Peter Brabazon

1. Welcome Peter Brabazon Sustainable Energy Ireland Glasnevin, Dublin 9 Tel: 01- 8369080 Fax: 01- 8372848 www.sei.ie

2. Context & Update Andrew Parish Sustainable Energy Ireland Glasnevin, Dublin 9 Tel: 01- 8369080 Fax: 01- 8372848 www.sei.ie

3. Energy Agreements An agreement between an individual firm or group of firms and the state aiming to achieve substantial energy and emissions reductions “beyond business-as-usual”

4. Policy context • Climate change • Kyoto Protocol • EU: Burden sharing arrangement • Ireland: +13% by 2008 - 2012 • National Climate Change Strategy – Oct ‘00 • Industry – One million tonnes CO2 reduction

5. National Policy Context • Integrated strategy • Early action to meet targets • Burden sharing and equity across all sectors • Market instruments with appropriate supports • Industry – taxation, agreements, emissions trading, best practice

6. Negotiated Agreements • Aim to provide fairness, flexibility while building competiveness • Firms agree to take certain actions or to meet specific targets • Equity in context of market instruments • Incentives for participation • Flexibility for firms while meeting national objectives • Can be individual or group basis • Can be across all activity, or technology specific

7. International Examples • UK • agreement to energy consumption improvements – levy rebates • Denmark • agreement to actions under a certain payback – tax rebates • Netherlands • agreement to meet best international practice

8. Agreements in Ireland • Core element of strategy • Signalled connection to energy/climate levy • Firm level, multi-year, legally binding agreements • Energy management systems a minimum • Best international practice, beyond business as usual

9. Pilot Agreements – Principal Aims(1) • A pilot project for energy related emissions in industry • Process emissions are not included • Action based approach • Engaging with industry on the development of suitable approaches to agreements • Verifying and calibrating energy data

10. Pilot Agreements – Principal Aims(2) • Determining resource requirements and support needs of industry and facilitators to deliver an effective agreement • Educating all stakeholders on the requirements and implications of the measure • Developing and testing suitable auditing, benchmarking and monitoring approaches • Benchmarking potential impacts of agreements

11. Pilot Agreements - Organisation • Project developed and implemented by Sustainable Energy Ireland • Consultative approach with industry • On-going consultation includes IBEC, DETE, DoELG, DCMNR • Will inform policy makers for implementation of full measure

12. Companies and Pilot Agreements - Benefits • Opportunity to influence • Early understanding of process • Benefits of audit • Best practice information

13. Pilot Agreements • Technology agreement • Individual agreement • Collective agreement

14. Individual agreement • Aimed at very large energy consumers with unique processes or activities • Based on full audit of all energy practices • Criteria negotiated and agreed • Audit and criteria used to develop list of possible actions • Draft agreement based on identified desirable actions

15. Individual agreement • Aughinish Alumina

16. Collective agreement • Collective efficiency • A group of firms with largely similar processes • Audits to develop general understanding • Criteria for action agreed • List of desired actions developed • Draft agreement based on identified actions

17. Collective agreement Chemical / Pharmaceutical Sector • GlaxoSmithkline, Co Cork • Irotec Laboratories, Co Cork • Janssen, Co Cork • Leo Laboratories, Dublin • Micro-Bio, Fermoy, Co Cork • Novartis, Co Cork • Servier Laboratories, Arklow, Co Wicklow • Wyeth Medica, Newbridge, Co Kildare (8)

18. Technology agreement • Capturing key elements of energy use across industry • Pilot agreement focuses on generation and distribution of hot water and steam • Audits to understand existing practices, develop standards and identify opportunities • Discussions with suppliers/installers • Agreement based on actions and practices

19. Technology agreement • Kepak, Co Meath • Millipore, Carrigtwohill, Cork • Smurfit Paper Mills, Dublin • St James’s Hospital, Dublin • Transitions Optical,Co Galway • Tyco Healthcare, Mulhuddart, Dublin • Unilever BestFoods Ireland, Dublin • Yeast Products, Dublin • Aer Rianta, Dublin • Cadbury, Coolock, Dublin • Dawn Meats, Co Mayo • GE Superabrasives, Dublin • Glanbia Ballyragget, Co Kilkenny • Green Isle Foods, Naas, Co Kildare • Hewlett Packard, Leixlip, Co Kildare (15)

