Maxim Luttmer

Date April 06

Project executed within the framework of the Energy Intelligence for Europe program,

contractnumber EIE-2003-114

EVALUATION OF LABELLING OF APPLIANCES IN THE NETHERLAND

CASESTUDY E XECUTED W ITH IN THE FRAMEWORK

OF THE A ID - EE PRO JECT

I

Table of contents

1 Characterization of the instrument 1

1.1 Targets, including relation to end use sector and relation to

national Kyoto target 1

1.2 Period the policy instrument was active 1

1.3 Actions, Specific technologies and/or energy efficiency

measures 2

1.4 Target groups 2

1.5 National context 2

1.6 International context 3

1.7 Market failures to overcome 3

1.8 Organisations, which are responsible for implementation and

execution 3

1.9 Available budget 4

1.10 Available information on initial expected effectiveness and

cost-efficiency of the instrument 4

2 Pol icy theory 5

2.1 Cause-impact relations, indicators and success and failure

factors 5

2.2 Interaction with other policies 5

3 Evaluation 7

3.1 Familiarity of consumers and retailers with the energy label 7

3.2 Increase of availability of high energy efficient appliances 7

3.3 Market share 8

3.4 Influence of labelling on the buying decision 10

3.5 Realised energy saving 10

3.6 Effectiveness 14

3.7 Cost efficiency 15

4 Conclusions 17

4.1 Net impact, effectiveness and cost efficiency 17

I I

4.2 Success factors 17

4.3 Fail factors 18

4.4 Monitoring and evaluation 18

4.5 Summary: Learning experiences 19

1

1 Characterizat ion of the instrument

1.1 Targets , inc luding re la t ion to end use sector

and re la t ion to nat iona l Kyoto target

The main objective of the Dutch government with “energy labelling” is an overall

improvement of the energy efficiency of electrical appliances. This should be ac-

complished by stimulating both the demand as the supply side of the market; an en-

ergy label will create awareness and influence the buying behaviour under cos-

tumers and producers/ manufacturers can distinguish themselves through innova-

tion and improvement of their image.

Within the framework of the Dutch Climate policy and the national Kyoto target,

both labelling as fiscal incentives should lead tot a CO2 emission reduction of 0.3

Mton in 2010 (VROM, 1999)1.

1.2 Per iod the po l icy instrument was act ive

The energy labels for appliances were first introduced in the Netherlands in 1995

for electric refrigerators and freezers. Since that date several other “large” energy-

consuming appliances were added to the list; washing machines and electric tumble

dryers in 1996, washing and drying combinations in 1998, dishwashers in 1999,

lightening in 2001. In 2003 also ovens and air-conditioners where added to the list.

There are various EU directives that regulate the obligation of energy labels for

electrical appliances (directives 94/2/EC; 95/12/EC; 96/60/EC; 97/17/EC;

98/11/EC; 92/42/EC; 96/57/EEC; 2002/31/EC)2, 3,4,5,6,7,8,9

.

1 (VROM, 1999) Uitvoeringsnota Klimaatbeleid deel I VROM 1999. 2 Directive 94/2/EC, Commission directive of 21 January 1994 implementing Council Direc-

tive 92/75/EEC with regard to energy labelling of household electiric refrigerators, freezers

and their combinations, Official Journal L045, 17/02/1994, p001-0022 3 Directive 95/12/EC Commission Directive of 23 May 1995 implementing Council Directive

92/75/EEC with regard to energy labelling of household washing machines, Oficial Journal

L136, 21/06/1995 pp.0001-0027 4 Directive 95/13/EC Commission Directive of 23 May 1995 implementing Council Directive

92/75/EEC with regard to energy labelling of household electric tumble dryers official Jour-

nal L136, 21/06/1995, p.0028-0051 5 Directive 96/60/EC Commision Directive of 19 Septmeber 1996 implementing Coucil Di-

rective 92/75/EEC with regard to energy labelling of household dishwashers (Text with EEA

relevance) official Journal L118, 07/05/1997 pp.0001-0025 6 Directive 98/11/EC Commissions Directive of 27 January 1998 implementing Council Di-

rective 92/75/EEC with regard to energy labelling of household laps (Text with EEA rele-

vance) official Jounal L071, 10/03/1998, p.001-0008 7 Directive 92/42/EEC Council Directive of 21 May 1992 on efficiency requirements for new

hot-water boilers fired with liquid or gaseous fuels Official Journal L167, 22/06/1992

p.0017-0027

2

1.3 Act ions , Spec i f ic technolog ies and/or en-

ergy ef f ic iency measures

The energy label shows the energy efficiency of appliances compared with similar

models. “A” energy rated appliances are the most efficient and “G” the least effi-

cient. The label also shows the electricity consumption of the appliance in units

(kWh) under standard test conditions. Further it contains information such as the

capacity of the refrigerator or freezer in litres, the wash and spin performance of

washing machines, and sometimes info about noise emissions10

(EC, 1992).

