.6
2
1.1
3
4
Savings achieved (Mtoe)
5
6
7
8
9
Savings targets (Mtoe)
10
11
12
13
14
15
16
Targets for the coming period (Mtoe)
Figure 6: Past and forecast annual primary energy savings under the White Certificates scheme
(Source: Ministry of Economic Development 2013)12
10 Italian Energy Efficiency Action Plan 2014.
11 Di Santo, Dario; Tomassetti, Giuseppe; D’Ambrosio, Stefano (2014):
White Certificates in Industry. http://www.iepec.org/conf-docs/papers/2014/Dario%20Di%20Santo.pdf.
12 Ministry of Economic Development (2013):
Application of Article 7 of Directive 2012/27/EU on energy efficiency obligation schemes.
Notification of methodology. Annex A.
How to make Europe Number 1 in Energy Efficiency
11
3.2 The Energy Efficiency Obligation Scheme in Denmark
The Danish Energy Efficiency Obligation (EEO) promotes costeffective energy savings in all end-user sectors of the Danish economy. Denmark has a history of energy audits and
providing advice to customers by energy distribution companies dating back to the 1990s.13 The EEO could therefore
pick up on existing standard reporting templates. The combination of setting mandatory targets for the industry at a far
earlier stage than other countries, the tradition of standard
reporting templates and the freedom to choose measures to
implement represents the major success factor of the EEO. In
2013, the majority of energy savings were realised in industry (44.42% of all savings achieved) and the household sector
(30.79%) across all distribution companies.14
The EEO was set up as an agreement between the Danish energy
distribution companies and the public authorities (primarily the
Danish Energy Agency (DEA)). It allows the targeted companies
to choose freely measures they consider most cost-effective, as
long as the effect of energy savings can be documented. Most
common measures are advice and subsidies to realise energy
savings in enterprises and households or a combination of both.
To calculate the savings for target achievement from the annual
savings of an enterprise or household, a simple weighting factor is applied, which reflects the savings’ lifespan, the impact on
primary energy consumption, and the expected CO2 impact. A
further objective is the promotion of BAT, wherever possible.
Prior to the agreement, the main barriers to achieving energy
efficiency improvements were knowledge and information
barriers, economic and financial barriers and a lack of interest
and motivation in energy efficiency improvement.
They were addressed by a successful combination of:
information and awareness raising campaigns;
targeted advice and financial incentives to energy
company customers;
a legal Energy Efficiency Obligation of energy savings for
energy network or fuel distribution companies;
allowing costs for achieving energy efficiency savings to
be included in the network tariffs.15
The following flow chart summarises the main elements of
the Danish EEO.
Public authorities
Energy efficiency obligation /Proof of energy savings
Energy
distribution
company
Energy
distribution
company
Energy
distribution
company
Freedom of Methodology
(mainly subsidies & advice)
Households
Industry
Commercial
sector
Energy service
providers
Public
sector
Transportation
Figure 7: The Danish Energy Efficiency Obligation (Source: Fraunhofer ISI 2014)16
13 Bundgaard, S.S.; Togeby, M.; Dyhr-Mikkelsen, K.; Sommer, T.; Kjærbye, V.H.; Larsen, A.E. (2013):
Spending to save: evaluation of the Energy Efficiency Obligation in Denmark. ECEE Summer Study Proceedings.
14 ENSPOL (2015): Energy Saving Policies and Energy Efficiency Obligation Scheme. D2.1.1:
Report on existing and planned EEOs in the EU – Part I: Evaluation of existing schemes.
15 bigEE (2013): Policy Guide. Online: http://www.bigee.net/en/policy/guide/buildings/policy_examples/42/. Retrieved 17 September 2015.
16 Fraunhofer ISI (2014): Kosten-/Nutzen-Analyse von Instrumenten zur Realisierung von Endenergieeinsparungen in Deutschland.
Ausgestaltungsoptionen und Bewertung von Instrumenten und möglicher Instrumentenkombinationen für Deutschland.
