EU Directive on Energy End-Use and Services

European Commission, Directorate-General for Energy and Transport n° 119.04.2006

European Commission

Copenhagen19.04.2006

EU Directive on EU Directive on Energy EndEnergy End--use use Efficiency and Efficiency and

Energy ServicesEnergy Services

Håvard Vaggen MalvikDG Energy and Transport


European CommissionMain Energy Priorities

1. Increasing energy efficiency2. Achieving a properly functioning

internal market for gas and electricity3. Promoting renewable energy4. Strengthening nuclear safety and

security5. Security of Europe’s energy supplies and

further developing external energy policy relations

6. Improving the links between energy policies and environmental and research policies

Mr. Andris PiebalgsEnergy Commissioner


TheThe EnergyEnergy EfficiencyEfficiency DirectiveDirective

Proposal adopted by Com.: 10.12.20032nd Reading Agreement 30.11.2005Adoption by Council (A-point): 14.03.2006Signature by Council and EP: 05.04.2006Entry into force: May 2006Transposition deadline: May 2008First Committee meeting: June 2006

Co-decision: Timeframe



To promote cost-effective energy efficiency in EU Member States through obligations and the removal of institutional, financial and legal barriers. To promote the development of a sustainable market for energy efficiency and energy services.

Article 1: Objective



Covers all energy end-use suppliers (distributors and retailers of electricity, natural gas, LNG, LPG, district heating & cooling, heating oil, coal, lignite, peat, biomass, and transport fuels).

Aviation fuels and maritime bunkers excluded. Small companies < 75 GWh/yr. may be excluded from Art. 6 and 13.

Covers all energy end-use sectors: - domestic, agricultural, public and tertiary sectors- non-energy intensive industries and transport

Emissions Trading sector excluded.

Article 2: Scope



9-year 9 % indicative target (1% cumulative annual savings) measured from 1.1.2008 until 31.12.2016. Fixed amount of energy (TWh) calculated as 1% of 5-year average of unadjusted final consumption.

Credit for some “early actions” >1995 (1991). But effects must be measurable after 2008.All measures must be verifiable and measurable or estimable. (Details in Annexes I, II, III and IV.)

The Commission to revisit a White Certificate System

Article 4: The target


Calculating the targetCalculating the target

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target savings9% of reference consumptionreference consumption

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Accumulation of savingsAccumulation of savings

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indicative savings target savings

intermediate targetapp. 3%

final target9 %



The Public Sector in Member States will be obliged to:fulfil an exemplary role;publish energy efficiency guidelines as assessment criteria in tendering for public contracts;select two mandatory measures from a list in Annex VI, requiring energy-efficient public procurement, energy audits and energy performance contracting.

Article 5: Public Sector Obligations



Member States and suppliers to promote energy services & energy efficiency measures. Obligation for energy distribution and/or retail energy sales companies to choose between: a) energy services, energy audits, energy efficiency measures or contribute to an energy efficiency fund.

b) voluntary agreements and/or market oriented schemes

Energy companies to help remove market barriers, and not hinder EE market development.

Article 6: Obligation on Energy Suppliers



MS to make sure that information about this Directive is widely distributed to relevant market actors.MS to establish appropriate conditions for providing information to final customers.The Commission to facilitate best practice exchange and dissemination.

Article 7: Availability of Information



Qualification, accreditation and certification of energy service providers to ensure technical competence.Linked to the energy service & energy audit option in Article 6.

Article 8: Qualification & Accreditation



Removal of legislation that restricts use of financial instruments for energy savings Promotion of financial instruments for energy savings, e.g. third-party financing and energy performance contracting.

Article 9: Financial instruments



For tariffs and regulations for net-bound energy, regulators to use tariff structures that avoid unnecessary volume driving incentives.Schemes and tariffs with a social aim may be permitted.

Article 10: Distribution tariffs



Promotion of the establishment of energy efficiency funds or funding mechanisms.Funds to target high risk sectors.To be open to all providers of energy efficiency improvement measures.

Article 11: Funding mechanisms


TheThe EnergyEnergy EfficiancyEfficiancy DirectiveDirective

Member States to ensure the wide availability of high quality independent energy audit schemes.To be carried out in an independent manner.Availability of audits to be ensured in markets where they are not sold commercially.

