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EIE/07/057/SI2.466696 - EU LTA UPTAKE

European uptake of successful implementations of Industrial SMELTAs as a part of Voluntary Agreements

Publishable Final Report

The sole responsibility for the content of this publication lies withthe authors. It does not necessarily reflect the opinion of the EuropeanCommunities. The European Commission is not responsible for any use that maybe made of the information contained therein.

Date of preparation: 01.07.2009

Contact (project co-ordinator):

Herman GelsSenterNovem Utrecht, [email protected]: +31 30 2 147 837Mobile: +31 627 878 954www.senternovem.nl

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1 Summary

Long Term Agreements (LTAs) on energy efficiency improvement between industrial SMEassociations and public authorities are particularly suited to support the EU energy efficiencypolicy. LTAs are effective instruments to guarantee commitment of both public authorities andSME associations and companies in written agreements. Though these parties join voluntarily,the obligations after signing a contract are clear and specific. An LTA contains arrangements onSMART targets, monitoring and consequences of non compliancy, while it also reduces costs andadministrative burdens. LTA examples show considerable success: several sectors achieved anenergy efficiency improvement of 30% over the past 15 years. However, industrial SMEs inEurope (responsible for 25 % of the industrial energy consumption) and a number of nationalgovernments are not very familiar with LTAs. Therefore, LTA UPTAKE project provides a webbased toolkit to support industrial SME associations and public authorities in the EU in theirprocess of setting up these LTAs.

This report provides a detailed overview of present LTA features in different EU countries(Section 3 and 4). LTA Uptake used these features to derive a common “European” sense onnecessary tools (Section 5) and accompanying tool requirements (Section 6). Embroidering onthese tool requirements the action resulted in the backbone of the Action: the LTA Uptake toolkitaiming to support potential European LTA parties: public authorities and SME associations to setup LTAs on energy efficiency improvement.

The LTA Uptake toolkit with all its features and its complete content is free accessible atwww.ltauptake.eu. A summary of the tools in a predefined timeline of subsequent LTA phases, asummary of all tools and a summary of each separate tool is provided in section 7.

Both the tool requirements as well as the final toolbox has been endorsed by a group ofapproximately 40 experts, representing national governments, energy agencies and SME sectorassociations in Europe.

The toolbox has also been used to get three signed (pilot) LTAs, represented by:

1. the Swedish National Government and the Swedish association of foundries (presented as apre agreement)

2. the Finish National Government and the Finish Hospitality Association3. the Dutch National Government and the Netherlands Association of Regional Water

Authorities

Next to the need of LTA experience at national levels, LTA Uptake partners observe a need ofsmall scale LTA pilot experience at regional and local levels. Small scale pilots makes the LTAconcept more surveyable and manageable for decision makers. See also Section 8.

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A changing attitude has also been observed toward LTAs at national level in less LTAexperienced countries. Initial reservations in these countries at mainly national authorities levelshifted to a more proactive attitude, willing to start pilot LTAs with representatives of industriesin Poland and Czech Republic.

Both developments were initiated by the LTAUptake partners and resulted in 7 new LTA pilots,in which parties strongly commit themselves in Letters of Intent to negotiate LTAs including:

1. SMART (Specific, Measurable, Achievable, Realistic and Time bound ) targets on energyefficiency improvement or CO2 reduction.

2. a way of periodical monitoring, reporting and evaluation to achieve these targets.3. Incentives and consequences of non compliance.

These pilots are planned to be concluded with LTAs in an LTA Uptake follow up IEE proposal,called VABEC. Twenty additional pilots are planned to be recruited all over Europe as well. Allof them are expected to actively use the LTA uptake toolbox.

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Table of Content1 SUMMARY......................................................................................................................................................... 2

2 INTRODUCTION .............................................................................................................................................. 7

3 REVIEW AND ASSESSMENT OF EXISTING LTAS .................................................................................. 9

3.1 LTA TERMINOLOGY .................................................................................................................................. 113.2 REVIEW OF THE TYPICAL FEATURES OF EXISTING LTAS ............................................................................ 13

3.2.1 LTA features ......................................................................................................................................... 133.2.2 Main aims............................................................................................................................................. 143.2.3 Target sectors....................................................................................................................................... 153.2.4 Legislation............................................................................................................................................ 153.2.5 Financial incentives ............................................................................................................................. 163.2.6 Motivation for joining .......................................................................................................................... 173.2.7 Agreement type..................................................................................................................................... 193.2.8 Commitments........................................................................................................................................ 193.2.9 Sanctions .............................................................................................................................................. 213.2.10 Energy audits................................................................................................................................... 213.2.11 Tools ................................................................................................................................................ 223.2.12 Results ............................................................................................................................................. 25

4 ASSESSMENT OF LTA EXPERIENCES..................................................................................................... 27