Im Auftrag des Bundesministeriums für Wirtschaft und Energie (BMWi), Vergabe und fachliche Begleitung durch die Bundesstelle für Energieeffizienz (BfEE).
12
How to make Europe Number 1 in Energy Efficiency
Source: fotolia
The current monitoring system requires companies to submit
annual reports on their actual energy savings to the trade associations, which then submit them to the DEA. Quality assurance is required to be implemented by the companies to
ensure that energy savings are determined and implemented
in accordance with the framework. In addition, DEA conducts
an annual spot check across all involved companies.
3.3 The KfW Programme in Germany
The German state-owned Bank for Reconstruction
(“Kreditanstalt für Wiederaufbau, KfW”) manages
two programmes to improve the energy efficiency of
German residential buildings, the EEC (Energy-Efficient
Construction) targeting the construction of new buildings
and the EER (Energy-Efficient Refurbishment) addressing the
refurbishment of existing buildings.17
The KfW programme is an innovative and efficient
instrument because it uses a scaling system for building
energy efficiency, where the amount of funding is tied
to Germany’s Minimum Energy Performance Standard.
Hence, if the Minimum Energy Performance Standard is
tightened, the scaling system’s criteria becomes stricter as
well. Additionally, KfW makes use of local commercial bank
offices to facilitate loans.18 Due to government liabilities,
KfW can raise capital at low costs.
Both programmes offer financial products (upfront grants or
soft loans, which may have a grant component)20 to building
owners to overcome economic barriers (e.g. lack of sufficient
loan financing or own upfront capital, short payback
New building
Building stock
Energy-Efficient Construction
Energy-Efficient Refurbishment
soft loans
max. 50,000 Eur per housing
unit (Eur 100,000 from April
2016)
Kfw-Efficiency House standard
three promotional stages
partial debt relief possible
soft loans
max. 100,000 Eur per
housing unit
Kfw-Efficiency House standard
five promotional stages
partial debt relief possible
max. 50,000 Eur for single
measures as an alternative
grants as an alternative for
owners of single and
two family houses
Higher energy efficiency means better financing conditions
Figure 8: Overview of KfW’s financing mechanisms for new and existing
buildings (based on KfW 2015a, b, c)19
expectations) to realise energy-efficient investments. The
amount of the grants depends on the energy efficiency level
achieved: the higher the energy efficiency, the better the
financing arrangement.21
In 2012, the Government allocated EUR 1.5 billion to finance
the grants and reduced interest rates of loans in the scheme.
Apart from that, KfW, an AAA-rated bank, was able to raise
EUR 8.4 billion for the loans. These add up to EUR 9.9 billion
of loans and grants, which leverage another EUR 17.2 billion of
investment. 22
17 Through the “energy efficiency programme – energy-efficient construction and refurbishment”, KfW also seeks to drive to the energy demand in new and existing non-residential buildings.
18 If an investors seeks to gain access to KfW grants, then KfW must be consulted directly.
19 KfW (2015a): Energieeffizient Sanieren – Kredit. https://www.kfw.de/inlandsfoerderung/Privatpersonen/Bestandsimmobilien/Finanzierungsangebote/Energieeffizient Sanieren-Kredit-(151-152)/; KfW (2015b): Energieeffizient Sanieren – Investitionszuschuss. https://www.kfw.de/inlandsfoerderung/Privatpersonen/Bestandsimmobilien/
Finanzierungsangebote/Energieeffizient-Sanieren-Zuschuss-(430)/; KfW (2015c): Energieeffizient bauen. https://www.kfw.de/inlandsfoerderung/Privatpersonen/Bestandsimmobilie/
Förderprodukte/Energieeffizient-Bauen-(153)/.
20The financial products offered through EEC and EER differ to a certain extend. For more in-depth information, please consult, for example, KfW (2015a, 2015b, 2015c) or bigEE (2012).