1.4 Target groups

The principle target group are consumers (private and businesses). Other target

groups are producers, importers and retailers that offer the appliances to the market.

To reach the target groups several instruments where put in place to ensure that the

instrument labelling will lead to the targeted effect. Applied instruments are:

awareness campaigns, such as the “Postbus 51 (television)”, communication tools

and economic instruments (in the period between 1995 and 2002, Environmental

Action Plan and Energy Premium Regulation11

).

1.5 Nat iona l context

Labelling is part of a mix of National policy instruments with the aim to change and

or stabilize the trend of a constantly increasing electricity use, due to an increasing

penetration of appliances (VROM, 1999).

Energy labels for appliances were first introduced in the Netherlands in 1995. From

the beginning the energy label in the Netherlands had a strong relation with the fol-

lowing energy policy instruments: the MAP (Environmental Action Plan from 1991

to 2000) and the EPR (Energy Premium Regulation from 2000 to 2003) (see also

par.2.2). Only a MAP or EPR subsidy could be received when the appliance had an

“A” label..

8 Directive 96/57/EC of the European Parliament and of the Council of 3 September 1996

on energy efficiency requirements for household electric refrigerators, freezers and combi-

nations thereof Official Journal L236, 18/09/1996, p.0036-0043. 9 Directive 2002/31/EC of 22 March 2002 implementing Council Directive 92/75/EEC with

regard to energy labelling of household air-conditioners 10 Council Directive 92/75/EEC of 22 September 1992 on the indication by labelling and

standard product information of the consumption of energy and other resources by

household appliances [Official Journal L 297 of 13.10.1992]. 11 See paragraph 1.5.

3

1.6 Internat iona l context

With the Council Directive 92/75/EEC of 22 September 199212

the European Union

(DG TREN) took the initiative for the introduction of energy labels for appliances

in the member states. The aim of this directive is to harmonize national measures

relating to the publication of information on the consumption of energy and of other

essential resources by household appliances. After 1992 several directives where

announced each one focusing on different appliances (see also par.1.3). The mem-

ber states are obliged to translate these directives into law.

The initiative for future or existing labelling of specific appliances is taken by the

European commission together with a labelling committee. Each member state is

represented in this committee. In the Netherlands the ministry of Economic Affairs

is taking part in the committee.

1.7 Market fa i lures to overcome

The first market barrier to overcome with labelling is a lack of knowledge with the

consumer on the energy consumption of a specific appliance. By presenting a label

on an appliance a consumer can see (if aware of the label) the energy consumption.

In this way the energy consumption can influence the buying decision. Another

market barrier is a lack of incentives to innovate. By introducing the energy label

the assumption was that producers are more inclined to innovate (towards more ef-

ficient appliances) than otherwise.

1.8 Organisat ions , which are respons ib le for

implementat ion and execut ion

By law a producer or manufacturer has to label the appliances that they offer to the

market. The certification is done by a certification firm. For cooling appliances for

example, the Dutch organisation TNO is performing the certification. CENELEC,

the European Committee for Electro technical Standardization prescribes the stan-

dard measurement procedure that should be used. The Dutch association of suppli-

ers of domestic appliances (VLEHAN) is providing the labels. A producer should

apply for a label at the VLEHAN. Control and verification is carried out by the

Economische Controle Dienst (ECD).

12 Directive on the indication by labelling and standard product information of the con-

sumption of energy and other resources by household appliances [Official Journal L 297 of

13.10.1992]

4

1.9 Ava i lab le budget

The government has a budget for the implementation of the legislation. It is how-

ever extremely difficult, so not impossible to determine the budget for this. How-

ever, during the reviewed period also two additional economic policy schemes were

in place; the Environmental Action Plan and the Energy Premium Regulation

(MAP and EPR see also par. 2.1). A subsidy within these economic schemes could

only be received when buying an “A” label appliance. In total an amount of 25 mil-

lion Euro subsidy is provided within the framework of MAP. About 159 million

Euro EPR subsidy is provided (Ecofys, 2004)13

. The total costs for the government

for the implementation of the MAP and EPR were: 15 million Euro for MAP and

34 million Euro for EPR (Ecofys, 2004). As it is not exactly clear how much costs

are made within MAP an estimation is made based on the amount of MAP subsidy

received by consumers.

