GEODE S POSITION ON THE EC DIRECTIVE PROPOSAL Christian Held, Deputy Chairman of GEODE GEODE Autumn Conference 21 st October 2011 Wien Energie Stromnetz GmbH Mariannengasse 4-6 Vienna
2 Summary I. Introduction II. GEODE S amendment proposals III. IV. a. Articles 4, 6, 7,8, 10, 12 b. Annexes II, VI, VII, XI, XII Other positions a. European Parliament b. Member States Conclusion
3 Summary I. Introduction II. GEODE S amendment proposals III. IV. a. Articles 4, 6, 7,8, 10, 12 b. Annexes II, VI, VII, XI, XII Other positions a. European Parliament b. Member States Conclusion
4 Introduction GEODE welcomes the publication of the draft Directive on energy efficiency on such short notice after the release of the COM s Energy Efficiency Plan GEODE wishes to stress that an ambitious energy efficiency policy is an absolute condition to the achieving of the 20/20/20 targets In particular, GEODE underlines the crucial role that could be played by DSOs in helping reduce energy consumption: DSOs have a close relationship to consumers and infrastructure DSOs are objective market partners DSOs are often responsible for metering
5 Summary I. Introduction II. GEODE S amendment proposals III. IV. a. Articles 4, 6, 7,8, 10, 12 b. Annexes II, VI, VII, XI, XII Other positions a. European Parliament b. Member States Conclusion
6 Article 4 Public bodies Paragraph 4 Adoption of energy efficiency plans for public bodies: MS to ensure that public bodies adopt the plans contents and frame of the plans developed and adopted at local level the plans are to be legally binding need to strengthen the work on energy efficiency at local and regional level measures to be decided in a bottom-up process Relation to other articles of the directive: cooling and heating plans in Article 10 should be an integral part of the energy efficiency plans
7 Article 6 Energy efficiency obligation schemes Paragraph 1 (1) Fusion of paragraphs 1 and 9 (1): each Member State shall set up an energy efficiency obligation scheme or take other measures to achieve energy savings among final customers taxation schemes, support schemes and market design often different between MS - wrong to promote mostly energy efficiency obligation schemes, which are one option among many to incentivise end user efficiency mentioning the alternative possibility in paragraph 1 will put it on equal footing with the obligation schemes
8 Article 6 Energy efficiency obligation schemes Paragraph 1 (1) Modification of the saving goals: energy savings equivalent to 4,5% in the previous three years need for a less bureaucratic approach substantial variation of energy use between years three years period gives measures time to have an effect on energy use
9 Article 6 Energy efficiency obligation schemes Paragraph 1 (2) Inclusion of energy savings in the transport sector: removal of the sentence excluding energy used in transport addition: Member States may include measures in the transport sector in their national schemes the EU target for energy efficiency includes the transport sector measures taken in this sector have a direct effect on the reduction of carbon emissions many companies are already involved in promoting electric vehicles and produce biogas and biofuels
10 Article 7 Energy audits and energy management systems Paragraph 1 Energy services market: addition: Member States shall ensure that energy distributors and retailers can participate in this market energy companies have direct contact with the end user, it should be clarified that they can continue to be active in this market DSOs as objective market partners do not depend on increased sales of energy DSOs often have responsibility for the metering assets and technology necessary to verify, evaluate and monitor the results of energy efficiency measures
11 Article 8 Metering and informative billing Paragraph 1 Narrowing of the scope of Article 8: removal of district heating or cooling and district-supplied domestic hot water only final customers for electricity and gas shall be provided with individual meters not technically feasible or useful from a cost/benefit perspective to provide information on energy use in heating/cooling
12 Article 8 Metering and informative billing Paragraph 2 Change of the implementation deadline: billing based on actual consumption no later than 1 st January 2020 instead of 2015 3 rd package 2020: deadline for electricity meters roll-out in 2020, already accepted by Member States and market players changing the deadline increases the financial and administrative burden on companies: the costs of such a requirement outweighs the possible benefits other issues have to be considered (tendering procedures, intensive test runs before starting the roll-out of smart meters) implementation will take several years: not technically feasible to meet the 2015 target