21 The energetic performance of a building can be classified into different Efficiency House (EH) Levels – a scaled system simplifying the financing procedure.
22 IEA (2013): Energy Efficiency Market Report 2013. https://www.iea.org/publications/freepublications/publication/EEMR2013_free.pdf.
How to make Europe Number 1 in Energy Efficiency
13
3.4 The Slovak Energy Efficiency and Renewable Energy
Finance Facility (SlovSEFF)
The Slovak Sustainable Energy Financing Facility (SlovSEFF)
channels financing to sustainable energy projects, hereby
reducing greenhouse gas emissions. The innovative aspect
of the policy is that it combines:
loans (EUR 20k – 2,500k);
grants (7.5% to 15% of loan);
incentive payments,;
and free technical assistance to borrowers.23
SlovSEFF is one of the first Sustainable Energy Finance Facilities launched by the European Bank for Reconstruction
and Development (EBRD) in 2007 with a credit line of EUR
60 million. Its set up was motivated by the closure of the
Bohunice nuclear power plant, which was part of the accession negotiations of Slovakia to the EU.24 In 2009, an extension to the facility was approved (SlovSEFF II) with a credit
line of EUR 90 million. Since 2014, the EBRD commissioned
the third phase of the fund (SlovSEFF III).The EBRD extends
credit lines to local financial institutions to develop energy
financing as a permanent field of business. Local financial
institutions (four in the first phase and six in the second
phase) act as intermediaries and lend funds to clients (small
and medium-sized enterprises, corporate and residential
borrowers) to undertake energy efficiency savings projects
or invest in small-scale renewable energy generation.
SlovSEFF also provides technical assistance to financial institutions and their clients such as training to:
promote new financial products;
assess technically eligible products;
create standards for environmental due diligence.
Borrowers are assisted to identify energy saving opportunities through energy audits and are advised on high performing technologies. Technical assistance is provided by
external, local consultants. The main barrier to the implementation of energy efficiency projects are long payback
times and large upfront investments. Incentive payments,
which vary according to the project, have helped to correct
these market barriers. An evaluation report of the EBRD
(2014) finds a “significant improvement in the living standard of residents of the refurbished apartment blocks” (p.21).
Even though no benchmarks were set, it is estimated that
31,184 households and therewith 86,376 residents benefitted
from the refurbishments.25
Compliance is ensured by the reporting of annual GHG emissions and energy savings by the borrowers to SIEA (Slovak
Innovation and Energy Agency) for a period of 5 years after
project completion, via online templates.
3.5 The Car Registration Tax in Latvia
If a new car is registered in Latvia, the passenger car registration tax applies. Latvia is one of several EU Member States
that has made their car registration taxes progressively increase with car emissions, to stimulate the purchase of more
energy-efficient cars with lower CO2 emissions. The higher
the emissions, the higher the taxation. For instance:
the car registration tax for a car emitting 120 grams of
CO2 is EUR 51.60 (EUR 0.43 per gram of CO2),
the registration tax for a car emitting triple emissions
(360 grams of CO2) does not only triple, but amounts to
EUR 2,556.60 (EUR 7.11 per gram of CO2), which is in fact
nearly fiftyfold.26
Carbon dioxide (CO2)
emissions grams for 1 km
Not over 120 grams
0,43
121-170 grams
1,42
171-220 grams
2,13
221-250 grams
3,56
251-300 grams
4,27
301-350 grams
5,69
Over 350 grams
7,11
Table 1: Taxation (pricing) scheme for registering new passenger car in Latvia
(Ministry of Finance 2015)27
Due to the registration tax, less efficient passenger cars are
put in a disadvantaged position due to higher (registration)
costs. Hence, less polluting cars become cheaper in comparison to inefficient models. Through the price signal of the tax
scheme, the government seeks to motivate end-users to buy
environment-friendly cars and to make car manufacturers
penetrate the market with more efficient vehicles.
