Meeting the energy audit requirement

of the Energy Efficiency Directive

& introducing other headline elements of the implementing legislation including CHP provisions

Enda Gallagher and Errol Close, Department of Communications, Energy and Natural Resources

The Energy Efficiency Directive

The Energy Efficiency Directive

The Energy Efficiency Directive

Its intent is sensible

Energy efficiency is

the energy game-changer

Why?

The Energy Efficiency Directive

Its intent is sensible

Energy efficiency is

the energy game-changer

Why?

Because it’s available to all

As the saying goes, the Stone Age did not end because we ran out of stones;

we transitioned to better solutions. The same opportunity lies before us

with energy efficiency and clean energy – Stephen Chu

The Energy Efficiency Directive (EED)

and EU Energy Targets

The EED establishes

• a common framework of policy measures

• for the promotion of energy efficiency

• to ensure the achievement of the 20%

energy efficiency target

The EED and Ireland’s Targets

Ireland’s national E.E. target is 31,925 GWh

or 20% saving by 2020

and €2.4bn

Non compliance (re Article 7,

1.5% target – see slide on

Obligation Scheme)

=

EU fines

Lights, camera, action…

The National Energy Efficiency

Action Plan

NEEAP – the action pillars

• Public Sector

• Business

• Buildings

• Transport

• Energy Supply

• Cross-

sectional

The targets…national

The targets…public sector

The targets…business sector

The Public Sector

Target - 33%

• Fulfil exemplar role

• Minister to publish EE

guidelines to sector

• Publish EE actions &

assessment of savings

• Detailed data to SEAI

• SEAI – public sector

annual report

• Buy/lease - minimum

A3 BER

The Public Sector – OPW & OGP

• Energy inventory heated/cooled central

gov’t public buildings 250m sq – July ‘15

• Central gov’t to only buy high energy

performance products

• Public service contract tenders –

assessment of long term energy savings

• Public body 500m sq or 35k energy

spend must comply with audits regs

Energy Supply

• CER to complete a national

assessment of energy efficiency

potential of electricity and gas

trans and dist systems-30/6/2015

• + the EE improvement measures

in assessment to be timetabled

• CER to have regard to EE when

making decisions on operation

of electricity and gas systems

• CER to provide incentives in

electricity systems for EE

improvement

Energy Supply

• CER to amend licence

conditions so as to reduce

volume of distributed energy

• CER to ensure that tariffs

reflect EE savings

• CER to ensure tariff incentives

detrimental to EE are removed

• CER may approve schemes and

tariff structures with a social

aim

• CER to promote demand side

resources

• CER to make system / grid

services available for e.g. co-

gen etc.

Energy Demand Management Metering and Billing

• CER - mandated - smart metering systems and to

“licence condition” time of use tariffs.

• Must ensure DSO provides final customers -

electricity and gas – smart metering system (actual

and time of use)

• ensure new / re-build, final customers, electricity

and gas – individual meter

• CER - ensure accurate billing

• And free billing

The Business Sector

• Obligation Scheme

• CHP

• Energy Audits

Energy Efficiency Obligation Scheme

• Obligation – Savings of 1.5% of annual energy

sales to final consumers

• 1,469GWh….1,102GWh negotiated

• Options – impose full 1.5% via an EEOS or

impose part via EEOS + alt measures

• Sales higher than 600GWh

• 550GWh = EEOS target (7 years 3,850GWh)

• 75% Non Res, 20% Res, 5% Poverty

• Voluntary Agreement programme transitions…

• Trading of energy credits – buyout (max 30%, 6c,

20.4c and 88c per KWh) and penalty price (1.25

times the buyout price)

CHP & District Heating

CHP & District Heating

Two aspects to be covered

• Regulations 23 to 25

• Promotion of efficiency in heating and cooling

• Comprehensive national assessment

• Installation level assessment

• Regulation 26

• Guarantees of Origin for high efficiency CHP

Promotion of efficiency in heating and

cooling

Comprehensive assessment (Reg 23(1) to (9))