1.10 Ava i lab le informat ion on in i t ia l expected e f-

fect iveness and cost-ef f ic iency o f the in -

strument

In a study published by ECN in 2000, the long term effect of energy labels is esti-

mated at 0.25 Mton CO2 emission reduction in 2010 (ECN, 2000)14

. One important

premise is that the EPR (subsidy) is active during the whole period between 2000

and 2010. In a more recent study published by ECN in 2005, the total estimated

CO2 emission reduction between 2000 and 2010, due to a combined effect from la-

belling, EPR (until 2003) and energy taxation, is estimated on 0.6 Mton (ECN,

2005)15

.

13 (Ecofys, 2004). Evaluatie van het Klimaatbeleid in de gebouwde omgeving 1995–2002,

2004. 14 (ECN, 2000) Energielabels en Energiepremies, focus Energieverslag Nederland 2000. 15 (ECN, 2005) Referentieramingen en energie en emissies 2005-2020, ECN, 2005.

5

2 Policy theory

2.1 Cause- impact re la t ions , ind icators and suc-

cess and fa i lure factors

The assumptions of how the energy label for electrical appliances works are de-

scribed by means of cause-impact relations. For each cause-impact relation sugges-

tions are made for indicators. These will be used to monitor the effect and to find

out the learning experiences.

1. The European Union directive on labelling of appliances is accepted.

2. The national government transposes the EU directive into national legisla-

tion.

3. The national government starts campaigns to promote labelling. The as-

sumption here is that if consumers and retailers are familiar with the energy

label they will become aware of the energy use of appliances.

4. As a result of the energy label, producers innovate and bring more efficient

appliances on the market. Consequently the availability of high efficient

appliances increases.

5. Retailers will add appliances with a higher energy efficiency to their range

of products. The assumption here is that if more appliances with higher ef-

ficiency will be offered by producers, retailers will also offer more of these

appliances to the market. The market share of more energy efficiency ap-

pliances will consequently increase.

6. Consumer considers buying a new appliance. The assumption here is that

the consumer sees or is aware of the energy label and is being influenced

by it.

7. The consumer is buying an appliance with a higher energy efficiency. The

assumption that due to the information on the label the consumer is choos-

ing a more efficient appliance. Consequently an energy saving will be real-

ised.

2.2 Interact ion wi th other po l ic ies

The energy label has a relation with the EPR (Energy Premium Regulation) and

MAP (Environmental Action Plan). The EPR started in 2000 and aimed to stimu-

late households to take energy saving measures and to buy energy efficient appli-

ances. Until October 2003, consumers could get an EPR subsidy for appliances

with an “A”-label. For some appliances additional conditions where set to receive

the subsidy.

6

The MAP started in 1991 and ended in 2000. It aimed at a CO2 reduction within

households, governmental and the tertiary sector. Within the framework of MAP

several actions where taken by energy distribution companies who where responsi-

ble for the implementation. The most important actions within the sector consumers

focussed on a change of behaviour and the purchase of energy efficient appliances

by subsidising them (since 1995 linked to the energy label). For example, between

1997 and 1998 many commercials on energy efficient appliances were broadcasted

on television.

Figure 1 Overal l p ic ture of assumed funct ion ing of the label l ing instru-

ment: cause- impact re lat ions, ind icators, success and fai lure factors and

interact ions wi th other instruments

7

3 Evaluation

3.1 Fami l iar i ty o f consumers and reta i lers with

the energy label

From 1995 to 2002, awareness campaigns were broadcasted on television, and pub-

lications were organised in newspapers and magazines within the framework of

both MAP as EPR. Monitoring of the results was done by EnergieNed16

(CEA,

2001a and b)17,18

. The results also showed the familiarity of consumers with the en-

ergy label. Since the introduction of the label in 1996 the familiarity increased from

27% to 64% in 2000. Within the same period the amount of people that didn’t

know the energy label decreased by 73% to 29%. No more recent information is

available about the familiarity of the energy label (after 2000).

3.2 Increase of ava i lab i l i ty o f h igh energy ef f i -

c ient app l iances

The assumption is that producers change (innovate) their product line and introduce

appliances with a higher energy efficiency in order to comply with the “A” label

standard.

Besides labelling, important drivers are the commitments made between the Euro-

pean Committee of Domestic Equipment Manufacturers (CECED) and the Euro-

pean Commission (ECN, 2000)(CECED, 2003a)19

. In these commitments the par-

ticipants (producers and importers) commit themselves to reduce the energy con-

sumption with a certain percentage before a specific target year. A large share of

the producers in Europe is participating in these commitments. The target set in the

commitments is strongly related to the energy label (through the energy index be-

longing to labelling). Further, to monitor the progress the CECED is collecting all

data declared on the energy labels by manufacturers.

