Demand-side energy efficiency policies: brief overview

Transcription

1 Demand-side energy efficiency policies: brief overview Aleksandra Novikova, PhD IKEM University of Greifswald Istanbul, Turkey May 2015 ECRAN Modeling Workshop

2 Outline Policy instruments By type By sector Is there a silver bullet Conclusions

3 Topology Regulatory approaches Economic instruments Information programmes Government provisions of public goods and services Voluntary actions

4 Topology Regulatory approaches Economic instruments Information programmes Government provisions of public goods and services Voluntary actions

5 Topology Regulatory approaches Emission standards Technology standards Product standards

6 Standardization: mechanism % of Market 0 More Efficient Energy Efficiency Scale Less Efficient Seite 6

7 Example: product standards The EcodesignDirective 2009/125/EC provides a coherent and integrated framework which allows setting mandatory ecodesign requirements including energy-efficiency requirements - for energyrelated products. ABB Efficiency requirements for low voltage motors. The EcodesignDirective covers buildings, industry, and transport

8 Example: technology standard The Energy Performance of Buildings Directive (EPBD) 2002/91/EC: Adoption of minimum requirements for energy performance of new and existing buildings and their revision every five years 2010/31/EC: by 1 January 2021, all new buildings in the EU-27 must have nearly zero-energy consumption Fig. Evolution of stringency of energy requirements in the Danish building energy code SBI/Aalborg University, 2013 in OECD/IEA, Modernising Building Energy Codes

9 Example: emission standard Fig. CO2 emissions of selected commercially available passenger car models in the EU in 2013 Source: International Council on Clean Transportation EU CO2 emission standards for passenger cars Seite 9 and light-commercial vehicles

10 Topology Regulatory approaches Economic instruments Information programmes Government provisions of public goods and services Voluntary actions

11 Topology Regulatory approaches Economic instruments Taxes Subsidies Emission trading schemes

12 Taxes: mechanism Private cost Private cost (after tax) Private cost (before tax) Demand Volume

13 Example: Taxation in road transport In the case of road transport, a wide range of taxes apply, including: annual circulation tax (road tax), vehicle purchase tax, infrastructure charge (tolls on specific parts of the network, e.g. motorways, tunnels, bridges), parking fees, congestion charge, company car taxation fuel excise tax insurance tax Date of introduction of differentiated tax rates: Car Purchase Tax 1992: Austria, 2000: Denmark, 2002: UK (company cars), 2006: Cyprus, France, Netherlands, Portugal, 2007: Luxembourg, Norway, 2008: Spain, Finland, Ireland, 2009: Germany, 2010: Greece, Latvia, Slovenia, UK (private cars), 2012: Belgium Annual tax 1997: Denmark, 1998: UK, 2006: France (company cars only), Sweden, 2008: Netherlands, Ireland, 2010: Finland AEA Energy efficiency policies in the transport sector in the EU.

14 Example: Fuel taxation

15 Subsidies: mechanism Private cost Private cost (before subsidy) Private cost (after subsidy) Demand Volume Seite 15

16 Sources of financing: case study for buildings retrofits Source: MURE ODYSSEE. Energy efficiency in the EU: trends and policies. Type of Financing Drawbacks Advantage State budgets State-like budgets (e.g. from ETS) Difficult to mobilize investment when budgets are tight Heavily dependent on the CO 2 price. Not easy to finance large-scale deep renovation Can be directed towards deep renovation Independent from the direct state budget Leveraging private investments from energy companies through energy saving obligations Deep renovation not favoureduntil specific measures are taken Believed to be more stable financing source. Energy companies may develop into energy service companies Leveraging private investments through energy service companies Energy conversion options that pay off rapidly are financed; deep renovation is hampered Financing charge is totally on the private sector Financing through a levy on energy consumption ( Feed-in tariff for energy efficiency ) Combining different sources in an Energy Efficiency Fund Charge on energy may add to other charges, e.g. from renewable but has a broader basis than just electricity to charge. In most cases, the final consumer/tax payer would carry the charges. Financing stability and risk-lowering. Deep renovation can be financed. Large basis. More flexibility in promoting innovative technologies Seite 16