Apart from energy performance enhancement, the government is able to reduce energy imports and reduce pollution.28 Moreover, the Latvian government can collect tax revenues, but no information is available on how such revenues
are spent.29
23 SlovSEFF (2015). SlovSEFF. Online: http://www.slovseff.eu/index.php/en/#. Last retrieved 18 September 2015.
24 EBRD (2014). OPERATION EVALUATION. Slovak sustainable energy finance facility I & II.
25 SlovSEFF (2015). SlovSEFF. Online: http://www.slovseff.eu/index.php/en/#. Last retrieved 18 September 2015.
26 Mure II & Institute of Physical Energetics (2015b): Applying a differential tax rate for passenger cars depending on engine size and age.
http://www.measures-odyssee-mure.eu/public/mure_pdf/transport/LV17.PDF.
27 Ministry of Finance (2015): Tax on Cars and Motorcycles. http://www.fm.gov.lv/en/s/taxes/tax_on_cars_and_motorcycles/.
28 OECD (2015): OECD Economic Surveys: Latvia 2015. http://www.oecd.org/eco/surveys/Overview_Latvia_2015_Eng.pdf.
29 Ideally, revenues would contribute to enhance environmental and climate protection measures.
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How to make Europe Number 1 in Energy Efficiency
Tax rate for 1 gram
per 1 km (EUR)
4. Specific Recommendations from
the Business Community
Within the EEW3 project, feedback from business stakeholders on EU energy efficiency policies and their impact on the business community was gathered. Five workshops took place in Denmark, Germany, Croatia, Italy and Poland.
Need for a harmonised market and long-term strategy
across Europe
The business community in Denmark highlights positive experiences gained over the last years at EU level. A
better integration and harmonisation is needed “(…) for
Europe to stand a chance of staying up front with market developments” and to avoid slowing down current
Danish developments: Trade barriers should be removed
“to expand business plans developed in one Member
State (…) across Europe”. The business community in
Poland criticises that legislation has not yet established
long-term agreements. As legislative uncertainty and
the short time horizon of support systems are seen as
significant barriers, the “removal of the legislative disarray” is one of the major recommendations provided.
Improve the transposition of EU Directives into
national legislation
The business communities from all five countries, except Denmark, faced difficulties by the design and implementation of legislative frameworks. The business
community pointed at the lack of assistance from the
EU or the lack of political will at national level. To facilitate quick results, the German business community
recommends “a combination of regulatory approaches
with incentive programmes” for future energy efficiency
policy. Therefore, clear targets should be set on EU level,
“but how these targets will be realised should be left to
decide by the individual actor”.
Better information at both EU and consumer level
Lack of information, both on best practices and general
training, and the dissemination thereof was expressed by
the majority of business communities. The Italian business community emphasises the importance “to support
the exchange of best practices at EU level”. On end user
level, they see the need for information and training campaigns, which “will help end users to take the opportunity
to invest in energy efficiency, to train companies offering
energy services and to facilitate the diffusion of competences among banks in order to facilitate third party financing for small and medium size projects.”
Facilitate access to financial instruments and increase
support for small and medium-sized actors
Access to financial instruments is not granted to all
relevant stakeholders in some countries. The business
community in several countries expressed the need for
financial and regulatory support for smaller projects. In
Croatia, applications to tenders and grants for energy
efficiency are usually only eligible to public institutions.
There is “a large potential for expanding these tenders
to the private sector and private households”. Moreover,
the business community calls for “new and innovative financial mechanisms” to be developed jointly by the Croatian Environment Protection, the Energy Efficiency Fund,
commercial banks and public-private partnerships. Green
public procurements were also highlighted as a good way
to encourage local producers and the economy.
These recommendations are aligned with survey results. When asked which policy measures the energy efficiency experts
would like to see at EU level (“ In your opinion, should the following measures be introduced on European level?”), the two
most popular measures were “a large European energy efficiency fund (giving both grants and loans)” and “stricter minimum
standards for buildings and appliances”.