16 Dutch Federation of Energy Distribution Companies, www.EnergieNed.nl. 17 (CEA, 2001a). Monitoring Nationale MAP-campagne, 9-meting, 11-meting, drs J.C.S. van

Boetzelaer, drs H.C. Schneider, rapportnrs 9924, 0052, Rotterdam, juli

1999, januari 2001 18 (CEA, 2001b) Evaluatie 10 jaar MAP-campagne, Wat weten mensen van energiebespar-

ing en wat doen ze aan energiebesparing?, drs J.C.S. van Boetzelaer, drs H.C. Schneider,

rapportnr 0109, Rotterdam, juni 2001 19 (CECED, 2003a) CECED Voluntary Commitment on reducing energy consumption of

household dishwashers.

8

Since 1997, several commitments were made for refrigerators, freezers, washing

machines and dishwashers. In the commitment for dishwashers for example, pro-

ducers commit themselves to reduce the average energy consumption with 20% be-

tween 2000 and 2002. This target is partly realised by a phase out of less efficient

dishwashers (no import and not producing less efficient appliances).

The European directive on labelling and the commitment resulted for refrigerators

and freezers in an improvement of the average energy consumption of about 4.5% a

year between 1996 and 2003 (CECED, 2003b)20

. Before this period the improve-

ment was less than 2.5% a year (1992-1997). In the last 10 years the energy effi-

ciency increased with 34% for washing machines, 36% for dishwashers and 40%

for refrigerators and freezers (CECED, 2005)21

. Despite the fact that more efficient

technologies are available, it does not always guarantee the uptake of these appli-

ances by the market. An important example is dryers. A limited supply by retailers,

the high price and issues such as the need for a gas connection (for gas dryers) are

reasons for this (ECN, 2000)22

(VLEHAN, 2005a)23

.

3.3 Market share

Table 1 and Figure 224

show the market share of appliances with a label “A”. It can

be seen that between 1997 and 2003 the amount of sold “A” label washing ma-

chines, dishwashers, refrigerators and freezers grew considerably.

There is still a significant broad range in energy use of “A” label refrigerators and

freezers. An issue that arises from this is that consumers can not easily make a

choice for the most efficient appliance, nor can the national government influence

the buying behaviour of the consumers. For this reason the Energy+ label was in-

troduced. The Energy+ label is based on the energy efficiency index as used within

the standard labelling system. Energy+ appliances are at least 13% to 25% more

energy efficient as “A” label appliances (the energy efficiency index is lower than

0.42). Better than class “A” is for refrigerators and freezers presented in

Table 1 as A+ and A++.

In the last years energy efficiency improvements25

for washing machines have been

made through a reduction of the water consumption and through intelligent pro-

grams. According to CECED, washing machines are already close to their techno-

20 (CECED, 2003b) CECED, Unilateral Commitment on reducing energy consumption of

household refrigerators and freezers. 21 (CECED, 2005) Why be campaign associate? Views from the Industry. 22 (ECN, 2000) Energielabels en Energiepremies, focus Energieverslag Nederland 2000. 23 (VLEHAN, 2005a). Telephone interview with VLEHAN (Mr. M.P.J.A. Muijser). 24 Received from Jan Paul Siderius van SenterNovem, based on information from VLEHAN,

belastingdienst and GfK (Oktober, 2005). 25 Another reason for an lower average energy consumption of washing machines is the

availability of better washing powders which make it possible to wash on a lower

temperature (MilieuCentraal, 2005).

9

logical limit (CECED, 2005). As can be seen in Figure 2, and Table 1, in the Neth-

erlands, almost 100% of the sold washing machines and dishwashers on the market

are energy class “A” machines. The market share for both refrigerators and freezers

increased considerably since 1997. In the years 2003 and 2004 the market share of

label “A” and better, for both type of appliances, decreased a little. A reason for

this is that since 2003 no EPR subsidy is given anymore for these appliances

(VLEHAN, 2005). From

Table 1 can also be concluded that hardly any label “A” dryers are sold up till now

(see also par.1.7). It furthermore shows that the market share of efficient lightening

grows slowly. Currently the market share of energy efficient lightening is 10%, so

still a large part of the potential is unused. Obviously this is also true for dryers.

Table 1: Percentage of total sale of labe l “A” appliances (and better), the

market share26 (Vlehan, 2005)27 (VROM, 2005)(Mi l ieuCentraa l, 2005).

0

10

20

30

40

50

60

70

80

90

100

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

year

Ma

rket

Sh

are

of

lab

el A

an

d b

ett

er

Washing machines

Dishwashers

Refrigerators

Deepfreezers

Dryers

Lightening

Figure 2. Market share of label A and better appl iances between 1995

and 2004.

