iea - energy policy highlights

8/10/2019 IEA - Energy Policy Highlights

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Energy Policy

Highlights


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Energy Policy Highlightsshowcases what the 28 IEA member countries

identified as key recent developments in their energy policies. Each

country contribution covers a range of energy-related topics, with best

practices and policy examples from their respective governments, including

objectives, characteristics, challenges and successes, and shared lessons.

Each contribution underscores the changing nature of both global

and domestic energy challenges, as well as the commonality of energy

concerns among member countries. For example, many of the policies

highlighted identify an urgent need to reduce greenhouse gas (GHG)

emissions as a clear objective. Electricity, enhancing energy efficiency and

increasing the share of renewables in the energy mix in a cost effective

manner are likewise areas of common focus. Overall, the energy concerns

reflect key areas of focus for the IEA energy security, environmental

protection and economic development.

On the end-user side, increasing public awareness of domestic energy

policies through improved transparency and engagement is an important

facet of policy support among IEA member countries. The successful

implementation of policies and other initiatives benefitted from efforts to

inform the public. The IEA hopes that Energy Policy Highlightswill provide

a useful point of reference and dialogue for the 2013 IEA Ministerial, and

will help advance the Agencys well-established practice of co-operation

and worldwide engagement through the sharing of experiences, best

practices and lessons learned, among IEA member countries and partner

countries alike.

Energy Policy

Highlights


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The global energy landscape is changing quicklyas a result of economic shifts and technologicaladvancements. Game-changers such as theunconventional oil and gas revolutions, orthe rapid retreat from nuclear power in somecountries, will further accelerate this change.This transformation naturally has importantconsequences for the energy policies ofInternational Energy Agency (IEA) membercountries, which must respond by employingefficient and cost-effective measures to ensureadaptable and flexible markets that safeguardenergy security while remaining consistent withinternational commitments.

The IEA has contributed to global energydiscussions since its founding, providingmember governments with analysis and policyrecommendations to address their respectivechallenges. Energy Policy Highlightsreflects thiswell-established practice of sharing experienceand lessons learned among peers. In preparationfor the 2013 IEA Ministerial, the IEA Secretariatinvited members to showcase recent innovationsin their energy policies. For the first time,members were asked to choose which measuresthey would like to highlight and share with otherpolicymakers. We thought it would be interestingfor members to see what steps their counterpartsare taking to overcome energy challenges that areoften very similar to their own.

I am delighted with the result. All 28 IEA membercountries provided examples, all of which areincluded in this publication. These are real-timepolicies that respond to many concerns, rangingfrom ensuring reliable energy supply to helpingcustomers make the best choice in electricityprovider, to developing new programmes topromote research and development. Governmentshave shown creativity and flexibility in findingthese solutions; their experiences and insightswill certainly be of great interest to other

policymakers. It is also gratifying to see anumber of IEA policy recommendations beingimplemented with good results.

Energy Policy Highlightsgroups memberscontributions under six thematic sections:general energy policies, energy efficiency,electricity, renewables, oil and gas, and researchand development. These policy examples andbest cases illustrate the range of topics andwide breadth of todays energy challenges.

Electricity and energy efficiency stand out asareas of particular interest. It is also striking thatmany governments emphasised the importanceof proactive efforts to inform and engagestakeholders as critical to the success of theirpolicy initiatives.

Reducing greenhouse gas (GHG) emissions is aclear objective of many of the policies, targetedby both improved energy efficiency and a highershare of renewables in the energy system. Given

the current economic climate, these submissionsunsurprisingly highlight the concern amongmember countries to find cost-effective andeconomically sustainable solutions. Anothertrend among the contributions is the importanceof empowering consumers and of raising publicawareness by means of transparent procedures.

I am confident that this publication, byshowcasing the latest policy best practices ofmember countries, will provide a useful source of

input for ministerial discussions and a basis forsubsequent work within the IEA Secretariat. Forthis valuable resource, I wish to express my specialthanks to all who contributed to this publication.

This publication is produced under myauthority as Executive Director of the IEA.

Maria van der Hoeven

Executive Director

International Energy Agency

Foreword


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Energy Policy Highlights is an exceptionalpublication for the International Energy Agency(IEA). While IEA publications are usually draftedby staff of the Secretariat, this publication wasauthored by each of the Agencys 28 membercountries, all of whom provided best practiceexamples from their respective governments.All credit for this publication belongs to thedelegates of the IEA Standing Group on Long-Term Cooperation (SLT), and their colleagues

in the Ministries of their respective capitals.Without their co-operation and contributions,this publication would not have been possible.Energy Policy Highlights was initiated andco-ordinated by Kijune Kim, Head of the IEACountry Studies Division (CSD), who successfullymanaged to bring all countries on boardthrough tireless individualised communicationwith his counterparts.

The IEA would like to extend thanks to the

Ministry of Trade, Industry and Energy (MOTIE)of Korea for providing the financial support thatmade this publication possible. We would alsolike to thank Rebecca Gaghen, Head of the IEACommunication and Information Office (CIO),for her insights and support.

A special thank you goes to: Ann Eggington, forher substantive contributions in shaping thepublication and her value-added comments;Kristine Douaud, for her editing expertise;Cheryl Haines, for her support in moving thispublication forward; and Muriel Custodioand Bertrand Sadin for their creative directionconcerning layout and design. Thank you toUlrich Benterbusch for his strategic guidance,and former Deputy Executive Director Richard

H. Jones for his wisdom and encouragementthroughout the entire process.

Special recognition goes to Kieran McNamara,James Simpson, Sylvia Beyer, Sonja Lekovic andCatherine Smith for their continuous supporttowards this publications quality and timelydelivery. Lastly, thanks are extended to all IEAcolleagues who provided valuable inputs,comments and support.

All comments are welcome and should beaddressed to:

Kijune Kim

Head, Country Studies DivisionInternational Energy Agency9, rue de la Fdration75739 Paris Cedex 15France

[email protected]

Acknowledgements


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General Energy Policy

12 Canada Canada is modernising and streamlining its regulatory procedures

for reviewing projects for the development of natural resources.

Czech Republic 14 The Czech Republics State Energy Strategy is being updated to facilitate the

transformation of the ageing energy sector, particularly the decline of lignite production.

16 Germany Public understanding of Germanys ambitious energy policy

is increased through annual reports on progress towards goals.

Netherlands 18 The Netherlands successfully shortened and simplified the process for implementing

national-interest energy projects.

20 SwedenSweden is working towards its long-term priorityof a vehicle fleet independent of fossil fuels by 2030.

Sweden has long and successful experience using high taxation on energy.

United States 23 The United States has recently published a Climate Action Plan for steady,

responsible national and international action to reduce GHGs.

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Energy Efficiency

26 Australia Large energy-using corporations are legally required to undertake energy assessments

of their businesses, identifying many attractive opportunities for energy-saving investment.

Canada 29 The latest energy code for commercial buildings continues

a cycle of improved energy performance of Canadas buildings.

31 Denmark In line with a framework agreed with government, energy utilities

are committed to cost-effective energy savings throughout the economy.

Ireland 33 A voluntary scheme with mandatory back-up

commits energy suppliers to energy-saving targets.

35 Italy Energy efficiency is promoted through a trading incentive scheme

of White Certificates and through tax rebates to households.

Japan 39Japan seeks further energy efficiency improvements

within its already highly energy-efficient economy.

41 Luxembourg Luxembourg is improving the energy efficiency of its building

stock through the introduction of energy performance certificates.

New Zealand 43 Insulating homes can bring health as well as energy benefits.

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45 Portugal A drive for greater energy efficiency in public buildings includes development

of a template for energy performance contracts with energy service companies.

Slovak Republic 46With assistance from the European Bank for Reconstruction and Development, the Slovak

Republic is making loans and grants available for energy efficiency and renewables projects.

48 Turkey Strong energy efficiency policy in Turkey enhances energy security to benefit

the fast-growing economy and to reduce greenhouse gas (GHG) emissions.

United Kingdom 50The Green Deal encourages energy consumers to invest now in energy-saving

measures and pay later through the savings on their energy bills.

Electricity52 Australia A new package of measures is making Australias

electricity market even more competitive.

Austria 55The German-Austrian price zone is contributing

to the liquidity of European wholesale electricity markets.

57 Belgium A campaign to raise awareness about switching energy suppliers

empowers consumers and improves the competitiveness of the market.

A new plan has been drawn up to manage electricity supply disruptionsfor sudden interruptions and for more predictable longer shortfalls.