Article 12: Energy Audits



Energy suppliers to provide to electricity, natural gas, DH/C and domestic hot water customers, when technically possible and cost effective: competitively priced individual meters that accurately reflects consumption + information on actual time of use. With meter replacement, such meters shall always be provided, unless technically impossible or not cost-effective in relation to long-term savings potential.When a new connection is made as a result of a new

building or a « major renovation », such meters shall always be provided.

Article 13: Metering



Billing performed by energy suppliers shall be based on actual energy consumption and presented in clear and understandable terms.Appropriate information shall be made available with the bill to provide customer with comprehensive account of current energy costs. Billing on the basis of actual consumption shall be performed frequently enough to enable customer to regulate his own energy consumption.

Article 13: Billing



Energy suppliers to provide in or with their bills, contracts, transactions or receipts at distribution stations:

Current actual prices and actual energy consumption;Comparisons with previous year's consumption, preferably in graphical form;Comparisons with comparable average normalised or benchmarked user in same user category;Contact information for energy efficiency improvement measures, end-user profiles and objective technical specifications for energy-using equipment.

Article 13: Billing (cont.)



National Energy Efficiency Action Plans to be developed by Member States

First EEAP by 30 June 2007Second EEAP by on 30 June 2011Third EEAP by on 30 June 2014

Commission to report on the EEAP’s within 6 months.The first EEAP to be forward looking, the next ones to cover past results and future measures.

Article 14: Reporting



By 1.1.2008, Committee to further refine and complement harmonised bottom-up model covering between 20 and 30%.By 1.1.2012 bottom-up model to cover a “significantly higher level” of final consumption.By 30 June 2008 develop a set of harmonised EE indicators based on those listed in Annex V.An amended or new directive to be tabled in 2013/2014.

Article 15: Review and adaptation



A committee with Member State representatives to be formed to help Commission further develop a harmonised bottom-up/top-down system to measure savings target.The Committee will adapt Annex II, III, IV and V to technical progress.First Committee meeting in June 2006.

Article 16: Comitology




Residential and tertiary, industry, transport. Cross-sectoral measures such as standards, labelling, metering, training and education. Horizontal measures such as regulations, taxes, and focused information campaigns. Measures must be clearly measured and verified or estimated according to guidelines in Annex IV.

Annex III: List of eligible measures



Harmonised calculation model using combination of top-down and bottom-up methods.Top-down calculations to be adjusted for degree days, structural changes, product mix and other extraneous factors. Existing models such as ODEX as starting point.Bottom-up method should be simplified and standardised methods should be used.With top-down and bottom-up together, risk of double- counting to be avoided.

Annex IV: General M & V Framework



Com. to replace list of lifetimes late in 2006CEN may be involved (Workshop Agreement)Long-term measures to (i.e., longer than 9 years) to be encouraged. But short-term measures acceptable and should be agreed upon before + 9 years measures. Lifetime discounting issues to be solved. Next step: Harmonised definitions for M & V

Upcoming work: First tasks



Upcoming tenders from Commission:Energy Efficiency Potential Study covering all MS + EEA (App. 350.000 Euro)Development of bottom-up & top down methodology + Directive Helpdesk (App. 1.25 mill. Euro)

Both tenders to be signed in 2006.

Supporting instruments


ConclusionsConclusions

Much subsidiarity is left to the Member State on how to reach the indicative targets.EEAPs; the Member State’s will have to re-think their energy efficiency policies and measures.The bottom up model will increase its importance during the target period.The result; more focus on cost effective and measurable / verifiable measures.


ConclusionsConclusions

The energy savings targets would be a strong driver in developing new energy efficiencymarkets.Numerous new business areas, including new energy services, energy auditing, smart metering, billing and financial instruments for energy savings will emerge. New markets + harmonised energy savings calculation methodology would pave the way for higher national targets.



Sources of information:

EP and Council websites:http://www.europarl.eu.int/meetdocs/2004_2009/organes/ITRE/ITRE_meetinglist.htmhttp://register.consilium.eu.int/servlet/driver?typ=&page=Simple&lang=EN&cmsid=638

Commission staff following the Directive:Randall Bowie: [email protected]åvard Vaggen Malvik: [email protected]


IEE supports more than 200 on-going projects, of which several are related to the EE&ES Directive:

ODYSSEE-MURE to monitor energy efficiency improvements in EU-25European Platform for the Promotion of Energy Performance Contracting (« Eurocontract »)PRIME etc.

Next Call for Proposals to be published in May 2006Follow-up program under CIP foreseen for 2007-2013More information availiable at:

http://europa.eu.int/comm/energy/intelligent/index_en.html

www.managenergy.net

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