4.1 THE SUCCESSFUL ELEMENTS IN A LTA ...................................................................................................... 274.1.1 General success factors........................................................................................................................ 274.1.2 Good communication ........................................................................................................................... 284.1.3 Simple administration .......................................................................................................................... 294.1.4 Motivating targets ................................................................................................................................ 294.1.5 Efficient monitoring and reporting....................................................................................................... 294.1.6 Support to participants......................................................................................................................... 304.1.7 Combining to existing activities ........................................................................................................... 304.1.8 Personal enthusiasm ............................................................................................................................ 30

4.2 THE MAIN BARRIERS AND WEAKNESSES..................................................................................................... 314.2.1 General weaknesses ............................................................................................................................. 314.2.2 Uncertainty in government policies ..................................................................................................... 324.2.3 Uncertainties in target-setting and cost-effectiveness.......................................................................... 324.2.4 Missing knowledge and tools ............................................................................................................... 334.2.5 Limited resources in administration..................................................................................................... 334.2.6 Limited resources in participating enterprises..................................................................................... 334.2.7 Confidentiality risks ............................................................................................................................. 344.2.8 Heavy reporting ................................................................................................................................... 34

5 IDENTIFIED NECESSARY TOOLS............................................................................................................. 35

5.1 PHASE 0: PREPARATION............................................................................................................................. 355.2 PHASE 1: INITIATION.................................................................................................................................. 365.3 PHASE 2: NEGOTIATION............................................................................................................................. 375.4 PHASE 3: IMPLEMENTATION....................................................................................................................... 385.5 PHASE 4: EVALUATION .............................................................................................................................. 39

6 TOOL REQUIREMENTS............................................................................................................................... 40

6.1 REQUIREMENTS FOR TOOLS IN PHASE 0: PREPARATION ............................................................................. 40

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6.1.1 TOOL 0.1: What is a LTA (general introduction) ................................................................................ 406.1.2 TOOL 0.2: Overview of existing LTAs ................................................................................................. 406.1.3 TOOL 0.3: List of links to existing LTA websites ................................................................................. 416.1.4 TOOL 0.4: Typical roles of key players ............................................................................................... 416.1.5 TOOL 0.5: Pros and cons of the different policy options..................................................................... 426.1.6 TOOL 0.6: Key questions before establishing an LTA scheme ............................................................ 426.1.7 TOOL 0.7: Guidebook for LTA planning and implementation............................................................ 43

6.2 REQUIREMENTS FOR TOOLS IN PHASE 1: INITIATION .................................................................................. 446.2.1 TOOL 1.1: LTA planning and implementation timeline and tasks....................................................... 446.2.2 TOOL 1.2: Cost analysis...................................................................................................................... 456.2.3 TOOL 1.3: Target setting and impact assessment calculation examples ............................................ 46

6.3 REQUIREMENTS FOR TOOLS IN PHASE 2:NEGOTIATION .............................................................................. 466.3.1 TOOL 2.1: List of terminology............................................................................................................. 466.3.2 TOOL 2.2: Agreement structure options .............................................................................................. 476.3.3 TOOL 2.3: Model table of content for agreement document................................................................ 476.3.4 TOOL 2.4: Checklist for the agreement document finalisation phase ................................................. 486.3.5 TOOL 2.5: Minimum requirements for reporting ................................................................................ 496.3.6 TOOL 2.6: Examples of marketing material ........................................................................................ 496.3.7 TOOL 2.7: Checklist for LTA scheme visual image design.................................................................. 50

6.4 REQUIREMENTS FOR TOOLS IN PHASE 3: IMPLEMENTATION....................................................................... 506.4.1 TOOL 3.1: Example list of supporting tools for SMEs......................................................................... 516.4.2 TOOL 3.2: Technical questions............................................................................................................ 516.4.3 TOOL 3.3: Examples of yearly reporting............................................................................................. 52

6.5 REQUIREMENTS FOR TOOLS IN PHASE 4: EVALUATION .............................................................................. 536.5.1 TOOL 4.1: Model table of content for evaluation report ..................................................................... 536.5.2 TOOL 4.2: Experiences from existing LTAs, examples of evaluation reports...................................... 53

7 TOOL SUMMARIES....................................................................................................................................... 55

7.1 PHASE 0 : PREPARATION..................................................................................................................... 557.2 PHASE 1 : INITIATION........................................................................................................................... 567.3 PHASE 2 : NEGOTIATION ..................................................................................................................... 577.4 PHASE 3 : IMPLEMENTATION............................................................................................................. 587.5 PHASE 4 : EVALUATION...................................................................................................................... 587.6 TOOLS ABSTRACTS : DISCOVER A DIGEST OF THE TOOLS............................................................................ 59