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60 Finland Finland has invested to improve the security of electricity supply.

Germany 62Planning procedures are streamlined for new projects aimed

at providing much-needed strengthening of the electricity grid.

64 Greece Vulnerable consumers within the liberalised electricity

market have been protected through a special lower tariff.

Hungary 66Hungarys technical programmes help to train

a new generation of nuclear power experts.

Hungary is opening a new disposal facility for nuclear waste.

68 Korea A nation-wide emergency drill demonstrates

that electricity can be saved in a hurry.

New Zealand 70New Zealands reliance on hydropower can lead to volatileelectricity spot prices; spot purchasers are now obliged to

publically stress-test the risks in their market positions.

Reassuring electricity consumers that switchingretailers is easy boosts electricity market competition.

73 Switzerland Saving electricity is supported by partial funding

of projects with longer payback periods.

United Kingdom 75The largest reform of the electricity system since privatisation

aims to increase renewables while preserving market characteristics.


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Renewables77 Austria Hydropower contributes to the security of Austrian energy

supplies and the stability of the wider European electricity system.

Denmark 78Major investment is planned to meet Denmarks new goal

that wind power generate 50% of its electricity consumption by 2020.

80 Netherlands In the support scheme for renewables, the level

of subsidy keeps up with the market price of energy.

Norway-Sweden 82A joint Norway-Sweden scheme provides a larger market for

trading electricity certificates, promoting renewable generation.

84 Spain A high proportion of Spains electricity is already provided

by renewable sources; grid operation has been adaptedto successfully handle output variability.

Oil and Gas87 Austria Increased gas storage capacity is enhancing

Austrias ability to meet rising gas demand.

Ireland 89Ireland now holds most of its strategic stocks

nationally and no longer uses stock tickets.

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91 Italy Italy reviews its gas market mechanisms and infrastructure,

hoping to keep rising gas prices in check.

Japan 93In the light of changing gas markets, Japan is

examining ways to increase its power as a buyer.

95Norway Norway supports increasing production of oil.

Poland 97The recent liberalisation of the Polish gas market will benefit

consumers by providing a more competitive market.

99Portugal Major investment in new infrastructure is improving

Portugals security of supply and integration into the Iberian gas market.

Energy Researchand Development

101France A major new research programme aims to bring

innovative energy projects to the market.

Italy 103Post-privatisation, a scheme to ensure continuance of electricity research

and development (R&D) is funded through a component of consumers bills.

105KoreaA new large smart grid test bed enables

the testing of cutting-edge technologies.

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Energy Policy Highlights reflects a key benefit ofInternational Energy Agency (IEA) membership:sharing experience, and learning among policymakers and governments. In preparation forthe 2013 IEA Ministerial, IEA member countrieswere invited, for the first time, to highlight

recent developments in their energy policies.Their contributions are collected in thispublication.

All members provided examples of their policies,and the range of chosen topics illustratesthe broad scope of energy policies. However,substantial contributions in the areas ofelectricity and energy efficiency indicate themto be areas of particular current effort.

The contributions reflect the key IEA themesof energy security, environmental protectionand economic development. The agreedinternational goal of greenhouse gas (GHG)emissions reduction is the driver for manycontributions, and is targeted by bothimproved energy efficiency and a higher levelof renewables in national energy systems.Economic pressures are evident, however,and the need to find economically efficient

and sustainable approaches clearly concernsmembers. More generally, a number ofcontributions recognise the negative impactof rising energy prices on consumers. In somecases, this is countered by the attempt to makeretail markets work better through increasedawareness of consumers purchasing power.

A number of contributions underlinean increased need for transparency andengagement raising awareness of energy

policy and proposed actions in order to gainpublic acceptance. Many member countriesnoted that the success of their initiativeshad been facilitated by efforts to inform andinvolve the public.

Energy policySeveral members highlight their energypolicy reviews. The Czech Republic iscurrently updating its State Energy Strategy,particularly in light of declining ligniteproduction. Germany aims to increase publicunderstanding of its ambitious energy policythrough annual reports on progress towards its

goals. By introducing its Responsible ResourceDevelopment plan, Canada is modernising itsregulatory system for project reviews in orderto attain government goals.

The Netherlands successfully introduced ashortened procedure for energy infrastructureprojects to secure national interest. Sweden,with its long-term priority of a fossil fuel-free vehicle fleet by 2030 and carbon dioxidetaxation, is moving to a low-carbon economy.

In June 2013, the United States announcedits Climate Action Plan for steady, responsiblenational and international action to cut GHGemissions, based on three pillars: (i) cut carbonpollution in the United States; (ii) preparethe United States for the impacts of climatechange; and (iii) lead international efforts tocombat global climate change and prepare forits impacts.

Overview of

Energy Policy Highlights


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Energy efficiencyEnergy policy continues to face the challenge ofdelivering energy efficiency. Even highly energy-

efficient Japan is striving towards furtherenergy savings as a response to its constrainedenergy situation following the Great EastJapan Earthquake in 2011. Turkey has put inplace a wide-ranging strategic and legislativeframework to promote energy efficiency,including mandatory appointment of energymanagers by large energy users, and an annualenergy efficiency week to raise public awarenessof the issues.

Several members highlight the approach ofemploying energy providers to deliver energysavings, some of which are backed up bya trading incentive scheme based on theirrespective obligations. Other countries areexploring methods of encouraging energysavings by helping householders and businesseswith financial incentives: this could be throughgrants or by arrangements to undertake the

measures now and repay the costs later throughsavings from energy bills.

Canada continues to raise the standards of itscommercial building codes, while Portugal isseeking ways to improve energy performance inpublic buildings by standarising the contractsand approaches of energy service companies.A legal requirement for large energy-usingcorporations to assess their energy use inAustralia is boosting the identification and

adoption of energy efficiency opportunities.New Zealand is finding that a programmeto increase the number of warm, dry homesthrough insulation, which particularly helpslow-income households, brings benefits ofimproved health as well as energy savings.

ElectricityIncreasing the contribution of renewablesto national electricity supplies in a cost-

effective way is a challenge several membersare attempting to meet. The UK governmentis embarking on the largest reform sinceelectricity privatisation in order to introducemore renewables. The UK government hopesthis reform will provide the tools for transitionto its long-term vision: low-carbon technologiesthat are not only able to compete on a levelplaying field with fossil fuels, but also able toensure security of supply in the short, medium

and longer term. Germany is faced with theneed to strengthen its grid system to enablegreater flows from the north to the south tocompensate for the variability of renewablesources; it is therefore streamlining its planningprocedures for new grid projects.

Hungary highlights the importance of nuclearpower in the energy mix and, in the face of anageing specialist workforce, the need to train a

new generation of experts.In the face of difficult economic circumstances,several countries are seeking ways to makeelectricity markets more competitive, to increaseconsumer participation and to keep prices down.Belgium and New Zealand have run campaignsto convince consumers that switching electricityretailers is easy, aiming to encourage strongercompetition between suppliers. As part of awide-ranging market reform package, Australia

is also exploring tariff structures that willenable consumer participation in demand-sidemanagement and the creation of a nationalenergy consumer advocacy body.

Liberalisation of the electricity market inGreece coincided with a particularly severeeconomic crisis; attention is therefore focusedon protection against fuel poverty, with theintroduction of a special reduced tariff for

electricity for low-income, vulnerable households.


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Keeping the lights on understandably remainsa key security policy objective of IEA membercountries. Two countries highlighted their plansfor handling shortages in electricity supply, and

Korea has actually carried out a practice drillwhich demonstrates the considerable extent towhich quick reductions in demand are possiblethrough changes in the publics behaviour inenergy usage.

RenewablesSeveral countries are looking for cost-effective

ways to increase the share of renewablesin their energy systems. The Netherlandsintroduced a subsidy system with a slidingcomponent, whereby the premium varies withmarket price. As well as the examples discussedabove in the electricity section, a joint Norway-Sweden scheme provides a larger market fortrading electricity certificates which promoterenewables generation.

Some members already have considerable levelsof renewables integrated into their systemsand are coping well despite the variable natureof their output. Spain highlights the changesto grid operation which enable it to handlethis variability; in early 2013 nearly half of itselectricity consumption was, indeed, generatedby renewable sources. Denmark is planningmajor investment in further wind turbines tomeet its goal of 50% of electricity supply beinggenerated by wind. Austria cites its considerable

hydropower as contributing flexibility andsecurity of supply not only to its own electricitysupply, but also more widely to that of Europe.