20. Activity Progress Project planning Development of energy audit templates Steps and milestones have been agreed with participating firms Future Energy Solutions appointed to develop templates Project resources Project team, implementation structure and project budget have been developed by SEI Briefing of firms Initial meetings have taken place with each group Group Representatives Representatives for the participating firms in place, with linkages as appropriate with suitable industry representative bodies Progress to date

21. Activity Progress Energy audits Selection of auditors A panel of external auditors drawn up to carry out energy audits within the participating firms, in accordance with the templates Currently underway by competitive tendering process Informing stakeholders Individual briefing meetings have taken place with key stakeholders (Govt. Depts and industry representative bodies) Progress to date

22. Next Steps Timeframe Item December Auditors selected January / February Audits underway End February Audits completed End February All final reports in Mid March Negotiations End March Negotiations Mid April Conclude agreements End April Analyse

23. Analysis and Agreement Each audit will: • Review indicators, review projects, compare to international best practice, and assess efficiency potential • Audits will be collated to give group profile • Agreed action criteria • Draft action list • Discussion to finalise

24. Pilot Outputs • An agreed list of desirable actions that could form the basis of: • A full agreement • a programme of best practice energy management and investment • No formal requirement to implement actions from pilot agreement

26. The Role of Audits Brian Motherway Motherway Begley Ltd

27. The pilot project • Individual, Collective and Technology agreements • Action based agreements • Best international practice as reference • Translation between actions and targets

28. Future audit roles • Agreements in the National Climate Change Strategy • Information needs of all agreement types • Monitoring and compliance • SEI role

29. Audits in the pilot project • Compiling data from participants • Current energy practices • Gap between current performance and best international practice • Assessing possible projects • Developing strategy for moving towards best practice • Detailed plans subject to negotiation

30. Audits in the pilots 2 Collective agreement • Collating data to model ‘typical site’ • Action list negotiated at collective level • Each site takes up action list in local context

31. Audits in the pilots 3 Technology agreement • Restricted to thermal element • Wider applicability • Best practice guide to system • Involvement of suppliers

32. Special requirements of the pilots Pilot audits differ from normal audits: • Audit relationship • Defining scope of investigations • Approach to assessing projects • Reference to best international practice • Specific data & reporting requirements

33. Pilot Energy Agreements The Role of Audits

34. The templates • Setting out the special requirement of the pilot project audits • Standardising scope • Establishing compliance and data quality checks • Standardising reporting • Not standardising assessment, analysis, creative input

35. Special features • Data quality checks • Specific reference to best practice • 6 year payback in first analysis • No distinct payback categories • Identifying Special Investigations

36. Using the template • Auditor contracted to the firm to provide audit for energy strategy • Some special requirements for the pilot project additional to the firm’s needs • Template sets out project approach specific data needs • Quality assurance by SEI

38. Next Steps/Summary Peter Brabazon Sustainable Energy Ireland Glasnevin, Dublin 9 Tel: 01- 8369080 Fax: 01- 8372848 www.sei.ie

39. Audits – a key step in this project • Process and outputs must be robust • Perceived independence is vital • Quality standards must be seen to be high • Timing is of importance • Must provide learning

40. Quality assurance • SEI will maintain contact with the process • FES will provide independent QA: - contact with auditors - site visits - third party review of reports

41. Timing • The project is only useful if it feeds into policy sufficiently early • End February is the latest date for completion – earlier if possible • Early contact with the companies is vital • Companies must be kept in touch with progress and delays

42. Feedback from auditors • Feedback from auditors is important to the project • Feedback on process and on the templates • SEI will provide headings for written feedback at the end of the audits • SEI will provide feedback to you on project lessons/outcomes

43. Sustainable Energy Ireland Glasnevin, Dublin 9 Tel: 01- 8369080 Fax: 01- 8372848 www.sei.ie