7.6.1 TOOL 0.1: What is a Long-Term Agreement (LTA) ?.......................................................................... 597.6.2 TOOL 0.2: Overview of existing LTAs ................................................................................................. 597.6.3 TOOL 0.3: List of links to existing LTA websites in Europe ................................................................ 607.6.4 TOOL 0.4: Typical role of key players................................................................................................. 617.6.5 TOOL 0.5: LTAs as a policy option ..................................................................................................... 617.6.6 TOOL 0.6: Key questions before establishing an LTA scheme ............................................................ 627.6.7 TOOL 0.8: Create confidence between partners.................................................................................. 637.6.8 TOOL 1.1: LTA planning and implementation timeframe.................................................................... 637.6.9 TOOL 1.2: Cost analysis...................................................................................................................... 647.6.10 TOOL 1.3: EU legislation and directives ........................................................................................ 647.6.11 TOOL 1.4: Target-setting and impact assessment calculation examples........................................ 657.6.12 TOOL 2.1: List of terminology ........................................................................................................ 657.6.13 TOOL 2.2: Agreement scheme options............................................................................................ 667.6.14 TOOL 2.3: Model table of contents for a long-term agreement ...................................................... 667.6.15 TOOL 2.4: Checklist for the agreement document finalisation phase............................................. 677.6.16 TOOL 2.5: Minimum requirements for reporting monitoring data ................................................. 677.6.17 TOOL 2.6: Examples of promotional material................................................................................ 687.6.18 TOOL 2.7: Checklist for the visual image design............................................................................ 687.6.19 TOOL 3.1: Example of supporting tools for SMEs.......................................................................... 697.6.20 TOOL 3.2: Practical questions........................................................................................................ 69

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7.6.21 TOOL 3.3: Examples of annual reporting....................................................................................... 707.6.22 TOOL 4.1: Model table of contents for an evaluation report of an LTA scheme ............................ 70

7.7 TOOL 4.2: EXPERIENCES FROM EXISTING LTAS - BASED ON EVALUATION REPORTS ................................ 717.8 TOOL 4.3: EXAMPLES OF EVALUATION REPORTS...................................................................................... 71

8 IMPACT OF LTA UPTAKE ON EE POLICIES ......................................................................................... 72

8.1 INITIAL STATUS.......................................................................................................................................... 728.2 CHANGING ATTITUDE ................................................................................................................................ 728.3 CONTINUATION AND EUROPEAN OUTREACH.............................................................................................. 73

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2 IntroductionThe EU LTA UPTAKE consortium builds on the EU Energy end-use Efficiency and EnergyServices Directive (EESD), ratified by the EU Council of Ministers, aiming at 9% energy savingin the period 2008 - 2016. This project firmly supports SME industry and national governmentsin working to achieve this target.

The EU Green Paper and the resulting Energy Efficiency Action Plan proclaim the LongTerm Agreement (LTA) approach as European policy. LTAs are basically voluntary agreementsbetween an industrial association of Small and Middle Sized Enterprises (SMEs) and publicauthorities, expressing a mutual commitment to make an effort improving energy efficiencywithin a pre-arranged term.

This LTA approach has proven to be successful in a number of SME sectors resulting insubstantial energy efficiency improvement, e.g. more than 30% energy savings in a number ofindustrial SME sectors over the past decade.

The LTA is extraordinarily suitable to support the EESD because it guarantees a maximumenergy efficiency improvement against a minimum of regulations, bureaucracy, tax policy andlaw enforcement. It also ensures continuous bookkeeping of energy efficiency improvements asrequired by the bottom-up monitoring of the EESD. LTA is therefore an attractive instrument forthe European SME industry and national governments.

However, experiences on LTA implementation are neither easily accessible for SME industryassociations nor for some national authorities, responsible for GHG reduction in these sectors.

Therefore, the EU LTA UPTAKE project aims to provide a web based toolkit to supportindustrial SME associations and public authorities in the EU in their process of setting up theseLTAs. The toolkit will be formulated from the results of at least 3 pilot LTA processes, to bestarted and finalised during the course of the project. The toolkit will finally be validated by aninternational experts' platform, representing SME associations, industrial experts and decisionmakers. Overall project results will be demonstrated and disseminated in a series of workshops.

This document reports the four major project outputs:1. A review of the typical features of existing LTAs;2. Assessment of LTA experience3. Identified necessary tools4. Tool requirements5. Tool summaries

These outputs have been reported here along a chronologic line of achievements: Starting with anextensive review of existing LTA features and an assessment of experience with these features.This resulted in a set of tools identified to be necessary in the different phases of LTA processing,tool requirements and tool summaries. The main and full description of the tools are to be found

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on the website: www.uptake.eu. In this report the tools are only summarised in a comprehensiveoverview.

Tool development was not a target in itself. Therefore we conclude this report with some resultsof the Action in terms of changing energy efficiency policies and services in the Europeancommunity.

The partners in this project are:

Participant name CountrySenterNovem Netherlands (co-ordinator)Econotec BelgiumSofena BulgariaEnviros Czech RepublicMotiva Oy FinlandCRES GreeceKAPE PolandSTEM SwedenNepas Norway

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3 Review and assessment of existing LTAsThis report is Part 1 of the deliverables from the Work Package 2 in the EULTA Uptake -project.The aim of this Work Package is to present an overview of the status of the agreement schemes inthe partner countries and define the requirements for the Toolkit which will be made in WorkPackage 3.