Oil and gasHigh gas prices in particular nationalcircumstances have proved to be of concern.

Italy is reviewing its gas infrastructure andmarket mechanisms with the aim of keepingprices in check. Japan points to the changingstructure of the gas market and highlightsthe approaches the country is adopting tostrengthen its buying power, while Austria feelsthat its increasing gas storage facilities provideflexibility and security of supply.

On the oil front, and in line with an earlier

IEA recommendation, Ireland has increasedits security by rebalancing its holdings ofstrategic oil stocks so that 88 of its 90 daysof stock obligations are held on the island,and dependence on stock tickets has beeneliminated. Norway successfully increasedproduction of oil in an environmentally safe way.

Research and developmentSeveral contributions highlight the continuingimportance of research and development(R&D) in meeting future energy challenges.Italy wanted to ensure that sufficient R&D onelectricity continued after privatisation of theelectricity industry, and therefore developeda mechanism whereby such R&D is fundedthrough a small premium on consumer prices.Korea has established an advanced smart gridtest bed facility for testing cutting-edge smart

grid technologies. France has launched a majornew research programme aimed at bringinginnovative energy projects to the market.


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Policy area/objectivesNatural resources account for 15% of Canadasgross domestic product (GDP) and 50% of itsexports. When including spin-off industries,which also provide goods and services to thesector, natural resources account for close to20% of GDP nearly one-fifth of Canadaseconomy. The natural resource sectors alsodirectly employs approximately 800 000 workersin communities across the country.

More than 600 major economic projectsrepresenting CAD 650 billion1in potentialnew investments are planned across Canadaover the next ten years. To capitalise on theseopportunities, the government of Canada hasintroduced its plan for Responsible Resource

Development (RRD). RRD will moderniseCanadas regulatory system for project reviewsby delivering on four key objectives: (i) makingproject reviews more predictable and timely;(ii) reducing duplication of project reviews; (iii)strengthening environmental protection; and(iv) enhancing Aboriginal consultations.

Main characteristics

of the policyThe governments RRD plan, introduced in the2012 budget, has delivered several changesto strengthen accountability and ensure amore effective and efficient regulatory system.Responsibility for reviews was condensedfrom more than 40 agencies down to three:the Canadian Nuclear Safety Commission,

1. As of September 2013, CAD 1 was roughly equivalent to USD 0.96.

the National Energy Board and the CanadianEnvironmental Assessment Agency. Clear andpredictable review timelines were put in placeto increase accountability, including maximumbeginning-to-end timelines (12 months to24 months) for project reviews, depending onthe project.2

Resources are now more appropriately focusedon major projects with the greatest potentialfor significant environmental effects, whilesmaller, more routine projects no longerrequire formal environmental assessments, butremain subject to the requirements of all otherapplicable federal and provincial laws, standardsand permits. Duplication with the provincesis being reduced through the implementationof new tools, such as substitution and

equivalency, to advance the objective of oneproject, one review. In addition to improvingthe predictability and timeliness of the federalreview process, environmental protection willbe strengthened through the use of greatercompliance and enforcement mechanisms,and new funding to advance measures tostrengthen marine and pipeline safety. Notably,the government has put in place, for the firsttime, enforceable3environmental assessment

conditions, including financial penalties fromCAD 100 000 to CAD 400 000. This will doublethe number of inspections and comprehensiveaudits of federally regulated pipelines to identifyissues before incidents occur.

2. A 12 month timeline is in place for standard environmentalassessments, a 24 month timeline for review panels under theCanadian Environmental Assessment Act and an 18 month timelinefor projects regulated under the National Energy Board Act.

3. Under the Canadian Environmental Assessment Act, 2012.

CanadaResponsible resource development


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General energy policy 1

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Finally, the Government of Canada is ensuringconsistent consultations with Aboriginalpeoples and exploring new economicpartnerships with Aboriginal groups. The 2013

budget provided CAD 618 million to allowAboriginal peoples to participate more fully inCanadas economy and benefit from its growth.The government has also appointed a SpecialFederal Representative to engage Aboriginalcommunities on economic opportunitiesrelated to the proposed west coast energyinfrastructure, such as oil and gas pipelines, andmarine terminals. These efforts will help identifyopportunities to facilitate greater Aboriginal

participation in resource development, aswell as in ongoing efforts to strengthenenvironmental protection.

Challenges facedduring implementationPrior to the implementation of thegovernments plan for RRD, regulatory delays

and unnecessary duplication across jurisdictionsdiscouraged potential new investors andundermined the economic viability of majorprojects with no additional benefit for theenvironment. Fundamental changes wereneeded to create a modern, efficient andeffective regulatory system to capitalise onthese new investment opportunities, whileensuring strong environmental protectionand creating meaningful opportunities for

Aboriginal engagement and consultation.

Why the policy isconsidered a success

These measures will make the review processfor major projects more predictable and timely(a reduction from an average of four years to alegislated period of no more than two years),as well as facilitate investment and planningdecisions to support job creation and economicgrowth, while improving environmentalprotection and enhancing Aboriginalconsultation.

Lessons to be sharedThe plan for RRD was facilitated by the creationof the Major Projects Management OfficeInitiative a partnership among 11 federaldepartments and agencies with key regulatoryresponsibilities for major natural resourceprojects. As part of this initiative, the MajorProjects Management Office was establishedto serve as a single window into the federal

regulatory process, and to provide overarchingproject management and accountability ofthe federal regulatory review process for majorresource projects, while leading horizontalpolicy research and analysis to advance furtherimprovements to the regulatory systemfor major resource projects. This whole-of-government approach across departments andagencies ensured effective collaboration acrossgovernment on cross-cutting policy issues.


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Policy area/objectivesThe current update of the Czech StateEnergy Concept (SEC) aims to facilitatetransformation of the ageing Czech energysector to generate adequate electricity and

meet high supply standards in a cost-effectivemanner. It must resolve the problem of massivedecommissioning of lignite power plants,stabilise the wholesale electricity market andfind an optimal solution for preservation ofthe unique and effective municipal centralheating system.

Main characteristicsof the policyIn order to preserve the comparative advantageof a cost-effective municipal central heating

system that depends for more than 80% of itsfuel on domestic primary energy sources in theface of rapidly decreasing lignite supplies (Figure1), the SEC strives to re-direct available coalinto heating and highly effective co-generationsystems and find alternative fuels (waste,biomass and nuclear waste heat) not to increaseenergy import dependency.

Czech RepublicResponding to a changing energy scene:updating the Czech energy strategy

Decreasing mineable coal supplies in the Czech RepublicFigure 1

Note: environmental limits for mining on certain quarries were introduced by Governmental Resolution 444 from 1991; MT = megatonne.Source: update of the State Energy Concept, Ministry of Industry and Trade of the Czech Republic, 2013.

Power generation from decommissioned coal-fired power plants has to be replaced in acost-effective and energy-secure manner, e.g.by increasing the shares of nuclear energy (byup to more than 50%) and an economicallyviable renewable energy supply (RES). Naturalgas is perceived mainly as a provider of flexible

balancing energy and as a co-generation

fuel. Wholesale energy markets distortedby previous extensive RES subsidies mustbe stabilised and rationalised to once againgive sound investment signals, as investorscurrently are not willing to invest in anysources not subsidised by the state. Price-stabilisation measures will therefore have to

be temporarily introduced.

2012

Browncoal(Mt)

50

30

20

10

0

40

2016 2020 2024202220182014 2030 2034 2036203220282026 2038 2040

LibouBlina

VranyCSA

Jir + Dru ba

Extraction beyond limits

Extraction forecast (brown coal) for particular mining sites


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The new power generation mix (Figure 2) mustbe able to fulfil generation adequacy criteria andmust be manageable; hence, infrastructurerefurbishment and upgrade, including

demand-side management and accumulationsystems, are supported (especially researchand development [R&D] from the governmentside). The Czech Republic currently suffers from

loop-flows arising from discrepancies betweenpower generation and infrastructure build-up in the Central and Eastern Europe region.This situation is not sustainable and must be

systematically eliminated.

Gross electricity generation mix in the Czech RepublicFigure 2

Source: update of the State Energy Concept, Ministry of Industry and Trade of the Czech Republic, 2013.