26 No spefical market information could be found for energy efficient air-conditioners. 27 (Vlehan, 2005). Jaarverslag Vlehan 2004.

1 0

3.4 Inf luence of labe l l ing on the buying dec i -

s ion

About 75% of the consumers are aware of the energy use of an appliance when

purchasing one (CEA, 2001a en b). Being aware of the energy efficiency is one

thing, being influenced by it in the buying decision is another thing.

An evaluation study of the European energy label, made in 1997 (ECN, 2000)28

showed that more than 70% of the consumers consider energy efficiency when pur-

chasing an appliance. The same study also gives an indication of the specific influ-

ence of the energy label. It appeared that the Dutch consumers are, compared to

other European countries, sensitive for the information on the label. About 45% of

the consumers are influenced by this. This is measured in a period that the label

was not yet connected to a specific subsidy.

A study from EnergyNed, performed in 2000 within the framework of MAP, says

that about 57% of the Dutch consumers look at the energy label to determine the

energy use of a specific appliance (EnergieNed, 2000)29

.

The influence of the energy label is in the Netherlands strongly determined by the

MAP and EPR subsidies for appliances (provided between 1997 and 2003). A sub-

sidy for an appliance, both within MAP as EPR, could be received when buying a

label “A” appliance (see also par.2.2).

3.5 Real ised energy sav ing

In this paragraph the net impact, or realised energy saving for the policy instrument

labelling is determined. The net impact is the difference between the energy con-

sumption that would have occurred if labelling as a policy instrument would not

have been in place (the reference situation) and the actual energy consumption (all

energy savings are expressed in PJ-primary energy consumption). To determine the

realised energy saving due to labelling of appliances the following definitions are

made:

28 (ECN, 2000). Energie Verslag Nederland 2000. 29 (EnergieNed, 2000) MAP 1990-2000, Eindrapportage, 2000.

11

Frozen efficiency Total energy consumption that would have occurred if nothing would

have chanced (in terms of applied technology and implemented poli-

cies).

The total energy consumption is determined by the total number of

sold appliances in the period 1995 and 2004, multiplied with the aver-

age energy consumption of appliances in 1995 (label C/D) (Mi-

lieuCentraal, 2005).

Total savings due to

autonomous effi-

ciency improve-

ments

Total savings due to autonomous efficiency improvements between

1995 and 2004 (increase in energy efficiency per year due to standard

technology improvements).

For each appliance first an estimation is made of the growth of the

market share of “A” label appliances per year in case of autonomous

developments (efficient improvements).

For most appliances (washing machines, refrigerators and freezers) a

growth of 3% per year is assumed. This figure is based on the growth

of the market share of these appliances before the introduction of la-

belling as presented in the ECN study “Energie Verslag 2000” (ECN,

2000). For refrigerators this would mean for example a growth of the

market share of label “A” appliances of 30% between 1995 and 2004.

For dryers no growth of “A” label appliances is assumed (currently

only 0.3%). For lightening an estimation is made based on the figures

presented in the report “BEK cijfers 1994”, presented by EnergieNed

(EnergieNed, 1994)30

. According to this report the average amount of

energy efficient “lightbulbs” present in Dutch households in 1992 is

1.2 and in 1994 1.4.

Per appliance the total saving is determined by multiplying the total

amount of sold label “A” appliances in case of autonomous growth,

between 1995 and 2004, with a standard average savings figure per

appliance.

Reference situation: The total actual energy consumption in case no energy efficiency poli-

cies would have been in place (EPR, MAP and label).

The reference energy consumption is the total energy consumption in

the frozen efficiency situation minus the total savings due to autono-

mous energy efficiency improvements (reference savings).

30 (EnergieNed, 1994) BEK cijfers 1994, EnergieNed, Basis onderzoek Elektriciteitsverbruik

Kleinverbruikers.

1 2

Total actual energy

savings

The total actual energy savings due to autonomous improvements and

the policy instruments EPR, MAP and labelling.

Per appliance the total actual saving is determined by multiplying the

total actual amount of sold label “A” appliances, between 1995 and

2004, with a standard average savings figure per appliance.

Actual energy con-

sumption

The total actual energy consumption of sold appliances between 1995

and 2004 while the policy instruments EPR, MAP and labelling were

in place (Vlehan, 2005)31

.

Total energy consumption minus the savings due to actual develop-

ments (actual energy saving).

Net energy savings

due to EPR and

MAP

The net energy savings due to the policy instruments MAP and EPR.