The aim of this report is to present an overview of the existing long term agreements in thepartner countries, Denmark, UK and Ireland and also to analyse the comments and wishes fromcountries which have not introduced an agreement scheme yet. This material will benefit themaking of the Toolkit.

The report describes the typical features and main experiences from the project partner countries,it also presents the national success factors and some barriers that have been identified. There areexisting agreement schemes also in other countries (France, Switzerland, etc.) but they have notbeen assessed in this project.

The overview is based on interviews of the national experts and on evaluation reports of theLTAs. The country summaries (in the Appendix) have been written by the project partners.

Part 2 of the Work Package 2 reporting describes the LTA preparation procedure and the toolsneeded in the different phases of the agreement lifetime. The report Toolkit requirements hasbeen prepared for only internal use in the EULTA Uptake -project.

The following experts were interviewed for this overview:

Countries with existing LTA

Country Persons interviewed Interviewer

Belgium, Walloon Region

Belgium Flemish Region

Jacques Alexandre, member of theCabinet of the Minister for Energy inthe Walloon Government

Dirk Halet, Fevia (Agrofoodindustries association)

Patrick Degand, Essenscia Wallonie(Chemical industry association)

Laurie Dufourni, Belgian BrickAssociation

Erwin Cornelis (VITO, former headof Audit Covenant VerificationOffice

Georges Liebecq, ECONOTEC

Finland Hille Hyytiä, Ulla Suomi, Motiva Oy Erja Reinikainen, Olof Granlund Oy

The Netherlands Marjan Botman, Ministry ofEconomic Affairs

Frank Das, SenterNovem

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Norway Knut Norvald Knutsen, NorwegianWater Resources and EnergyDirectorate (NVE)

Ronald Fagernes, The Federation ofNorwegian Industries

Paul E. Hartmann, Norske Skog

Hans Even Helgerud, NEPAS

Sweden Camilla Ottosson, Swedish EnergyAgency

Thomas Björkman, Swedish EnergyAgency

Denmark Finn Josefsen, Danish EnergyAuthority

Erja Reinikainen, Olof Granlund Oy(by e-mail)

UK John Huddleston, AEA Technology Erja Reinikainen, Olof Granlund Oy,(by e-mail)

Ireland John O’Sullivan, SEI Erja Reinikainen, Olof Granlund Oy(by e-mail)

Countries with no LTA yet

Country / Long Term Agreementname

Persons interviewed Interviewer

Bulgaria Vladimir Minev, state expert,Bulgarian SME Promotion Agency

Bozhidar Ivanov, Sofena

Czech Republic Josef Zbořil –Confederation ofIndustry and Transport

Ladislav Špaček – Association ofChemical Industry

Vladimír Toman – Steel Federation

Jiří Študent – Czech EnvironmentalManagement Centre

Magda Purkrábková – Association ofGlass and Ceramic Industry

Ladislav Pazdera – Ministry ofIndustry and Trade

Daniel Hájek - Ministry of theEnvironment

Jarmilla Zimmermannová – Ministryof the Environment

Robert Pelka – Ministry of Finance

Petr Holoubek – State EnergyInspectorate

Michael ten Donkelaar, Enviros

Greece Lia Gidakou, Superintendent ofEnergy Efficiency Department,

Harris Andreosatos, Energy PolicyAnalysis Department, CRES

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Ministry of Development

Poland Informal interviews with industrymanagers and government officials.

Miroslaw Semczuk

3.1 LTA Terminology

LTA, long term agreement Also known as voluntary agreement (VA). Voluntaryagreements between authorities and energy use, aimingto improve energy efficiency. Usually there are someadvantages offered by the authorities to the participants,such as energy tax exemptions, subsidies on energyefficiency measures, etc.

LTA scheme The agreement scheme in a country may include severalagreements for different sectors, all having some mainfeatures in common. The main targets, time-frame,administration, monitoring, etc. are usually defined forthe agreement scheme.

LTA preparation procedure The period of the agreement planning when the targetsand commitments are negotiated. The preparation beginswhen the possibilities of establishing an agreementscheme are assessed and ends when the agreementdocuments are officially signed.

key players The organisations involved in establishing and runningan agreement scheme. Usually representatives fromauthorities, industry (or other agreement sector) and theadministrative body (may be an energy agency).Confederation of industries and sector associations areusually involved.

agreement parties The organisations that have commitments in theagreement. The number of parties depends on thestructure of the agreement. Usually there arecommitments for the participating companies,authorities, confederation of industries and sectorassociations.

participant Individual company or organisation joining theagreement, committing to improve energy efficiency.

company Term used for industrial enterprise joining in an

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agreement.

SME Small and medium sized industrial company.

energy audits Assessments analysing the energy use and possibilitiesfor energy saving, reporting energy saving measures.

energy management A systematic and usually documented procedure for theparticipants for monitoring, evaluating and improvingenergy efficiency.

monitoring and reporting A systematic procedure for the participants’ to report ontheir energy consumption to the administrator or otherbody that is responsible for monitoring the overallachievements within the agreement scheme.

evaluation A study carried out by an independent body on thefeatures, coverage, aims, results and other achievementsof the agreement scheme in order to determine needs forimprovements in the existing agreements or in thefollowing generation of agreements.

