220 likes | 298 Views
ADEME-WEC Workshop on Energy Efficiency Policies London 17-18 June 2010. The WEC project on energy efficiency policies evaluation: Case study on White certificates. Dr Eoin Lees, (consultant) UK Dr Didier bosseboeuf , ADEME, France. Contents.
E N D
ADEME-WEC Workshop on Energy Efficiency Policies London 17-18 June 2010 The WEC project on energy efficiency policies evaluation: Case study on White certificates Dr Eoin Lees, (consultant) UK Dr Didier bosseboeuf , ADEME, France
Contents • EU & South American White Certificates/ Energy Efficiency Obligations • Draw on case studies for Brazil, France, Italy and UK (1 emerged economy and 3 developed economies) • Where most activity is and cost effectiveness • Lessons learned particularly for electricity • What is the relevance for developing countries?
White Certificates/Energy Efficiency Obligations • Renewable Energy/CO2 Certificates largely exist because of Government intervention in the market place • White Certificates are no different – need an energy efficiency obligation • All significant EU & South American activities with utilities & small energy users on energy efficiency are linked to an obligation on some part of the energy utility to save energy in their customers premises • White Certificates are usually taken to represent the final stage i.e. any party (not just obligated party) can obtain (verified) certificate of energy saving which can be traded on the open market
How do Energy Efficiency Obligations Work? • Energy supplier/distributor has obligation to save energy in customers’ premises; target related to “volume” supplied/distributed/residential numbers • Projects with large energy users can “afford” to have energy saving measures monitored for actual saving • For small energy users – need to simplify approach and cost – use “approved” measures for which there are well established energy saving values (deemed or ex ante savings); • Monitoring and verification then is a “measure count” + random “dip check”
Who Decides on Size and Scope of EEO? • Best if Government as social and environmental implications • Can take care of equity issues by ring fencing share of energy saving target for low income consumers • All end use sectors have had EEOs • Personal view – best suited to traditionally “high transaction cost” sectors – residential and small organisations • Need to address deadweight/free riders/additionality issues – those that would have done it anyway and this is linked to the size of the target
What Costs are Involved and Who Pays? • Cost of energy efficiency measures (energy companies, customers, landlords, charities, manufacturers etc) • Cost of energy company marketing, sales, reporting, planning etc (in UK estimate ~15% of total costs) • Auditing & verifying of energy saving projects and if target met (typically <1% of energy company costs) • Government resource to set target every few years (very small compared to energy company costs)
Energy Efficiency Obligation and white certificates : the French Scheme • Energy efficiency standardized « actions » are identified and savings are estimated ex-ante through a standard methodology (KWh saved actualized on life time or “KWh cumac”). Non standard actions could be proposed • Certificates are delivered by administration • 180 standard “actions” evaluated ex ante by ADEME and professions (including some information or training measures) • A penalty of 2 cts €/KWh for non compliance
Cost Effectiveness - Energy Company’s Perspective for Delivered Electricity Savings in residential sector • Costs indicative due to different targets, different measures used and hence lifetimes • France expects cost to suppliers <1c€/kWh • Italy based on €89/WC • In all cases, cost is much less than cost of electricity generation
Cost Effectiveness - National Perspective for Delivered Electricity & CO2 Savings • Considers ALL costs (energy suppliers, customers, landlords, manufacturers, charities etc.) • Evaluates NPV (net of deadweight, energy valued at resource cost (not residential prices) • Only UK data available at present • Total investment of €1.4 billion (2005-8) (1£= €1.1) • NPV = €3.4 billion (3.5% discount rate) • CO2 saved 2.0MtC/year (corrected for deadweight and comfort); equivalent to 5% of household emissions • Resource cost to save ton of CO2 = -€ 58 i.e. a benefit • National cost to save a unit of electricity was 2.2c€/kWh - compare 10.6 c€/kWh consumer cost
Avoided Energy Costs for Participating Italian Customers cf. tariff contribution = 100 euro/toe large “private” economic gains
French case : Result from the first period 84 TWh cumac saved, 56% above the obligation Delivered certificates
French scheme : Stabilisation of the certificates prices (the market is still very marginal (few Kwh cumac))
French scheme : Total costs of the energy saving actions (4 Meuros over 3 years)
Preliminary findings and conclusions • EEO rather than White Certificates is the key; largely operated without significant trading • EEO work in both monopoly or liberalised electricity markets; and on electricity supplier or distributor • Deemed savings keeps administration, monitoring and verification costs of the “authority” low – <1% • Need to address deadweight issues either by minimising on a project by project basis or build into target - need to know previous sales of EE measures • Cost falls on end users – typically 1-4% of energy bill & does not come out of Governmental expenditure
Could EEO be a Policy Option for Developing Countries? • Key priority is to extend the access of their citizens to the benefits of electricity • In principle capital expenditure on increasing supply and reducing energy demand not in conflict; but in practice….? • EEO offer Governments a way to meet affordable electricity, improve energy security and improve environmental performance at relatively modest increase in consumers’ bills (1-2%) without direct Government expenditure • Consumer payback period is a few years
Practical Considerations for Developing Countries • EEO are simpler and do not need the financial infrastructure and markets of White Certificates • Need to develop deemed savings in local circumstances – tie in with CDM/CO2 offsetting? • Could adapt and improve the existing EU experience to local circumstances regarding administration, monitoring and verification of the energy companies meeting their energy saving targets • Saving electricity where inefficient technology in use and/or encouraging EE technology in new customers for electricity – balance to be struck • Personal judgement – no show stoppers!
Policy Benefits for Developing Countries • Financial benefits to consumers and commerce in medium term – lower overall cost in delivering energy service required • Improved energy security through reduced demand compared to supply side only approach • Reduced environmental impact, especially CO2 • Job creation benefits as well • Importance of these will be country specific.
Thank you for your attention For more information: www.worldenergy.org www.ademe.fr www.odyssee-indicators.org