The total net savings due to MAP and EPR is based upon the total

amount of appliances sold with a MAP and EPR subsidy times a stan-

dard energy saving per appliance, times the free rider effect for MAP

and for EPR. The freerider effect per appliances is based on the figures

presented in the study “Evaluation of climate policy in the built envi-

ronment” (Ecofys, 2004).

Net energy savings

labelling

The total net energy savings due to labelling are the total actual energy

savings minus the total reference energy savings, minus the total net

savings due to EPR and to MAP.

General assumptions • Average efficiency of electricity production (delivered at the con-

sumer) in the Netherlands in 200032

is: 41.9% (Novem, 2002)33

• The standard average saving figure is the difference between aver-

age energy consumption of appliances (label C/D) and the average

energy consumption of a label “A” appliance (MilieuCentraal,

2005).

Figure 3 shows the s teps that are taken.

31 (Vlehan, 2005). Sales of label “A” appliances from the Vlehan jaarverslag 2004 and from

SenterNovem (Dhr. Siderius) received in August 2005. 32 The effect is determined over the period 1995-2004. The year 2000 is chosen as the

reference year for the average efficiency of electricity production. 33 (Novem, 2002). Protocol Monitoring Duurzame Energie, 2002.

13

Figure 3. Out l ine of the steps taken to determine the net ef fect of the

pol icy instrument label l ing.

In Table 2 it can be seen that refrigerators and lightening are responsible for the

largest part of the savings, followed by washing machines and dishwashers. Dryers

do not add to the savings. The reason is that hardly any energy efficient dryers are

sold in the last year (low supply, expensive, see also par. 3.2). As no information

was available for air-conditioners, no savings could be calculated for these appli-

ances. Lightening contributes significantly, despite that currently not more than

10% of the light bulbs in households are taken by energy efficient lightening. A

large potential is still available here.

In the calculations the uncertainty for the standard average saving figure is taken

into account as here we expect the highest uncertainty. As a result, the net savings

as presented in Table.2 (last 3 columns) can vary plus/minus 50%.

1 4

Table 2. Energy consumption in terms of pr imary energy for the frozen

ef f ic iency s ituat ion, the reference and actua l s ituation and energy sav-

ings due to pol icy instruments , in the per iode 1995-2004 (Vlehan,

2005)(Ecofys, 2004)(Mi l ieuCentraal , 2005).

Table 3. Energy consumption in term of f ina l energy for the frozen ef f i-

c iency s ituation, the reference and actual s i tuat ion and energy savings

due to pol icy instruments, in the per iode 1995-2004 (Vlehan,

2005)(Ecofys, 2004)(Mi l ieuCentraal , 2005).

3.6 Effect iveness

The total net savings realised with the policy instruments MAP, EPR and labelling

between 1995 and 2004, is 4.1 PJ primary energy (1.7 PJ final energy use). This is,

expressed in a CO2 emission reduction, about 0.27 Mton. A large share (more than

40%) is realised through labelling of appliances, about 1.7 PJ primary energy (0.7

PJ final energy use) or 0.11 Mton CO2.

15

3.7 Cost e f f ic iency

In this paragraph the cost-efficiency of the instrument labelling is presented. It is

defined as the ratio between the costs and the benefits of labelling and the amount

of energy saved by it (Ecofys, 2005). The cost-efficiency is expressed in euro per

final energy use (GJ) and will be viewed from three different perspectives: (1) the

society as a whole, (2) the end-user and (3) the government.

In the calculations several assumptions have been made. Some of the assumptions

are surrounded by large uncertainties, because e.g. of lack of good monitoring data.

In the calculations the uncertainty for the standard average saving figure and the

additional costs are taken into account as here we expect the highest uncertainties.

Cost- efficiency for the society as a whole

The cost-efficiency for the society as a whole is based on the costs experienced by

the society as a whole. These costs are determined by calculating the total addi-

tional costs, compared to reference situation (no energy policy is in place, before

the introduction of labelling)34

over the period 1995-2004. For each appliance an

estimation is made for the additional costs and multiplied by the total amount of la-

bel “A” sold appliances over the reviewed period.

The cost-effectiveness for the society as a whole is accordingly calculated by:

1. Taking the total additional costs and depreciating these over the economic life-

time of 10 years and using the interest rate of the society (4%).

2. The total costs are reduced with the annual costs savings due to the total elec-

tricity savings. This would be around 480 million kWh (see also Figure 3, total

net savings due to MAP, EPR and labelling of 1.7 PJ final energy use). The

cost savings are calculated using national shadow prices (only production costs

of 0.05 €/kWh) (Ecofys, 2004).

3. The sum of the total additional costs and the costs savings is divided by the to-

tal actual savings (1.7 PJ final energy use).