• To be undertaken by SEAI in accordance with Annex VIII of the

Directive

• Assessing national potential for High Efficiency CHP and

District heating

• Includes a cost benefit analysis in accordance with Annex IX of

the Directive

• Include appropriate recommendations to encourage

consideration and accommodate development

• Report to be completed by 30 June 2015

Promotion of efficiency in heating and

cooling

Installation level cost benefit analysis to be undertaken by

the economic operator when the following criteria are

met:

- when planning to carry out particular activities in

relation to electricity generation, refurbishment of

industrial installations or district heating;

- when seeking a license or revised license from the

Environmental Protection Agency under Section 83

of the EPA Act of 1992

Activities requiring the installation level

assessment

Activity CBA Assessment – Assess

using CHP or waste heat

recovery to

To install a new thermal electricity generation installation with a total

rated thermal input exceeding 20 MW that is not already a cogeneration

unit; Provide for the operation of the installation

as, or conversion to, a high-efficiency

cogeneration installation; To substantially refurbish an existing thermal electricity generation

installation with a total rated thermal input exceeding 20 MW and the

refurbished unit will not be a cogeneration unit;

To install or substantially refurbish an industrial installation with a total

rated thermal input exceeding 20 MW generating waste heat at a useful

Utilise the waste heat to satisfy economically

justified demand, including through

cogeneration, and of the connection of that

installation to a district heating and cooling

network;

To construct a new district heating and cooling network or to install a

new energy production unit with a total rated thermal input in excess of

20MW in an existing district heating or cooling network or to

substantially refurbish an existing such installation and waste heat is not

being used from nearby industrial installations.

Utilise the waste heat from nearby industrial

installations.

Preparation and assessment of the

installation level CBA

• Installation cost benefit analysis to be prepared in accordance with

Annex IX

• SEAI to prepare guiding principles

• Cost benefit analysis to be submitted to the SEAI who will assess

taking account of:

• Comprehensive assessment

• Annex IX

• Actual activity versus the findings of the CBA

• SEAI shall publish notification of its assessment and invite

submissions

• SEAI shall then issue a notification of the outcome of its

assessment to the economic operator

Exemptions

Exemption from undertaking a CBA • The installation is of a class or at a location identified by the

Comprehensive assessment as not having potential for the

implementation of cost beneficial energy efficiency measures,

• The installation is an electricity generating station which is planned to

operate under 1,500 operating hours per year as a rolling average over

a period of 5 years,

• the installation needs to be located close to a geological storage site

as permitted by the European Communities (Geological Storage of

Carbon Dioxide) Regulations 2011 (S.I. No. 575 of 2011), or

• the installation is below any threshold designated by the Minister for

the amount of available useful waste heat, the demand for heat or the

distances between industrial installations and district heating networks

Exemption from outcome of CBA • The economic operator may make an application to the SEAI for an

exemption from implementing the energy production option preferred

under the cost benefit analysis for imperative reasons of law,

ownership or finance.

CHP & District Heating

Two aspects to be covered

• Regulations 23 to 25

• Promotion of efficiency in heating and cooling

• Comprehensive national assessment

• Installation level assessment

• Regulation 26

• Guarantees of Origin for high efficiency CHP

Guarantees of Origin (GOO’s)

• Guarantees of origin for electricity from High Efficiency CHP

• Similar process to that already in existence for GOO’s for renewable

generators

• Supervisory framework to be established by the CER for

• management of the system for issuance, registration, transfer and

cancellation of GOO’s

• provide for the recognition of GOO’s issued by other Member

States

• To be administered by SEMO in accordance with S.I.426/2014 and the

CER supervisory framework

Guarantees of Origin (GOO’s)

Eligibility

• Only for electricity generated from high efficiency CHP

• Standard size 1MWh

• 1 GOO issued for each unit of electricity from high efficiency

CHP

• Must be used within 12 months of the generation of the

corresponding unit

• Each GOO will be cancelled once used

• Information to be provided to support a request for a GOO

outlined in the statutory instrument

Provisions for revocation included due to:

