Title of the measure: General description. FRA16 Energy Efficiency Certificates

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1 Title of the measure: FRA16 Energy Efficiency Certificates General description The law n ( programme fixant les orientations de la politique énergétique ) adopted the 13th of July 2005 introduces a new instrument in France in the framework of the energy demand management policy : the energy savings certificates. The need was acknowledged to apply this action to existing basins (household and tertiary sectors), characterised by generally widespread - but energy intensive on the whole - user classes. This background brought about opportunities to set up a national policy based on energy efficiency Certificates, with a complementary role to other existing instruments, such as regulations under way, tax credit etc, and which could be based on encouraging the market parties towards mobilisation of their demand/supply, with no involvement of subsidies. First period of the mechanism (mid-2006 to mid-2009): The mandatory targets involve for the first three years 54 TWh in final energy cumulated and actualised with a 4% discount rate over the life of the energy efficiency actions (depending on the considered measure). The saving actions must be performed in the three years period: 1st of July 2006 to the 30th of June Within this period, there are no annual deadlines to be respected, and the targets will be verified only at the end of June Obligated entities The overall target will be shared among the different energy sources covered, then among obligated entities: depending on their market share. The decree from the 26th of September 2006 has decided the following repartition among the energy suppliers (obliged entities): - Electricity : 31 TWh ; - Natural gas : 14 TWh ; - Fuel : 6,8 TWh ; - LGP : 1,5 TWh ; - Cooling and heating: 0,7 TWh. At all, firms are obliged by the decree from the 26th of September 2006 to realise energy savings. As a rule, the total energy savings targets are shared among suppliers with annual sales beyond a fixed threshold. This threshold depends on the kind of energy supplied: - in case of suppliers of electricity, natural gas, LPG and heating or cooling, the threshold is 0.4 TWh in the year - in case of domestic fuel suppliers, there is no threshold: the obligation occurs from the first litre, according to a specific request of the professional organisation The amount of the apportioned targets over an obliged entity is proportional to his assessed sales volume and also to the values of the different energies. An annual adjustment system will be considered to account for variations in market shares (increase, decrease, new entries, and new exits). All the domestic fuel suppliers are entrusted with individual obligation; chance will be granted to transfer these obligations to a professional consortium structure. The collective structure will be in charge of the implementation of the sum of the obligations of the components. Today, two collective structures have been created, representing about fuel suppliers. Penalty for non-compliance: A value of 2c /kwh will be finally assumed as penalty for noncompliance with the apportioned targets, against an evaluated average cost of the saving programmes of 1 c /kwh. Payment of the penalty cancels the obligation.

2 Eligible entities: Some economic player can make savings projects and get certificates, even if they are not obligated entities We distinguish two types of eligible entities: - local communities, - other players : in this case, special conditions must be respected. The energy savings action must not indeed correspond to the main economic activity of the implementer and the action must not increase its turnover (for example, boilers distributors can not obtain certificates for their sales). In practise, local communities are eligible entities for programs they can implement on their own property or by a third party. All other entities are eligible for action on their own property only. Eligible actions: All end-use sectors are eligible, including transport. All energies are eligible. There are then some definitely not eligible technologies: installations implied in the CO2 abatement UE Directive, savings from only substitution between fossil fuels, installations required to fulfil the regulations in force. A threshold of savings have been fixed: an action must concern more than 1 GWh cumac to be accepted by administration. Standard methodologies: In 2007, standardised projects are encouraged, since they are considered eligible by default. 139 standard methodologies have been defined: substitution with low energy light bulbs; loft insulation; use of double glazing; installation of heating control mechanisms; replacement of domestic appliances with more efficient equipment; replacement of boilers or water heaters by more efficient equipment; fitting of insulating jackets to water heaters; fitting of heating control mechanisms; boiler maintenance; creation of wood-fired heating systems for district heating or in industry Sectors Housing Commercial buildings Industry Grids Transport Nb of standard methodologies These methodologies are based on fast and straightforward user-friendly procedures without complex details. Lump evaluation of energy savings are established for each action, expressed in kwh of final energy, cumulated and present-worthed over the life of the product. These procedures are the results of technical /objective evaluations of savings, then processed and weighted in suitable ways to keep into account: - the specific type of equipment or goods - the process used to save energy (e.g. switching to renewable sources, etc), - the state of the market of the processes - a possible state of grid congestion in particular geographical areas, which could be relieved by recovery of energy efficiency at a local scale Certificates register Since autumn 2007, a website has been created to register all the certificates. An obligated body can receive a certificate only if it registers on this website. It s also on this website that certificates can be sold and that one can follows the cotation of the kwh cumac. Transitional period (mid-2009 to end 2010): A transitional period was introduced, starting from 1 July No energy-saving target was set for that period, during which certain liable entities continued to carry out energy-saving actions.