Cost- efficiency for the end-user

The cost- efficiency for the end-user is based on the costs as the user experiences

them. In this case the additional costs are determined by using the same additional

costs as for the society as a whole, reduced with the subsidies MAP and EPR (nega-

tive costs).

The cost-effectiveness for the end-user is accordingly calculated by:

1. Taking the total additional costs for the end-user, minus the financial support

from MAP and EPR and depreciating these over the economic lifetime of 10

years and using the interest rate of the end-user (8%).

34 These additional costs are based on figures as presented in (Ecofys, 2004).

1 6

2. The total costs are reduced with the annual costs savings due to the total actual

electricity savings. This would be around 480 million kWh (see also Figure 3,

total savings due to MAP, EPR and labelling of 1.7 PJ final energy use). The

cost savings are calculated using real prices (production and taxation costs of

0.20 €/kWh) (Ecofys, 2004).

3. The sum of the total additional costs and the costs savings is divided by the to-

tal actual savings (1.7 PJ finale energy use).

Cost- efficiency for the government

Cost-efficiency for the government is based on the costs for the government neces-

sary for the implementation of the instrument. The exact costs for implementation

of the instrument labelling are difficult to determine. However as there is a strong

link of the energy label with the policy instruments MAP and EPR (specifically for

appliances) one could advocate that the costs for MAP and EPR are also the costs

for labelling. These would include the costs for MAP and EPR subsidies as well.

Because of the link of labelling with MAP and EPR the cost-efficiency for the gov-

ernment is calculated in two ways; with and without the effect of labelling.

1. Taking the total governmental expenditure and depreciate these over the eco-

nomic lifetime of 10 years using a governmental interest rate (4%). As said, the

total governmental expenditures35

include the costs for the policy instruments

MAP and EPR (in total about 232 million Euro).

2. The costs are divided by the total savings due to MAP, EPR (1 PJ final energy

use).

3. The costs are divided by the total savings due to MAP, EPR and labelling (1.7

PJ final energy use).

Table 4 shows the results. The total cost-efficiency for end-users is negative. This

means that the total benefits for end-users, over the reviewed period, are higher

than the total costs. For the society as a whole and the government the costs-

efficiency is positive. In other words, the costs are higher than the gained benefits

(costs savings due to energy savings).

Table 4. Cost-ef f ic ieny per type (Euro per GJ f ina l energy use).

Cost-efficiency per type

€/GJ final energy

use

"+/-" €/GJ final en-

ergy use

Society € 20 € 36

End-users -€ 31 € 37

Government (including MAP, EPR) € 28 € 15

Government (including MAP, EPR, Labelling) € 17 € 14

35 Division of the specific subsidies for appliances within MAP and EPR and the total subsidy

provided within MAP and EPR times the total governmental costs for implementation.

17

4 Conclusions

4.1 Net impact , e f fect iveness and cost e f f i -

c iency

The national government realised between 1995 and 2004 a total net energy saving

of 1.7 PJ (final energy use), or 0.27 Mton CO2 emission reduction, with the policy

instrument labelling combined with the policy instruments MAP and EPR. About

40% of the savings are realised through labelling of appliances (0.7 PJ or 0.11

Mton CO2).

Refrigerators and lightening are responsible for the largest part of the energy sav-

ings, followed by washing machines and dishwashers. Nowadays, the “A” label can

be seen as, more or less, standard for washing machines, dishwashers and refrigera-

tors and freezers. Currently, hardly any energy efficient dryers are sold. The reason

is that hardly any energy efficient dryers are sold in the last years. Lightening con-

tributes significantly to the total savings due to labelling, despite that currently not

more than 10% of the light bulbs in households are taken by energy efficient light-

ening. A large potential is still available here.

The total cost-efficiency of the policy instrument labelling is negative for end-users

(-31 Euro/GJ final energy use). This means that the total benefits for end-users,

over the reviewed period, are higher than the total costs. This is partly caused by

the subsidies provided by the government (MAP and EPR), but also the consider-

able costs savings that can be made with more efficient appliances. Both for the so-

ciety as a whole and the government the costs-efficiency are positive (20 Euro/GJ

and 17 Euro/GJ). In other words, the costs are higher than the gained benefits (costs

savings due to energy savings).

4.2 Success factors

A large share of the Dutch people is familiar with the energy label for appliances

(more than 64%). Important reasons for this are several awareness campaigns (tv,

newspapers, etc) that where organised within the framework of the policy instru-

ments MAP and EPR. Being aware of the energy efficiency is one thing, being in-

fluenced by it in the buying decision is another thing. An evaluation study of the

European energy label, made in 1997 (ECN, 2000)36

showed that more than 70% of

the consumers consider energy efficiency when purchasing an appliance. The same

36 (ECN, 2000). Energie Verslag Nederland 2000.