13 Article 8 Metering and informative billing Paragraph 3 Precision about information provided to the end customer: the information shall be provided in a transparent and cost effective manner, free of charge, as soon as the meters are installed in accordance with the Directive 2009/72/EC a greater frequency increases prices for the end-user electronic bills as standard, paper bills should be an additional service paid for by the customer monthly billing leads to higher energy bills: problem for vulnerable customers in winter information cannot be provided until the full roll-out of smart meters by 2020
14 Article 10 Promotion of efficiency in heating and cooling Paragraph 1 Change in the scope of the heating and cooling plans: local authorities and municipalities establish a local heating and cooling plan for developing the potential for the application of high-efficiency CHP district heating and cooling companies to participate in the establishing of these plans plans could be part of the local energy efficiency plans referred to by Article 4.4 plans to be set up locally: more efficient since national plans cannot provide for such a level of detail orientations and measures decided in a bottom-up process
15 Article 10 Promotion of efficiency in heating and cooling Paragraph 8 Formulation change: MS establish mechanisms not to ensure, but to encourage the connection of industrial installations with a total thermal input exceeding 20 MW generating waste heat to district heating and cooling networks the wording ensure is too strong: district heating companies first have to verify the technical feasibility of the industrial installation s connection
16 Article 12 Energy transmission and distribution Paragraph 1 (1) On smart regulation: addition: incentives also to make investments into the smart grids and integration of renewable energies and CHP incentives for investment or services resulting as a consequence of the energy savings scheme obligation of Art. 6 need for a system of bonuses rewarding SOs for offering system services to network users - but bonus not absorbed by cost regulation need to rethink the role of distribution networks and invest in them: smart regulation should be put in place to make it happen
17 Article 12 Energy transmission and distribution Paragraph 1 (2) Network tariffs and regulation: take into account legally binding guidelines and network codes DSOs not involved in the elaboration of network codes but affected by them nevertheless: only legally binding guidelines and network codes should be taken into account
18 Article 12 Energy transmission and distribution Paragraph 2 Infrastructure potential: no plans adopted by MS take sufficiently into account their potential for energy efficiency and system optimisation network operators to be consulted unclear what energy potentials are: has to mean system optimisation to minimise network expansion and promote the feed-in of renewable energy addition of a c): cost effective investments to be fully integrated into the network tariffs costs have to be calculated and recovered
19 Article 12 Energy transmission and distribution Paragraph 5 Integration of CHP electricity into the grid: addition: MS shall ensure, where applicable, that TSOs and DSOs guarantee the transmission and distribution of electricity from high efficiency CHP need for smaller, more material-related solutions (e.g. solar heating in the Southern Europe) Renewable energies: addition to c): MS may provide first priority in dispatch as referred to in the provisions in article 16(2) of directive 2009/28/EC priority dispatch of CHP welcomed but MS shall have the possibility to provide a first priority for renewable energy
20 Article 12 Energy transmission and distribution Paragraph 6 Incentives for high-efficiency CHP to be sited close to areas of demand: TSOs/DSOs to reduce the connection/use-ofsystem charges of high-efficiency CHP addition: these allocation incentives should reasonably be related to the residual network tariffs and be offered in a nondiscriminatory manner connection charges should reflect the costs: reduction must not lead to an unreasonable increase for spare network users optimisation of feed-in capacities cannot solely derive from the network tariffs
21 Article 12 Energy transmission and distribution Paragraph 7 Connection work for electricity from highefficiency CHP: MS may allow producers to issue a call for tenders for the connection work addition: all technical and security standards set by the grid operator with respect to the connection line and the necessary connection facilities have to be taken into consideration DSO is responsible for the distribution grid, therefore is the suitable actor to decide about the work in the grid - need for clarification: refers to works in the customer s installation, not to any works on the grid
22 Annex II Methodology for determining the efficiency of the cogeneration process Paragraph (b) Calculation of primary energy savings: - CHP Hη: annual average heat efficiency of the cogeneration production - Ref Hη: annual average efficiency reference value for separate heat production - CHP Eη: annual average electrical efficiency of the cogeneration production - REF Eη: annual average efficiency reference value for separate electricity production to take the annual average into account makes the calculation clearer