3 Second period (start 2011 to end 2013): In view of the positive results in the first period (see Evaluation heading below), Article 78 of Law No of 12 July 2010 making a national environmental commitment renewed the EEC mechanism for a second third-year period. This Article also extends the energy-saving obligations to those offering automobile fuels for consumption, where their annual sales exceed a certain threshold. In addition, unlike the first period, domestic fuel oil sellers are subject to energy-saving obligations if their annual sales are above a given threshold. The obligation levels for the second period are 255 TWhcumac for all sellers of electricity, gas, domestic fuel oil, LPG and networked heat or cooling energy, and 90 TWhcumac for those offering automobile fuels for consumption. In addition, Article 78 of the Law of 12 July 2010 restricts the range of entities eligible to request certificates to liable entities, public authorities, the National Housing Improvement Agency (ANAH) and social landlords. Lastly, this Article also states that contributing towards programmes to reduce the energy consumption of the least well-off households, in the context of combating energy insecurity, or towards programmes offering information, training and innovation in support of demand-side management, in particular aimed at developing vehicles with low carbon dioxide emissions, may now lead to issue of EECs. The new period began on Support for training and engineering actions The mechanism also provides for certificates to be issued in the context of carrying out the following: - firstly, actions to train construction sector professionals in energy saving: thus, the FEEBAT (energy-saving training for businesses and craftspeople in the construction sector) training mechanism has operated since the start of 2008 and has provided training for placement trainees as at the end of 2010; - secondly, engineering work. This work aims to draw up technical documents to support businesses and craftspeople in the construction sector with regard to the renovation, maintenance and construction of buildings in accordance with the Environment Round Table energy targets (low consumption and/or positive energy new buildings, major energy renovation of existing buildings). Energy Efficiency Certificates (EEC) are delivered for actions referenced in an official list of 210 «standardized actions» with predetermined savings targets (savings are estimated ex-ante through a standard methodology ) Sector Nb of stand. Operations actions Residential Buildings Commercial buildings Building insulation, heating, production of hot water, lighting, household appliances, ventilation, etc Building insulation, heating, production of hot water, lighting, ventilation, etc Industry 26 Transport 16 Lighting, electric utilities (motors, compressors), heat recovery, etc Eco-driving formation, green tyres, freight case mobile for rail-road combined transport, etc Agriculture 7 Milk pre-coolant, electric utilities (motors, ), etc Systems 11 Heating systems, public lighting, etc

Evolution of the price on the market in 2010 (in blue) Impact evaluation (methods and results) Certificates delivered (TWhcumac) Certificats délivrés au cours du temps (TWh cumac) 400 350 300 250 200

4 Evolution of the price on the market in 2010 (in blue) Impact evaluation (methods and results) Certificates delivered (TWhcumac) Certificats délivrés au cours du temps (TWh cumac) End of 1st period : 65,2 TWhc = +20% of the obligation 30 June 2011 : TWhc = 43% of second period obligation End of transition period : 164,3 TWhc = 30% of second period obligation Obj. 2 nd period 345 TWhc 50 0 Obj. 1st period 54 TWhc juil.-06 janv.-07 juil.-07 janv.-08 juil.-08 janv.-09 juil.-09 janv.-10 juil.-10 janv.-11 juil.-11 janv.-12 juil.-12 janv.-13 juil.-13 1st period Transition 2nd period

5 Energy and CO2 savings Those 84.5 TWh cumac that were certified correspond to a saving of 7.77 TWh per year. The CO2 savings are estimated around 1.83 MtCO2 each year. Ex-post evaluation 2010 direct CO 2 (kt) 1830 Energy (TJ) (Fuels/Electricity) Annual energy savings generated by the EEC mechanism Energy savings generated by all EECs issued as at 31 December 2010 (ex-post evaluation) Annual energy saving 1.10 Mtoe 1.05 Mtoe 1 Mtoe Percentage of target 22% 9% Energy savings generated by all EECs issued as at 31 December 2010 (ex-post evaluation) and by the second period of the mechanism (ex-ante evaluation) Annual energy saving 2.64 Mtoe 2.59 Mtoe Percentage of target 22% Energy savings generated by renewal of the mechanism until 2016 and 2020 Annual energy saving 4.97 Mtoe 8.03 Mtoe Measure Impact Level low medium high Explanation: impact is high both in Tertiary and Houshehold. Interaction of measures The system has interacted with other measures such as tax credit, Audits subsidies in buildings and local energy information centres. This instrument helps to finance and to diffuse energy efficiency materials and equipment. Same measure in Household and Tertiary. Historical data Following to the national debate on energy organised in 2003 government issued a project of law in This law (loi n du 13 juillet 2005 de programme fixant les orientations de la politique énergétique) has been adopted the 13th of July 2005 and defined the main orientations of the energy policy of the France. Targets on energy efficiency are precised: a reduction of energy intensity on 2%/year from 2015 and on 2,5%/year from References - Loi n du 13 juillet 2005 de programme fixant les orientations de la politique énergétique - Décret du 23 mai 2006 («décret obligations») - Décret du 23 mai 2006 («décret certificat») - Décret du 23 mai 2006 («décret registre») - Arrêté du 30 mai 2006 relatif aux modalités d application du dispositif de CEE - Arrêté du 19 juin 2006 fixant la liste des pièces d un dossier de demande de CEE - Arrêté du 19 juin 2006 définissant des opérations standardisées d économie d énergie

6 - Arrêté du 26 septembre 2006 fixant la répartition de l objectif national d économies d énergie - Arrêté du 19 décembre 2006 définissant des opérations standardisées d économie d énergie - Arrêté du 20 février 2007 relatif au registre des certificats d économie d énergie - Arrêté du 22 novembre 2007 définissant des opérations standardisées d économie d énergie - Livre blanc sur les énergies, Nicole Fontaine, Ministère de l Industrie, 2003 (

Partnership between energy companies and installers How White Certificates can finance energy efficiency for building renovation

Partnership between energy companies and installers How White Certificates can finance energy efficiency for building renovation Financing energy efficiency in private housing Opportunities from energy