1 8

study also gives an indication of the specific influence of the energy label. It ap-

peared that the Dutch consumers are, compared to other European countries, sensi-

tive for the information on the label. About 45% of the consumers are influenced by

this. Again here an important factor for the success of the instrument labelling was

the support of the financial instruments MAP and EPR (the subsidies where con-

nected the label).

Based on these success factors it can be recommended to combine awareness, in-

formation campaigns (through tv, newspapers, etc.) with financial support instru-

ments (specifically for the targeted appliances) when introducing the instrument of

labelling.

4.3 Fa i l fac tors

A current limitation for further success of the labelling instrument is that for several

appliances (washing machines, freezers, refrigerators, etc) the “A” label is, more or

less standard. To overcome this problem, the Energy+ label is introduced. This la-

bel is a voluntary instrument and only available for a few appliances (freezers and

refrigerators). Another fail factor was that the financial support was not adapted in

time, leading to a high number of free riders.

To overcome these fail factors, it is recommended to:

• introduce new labels (more efficient then the “A” label, such as the En-

ergy+ label) and oblige the instrument for the appliances on the market,

• monitor carefully the effect of the financial instruments in order to adapt

the financial support in time.

4.4 Monitor ing and eva luat ion

Vlehan is monitoring the market share of appliances. Not all labelled appliances are

structurally monitored (or at least published). For example for air-conditioning no

information is available. Also for lightening it is difficult to find recent information.

Regarding the effectiveness, it is difficult to determine the specific contribution of

labelling within the package of instruments. A monitoring protocol should be

drawn in which clearly is defined: the baseline (reference per appliance), the target

per appliance, the expected outcome (based on an exante evaluation) and if appli-

cable the subsidy provided (per appliance).

19

4.5 Summary: Learning exper iences

• It can be recommended to combine awareness, information campaigns (through

tv, newspapers, etc.) with subsidies (specifically for the targeted appliances)

when introducing the instrument of labelling,

• It is recommended to introduce “A” labels that are representing the “more effi-

cient appliances”, then standard available on the market. By the time the “A”

label becomes the standard, a new label should be introduced,

• Structurally monitor the instrument (market shares per appliance, etc.) and

draw up a monitoring protocol,

• Link to financial instruments to stimulate the market in the beginning.

21

References - documents

(CEA, 2001a). drs J.C.S. van Boetzelaer, drs H.C. Schneider, Monitoring Nationale

MAP-campagne, 9-meting, 11-meting, rapportnrs 9924, 0052, Rotterdam,

juli 1999, januari 2001

(CEA, 2001b) drs J.C.S. van Boetzelaer, drs H.C. Schneider, Evaluatie 10 jaar

MAP-campagne, Wat weten mensen van energiebesparing en wat doen ze aan en-

ergiebesparing?, rapportnr 0109, Rotterdam, juni 2001

(CECED, 2003a) CECED Voluntary Commitment on reducing energy consump-

tion of household dishwashers.

(CECED, 2003b) CECED, Unilateral Commitment on reducing energy consump-

tion of household refrigerators and freezers.

(CECED, 2005) Why be campaign associate? Views from the Industry.

(Ecofys, 2004). Evaluatie van het klimaatbeleid in de gebouwde omgeving (1995-

2000), June 2004

(EnergieNed, 2000) MAP 1990-2000, Eindrapportage, 2000.

(Novem, 2002). Protocol Monitoring Duurzame Energie, 2002.

(ECN, 2000) Energielabels en Energiepremies, derde hoofdstuk “Focus” in het En-

ergie Verslag Nederland 2000.

(ECN, 2005) Referentieramingen en energie en emissies 2005-2020, ECN, 2005.

(VROM, 1999) Uitvoeringsnota Klimaatbeleid deel I, VROM 1999.

(VROM, 1998) Energiebesparingsnota, VROM 1998.

(VROM, 1998): Costs and benefits of environmental policies – Definitions and cal-

culations methods (Kosten en baten van milieubeleid – Definities en be-

rekeningsmethoden). Publicatiereeks Milieustrategie1998/6, Den Hague.

(Vlehan, 2005). Sales of label “A” appliances from the Vlehan jaarverslag 2004

and from SenterNovem (Dhr. Siderius) received in August 2005.

23

References – interviews

• Mr. Hans-Paul Sidirius, SenterNovem.

• Ms. Groeneveld, MilieuCentraal

• Mr. M.P.J.A. Muijser, VLEHAN.