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3.2 Review of the typical features of existing LTAs

The tables in this chapter are from the summary of the interviews that were carried out amongnational LTA experts in countries with existing LTAs.

The answers from countries that have not been partners in the EULTA Uptake project are shownin the tables in the following chapters in italics.

Many schemes have been recently evaluated and revised (Denmark, Netherlands, UK, Finland).The second generation of agreements are ongoing in Finland, Netherlands, Denmark. New roundwill be started in Sweden in 2009. Agreement schemes are fairly new in Norway (2004) andIreland (2006).

The EULTA Uptake -project has a special emphasis on agreements for SMEs but this overviewcovers all agreements regardless of target sector or company size in the countries mentionedabove.

There are also existing LTAs in other European countries (France, etc.) but these agreementschemes have not been assessed in this project.

3.2.1 LTA features

There are several definitions for long-term agreements, also known as voluntary agreements.In the EULTA Uptake project:

In the EULTA Uptake project LTA’s are basically Voluntary Agreements between an IndustrialAssociation of Small and Medium Sized Enterprises (SMEs) and Public Authorities, expressing acommitment on efforts to improve energy efficiency within a pre-arranged term.

The agreement− is voluntary− has a long-term duration− has a negotiated content− offers carrots for participants and sticks for non-complying

In the Energy Services Directive:

“The voluntary agreements which are covered by this Directive should be transparent andcontain, where applicable, information on at least the following issues: quantified and stagedobjectives, monitoring and reporting.”

“…the voluntary agreements shall have clear and unambiguous objectives and monitoring andreporting requirements linked to procedures that can lead to revised and /or additional measureswhen the objectives are not achieved or are not likely to be achieved.”

The existing agreement schemes have some common features: joining the agreement is voluntary,the agreement scheme has a long time-frame and there are commitments for the participants and

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the authorities, usually involving some kind of carrots and sticks. The agreement type varies andso does the target-setting.

Table 1 Features of the LTA

NE

TH

ER

-LA

ND

S

NO

RW

AY

SW

ED

EN

BE

LGIU

MW

ALL

OO

NR

EG

ION

BE

LGIU

MF

LAN

DE

RS

RE

GIO

N

FIN

LAN

D

DE

NM

AR

K

UK

IRE

LAN

D

the activity is voluntary X X X X X X X X Xthe activity has a defined timeframe (long-term)

X X X X X X X X X

the agreement has beennegotiated between participantrepresentatives (associations)and authorities

X X X X X X

the reference consumption ofthe sector has been defined

X X X X X

the target for energy usereduction has been defined

X X ? X Not inLTA,accountedin overalltarget

(X) X Dependson thesector

X

the target for CO2 reduction hasbeen defined

X Not inLTA,accountedin overalltarget

Dependson thesector

X

there are commitments for theauthorities to support theenergy target achievement (e.g.financial incentives or others)

X X X X X X X X

there are commitments for theagreement partners, forexample on monitoring,reporting and assessment

X X X X X X X X X

3.2.2 Main aims

The countries with LTA schemes have different policy frameworks and instruments but eachcountry has made the agreements work in the national environment. The main aims for long termagreements in the national energy policies of the partner countries is to improve energyefficiency. Some countries have added CO2-emission reduction as an additional target.

Table 2 Main aims for the LTA in the national policy

NE

TH

ER

-LA

ND

S

NO

RW

AY

SW

ED

EN

BE

LGIU

MW

ALL

OO

NR

EG

ION

BE

LGIU

MF

LAN

DE

RS

RE

GIO

N

FIN

LAN

D

DE

NM

AR

K

UK

IRE

LAN

D

Improving energy efficiency X X X X X X X X XReducing CO2-emissions X X X X X (X) X

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3.2.3 Target sectors

Long term agreements are mostly targeted to energy intensive industry (in all interviewedcountries) but in most countries also SMEs can join the agreement or there are separateagreements for SME sectors.

Some countries have also extended the agreements to the service sector (Netherlands, Finland). Inthese cases the service sector has its own sector-specific agreements. It is also possible that thereis a different agreement scheme for municipalities or residential sector (this is the case inFinland).

Table 3 Target sectors for the LTA

NE

TH

ER

-LA

ND

S

NO

RW

AY

SW

ED

EN

BE

LGIU

MW

ALL

OO

NR

EG

ION

BE

LGIU

MF

LAN

DE

RS

RE

GIO

N

FIN

LAN

D

DE

NM

AR

K

UK

IRE

LAN

D

energy intensive industry X X X X X X X XSMEs X X X X X

Bertoldi’s paper on the target sectors of the LTA:

“In many countries (the Netherlands, Ireland, Sweden), there is a different VA scheme for theenergy intensive industry and the less intensive industries (which includes also many of theSMEs). This differentiation is done for two reasons: in less energy intensive industries there isless attention to energy consumption, and good energy management coupled with investment inhorizontal technology (lighting, compressors, motors) would in most cases capture the largestpart of the saving potential; in contrast in the energy intensive industry the major part of thesavings are in industrial processes and thus saving potentials are specific to each process andplant. Moreover in the energy intensive industry there is more attention for energy costs andenergy management.”