EU 28: measures which should be introduced on EU level
0%
20%
40% 60%
80% 100%
A large European energy efficiency fund
Yes
No
Stricter minimum standards for buildings
and appliances
Mandatory implementation of costeffective measures
European CO2-tax
How to make Europe Number 1 in Energy Efficiency
15
Source: fotolia
5. Key Policy Conclusions on European Energy
Efficiency Policies
All Stakeholders want energy efficiency policies, provided
that they are effective
1100 stakeholders from all EU Member States were involved
within the EEW3. Coming from different backgrounds (businesses, agencies, academics, governments and public institutions), they all had a positive attitude towards energy efficiency policies, agreeing that opportunities clearly outweigh
the risks. Europe becoming ‘number one on energy efficiency’
is connected to many concrete chances such as job effects,
increased competitiveness, stimulating innovation. However, policies are only regarded as supportive in this respect
if effective and stable. If policies frequently change, if their
structure and implementation is not transparent, commercial
stakeholders will perceive them more as a burden rather than
a support to their business.
Therefore, public acceptance depends on the quality and effectiveness of energy efficiency policies. Therefore, the quality and effectiveness of energy efficiency policies should be
increased.
Developing positive European and national narratives on
energy efficiency
Energy efficiency provides the chance to achieve climate targets, a strengthened economy, and energy security all at the
same time. So far, EU directives have not been able to create
a common understanding of the multiple benefits of energy
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How to make Europe Number 1 in Energy Efficiency
efficiency for all EU Member States and the variety of their
citizens, companies, and public authorities. Experience from
various Member States shows that the added value of energy
efficiency needs to be explained and communicated by national governments in order to implement successful policies
and create broad acceptance and subsequent political majorities in favour of energy efficiency. The same holds for EU level
policies.
Guiding the development of positive national narratives on
energy efficiency, an EU debate or a joint vision on energy efficiency is essential to encourage countries to act on energy
efficiency. Especially now that energy security stands high on
the political agenda of many countries, this narrative can be
used to create a common incentive in creating strong energy
efficiency policies. A narrative on increased competitiveness,
economic growth, employment, health, and, finally, climate
and environment, can also help to bring all countries together,
jointly realising the aim of the 2020 Strategy: smart, sustainable and inclusive growth.
The Concerted Actions were launched to support the implementation of European directives. National authorities meet
regularly to share information and best practices to implement the directives and avoid pitfalls. The Concerted Action
on EED should assist countries to develop their national narratives, framing energy efficiency policy as an investment, not
a burden.
Existing national narratives on energy efficiency
In Germany, the national narrative originates from a
long lasting debate about reducing economic vulnerability with the right fuel mix. It received its final political
push in 2011 by the Fukushima nuclear accident, resulting in a broad majority of supporters for the energy transition, the so-called Energiewende, with a strong focus
on energy efficiency. National consensus is based on the
strong economic and technological dimension of the Energiewende, in combination with both ecologic aspects
and the debate on security of supply.
In the 1970s, Denmark had an exceptionally high dependency on oil in its energy mix with more than 90% of its
energy supply based on imported oil. The oil crisis in 1973
and 1979 created significant economic difficulties for the
country. This crisis however pushed energy efficiency, renewables and, for some time, also coal in combination
with agricultural and social policies.30 Now, Denmark
is one of the leading countries in the development of
renewable energy and energy efficiency in the world
(WWF 2013)31 . It has achieved a well-accepted balance
between security of supply, agricultural and social politics, and ecological matters.
In countries, where the national narrative on energy efficiency
is not yet very strong (e.g. many Central and Eastern European
countries), and economic development is higher on the
agenda than e.g. climate policy, political discussions should
emphasise the multiple benefits of energy efficiency such as:
technological transition and boost of innovation, business opportunities (especially in struggling regions), creation of new qualified jobs, international competitiveness
improved energy security, fighting energy poverty etc.