• the provision of incorrect information,

• fraudulent activity,

• The issuance of an inaccurate GOO

• a GOO issued to the incorrect party

SEMO to publish any fees associated with GOO’s on its website

Energy Audits

The Working Plan

Energy Audits – Part 3 of SI 426/2014

Mandatory element applies to non-SMEs i.e.

more than 250 employees

Or

Turnover > €50m and an annual

balance sheet > €43m

Multi-site organisations must identify their

total energy use in Ireland, and ensure that

90% of this is covered by energy audit

Compliance Requirements

• Buildings, operations, and transport

• Cover at least 90% of total energy use

• Reporting to the SEAI must be completed

by the compliance date (5th December

2015)

• If no audit, may be asked for evidence why

Exemptions: ISO 50,001

• ISO 50,001 certification indicates

compliance, but only if the ISO 50,001

covers at least 90% of the energy use

(measured in kWh or cost)

• If not, then activities, buildings, and

transport outside the scope of the ISO

50,001 certification must be audited also

• In all, at least 90% of the energy

consumption of the organisation must be

covered by an energy audit

Exemptions: ISO14,001

• Environmental management systems such

as ISO14,001 may also be exempt, if an

energy aspect is explicitly included in the

scope and covers at least 90% of energy

use

• These organisations must still report

compliance, identifying the basis of the

exemption

Priority Requirements

• A National Registration

Scheme for Energy

Auditors, independently

run and supervised

• Transparent access to it

• National minimum

standards for energy

audits

• The availability of sufficient

auditors to meet the need

National Registration Scheme

• SEAI to operate

• Can farm out aspects

• Phased development

Registration Process

• Clear qualification requirements, open access

• Application received and evaluated

• Meets requirements – certified

• SEAI website page lists qualified auditors for

classes of audit, starting with large business

Minimum Criteria for Audits

“Minimum criteria for energy audits including those carried out as part

of energy management systems

The energy audits referred to in Article 8 shall be based on the following guidelines:

(a) be based on up-to-date, measured, traceable operational data on energy

consumption and (for electricity) load profiles;

(b) comprise a detailed review of the energy consumption profile of buildings or

groups of buildings, industrial operations or installations, including transportation;

(c) build, whenever possible, on life-cycle cost analysis (LCCA) instead of Simple

Payback Periods (SPP) in order to take account of long-term savings, residual values

of long-term investments and discount rates;

(d) be proportionate, and sufficiently representative to permit the drawing of a

reliable picture of overall energy performance and the reliable identification of the

most significant opportunities for improvement.

Energy audits shall allow detailed and validated calculations for the proposed

measures so as to provide clear information on potential savings.

The data used in energy audits shall be storable for historical analysis and tracking

performance.”

Qualification/Accreditation of Auditors

• Competence shall be evidenced using a

combination of experience and qualifications.

• SEAI are developing list of minimum qualifications

for various activities

• Auditors must register with SEAI’s national

registration system

• SEAI will manage a database of approved auditors

• In house auditors must also be registered and

independent – they must not be working in the area

they audit

• State must train up…Art 16

Overall Principles of S.I. 426/2014

• Aim is high quality energy audits, deep

and effective in line with Annex VI of

Article 8

• Key criteria are quality, transparency,

independence and auditor competence

• Member State (MS) determines what is

sufficiently qualified auditor

• Audit is to be independent i.e. external

or internal auditor independent of entity

or process being audited

• Auditor is to be accredited, qualified and

certified

• MS must ensure sufficient expertise and

capacity of certified auditors (internal or

external)

Overall Principles of S.I. 426/2014

• Scope is all energy across buildings, processes and transport

• MS must put in place means to demonstrate compliance

• MS determines what is reasonable or representative of total

energy use e.g. audit 90% of total

• Where a certified EnMS or EMS is the alternative, the obligated

organisation must include a high quality energy audit that fulfils the

requirements of Annex VI

• Results must be communicable i.e. a closed PDF report would

need to be accompanied by data / spreadsheet

• NB SP - Simple Payback is no longer acceptable, LCCA is the

preferred methodology

The EED Reward Factor!

€2.4 billion