23 Annex VI Minimum requirements for metering of individual energy consumption and the frequency of billing based on actual consumption Paragraphs 1 and 2 Individual meters: replacement: interface with standardised connection fast-moving technical development of smart meters: openness to innovative technology Frequency of billing: billing replaced with information on actual consumption monthly information enough for consumers to regulate their consumption, monthly billing increases costs and is not wished for Consequence of the changes in Article 8: precision: individual meters for electricity deletion of paragraphs 1.2 and 2.1 b) c) d)
24 Annex VII Planning for efficiency in heating and cooling Paragraph 3 Change in the requirements set on urban spatial plans: addition of an (e): the existence of gas supply networks is taken reasonably into account need to prevent the development of inefficient heating and cooling supply at the expense of already existent efficient gas supply: effect would be contra-productive
25 Annex XI Energy efficiency criteria for energy network regulation and for network tariffs set or approved by energy regulatory authorities Paragraphs 1 and 2 Network tariffs: shall take into consideration electricity and cost savings in networks achieved from demand side / response measures GEODE welcomes this measure, but the exact calculation is not possible Network regulation and tariffs: take into account network operators system responsibility and consider proportionate and reasonable network tariff levels for all end consumers preservation of network stability and of a proportionate and reasonable level of network tariffs for end consumers
26 Annex XI Energy efficiency criteria for energy network regulation and for network tariffs set or approved by energy regulatory authorities Paragraph 3 Support of dynamic pricing for demand response measures: network tariffs replaced by electricity customers tariffs DSOs responsible for grid reliability/stability: need to undertake demand-side management measures incl. interruptible or time-of-use tariffs real-time prices / other dynamic pricing models not easy for customers to understand - e.g. high grid fee because of congestion when the price of energy is low - preferred: a more capacity-orientated tariff system to help flatten the load curve
27 Annex XII Energy efficiency requirements for transmission system operators and distribution system operators Paragraph b) Connection of electricity from highefficiency CHP: The overall process to become connected to the grid should be no longer than 12 months : deleted 12 months fixed term too short given the likely delays in obtaining permissions from public authorities (e.g. for new lines or underground cables)
28 Summary I. Introduction II. GEODE S amendment proposals III. IV. I. Articles 4, 6, 7,8, 10, 12 II. Annexes II, VI, VII, XI, XII Other positions I. European Parliament II. Member States Conclusion
29 Draft Report European Parliament Draft report on the draft directive: Claude Turmes MEP, Committee on Industry, Research and Energy (ITRE) draft discussed on 5 th October Amendment proposals relevant to GEODE: Art. 4: encourages local municipalities to adopt energy efficiency plans Art. 6: three years period / energy in transport amendments same as GEODE; alternative to paragraph 1 not accepted Art. 8: smart meter roll-out condition to provide real-time information, has effect on the 2015 deadline Art. 12: first priority to electricity from RES; involvement of DSOs in demand response management
30 Member States Positions Member States concerns: in general absolutely opposed to binding national saving targets some are concerned that the measures to save energy could be bad for the competitiveness of the European industry Energy savings obligations (White Certificates) already implemented: in the UK, Italy, France, Denmark and Belgium (Flanders) Polish presidency Polish-Danish energy efficiency workshop in December 2011
31 Summary I. Introduction II. GEODE S amendment proposals III. IV. a. Articles 4, 6, 7,8, 10, 12 b. Annexes II, VI, VII, XI, XII Other positions a. European Parliament b. Member States Conclusion
32 Conclusion Directive has the potential to bring important steps forward into realising the EU 20/20/20 targets But opposition of several MS: risk of dilution of draft regulations, which would make the directive inefficient and delay further action to 2014 GEODE will continue to work in favour of energy efficiency and to contribute to the directive s implementation on both European and national level GEODE wishes to stress the essential role of the EP and the oncoming Danish presidency, hoping they will contribute to the adoption of an ambitious directive
33 Thank you for your attention! GEODE General Delegation Avenue Marnix 28 1000 Brussels info@geode.de Tel.: +32 (0)2 204 44 60 Fax: +32 (0)2 204 44 69