Challenges faced

during implementationOne of the biggest challenges for the SEC wasto find broad consensus across the wholepolitical spectrum. The update of the SEC hasnot been approved since 2004 (even thoughit should be done every five years). The mostdisputed topics of the SEC for the generalpublic were the potential breaking of theenvironmental lignite coal limits, the shareof RES and nuclear, and the energy savings

potential. The resulting compromise draft iscurrently undergoing a Strategic EnvironmentalAssessment (SEA).1Final approval is alsodependent on comprehensive analyses, forwhich completely new methodology had tobe developed, of the impacts of the SEC onthe national economy, individual householdsand Czech competitiveness. Intensive debate

1. Directive 2001/42/EC of the European Parliament and of the Councilof 27 June 2001 on the assessment of the effects of certain plans

and programmes on the environment.

and negotiations are expected when pursuingpartial goals (proposed in the document) before

actually implementing the SEC.

Why the policy isconsidered a successThe current SEC proposal has gained broad supportboth in the political arena and among professionals.Thanks to the goals included in the proposal, itprovides clear implementation methodology for thepublic and regulatory authorities.

Lessons to be sharedWide public acceptance of the SEC proposalwas facilitated by a technologically-neutralapproach to energy resources, a focus oncost-effectiveness and the minimisation ofnegative impacts on the national economy, allaccompanied by intensive consultation with

key stakeholders.

7%

50%

1%1%

33%

7%2010 20401% 3%

15%

6%1%

51%

20%

4%

Black coal Brown coal Natural gas Other gases

Nuclear Renewable and secondary sources Other fuels


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Policy area/objectivesThe German government, through its EnergyConcept (2010) and its energy reforms(2011), has set itself the goal of making thecountry one of the most energy efficient and

environmentally sound economies in the world,while maintaining competitive energy pricesand a high level of prosperity. This ambitiousand long-term project can only succeed withbroad public acceptance.

Since Germany is breaking fresh ground in manyaspects of its overall energy policy strategy,it is important to monitor this fundamentaltransition closely. The government has therefore

established a process to monitor progress andto fine-tune measures where necessary. At thesame time, the monitoring process Energy ofthe Future is designed to inform the publiccomprehensively about the restructuring of theenergy system, to promote public participationand to increase acceptance of the reforms.


of the policyGermanys ambitious energy goals include areduction in greenhouse gas (GHG) emissions by40% by 2020 and by at least 80% by 2050, and adecrease in primary energy consumption by 20%by 2020 and by 50% by 2050 (base year 2008).The proportion of energy consumption coveredby renewables is to rise to 30% by 2030 and to60% by 2050.

Energy of the Future is long-term and fact-basedmonitoring process. It includes: (i) an annualmonitoring report the first submitted inDecember 2012 outlining the facts and statusof implementation of measures and progresstowards goals; and (ii) a more detailed three-

yearly progress report starting in 2014 thatdraws on multi-annual data and more granularanalysis, for a more detailed assessment offuture challenges and a better appraisal of theneed for additional measures.

An independent commission of fourdistinguished energy experts scrutinises thecross-governmental monitoring process;their independent opinion is attached to

the monitoring report. Public participationalso plays a key role: citizens, companies andassociations are invited to submit suggestionsand ideas.

Challenges facedduring implementationWork on the first monitoring report showed

that in some cases improved energy statisticsare needed in the future. For example,incomplete data on international energy pricesand energy consumption in the household,transport and trade sectors can only provide arestricted view.

GermanyMonitoring Germanys energy reforms:creating transparency and public acceptance


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The public and the media appreciated thefirst monitoring report as a useful andcomprehensive overview of the status of theenergy reforms, welcoming the transparentprocedure and public dialogue. Manyassociations, institutions and members ofthe public took the opportunity to submitcomments. Consequently, important additionalinformation e.gon heat consumption inhouseholds or on efficiency in the transport

sector was incorporated in the monitoringreport and thus improved its quality andinformative value.

Lessons to be sharedThe scrutiny of the independent commission ofenergy experts, as well as the use of verifiable

data, strongly increased the credibility of themonitoring process. Furthermore, the firstmonitoring report showed the public thatGermany is on track in the key areas of thereforms. Yet, in order to achieve the goals set outin the Energy Concept, both further reform stepsand joint efforts by all stakeholders are necessary.

A comprehensive description and an Englishversion of the first monitoring report are

published on the Federal Ministry of Economicswebsite: www.bmwi.de/DE/Themen/Energie/Energiewende/monitoring-prozess.html.
http://www.bmwi.de/DE/Themen/Energie/Energiewende/monitoring-prozess.htmlhttp://www.bmwi.de/DE/Themen/Energie/Energiewende/monitoring-prozess.htmlhttp://www.bmwi.de/DE/Themen/Energie/Energiewende/monitoring-prozess.htmlhttp://www.bmwi.de/DE/Themen/Energie/Energiewende/monitoring-prozess.html


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Policy area/objectivesIn 2009, the national co-ordination procedurefor energy projects of national interest wasintroduced as a response to complaints ofthe long procedures to realise major energy

infrastructure like electricity grids or windparks (e.g. 10 years to 15 years in the case ofthe national electricity grid). The long durationof the procedures was due to several causes:lack of alignment in permitting procedures;multiple possibilities for objection and appealagainst a single project; involvement of differentgovernment levels with different views; andincreasing not in my backyard (NIMBY)behaviour against energy infrastructure projects.

As a result of the long procedures, the securityof the energy supply was endangered, economicopportunities were lost and the developmentof sustainable energy production (wind energy)was adversely affected.

The national co-ordination procedure for largeenergy infrastructure projects, part of the DutchEnvironmental Planning Act, was introduced asa remedy. Its objective is to shorten and simplify

spatial planning and permitting procedures forenergy projects of national interest.

Main characteristicsof the policyThe basic idea of the national co-ordinationprocedure is that if a project is of nationalinterest, the national government should

be responsible for making the decisions.Spatial decision-making is therefore done atthe national level. The Minister of EconomicAffairs and the Minister of Infrastructureand Environment jointly decide on a nationalland-use plan regarding the energy project

concerned. This national plan automaticallyreplaces the land-use plan of the local authority.

The issuing of the necessary permits for aproject continues to be in the hands of localauthorities, but is subject to time limits whichare imposed by the Minister of EconomicAffairs. In case of opposition or reluctance ingranting the permits, the Minister can director overrule the local authorities. All draft

decisions concerning the project are publishedfor consultation at the same time. There isone opportunity for appeal against the finaldecisions, and the court rules on all decisionsat once within six months. The total averagetime for this formal procedure is about one

year. However, this period does not includetime for research for the environmental impactassessment (EIA). The EIA is the basis for thespatial decision and the permits, and often

requires several years.

Challenges facedduring implementationIn order to gain time, the national co-ordinationprocedure often requires that the EIA, spatialplanning and permitting be done in parallel. Thisis only successful if the project promoter and the

different authorities involved co-operate very

NetherlandsShortened and simplified procedures for energyprojects of national interest


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closely. It also requires that the practitioners whoconduct the EIA and the spatial planning have ahigh level of expertise. A challenge which has tobe faced constantly is that not all local or regional

governments welcome national interference intheir local interests.

Why the policy isconsidered a successExperiences with the national co-ordinationprocedure have so far been positive. The averagerealisation time of a project has been reducedfrom ten to about one to four years, includingthe research period for the EIA.

Lessons to be sharedOne of the important remaining challengesis the lack of public acceptance for some

projects. Opposition to high-voltage lines andwindmills especially persists. Although NIMBYbehaviour is, to a certain extent, inevitable ina small and densely populated country like theNetherlands, much can still be gained fromgood communication and participation withthe different stakeholders in a project. Earlydialogue with citizens affected by a project isessential, as well as early co-operation betweenthe project promoter and the various authorities.

Transparency, diplomacy and an open mind arerequired from all the parties involved.


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Policy area/objectivesIn 2009, the government adopted an integratedclimate and energy policy package. One integralpart of the package is the vision of a Swedishvehicle fleet independent of fossil fuels by 2030.

Main characteristicsof the policyA number of regulations and economicincentives have already been introduced tofulfil this vision. The Swedish taxation systemsupports the purchase of environment-friendlyvehicles through a tax exemption throughoutthe first five years. This incentive has been

strengthened with the introduction of an extrasubsidy for super environment-friendly carsemitting less than 50 grams of carbon dioxide(CO

2) per kilometre, which targets plug-in

hybrids and electric vehicles.