3.2.4 Legislation

In some countries there is national legislation connected to the LTA scheme, but it does not seemto be necessary for achieving good results. Finland, for example, has a good experience of a 10-year period of the first generation of agreements which were completely on voluntary basis withno legislation and no remarkable sanctions either. In the Walloon Region of Belgium LTAs areconsidered as environmental conventions and as such are for instance submitted to a publicenquiry before signature.

Long term agreements are mentioned as a tool in the implementation of the Energy ServicesDirective in many of the national energy efficiency action plans (NEEAP) submitted in 2007 tothe European Commission.

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Table 4 Legislation connected to the LTA

NE

TH

ER

-LA

ND

S

NO

RW

AY

SW

ED

EN

BE

LGIU

MW

ALL

OO

NR

EG

ION

BE

LGIU

MF

LAN

DE

RS

RE

GIO

N

FIN

LAN

D

DE

NM

AR

K

UK

IRE

LAN

D

LTA scheme is set up basedon a law

X X X X X X X

Commitments for LTAparties are defined in a law

X X X

3.2.5 Financial incentives

The agreements usually have “a carrot” for the participating enterprises, a financial incentiveprovided by the authorities. It is often mentioned, that a LTA is usually working ascomplementary element to other regulations or financial incentives, as such the LTA is an emptyframework.

If there is an energy tax or a CO2-tax on energy, the participants may be entitled to tax exemptionwhen committing themselves to improving their energy efficiency. Tax reduction or exemption isa powerful element in most cases and a strong driver for joining the agreements. (See alsoChapter 4.6)

There are examples of countries where tax exemption does not exist and the drivers for thevoluntary agreement are different: in Finland the authority subsidises energy audits and energyefficiency investments. In Ireland tailored support and consulting is available for the participatingenterprises.

Table 5 Financial incentives in the LTA offered by the authorities

NE

TH

ER

-LA

ND

S

NO

RW

AY

SW

ED

EN

BE

LGIU

MW

ALL

OO

NR

EG

ION

BE

LGIU

MF

LAN

DE

RS

RE

GIO

N

FIN

LAN

D

DE

NM

AR

K

UK

IRE

LAN

D

Tax reduction / exemption X X X X X X XSubsidy on energy audits X X X X

(CarbonTrust)

Subsidy on energy efficiencyinvestments

X X (X) notlinked toLTA

Reduction on thecontribution to greencertificates

X

Financing to associations fordata collection

X

Tailored support toparticipants

X

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Bertoldi describes the financial incentives connected to long term agreements in the followingway:

“Many of the EU-15 Member States have implemented some form of voluntary agreements intheir industrial sectors. These have taken different forms, and have different legal status. Ingeneral, in all cases there has been some kind of “governmental intervention”: the government asa party in the agreement or endorser of the agreement may support the implementation, orpromise to refrain from introducing additional polices (mainly energy or carbon taxation), or mayoffer rebates (from energy or carbon taxes) or subsidies for energy audits.”

”Two approaches towards LTAs exist in Europe:

• The “mandatory” approach: countries with (existing) CO2/energy tax schemes are using LTAsto justify tax exemptions for energy intensive industry. Typical examples are the Danish,Swedish and UK cases. The LTA scheme in the Netherlands offered industry an easier access toenvironmental permits coupled with R&D incentives.

• The “voluntary” approach: countries with existing energy audit programs or similar supportschemes can use LTAs to design a visible and more flexible and effective framework to achieveenvironmental targets. This is the case in Finland.

In reality these approaches often appear in combination.”

3.2.6 Motivation for joining

The interviews show clearly that the main motivation for companies for joining the agreementscheme is tax exemption or that the threat of future taxation or regulation can be avoided. Theagreements in Finland have no tax exemption as a carrot but the threat of future regulation hasprompted associations and enterprises for a voluntary action.

From an individual participant’s point of view usually the possibility for cost savings is the mainmotivation for joining the agreement. Experiences from energy audits and energy managementschemes prove that there are good possibilities for improving energy efficiency by implementingmeasures with a low pay-back time.

The interview template didn’t give a possibility to choose “green image” as an option inconnection with the question on motivation, but the evaluations of existing LTAs show that formany participants it is important to be in the front line promoting energy efficiency and betterenvironment. Having a positive green image in the media is a business factor which is becomingmore and more important.

At first, enterprises knew that some kind of contribution would be asked to their sector in order toprovide their share in the Kyoto objective. LTAs offered a structure which gave them thepossibility to define their contribution while respecting their freedom in the choice of means tomeet the objective. Now, with time, companies realize that the LTA process offers them theconstitution of an energy management plan, backed by (often subsidized) audits and enablingthem to react adequately in front of sharp increases in energy prices.