17 Incentives and subsidies Incentives and subsidies Provision of finance Tax incentives Price guarantees Grants Credits Feed in tariffs Loans Exemption Fixed premiums Preferential Reduction Guarantees Accelerated depreciation Rebates Seite 17

18 Provision of finance vs tax incentives Fig. Number of financial instruments in place by country in EU, 2011 (BPIE 2012) Traditionally, grants and preferential loans are used Tax incentives Preferred by the governments However favor households with higher incomes in case of progressive tariff systems

19 Financial incentives for deep thermal efficiency retrofits Table. Comprehensive thermal retrofit using tax incentives and KfW programmes, 2010 Number of comprehensive retrofit investments through tax incentives Number of comprehensive retrofits through KfW programs (excluding heating) Number of measures Italy Netherlands Loans Grants 5622 (2%) 177 (3%) 18,591 (23%) 3,962 (6%) Total support EUR42 mln (3%) EUR 4 mln (3%) - EUR45 mln (46%) Total investments EUR 76 mln(3%) EUR 9 mln (3%) EUR 3,248 mln (70%)

20 Deep retrofits: success factors 80% Level of support % 60% 40% 20% 0% KfW Loan (Germany) KfW Grant (Germany) Tax credits (Italy) Tax rebates (Netherlands) Support of single measures Share of comprehensive invetsments Support of comprehensive retrofit Countries that supported comprehensive retrofits and single measures with the same level of support received mostly applications for single measures Updates of building codes should be based on the state of art promoted by incentives Retrofitted buildings should be pre-audited

21 Case study: provision of finance in Germany Fig. Share of investment costs supported by KfWfor different depths of retrofit 20% 1600 Share of investment cost, % 15% 10% 5% Investment, Mio Euro 0% Loan Grant Loan Grant Loan Grant Loan Grant Loan Grant Loan Grant KfW 55 KfW 70 KfW 85 KfW 100 KfW 115 Single measure Grant equivalent of the loan Loan relief Grant Investment 0

22 Examples of scrappage schemes MURE database and HIS global insight. March 2010

23 Tradable permits: mechanism Emission allowance Entity A Emissions target prior to trading Entity B tco 2 Allowances to sell Allowances to buy New targets after transaction Seite 23

24 Example: EU ETS for the industry

25 Topology Regulatory approaches Economic instruments Information programmes Government provisions of public goods and services Voluntary actions

26 Information tools Information Certification and labeling Information disclosure Education Energy audits Public leadership programs Promotion, recognition, advertising Measureme nt and reporting Comparative Detailed billing Best practice guides Endorsemen t Training Seite 26

27 EU Standard and Labeling scheme: comparative labeling Energy Manufacturer Model More efficient Less efficient A B C D E F G Energy consumption kwh/year (Based on standard test results for 24h) Logo ABC 123 A 350 Actual consumption will depend on how the appliance is used and where it is located Fresh food volume I Frozen food volume I Noise (db(a)re 1 pw) 40 Further information is contained in product brochures Norm EN 153 May 1990 Refrigerator Label Directive 94/2/EC Seite 27

28 EU Standard and Labeling scheme Set originally 7 Energy Efficiency Categories (now 10) % of Market A B C D E F G Current Appliance Stock 0 Paolo Bertoldi 2006 More Efficient Energy Efficiency Scale Less Efficient Seite 28

29 EU labeling and standardization program: cooling appliances Share of models/market, % A++ A+ A B C D E F G More efficient Energy efficiency labels Less efficient Data sources: : IPCC 4AR (EU-25), : GfKat the AtLETEworkshop (EU-10), : GFK in topten-eu for refrigerators (EU-23) Seite 29