To promote alternative fuels, high-ratio blendsof renewables into gasoline and diesel (E85,ED95 and biodiesel 100% Fatty Acid MethylEster [FAME]) are subject to a full tax exemption.In addition, pumping stations which sell more

than 1 000 cubic metres per year are requiredto offer a renewable fuel (e.g. E85). With regardsto low-ratio blends into gasoline and diesel,there is no obligation today. However, from May2014 the government is planning to introduceblending obligations which aim at an increasedlevel of low blending. The new law alsointroduces a specific sub-quota for advancedbiofuels. Low-ratio blends of renewables haveso far been incentivised through the general tax

exemption on biofuels and the worlds highestCO

2tax imposed on the European Union non-

Emissions Trading Scheme (non-ETS) sectors.

Another government priority has been research,development and deployment of clean vehicles(including a demonstration programme fore-mobility) and advanced biofuels, with the

focus on the production of biofuels based onfeed-stocks originating from forestry.

Already in 2012, Sweden reached the bindingEuropean Union (EU) target that, by 2020, theshare of renewable energy in the transportsector should be 10% in EU member states.The national long-term priority for 2030 isfar more ambitious than this target; a specialcommittee has been established to investigate

the options for facilitating development in linewith the vision for 2030. The committee, whichinvolves all relevant stakeholders, will present itsconclusions in December 2013.

Challenges facedduring implementationSweden has already largely phased out fossil

fuels from electricity generation and the heatingsector, so the transport sector is the largestremaining challenge. The cost and availabilityof renewable biofuels has led the Swedishgovernment to invest heavily in research anddevelopment in this field. Another obstacle isthe availability of environment-friendly vehicles.Car manufacturers work on a global scale andare reluctant to adjust their models solely forthe Swedish market.

SwedenA vehicle fleet independent of fossil fuel by 2030


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As the long-term priority is set for 2030, it is tooearly to make a final assessment of the results,but already this project has attracted much-needed attention to the transport sector and tothe obstacles to be addressed in the fulfilmentof the priority.

Lessons to be sharedThe setting of ambitious priorities triggersmuch-needed discussion and creativity.

Energy and CO2taxation in Sweden

Policy area/objectivesAn important tool to achieve reduced GHGemissions targets is the use of economicinstruments, such as CO

2taxes and emissions

trading. Pricing of CO2emissions is essential in

order to make those who pollute pay for theirimpact on the environment. High energy taxeson fuels and electricity, as well as high CO

2taxes

on fossil fuels, effectively steer demand throughenvironmental signals, putting an implicitprice on fossil carbon while at the same timeproviding state revenues.

Main characteristicsof the policySweden has long and successful experiencein applying taxation on energy. Motor fuelshave been taxed in Sweden since the 1920s.An energy tax on electricity, as well as on oiland coal used for heating purposes, has beencollected since the 1950s. Taxation was laterextended to cover liquefied petroleum gas (LPG)and natural gas as well. The oil crisis duringthe 1970s led to an increased awareness of thesecurity of supply of oil products, which resultedin higher taxation of these products. Swedencomplemented the energy tax with specific CO

2

and sulphur taxes in 1991, as environmentalpolicy was becoming increasingly important onthe political agenda.

The prevailing principle has been to levy energyand CO

2taxes on fossil fuels when used as

motor fuels or heating fuels. The CO2tax is

levied on fuels containing fossil carbon, and theSwedish CO

2tax rates have been significantly

increased over the years, with the purpose of

achieving cost-effective emission reductions.

Sweden today has the worlds highest CO2tax

imposed on the non-trading (non-ETS) sectorsand on households and services. In 2012, thegeneral CO

2tax corresponded to EUR 118 per

tonne (EUR/t) of CO2

(SEK 1.081per kilogrammeof CO

2), which can be compared with current

permit prices within the EU-ETS below EUR 10/t,or the minimum CO

2tax levels in the EU

proposal for a revised Energy Taxation Directiveof EUR 20/t. Thus, for buyers of heating oilthe price is almost doubled compared to themarket price. The CO

2tax has been the major

incentive to reduce the use of fossil fuels, andthe major driving force behind the rapid growthof bioenergy in Sweden, in particular for thedistrict heating sector.

1. As of September 2013, Swedish kronor SEK 1 was roughly equivalent

to USD 0.152.


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Challenges facedduring implementation

The Swedish energy taxation system has beendesigned to strike a balance between fulfillingenvironmental objectives and accounting forthe risks of carbon leakage. Hence, a lower taxlevel has been applied on fuels used for heatingpurposes by industry ever since the introductionof the CO

2tax.

Why the policy is

considered a successDuring its over 20 years of existence, the CO

2

tax has contributed to reduced fossil fuelconsumption in Sweden, in particular for thehousehold and service sectors and districtheating production, where the full CO

2tax has

been applied. Today, the share of fossil fuels indistrict heating is less than 15%. The increase ofbiofuels (exempted from the CO

2tax) has been

substantial during recent decades followinga steadily increased level of the full CO

2tax.

Bioenergy today provides for over a quarter ofthe total energy consumption in Sweden.

Lessons to be sharedA CO

2tax has the advantage of being a market-

based instrument, which at low administrativecosts enables households and firms to choosemeasures to reduce fossil fuel consumption and thus GHG emissions that are bestsuited to their specific situation. The Swedish

experience shows that emission reductionscan be combined with economic growth.During the period 1990-2012, CO

2-equivalent

emissions were reduced by 20%, while at thesame time economic activity increased by 59%.A tax also works well in combination with otherinstruments of climate and energy policy, suchas green certificates, subsidies to renewables,and regulations that have been introduced after(or in some cases before) the tax.


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Policy area/objectivesOn 25 June 2013, US President Barack Obamapresented the US Climate Action Plan for steady,responsible national and international actionto cut the GHG emissions that cause climatechange and threaten public health. The planhas three pillars: (i) cut carbon pollution in theUnited States; (ii) prepare the United States forthe impacts of climate change; and (iii) leadinternational efforts to combat global climatechange and prepare for its impacts.

Main characteristicsof the policyEach pillar in the plan consists of a wide variety ofexecutive actions the president can take.

The key mitigation elements are numerous:

z to cut CO2pollution from coal-fired power

plants by directing the US EnvironmentalProtection Agency to establish carbonpollution standards for both new and existingpower plants;

z to unlock long-term investment in clean

energy innovation by making up toUSD 8 billion in loan guarantee authorityavailable for a wide array of advanced energyprojects that use fossil fuels;

z to accelerate clean energy permitting by:directing the US Department of the Interior topermit 10 gigawatts (GW) of renewables onpublic lands by 2020; setting a goal to install100 megawatts of renewables in federallyassisted housing by 2020; and deploying

3 GW of renewables in military installations;

z to expand the federal governments BetterBuilding Challenge to focus on helpingcommercial, industrial, and multi-familybuildings become at least 20% more energyefficient by 2020;

z to reduce CO2

pollution by at least3 billion metric tonnes cumulatively by 2030

through efficiency standards for appliancesand federal buildings;

z to increase fuel economy standards bydeveloping post-2018 fuel economy standardsfor heavy-duty vehicles;

z to leverage new opportunities to reducepollution of hydrofluorocarbons (HFCs),direct agencies to develop a comprehensivemethane strategy and commit to protectforests and critical landscapes.

The key climate resilience and preparednesselements also address several goals:

z to build stronger and safer communitiesand infrastructure by directing agencies tosupport local climate-resilient investment,and integrate climate risk-managementconsiderations into planning andprogrammes;

z to pilot innovative strategies in the HurricaneSandy-affected region to support resilienceand reduce vulnerability to future large-scaleflood and storm events;

z initiate the creation of sustainable andresilient hospitals in the face of climatechange;

United StatesUS Climate Action Plan


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z to protect the US economy and naturalresources by directing agencies to: identifyapproaches to improve natural defencesagainst extreme weather; maintain

agricultural productivity by deliveringtailored, science-based knowledge to farmers,ranchers, and landowners; help communitiesmanage drought-related risk by launching aNational Drought Resilience Partnership; andexpand and update efforts to reduce wildfirerisks and prepare for future floods;

z to provide climate preparedness tools andinformation needed by state, local, and

private-sector leaders through a centralisedtoolkit and a new Climate Data Initiative.