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Table 6 Motivation issues for participants to join in the LTA

NE

TH

ER

-LA

ND

S

NO

RW

AY

SW

ED

EN

BE

LGIU

MW

ALL

OO

NR

EG

ION

BE

LGIU

MF

LAN

DE

RS

RE

GIO

N

FIN

LAN

D

DE

NM

AR

K

UK

IRE

LAN

D

energy or CO2 taxexemption

X(large)

X X X X X X

avoid future taxation X X Xavoid regulation X Xlong term guarantee onenergy cost

X

cost reduction / energysaving

X X X X X X

voluntary action forenvironment

X X

Bertoldi’s comments on motivation and financial incentives:

“Voluntary agreements can have different nature, structure, obligations and parties. Priceclassifies them as follows:

1) programs that are completely voluntary,

2) programs that use the threat of future regulations or energy/greenhouse gas emissions taxes asa motivation for participation, and

3) programs that are implemented in conjunction with an existing energy/greenhouse gasemissions tax policy or with strict regulations.

According to Price the first group refers to fairly low-cost incentive programs for participatingentities: government and public recognition, provision of information on energy-efficienttechnologies, government assistance and training in energy management; financial assistance andincentives are provided in some cases such as free or low-cost energy audits or tax exemptionsfor the purchase of energy-efficient equipment.

VAs that use the threat of future regulation or taxes are characterized by the use of easierenvironmental permitting procedures, promise of relief from additional regulations, and avoidedimplementation of energy or GHG emissions taxes.

Finally, VAs may also rely on a combination of some of the incentives used in the completelyvoluntary programs and the implied threat of regulations or taxes programs.”

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3.2.7 Agreement type

The agreements may be company-specific agreements or framework agreements, where theparticipating enterprises join a generic or a sector-specific agreement. There may be separateagreements for energy intensive industry and SMEs although, according to the interviews, thelarge and small companies are usually members in the same sector associations.

The interviews show that the sector association agreements are the most common type. Usuallythere is a framework agreement with different sector-specific action plans or agreements, whichthe enterprises join by signing an application or an accession document. This agreement type istypical for SMEs. The company-specific agreements are mainly applied for energy intensiveindustry.

Table 8 The type of the agreement

LTA agreement type

NE

TH

ER

-LA

ND

S

NO

RW

AY

SW

ED

EN

BE

LGIU

MW

ALL

OO

NR

EG

ION

BE

LGIU

MF

LAN

DE

RS

RE

GIO

N

FIN

LAN

D

DE

NM

AR

K

UK

IRE

LAN

D

company-specific agreementwith authorities

X(Large)

X X X X

company-specific agreementwith energy agency

X

sector associationagreement with authorities

X X X X X X

Bertoldi:

“Having an individual sectoral approach is useful because each individual industrial branch hasits own specific production processes and patterns of energy consumption and the complexity ofboth the individual production processes and the solutions to improve energy efficiency, togetherwith the fact that it is the industry itself that has the best knowledge of the production processesand the technologies required to improve efficiency, makes it difficult to design regulation that isbuilt upon ‘real-life’ thorough knowledge of production processes and flexible enough to adapt tothe different and specific characteristic of each sector.”

3.2.8 Commitments

Most agreement schemes have clearly defined commitments for the participating companies: theyshould meet the defined overall, sector-specific or company-specific targets. The tools that areused in this effort are energy conservation plans, energy audits and energy management. Severalcountries have adopted a verified energy management system as the main tool in the agreementscheme (Norway, Sweden, Denmark and Ireland) or a non-verified system (e.g. Finland).

In only a few agreement schemes the participants are obliged to implement the energy efficiencymeasures pointed out in an energy audit and having a pay-back time shorter than e.g. 5 years.

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Sometimes the target is defined based on those energy saving measures pointed out in an audit,but enterprises are only committed to meet the target - no matter what means they apply.

This is interesting, because the other commitments (audits and energy conservation plans) as suchdon’t save energy.

In most LTAs the targets are defined on company level and the usually the targets are strict (i.e.not flexible) and connected to a certain baseline. The guarantee on that more than business-as-usual improvement in energy efficiency is realised lies in an adequate method for target setting.

All agreement schemes include mandatory reporting on company level and sector level results areaggregated from this data. The aim is that the efficiency of the agreement scheme can bemeasured by using a bottom-up monitoring procedure.

Table 9 Commitments for the participants in the LTA

What are the commitmentsfor participants in the LTA

NE

TH

ER

-LA

ND

S

NO

RW

AY

SW

ED

EN

BE

LGIU

MW

ALL

OO

NR

EG

ION

BE

LGIU

MF

LAN

DE

RS

RE

GIO

N

FIN

LAN

D

DE

NM

AR

K

UK

IRE

LAN

D

To meet the defined targets X X X X X X XTo draw up an energyconservation plan

X X X X X X

To carry out energy audits orenergy analyses

X X X X X X

To implement saving measureswithin a fixed payback

X(<5 yrs)

X X

To establish an energymonitoring procedure

X X X X

To establish an energymanagement system

X X X (X) X X

To have the EMS verified by anaccredited auditor

X X X X

To integrate energymanagement into an existingenvironmental or othermanagement system

(X) X

Regular reporting X X X X X X X X XAnnual self-audit random

check (X) X XImprove energy efficiency inorder to meet a prescribed andquantified objective

X

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3.2.9 SanctionsMost agreement schemes have defined criteria for complying with the commitments andsanctions for the participants in case they fail to meet the commitments defined in the agreement.