To find the right way of highlighting the multiple benefits of
energy efficiency in the national context, results from IEA and
the Horizon 2020 project ‘COMBI’ can be used. It is also important to listen more to the business community about how
their market perspectives can be supported by effective policies. Where arguments for energy efficiency can be matched
better with respective national priorities, more policy stakeholders could be persuaded to develop a positive narrative for
energy efficiency.
Such a process should be sufficiently reflected by e.g. the Concerted Actions and in EU research programmes like Horizon 2020.
Better communication and higher effectiveness of
energy efficiency policies
Energy savings are difficult to measure, resulting in complex
methodologies, terminologies, and policy processes (e.g. quantification of savings, monitoring and verification). As a result,
national legislation and implementation often deals with this
complexity by developing bureaucratic policy approaches. As
a consequence, programmes can be difficult to understand,
communication may be weak, and frequent changes can
make it difficult for stakeholders to develop business around
them. Market actors may perceive such over complex regulation more as a burden (e.g. high transaction cost) than a support (attractive business opportunities). In conjunction with
often small budgets, many programmes show poor results.
This effect is often mistaken as general unattractiveness of
energy efficiency, or as an unfavourable cost-benefit relation.
Thus, there is a need to focus more on the translation of complex methodologies and terminologies into easily applicable
and reliable implementation programmes.
Here, the National Energy Efficiency Action Plans (NEEAPs)
and other reporting documents play an important part, providing information about policies and allowing comparisons
between the Member States. There is also a need for a joint
and coherent analysis of potentials, technology roadmaps,
transformation pathways and end-points, and scenarios between Member States and the different EU directives. Based
on this, policy makers must pay attention to reducing transaction cost for market actors and create attractive policy packages (i.e. combinations of policy instruments reinforcing each
other, e.g. the policy packages recommended by Energy Efficiency Watch 2)32. The European Commission could take the
lead.
It is recommended to include in the compatibility evaluation
of national policies with EU directives criteria measuring the
effectiveness of policies such as:
attractiveness to the target groups,
streamlined participation,
sufficient funding to achieve potential,
awareness of the policy and benefits by the target groups.
Exemptions from EU Directives should be abolished or reduced. National target debates often focus on making the
best bargain with exemptions (most notably the exemptions
in the EED, cf. below) rather than ambitious energy efficiency
policies as a chance for economic prosperity. Further action in
terms of translating the complexity of directives and clearly
defining actions is needed (e.g. the implementation of public
procurement, which is still subject to interpretation). A Concerted Action committee could deal with policy coordination
and coherence between the EED, EPBD, Ecodesign/Labelling
and the Renewable Energy Directive.
30IRENA (2013): GWEC Denmark. https://irena.org/DocumentDownloads/Publications/GWEC_Denmark.pdf.
31 WWF (2013) Denmark – Global Leader on Climate and Energy.
32 http://www.energy-efficiency-watch.org/fileadmin/eew_documents/Documents/EEW2/Good_practice_ways_out_of_energy_debt_BROCHURE.pdf
How to make Europe Number 1 in Energy Efficiency
17
Fostering innovative business models
One of the general barriers for energy efficiency, continuously
observed since EEW1, is a structural conflict of interest with
existing business models in the energy sector. Commercial
stakeholders making profits on selling energy will not be in
favour of cutting their markets by reducing the overall energy
consumption – and mobilise their lobby power accordingly –
unless they are provided with a clear route towards alternative business models.
One aim of the EED is to establish an energy service market.
Yet, each country follows different routes in implementing
such a market. The definition of Energy Service Companies
(ESCOs) is kept very wide, and focusses in some cases just on
selling energy efficiency products, while the supply side remains unchanged. Current business models of energy suppliers require a fundamental transformation, where companies
can capitalise energy savings as core part of their business
(e.g. energy performance contracting).