Key objectives of the international elements areequally ambitious:

z to enhance and expand internationalinitiatives through forums such as theMajor Economies Forum and the CleanEnergy Ministerial, identifying new areas forbilateral co-operation;

z to combat short-lived climate pollutants,such as methane, hydrofluorocarbons, andblack carbon through the Climate and CleanAir Coalition, Global Methane Initiative,and working under the Montreal Protocolto phase down the consumption andproduction of HFCs;

z to expand clean energy use by promotingnatural gas development and fuel switching,the safe and secure use of nuclear power,and clean coal technologies;

z to cut energy waste by aggressivelypromoting energy efficiency in critical areassuch as buildings, wastewater treatmentand appliances;

z to launch negotiations at the World TradeOrganization (WTO) towards global freetrade in environmental goods, includingclean energy technologies;

z to phase-out US fossil fuel tax subsidies, andcollaborate with partners around the worldtoward this goal;

z

to end US government support for publicfinancing of new coal-fired power plantsoverseas, except for the most efficient coaltechnology available in the worlds poorestcountries, or facilities deploying carboncapture and sequestration technologies;

z to strengthen global resilience to climatechange by expanding government andlocal community planning and responsecapacities;

z to lead efforts to address climate changethrough international negotiations, seekingan agreement that is ambitious, inclusiveand flexible.

Challenges facedduring implementationChallenges are specific to individual actions

and vary widely; the plan therefore sets specificmeasures to address each of them. Examples ofsuch challenges are as follows:

z addressing the high costs of some types oftechnology development (such as the highupfront cost of carbon capture and storage;

z promoting the widespread investmentin appliance and equipment efficiency(including properly balancing significant

cost savings through efficiency gains withupfront capital investment costs);

z overcoming barriers to incentivisingprivate sector action (and the wise use ofgovernment resources that avoid duplicatingor crowding out private sector investments).


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The United States will evaluate progress onthe implementation of the Climate ActionPlan regularly and sharing results and lessonslearned. One key metric (although one that willonly be measurable over time) will be reductionsin US GHG emissions; the plan is designedto help meet the US commitment to reduceemissions in the range of 17% below 2005levels by 2020, as agreed in the United Nations

climate negotiations. President Obama hasalso set a goal to double renewable electricitygeneration by 2020.

Lessons to be sharedThe United States looks forward to sharingthe results of its efforts under this plan withthe international community, and will provideregular updates on progress through bothdomestic and international reports.


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AustraliaEnabling industry to improve energy efficiency

Policy area/objectivesIndustry accounts for approximately 80% ofAustralias total energy use.1The governmentsEnergy Efficiency Opportunities (EEO) Program2aims to enable industry to become moreenergy efficient. Participating corporations are

achieving financial benefits totalling aroundAUD 800 million per year.3

Main characteristicsof the policyParticipation in the programme is mandatoryfor corporations whose energy use exceeds0.5 petajoules (PJ) (the equivalent of 10 000households) in a financial year. Participatingcorporations are required to undertake anenergy assessment which involves numerouscomponents:

z senior leadership and managementendorsement of energy performanceobjectives;

z involvement of experts and company staffwith an influence on energy use;

z the collection and analysis of energy-use

data to underpin an assessment;

z a systematic process to identify andevaluate opportunities to improve energyproductivity;

z the presentation of outcomes to decision-makers and the board;

1. Available at: http://eeo.govspace.gov.au/files/2012/11/Continuing-Opportunities-2011.pdf.

2. As per the Energy Efficiency Oppor tunities Act 2006 and associatedregulations.

3. As of September 2013, AUD 1 was roughly equivalent to USD 0.93.

z public reporting of assessment outcomes.

The programme includes several key features:

z A focus on improving energy use in abusiness brings benefits in productivity,competitiveness and greenhouse gas (GHG)abatement.

z The legislative requirements are light-handed: only the process for assessing andreporting on energy use is mandatory forcorporations. The actual implementationof the opportunities they discover is notmandatory, although many companiesact to improve energy efficiency once theinformation is available.

z A wide range of comprehensive tools andinformation has been developed by the

government to help corporations discover asmany opportunities as possible.

z Promotion of a rigorous approach to energyassessment aims to permanently changebehaviour within a company, beyond merestandards compliance. When corporationsdevelop an understanding of how energy isused in their business, they are able to makedecisions on implementation that fit withother business priorities.

In 2011, the programme was expanded toinclude companies in the electricity generationsector, increasing the coverage to nearly 60%of Australias total energy use. As of 2013,corporations undertaking new developmentsand/or major expansion projects are alsocovered, thus helping to ensure energyefficiency is part of design considerations.
http://eeo.govspace.gov.au/files/2012/11/Continuing-Opportunities-2011.pdfhttp://eeo.govspace.gov.au/files/2012/11/Continuing-Opportunities-2011.pdfhttp://eeo.govspace.gov.au/files/2012/11/Continuing-Opportunities-2011.pdfhttp://eeo.govspace.gov.au/files/2012/11/Continuing-Opportunities-2011.pdf


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Challenges facedduring implementation

To address industry concerns about theprogrammes regulatory obligations, theAustralian government works closely withcorporations to develop tools and systems tosupport their participation in the programme,including guidance materials, industryworkshops and dedicated industry supportofficers. Ensuring that key personnel in eachcorporation understand the programmesobligations and intent from the board through

to the staff member submitting reports is anongoing challenge.


In 2011, the majority of participating corporationscompleted their first five-year assessment cycle,reporting the identification of opportunitiesto save an estimated 164 PJ, with the adoptionof 89 PJ (equivalent to 1.5% of Australias totalenergy use), representing an annual emissionsabatement of 8.3 million tonnes of carbon dioxideequivalent (MtCO

2-eq) and net annual financial

savings of over AUD 800 million. However,across all sectors of Australian industry, there is

still potential for further savings, with 4.6% ofidentified savings remaining under investigationor not to be implemented.

Identified and adopted energy savingsas a percentage of assessed energy use

Figure 3

Source: Commonwealth of Australia, 2012.

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Adopted

A regular independent review process of theEEO Program is undertaken at the mid-wayand end point of each five-year cycle. The mostrecent review4estimates that of all the energy,

4. Available at: http://energyefficiencyopportunities.gov.au/about-the-

eeo-program/program-review/full-cycle-review/.

GHG emissions and financial savings reportedby participating corporations, around 40%had been enabled by the programme, witheconomic (e.g.energy prices), environmentaland social factors accounting for the remainingsavings. The review highlights that barriers

around access to information on potential
http://energyefficiencyopportunities.gov.au/about-the-eeo-program/program-review/full-cycle-review/http://energyefficiencyopportunities.gov.au/about-the-eeo-program/program-review/full-cycle-review/http://energyefficiencyopportunities.gov.au/about-the-eeo-program/program-review/full-cycle-review/http://energyefficiencyopportunities.gov.au/about-the-eeo-program/program-review/full-cycle-review/


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opportunities have been significantly reducedduring the programmes first five-year cycle.It also indicates a marked improvement inthe knowledge, skills and systems available to

identify, implement and track opportunities toimprove energy productivity.

Lessons to be sharedz Ongoing engagement with industry

stakeholders an integral part of the EEOPrograms design and implementation encourages corporations to embed energy

efficiency as standard business practice.z While standards and frameworks are useful

tools to improve energy efficiency, withoutenabling legislation their efficacy will belimited. Some corporations do not have astrong economic incentive to pursue energyefficiency; therefore legislative obligationscan be used to drive behaviour change.

z Compliance obligations must be balancedwith tailored assistance, flexibility andappropriate guidance. This recognisescorporations who have existing processes for

improving energy efficiency and the uniqueneeds of different industry sectors.

z Mandating the implementation ofopportunities is not necessary to achieve thebenefits from improved energy efficiency.Providing senior leaders and corporate boardswith information to justify investmentin energy efficiency allows decisions onimplementation to be made at the discretionof the participating corporations.


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CanadaContinuous building energy code improvements

Policy area/objectivesCanada is committed to a cycle of continuousbuilding energy code improvements. In 1997,Canada established a buildings code (Code1997),1which set a minimum level for energyperformance in the design and construction

of new buildings and, in 1998, launched anincentive programme2for commercial buildingsto push performance 25% beyond thoseminimum performance levels.