30 Energy audits in households, Germany HausSanieren Profitieren(retrofit the house and profit) 79,000 annually small scale, free or low-cost audits target owners with low interest in energy related investments Vor-Ort-Beratung(BAFA programme) 20,000 in 2010 large scale audits costing more than 300 EUR target actors that are certain that they want to conduct retrofits but are unsure which investments are cost-optimal In addition, the KfWprogramme 431 also requires the use of, and provides financial support for, energy audits during the retrofitting process mandatory for retrofits to 45% less primary energy demand than new buildings, voluntary for other standards

31 Detailed bills Detailed bills may include historical energy consumption and costs standard or average consumption/cost data to serve as a benchmark for comparison on-and off-peak information where there are fluctuating energy tariffs or a breakdown of energy consumption by end-use based on a representative household pattern Detailed bills may result in 1-10% energy savings Fig. Electrical energy savings resulting from detailed billing/written energy report experiments as compared to control groups Energy savings, % control group 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% High estimate Low estimate Note: (for the case marked DH, district heat savings are examined; for the case marked BL, heating savings versus the baseline equal to the last period consumption are provided)

32 Detailed bills: example Example: energy report as provided by OPower( 32 Seite 32

33 Topology Regulatory approaches Economic instruments Information programmes Government provisions of public goods and services Voluntary actions

34 Public procurement in Finland Government resolution on the promotion of sustainable environmental and energy solutions (cleantech) in public procurement (2013) New public buildings shall be almost zero energy buildings after year 2017 Rental buildings shall be at least in category D. In buildings undergoing deep renovation the objective is reduce energy consumption to a level, which is 15% under the level required by the building code for renovations. Energy consumption by public sector goods transportation and mobility of personnel has to be cut by 10% from 2012 levels by 2015 By 2015 the average CO2 emissions of cars procured or rented by the state shall not exceed 100 g/km or, alternatively, the proportion of alternative fuels (e.g. electricity, ethanol, gas or hybrid) has to be at least 30% All government employees using vehicles shall receive eco-driving education Impact In public buildings 0.6% of sectoraltotal in 2006 In transport 0.3% of these sectoral total in 2006 MURE ODYSSEE database

35 Topology Regulatory approaches Economic instruments Information programmes Government provisions of public goods and services Voluntary actions

36 Voluntary agreements in industry Programme for Energy Efficiency in Energy Intensive Industry, Sweden (since 2005) By meeting their efficiency goals, energy intensive companies can avoid the electricity tax (0.5 euro/mwh) applicable since 1 July Results: actions by the participants have been reported. Climate Change Agreements, UK (since 2001) Participants can receive a part exemption from the Climate Change Levy for businesses within energy intensive sectors that agreed to challenging targets for improving their energy efficiency or reducing carbon emissions. Ca facilities have participated in In Norway, pulp and paper companies may apply for participation in a programme for energy efficiency and the approved companies will be given a full exemption from the electricity tax. ADEME Energy efficiency policies in industry. Lessons learnt from the ODYSSEE-MURE database.

37 Policy packages by sector: buildings

38 Map of German policies and programs supporting thermal energy demand reductions, 2012 Households / Investors Contractors Policy objectives /mechanisms: Objective 1: Uninterested Planning Objective 2: Planning Invest Objective 3: Implement investment optimally Targeted Energy Audits Advice of Contractors Further Education Provide Information General Internet Energy Performance Certificates Heating Bills TV and Press Desk Advice Basic Education and Master Internet Manuals Provide low-cost capital KfW Energy Efficient Retrofit/Construction Provide financial incentives Provide subsides upfront Change heating costs Align incentives MAP 35a Tax Relief Heating Cost Ordinance Eco Tax Tenancy Law Set minimum standards Set standards for existing buildings Set standards for new buildings Energy Savings Ordinance BImSchV Renewable Energy Heating Act