Countries that have been able to develop innovative energy
services are, for example, Denmark, Italy and France, while results in the UK are mixed. In Germany, it is more the suppliers
of energy efficient products and materials that are benefitting from subsidy schemes. Well-designed Energy Efficiency
Obligations (EEOs) provide opportunities for project developers to identify and commercialise savings potentials that are
more difficult to address e.g. under subsidy schemes. EEOs
are not necessarily the best option for all countries. But it is
recommended that countries revise their policies, foster innovative energy efficient services, enable the transition towards
business models generating revenues from energy savings,
and not from selling energy.
Energy Performance Contracting
Business approaches for energy performance contracting have been around already for two decades. A service
provider ensures that ambitious saving measures are
implemented at the client’s side and thus his or her energy bill is reduced. Part of the money the client saves is
paid as a regular fee to the service provider for a determined period. So far, in most countries energy performance contracting finds only a niche market, impeded
by administrative and legal barriers. However, there
are some good practice examples of how to further
encourage this business. Especially the Czech Republic,
Sweden and Austria have created advanced markets by
declaring Energy Performance Contracting a priority in
the energy-efficiency sector.33
Going along with the above, it is important to create favourable conditions for international energy efficiency service
business. So far, each country is developing its own energy
services sector. It is not possible, for instance, for a project
developer operating under an EEO in his country to be able
to expand to another EU country, as some systems by design
give preference to domestic players. In order to realise economies of scale on European level, national schemes should also
be made accessible for service providers from other EU countries, e.g. by applying European tendering rules. This does not
mean, however, to allow international trade of White Certificates, which would create complex problems of their comparability.
Introducing binding and specific targets and effective
financing instruments
To define and measure the aimed effect of any policy, it is essential to have binding and specific targets in place. Therefore,
policy measures mentioned in the NEEAPs should always be
connected to a specific target, as a breakdown of a specific
and binding national and EU targets for final and primary energy consumption. Acceptance for targets can be increased if
Member States are asked to suggest measures with respective targets, which in a bottom up process accumulate to a
national target.
Energy efficiency has the potential to become the number one solution for economic recovery in the EU, under the
condition that the available money is used in the right way.
Structural Funds are a very strong instrument. However, the
current handling is too bureaucratic and often problematic.
This has led to a paradox situation where there is not a lack of
financing options for energy efficiency measures per se, but
rather a low absorption capacity of EU funds, especially from
the EU-13 countries.34 To increase this absorption capacity, the
following conditions will need to be improved:
streamline administrative requirements across all levels
(EU, national, regional) and avoid accumulation of rules
coming from different level
developing information/visibility of financial instruments together with local agents
increasing technical assistance to potential project developers and applicants in combination with financial
instruments.
The EED has triggered an energy efficiency policy-making
process in the EU. A number of innovative policies have been
created which need to be reinforced and expanded by mutual
learning. The EEW3 has shown that progress has been made
across the Member States. To accelerate the progress, this
brochure presents best practice examples of energy efficiency
policies, which can be replicated across Member States.
33 Transparense (2013): D2.1 European EPC Market Overview. Results of the EU-wide market survey.
34Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Hungary, Lativa, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia.
18
How to make Europe Number 1 in Energy Efficiency
The electronic version of this brochure can be found
on the Energy-Efficiency-Watch website:
www.energy-efficiency-watch.org
Source: European Parliament
How to make Europe Number 1 in Energy Efficiency
19
Key publications
Complete Expert Survey Report and Report Summary including main findings
28 Country Reports
EEW3 Key Policy Conclusions
10 Case Studies
Final Report containing all findings of Energy Efficiency Watch 3
available on the Energy-Efficiency-Watch website:
www.energy-efficiency-watch.org
Contact:
EUFORES a.i.s.b.l.
European Forum for Renewable Energy Sources
Dr. Jan Geiss
Renewable Energy House
Rue d’Arlon 63 – 65
B-1040 Brussels, Belgium
Tel.: +32 (0) 25 46 19 48
Fax: +32 (0) 25 46 19 34
[email protected]
http://www.energy-efficiency-watch.org
Gold project sponsors