The next step was to incorporate progressivebuilding practices into performance standardsby 2012. In 2011, the National Energy Codeof Canada for Buildings 2011 (Code 2011)established a minimum energy performancelevel for buildings above three storeys and

incorporated the latest standards and practices,such as natural lighting and enhancedventilation. Adoption of Code 2011 is currentlyunderway across all jurisdictions in Canada,with one exception that already incorporatesstringent guidelines for building design.


of the policyCode 2011 provides minimum requirements forthe design and construction of energy efficientnew commercial buildings and covers thebuilding envelope, systems and equipment forheating, ventilating and air-conditioning, servicewater heating, lighting, and the provision of

1. The Model National Energy Code of Canada for Buildings (Code 1997).2. The Commercial Buildings Incentive Program (CBIP) was launched by

Natural Resources Canada.

electrical power systems and motors. In 2020,the savings from these efforts are estimated tobe worth CAD 350 million.3

In addition, efforts are already underway for thenext iteration, Code 2015, which will includenew equipment standards and regulations.Beyond 2015, future updates to the Code will

include energy performance improvements thatmaintain Canadas collective progress towardnet-zero energy buildings (i.e.maximisingenergy efficiency and providing for the use ofon-site renewable energy such that buildingsgenerate as much energy as theywould drawfrom electricity, gas and oil sources). Thenational model energy code for buildings in2015 will establish todays innovative practicesas the new minimum standards for tomorrow.

Challenges facedduring implementationBuilding codes are under provincial andterritorial jurisdiction, with municipalitiesplaying a key role in their implementation. Thefederal government therefore helps to bringtogether key stakeholders across all levels of

government, industry and academia in order tocontinuously review and update the Code.

One challenge faced by Code 1997 was itsfocus on requirements to reduce energy costs.A building code focused on energy costs canencourage less efficient buildings that ultimatelyuse more energy per square metre because the

3. As of September 2013, CAD 1 is approximately equivalent to

USD 0.96.


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cost of the particular fuel type used is lower.Code 2011 helps to overcome this drawback.In contrast to Code 1997, Code 2011 is anobjective-based energy code that is fuel-type

neutral, which will consequently result in themost energy-efficient design. Ultimately, thismajor shift from a code based on energy coststo one based on energy efficiency exemplifieshow building codes can be developed to protectbuilding owners from fluctuating utility prices.This new focus on the design and construction ofbuildings helps to ensure that newly constructedbuildings will always be more energy efficientthan in the past.

Why the policy isconsidered a successThe policy will generate significant savingsover a buildings typical 40-year to 60-yearlifespan. In 2020, buildings built to the Code

are expected to save 17 PJ of energy per year, orCAD 350 million in annual energy costs. Morethan 1 megatonne of annual GHG emissionsare expected to be avoided in 2020 as a result.

Efficient green buildings improved lighting andair quality help to reduce sick days and increaseproductivity of building occupants. A buildingbuilt to Code 2011 can also offer buildingowners a competitive advantage in the realestate market when leasing or selling.

Lessons to be shared

In a country where building codes are theresponsibility of provincial and territorialgovernments, the development of Code2011 is an excellent example of what can beaccomplished through strong and effectiveinter-governmental collaboration.


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Policy area/objectivesIn 2006, with broad political support, theminister responsible for energy and the gridand distribution companies in the electricity,natural gas, district heating and oil sectors

entered into a voluntary agreement to achieveannual energy savings.

The aim ofthe agreementwas to createasolid framework forincreased cost-efficientand market-oriented energy-saving efforts,with particular focus onachievingcost-effective savings.

Main characteristicsof the policyThis agreement effectively commits utilitycompanies to the responsibility for increasingthe overall savings, focusing on achieving energysavings in final energy consumption in allsectors. The utility companies are free to choosethe methods they use to deliver savings in themost cost-effective way. This includes allowing

utility companies to carry out savings measuresoutside their own supply area, and outside theirown energy type.

In 2006, the total annual savings target forthe scheme was 2.05 PJ, and responsibility fordelivery was divided among the energy sectorsinvolved. The total savings target has graduallyrisen since 2006. Because the 2012 EnergyPolicy Agreement determined ambitious goalsfor energy savings, the agreement between

energy companies and the minister for energywas renegotiated. The annual energy savingstarget in the two-year period 2013-14 is 10.7 PJ,equivalent to approximately 2.6% of the totalenergy consumption1in Denmark; the annualtarget for 2015 is 12.2 PJ.

Challenges facedduring implementationThe design of the scheme had to take intoaccount the challenge of additionality:in other words, some of the savings wouldhave been carried out independent of theinvolvement of the utility companies. Severalmeasures addressed this: in 2010 the overallsavings target was increased by approximately15% in order to adjust for additionality;furthermore, saving measures with lowadditionality were either taken out of thescheme, or the value of these measures waslowered significantly.

Allowing grid companies to undertake the taskof carrying out savings measures themselves

makes it difficult to secure low prices, ascompetition is limited.

For some of the smaller companies,administration of the agreement can be achallenge.

1. Energy consumption excluding transport.

DenmarkThe Danish energy-saving scheme:increased obligations on energy utilities


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The average cost of savings reported in 2011was approximately EUR 0.05 per kilowatthour (kWh) in first-year savings, equivalentto EUR 0.005 per kWh when assuming anaverage savings lifetime of 10 years. Theutility companies can recover the cost of thesavings via tariffs. An independent evaluationconducted in 2008 showed that the schemeis considered very cost-effective, even whenincluding the costs to consumers.

Lessons to be sharedLetting the grid and distribution companiesdeliver the obligation scheme makes

implementation of the annual savings targeteasier: the utilities are spread across the countryand are already in contact with consumers.The arrangement also provides a secure andstable way to finance energy savings activities,because it avoids the difficulties of securingstate financing.


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IrelandEnergy-saving targets for energy suppliers

Policy area/objectivesThe programme of energy savings targets forenergy suppliers is a central component ofIrish energy efficiency policy, as well as of widerenergy and climate policies. The first NationalEnergy Efficiency Action Plan (2009) identified

the potential for an energy savings programmetargeted at energy suppliers. Given the extentof Irelands national energy efficiency target (setat 31 925 gigawatt hours [GWh], with a gap-to-target of 8 000 GWh), additional measures wouldbe required in order to meet the 2020 objective.

Following discussions between the Irishgovernment1and the energy industry, newenergy savings targets were introduced for allenergy suppliers on a three-year cycle, initially

for 2011-13 with a new iteration to be decidedfor 2014-17.2

Main characteristicsof the policyThe programme runs on a voluntary basis,with 19 energy suppliers spread acrosselectricity, gas, solid fuels and oil importers

currently signed up for voluntary energy savingsagreements. Legislation underpinning theseagreements allows the minister to impose energysavings targets on energy suppliers if they choosenot to sign an energy savings agreement.3

1. Department of Communications, Energy and Natural Resources(DCENR).

2. In accordance with the Energy Efficiency Directive (2012/27/EU).

3. Energy Miscellaneous Provisions Act, 2012.

Operation of the existing programme isdelegated by the minister to the countrysnational energy agency (Sustainable EnergyAuthority of Ireland [SEAI]), which maintainsa list of approved measures and associatedenergy savings. The list currently comprises 26measures with more added on request (from

energy suppliers or third parties) by the SEAI.All new measures, and actions undertaken byenergy suppliers, are subject to appropriatemonitoring, verification and audit.

Energy suppliers are required to submit anannual plan in advance of each operational year,setting out their programme of activity thatwill deliver their energy savings target. SEAImanages the operational aspects of programmedelivery, including managing energy supplier

performance. Trading is allowed in the event anenergy supplier exceeds its energy savings target.

Challenges facedduring implementationThe introduction of energy savings targets forenergy suppliers was particularly challengingbecause no similar arrangements existed prior

to the programmes commencement. Even afterextensive public engagement, the Departmentof Communications, Energy and NaturalResources (DCENR) found it hard to convincethe energy suppliers of the merits of such aprogramme, and that it could add value to theirconsumer offering in liberalised markets, ratherthan detracting from their core business model.


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The adjusted three-year energy savings target tobe delivered by the energy suppliers is 875 GWh,with the targets allocated by sector as follows:oil (33%); gas (15%); electricity (48%); and solidfuels (4%). After two years, 81% of anticipatedenergy savings will have been achieved, withenergy suppliers striving to meet the full three-

year programme target by the end of 2013.

Lessons to be sharedThe DCENR consulted substantively on allof the programmes parameters prior to its

introduction. This commitment to transparencyand dialogue enabled the department to buildup trust and co-operation with energy suppliers,which facilitated the introduction and operationof the programme. The DCENR continues toengage with energy suppliers through a quarterlygovernance forum, at which issues of operationaland strategic direction are discussed.