39 Existing and feasible policies in EU-27 for nzeb (Bürger 2012) Instrument type Regulatory instruments Economic instruments Grants and preferential loans linked to state budget Tax incentives Energy tariffs Instruments strengthening support and financing activities within the market Main characteristic Policies and measures Command and control type regulations Require different ways of financing the programs Positive or negative incentives add. fiscal burden) Tariff structure incentivizing the reduction of energy consumption Financial support or finance provided by market actors -> state budget independent support Building codes for new and existing buildings Obligations to retrofit for ex., upon reaching a particular age, noncompliance with minimum performance standards Financed through state budget Financed through state-like budget fed by specifically dedicated revenues like revenues from carbon markets Financed through surcharge on energy or climate taxes Financed through a levy on buildings: the worse the energy standard, the higher the levy Tax incentives for investors Tax deductions that reduce taxable income Tax credits that reduce the tax liability Reduced VAT for efficiency technologies Property tax proportional to building performance Property purchase tax proportional to building performance Progressive energy tariffs Energy saving obligation for energy suppliers or grid operators Bonus/Premium scheme (energy efficiency feed-in tariff i.e. legal entitlement to a bonus payment of savings achieved) Energy service companies (ESCOs) and energy performance contracting Bank obligation to grant interest reduced loans Seite 39

40 Existing and feasible policies in EU-27 for nzeb (Bürger 2012) cont. Instrument type Main characteristic Policies and measures Capacity building, qualification and quality assurance Assure quality -> keep confidence high; targets at sufficient number of skilled manpower along whole value chain Information, motivation, advice Market transformation (supply side) measures Target-group specific approaches Ownersorganizations Motivate home owners to invest in modernization measures; allow home owners to do informed decisions Shape the market for new technologies by working with the supply side Target heterogeneous barriers in multi-family buildings Rental homes Split incentive barrier Low-income owners Financing barriers Professional training/ Vocational education Branded quality standards for refurbishment measures Qualified long-term building specific refurbishment plans (roadmap) Energy performance certificates Combining financial support with mandatory advice Competence centres for energetic building refurbishment Research and development support Technology procurement Premiums for providers of efficient technologies Organizing competitions or tenders between technology providers Creating networks Labeling, testing and certification Requirement to homeowner associations to build renovation funds over time Governmental debt guarantees for providing loans to condominiums Professional housing companies/property managers Introduction of rules demanding tenants to tolerate retrofits Cost and benefit allocation rules among tenants and landlords Rent reduction claims by tenants in case of non-conduction of retrofits by landlords Public debt guarantees to private banks Seite 40 Grants for low income owners

41 Policy packages by sector: industry

42 EU Measures for Industry in the MURE Database Seite 42

43 Energy efficiency policies for industry in the EU-28 MURE database 2012 Coop = Co-operative measures, Cros= Cross-sectoralmeasures, Fina= Financial measures, Fisc= Fiscal measures, Info =Information/education/training, Le/I = Legislative/Informative, Le/N = Legislative/Normative, Mark = New market-based instruments Seite 43

44 Energy efficiency policies for industry in the EU-28 MURE database 2012 Note: Some caution is needed while analysing this information because there is some variety in how countries package their measures. Some countries have reported lager packages of measures as one measure while others split them into several independent measures. Seite 44

45 Policy packages by sector: transport

46 Transportation policies in the EU: state 2012 Source: AEA Energy efficiency policies in the transport sector in the EU. ODYSSEE/MURE Seite 46

47 Transportation policies in the EU: state 2012 Note: Regulations includes normative measures and organisational measures includes infrastructure and social planning measures Source: AEA Energy efficiency policies in the transport sector in the EU. ODYSSEE/MURE Seite 47

48 Transportation policies in the EU: state 2012 Fig. Main aims of ongoing measures Souce: AEA Energy efficiency policies in the transport sector in the EU. ODYSSEE/MURE Seite 48

49 Variation final energy consumption EU Mtoe Var. cons. final Activity Demography Lifestyles Structure Energy savings Climate Other Indicators MURE database

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