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Policy area/objectivesThe main implementation methods for energyefficiency policies in Italy are White Certificates(WhCs) introduced in 2005, and a 55% tax rebatescheme introduced in 2007. The WhCs scheme

was introduced with the adoption of the firstEuropean Directive on the liberalisation of theelectricity and natural gas market. Both schemesaim at a wide range of policy purposes, such asreduced GHG emissions, reduced energy importdependence, and development of the marketfor energy efficiency products and services.It is noteworthy that the two systems areimplemented, respectively, as complimentarypolicy measures to the CO

2reduction efforts in

the European Union Emission Trading Scheme(ELL-ETS) and the non-ETS sectors.

Main characteristicsof the policyWhCs are an example of a trading incentivescheme, promoting energy efficiency measuresin the industry sector, both in the production

process and in end-use products. Each WhCrepresents a savings of 1 tonne of oil-equivalent(toe). The scheme is based on energy-savingsobligations imposed on electricity and gasdistributors with more than 50 000 customersto achieve annual targets of primary energysavings. Financial penalties for non-compliancewith targets are imposed and, in order tosatisfy annual obligations, WhCs generated byinterventions implemented by other operators

or non-obligated parties can be bought on the

market. The trading mechanism is a centralelement of the system and it ensures, inprinciple, that savings occur where they areeconomically most efficient. Furthermore, thescheme is governed by a strong additionalitycriterion: only savings achieved above

the market average or above legislativerequirements are taken into account.

The 55% tax rebate programme provides taxcredits to households for comprehensive orsingle retrofit energy efficiency measures,such as thermal insulation, installation ofsolar panels, replacement of heating andair-conditioning systems or comprehensiverefurbishments. The total deductible amount is

then distributed over a period of ten years.1

Challenges facedduring implementationEnergy Service Companies (ESCOs) are willing toaccept long payback periods and have becomethe main actors in implementing projects:almost 400 different ESCOs have successfullyimplemented projects of 20 toe savings(equivalent to 20 WhCs) or more. Unfortunately,less than 20 GWh per year (GWh/yr) of nearly27 000 GWh/yr of savings stem from measuresrelated to the building envelope: the relativelyshort lifetime of project support (five years withsome exceptions of eight years) makes projectswith high upfront costs and longer paybacktimes less attractive.

1. Five years before 2011.

ItalyEnergy efficiency policy implementation throughWhite Certificates and 55% tax rebate schemes


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In the 55% scheme, the cost saved per kWhranges from EUR 0.06 for comprehensiveretrofit measures to EUR 0.15 for replacementof windows. In general, a comprehensive

package of measures is more cost-efficientthan single measures, at the price of greatercomplexity and at the risk of insufficientresources. The simultaneous implementation ofboth schemes together with regional schemes,giving rise to a potential problem of doublecounting, suggests the desirability of strongercompartmentalisation of incentive measures.Finally, at present the eligibility of interventionsunder the 55% scheme can only be extended

annually, leaving operators with someuncertainty nearing the end of each year.

Why the policy isconsidered a successBoth schemes have boosted the developmentof a market for energy efficiency services aswell as the awareness among households of

the multiple benefits related to the adoption ofenergy efficiency technologies and behaviours.

By 2011, more than 6 000 projects (of at least20 toe each) had been submitted for WhCs andabout 1 300 000 projects for the 55% scheme,providing an overall energy savings of more than

34 000 GWh/yr (2.2% of energy consumption in2011) of almost 60 000 GWh/year saved at thenational level thanks to all the energy efficiencypolicies implemented.2

Lessons to be sharedWhCs represent an open-ended system widelyadopted because any type of end-use energy

efficiency measure qualifies for a certificate.Even if more cost effective, the 55% scheme ismore widely spread at a household level andhence more difficult to administer. A wealth ofquantitative and qualitative data at the projectand programme levels is available, thanks tothe bottom-up monitoring approach whichcharacterises both schemes; this is helpful inthe evaluation of both the rebound effect ofpolicies and end-users response to information

and awareness-raising campaigns.

2. Energy Efficiency Annual Report, 2011.

2007 2008 2009 2010 2011 TOTAL

55% 788 1 961 1 487 2 032 1 369 7 637WhCs 3 515 5 757 7 718 5 750 4 041 26 781

Source: Rifiuti di apparecchiature elettriche ed elettronich (RAEE), 2011.

Energy savings: annual values (GWh/yr)Table 1


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Actions 2007 2008 2009 2010 2011Total

2007-11Overall renovation of building 48 114 85 32 25 304

Insulation of opaque vertical envelope 21 39 42 69 50 220

Insulation of opaque horizontal envelope 23 151 156 132 135 597

Replacement of windows 142 305 297 570 383 1 696

Replacement of electric boilers 93 288 245 254 155 1 035

Use of efficient heating systems 268 614 626 961 612 3 081

Balanced flues and wood-fired boilers 20 49 36 14 10 130

Multiple selection 173 401 0 0 0 574

Total 788 1 961 1 487 2 032 1 369 7 637

Source: RAEE, 2011.

Energy savings from 55% scheme (GWh/yr)Table 2

Energy savings: annual values

Energy savings: cumulative values

Figure 4

Figure 5

Source: RAEE, 2011.

Source: RAEE, 2011.

0

2 000

4 000

6 000

8 000

10 000

2007 2008 2009 2010 2011

GWh/yr

55%

WhCs

25 000

30 000

0

5 000

10 000

15 000

20 000

2007 2008 2009 2010 2011

GWh/yr

55%

WhCs


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Cumulative Annual AnnualTotal

2009 2010 2011

Standard/analytical schedules 13 539 1 047 1 099 15 685

Time and materials projects:

Generation: industry 1 700 569 31 2 300

Electricity: industry 380 526 178 1 084

Heating: residential and services 484 247 67 798

Thermal: industry 537 3 290 2 643 6 470

Generation: residential and services 190 0 0 191

Public lighting 92 40 1 133

Electricity: residential and services 67 32 21 120

Total 16 990 5 750 4 041 26 781

Source: RAEE, 2011.

Energy savings from WhCs scheme (GWh/yr)Table 3

Source: RAEE, 2011.

4%3%8%

2% 8%

Overall

Vertical

Horizontal

Windows

Electric boilers

Heating

Wood

Multiple

39%

14%

22%

4%3%

1%

0.5%

0.4% StandardGeneration (industry)

Electricity (industry)

Heating (residential and services)

Thermal (industry)

Generation (residential and services)

Public lighting

Electricity (residential and services)

59%

24%

9%

Energy savingsfrom 55% scheme

Energy savingsacross supply-side

Figure 6 Figure 7


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Policy area/objectivesJapans energy intensity has improved 40%since the 1970s and is among the worlds best,enhancing Japans industrial competitiveness.Having experienced the challenges of a tightpower supply and demand balance after the

Great East Japan Earthquake (Fukushimanuclear accident) in 2011, Japan is revitalisingits energy efficiency policy once again.

Main characteristicsof the policyThe government amended its Act on theRational Use of Energy in May 2013. The

acts first pillar aims to improve the thermalinsulation performance of houses and buildings.The use of more energy-efficient insulatorsand windows will help reduce the energyconsumption associated with air conditioningand water heating, which accounts for 60%of energy consumption in the housing andbuildings sector. The government thereforerecently added insulators and windows tothe list of products covered by the Top Runner

Program. This is a set of regulations whichsets specific numerical energy efficiencystandards at levels above the performance ofthe best products at a given time, and requiresmanufacturers and importers to meet thosestandards within three years to ten years. Theprogramme serves to promote both energyconservation and innovation.

The Acts second pillar is the reduction of peakdemand by promoting the introduction oftechnologies such as smart meters, energymanagement systems and storage batteries.Consumers efforts to reduce the use ofelectricity from utility grids during peak demandhours will be evaluated positively, and will be

taken into account when calculating the energyintensity improvement goal under the Act.

Challenges facedduring implementationFrom 1973-2011, Japanese gross domesticproduct (GDP) grew by 2.4 times, while finalenergy consumption increased only 1.3 times

due to substantial improvement in energyintensity. However, the improvement varies bysector. While industrys energy consumptiondecreased by 10%, the transport industryincreased 1.9 times. Similarly, consumptionin the housing and buildings sector increased2.5 times due to an increasing number ofhouseholds, greater use of appliances, andexpanding office space. The housing andbuildings sector therefore has the greatest

potential for better energy efficiency.Following the devastating earthquake andtsunami in March 2011, eastern Japan faced asubstantial loss of power-generating capac

iea - energy policy highlights

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