The sanctions for not meeting the obligations vary but if tax exemption is used as the carrot, thesanction for not complying is to pay the exempted taxes. The sanction may also be that theparticipant is expelled from the agreement or that the received audit subsidies etc. have to be paidback.

Table 10 Sanctions for the participants in the LTA

NE

TH

ER

-LA

ND

S

NO

RW

AY

SW

ED

EN

BE

LGIU

MW

ALL

OO

NR

EG

ION

BE

LGIU

MF

LAN

DE

RS

RE

GIO

N

FIN

LAN

D

DE

NM

AR

K

UK

IRE

LAN

D

comply / non comply criteriafor fulfilling commitments

X X X associat. X X ? X

penalties for not meetingcriteria (expelled fromcontract, payback ofsubsidies, etc)

X X X X X X X

3.2.10 Energy audits

Energy audits are commonly used as a tool to identify the saving potential in the participatingenterprises. In some countries audits are subsidised by the government but it is not a prerequisitefor using them effectively in connection with the LTA. Usually audits are marketed as ordinaryconsulting services, and they don’t necessarily have a direct connection to utilities or energymanagement consulting.

Finland has had an energy audit programme running for a long time, even before the LTA wasinitiated. Therefore it is natural that energy audits were a key element in the implementation ofthe first generation of agreements.

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Table 11 Energy audits

NE

TH

ER

-LA

ND

S

NO

RW

AY

SW

ED

EN

BE

LGIU

MW

ALL

OO

NR

EG

ION

BE

LGIU

MF

LAN

DE

RS

RE

GIO

N

FIN

LAN

D

DE

NM

AR

K

UK

IRE

LAN

D

there is an ongoing energyauditing programme /scheme in the country

X X X *)

energy audits are subsidisedby the government

X X X X

energy audits are marketedas ordinary consultingservices

X X

energy audits are marketedby the utilities

X

energy audits are connectedto the existing LTA schemes

X X X X X X X

*) One day free assessment for SMEs is possible in a programme which is not connected to the LTA

3.2.11 Tools

A wide range of tools has been developed in the countries with existing LTAs. There are tools forthe administration of the scheme and also tools for the participating enterprises. The latter havebeen introduced in more detail in the BESS-project.

The agreement document, marketing and information material and guidelines for reporting arethe most common tools. Baseline energy use calculations, saving potential assessments and cost-effectiveness estimates exist in many countries at some level but they are not often publiclyavailable tools.

The CCA-scheme in UK has a website called the Participants’ pack, including advice on joiningthe agreement and on what is expected from the participants. The pack consists of severaldocuments and spreadsheets for participating companies and associations.

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Table 12 Existing tools available for the LTA administration (authorities and associations)

NE

TH

ER

-LA

ND

S

NO

RW

AY

SW

ED

EN

BE

LGIU

MW

ALL

OO

NR

EG

ION

BE

LGIU

MF

LAN

DE

RS

RE

GIO

N

FIN

LAN

D

DE

NM

AR

K

UK

IRE

LAN

D

LTA agreement document X X X X X X X XSME’s accession document to theagreement(if a framework agreement)

X X X

sector energy use X X X Xsector saving potential assessment X X Xreference energy use calculation X Xtarget level calculation X X X (X)negotiation material for initial LTAdiscussionssector working group material forLTA establishmentmarketing material X X Xinformation material X X X X Xreporting requirements andformats

X X X X

verification guidelines toaccounting auditors

X X X

Energy management guides, guides on implementing energy audits and examples of sector-specific energy saving measures seem to be the most common tools that are offered to theparticipating enterprises.

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Table 13 Existing tools available for the participants within the LTA

NE

TH

ER

-LA

ND

S

NO

RW

AY

SW

ED

EN

BE

LGIU

MW

ALL

OO

NR

EG

ION

BE

LGIU

MF

LAN

DE

RS

RE

GIO

N

FIN

LAN

D

DE

NM

AR

K

UK

IRE

LAN

D

template for an energyconservation plan

X X (X)

guide on implementing energyaudits

X X X X

call for tender documents forenergy audits

X

energy monitoring template X Xenergy management guide X X X X X X X Xmotivation and training material X X Xprocurement guidelines forenergy efficient purchases

X X (X)

examples of sector specificenergy saving measures

X X X X

contact information list Xparticipant’s pack X

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3.2.12 ResultsAll countries that have introduced an LTA scheme report good results. The agreements have beenaccepted by industry and the coverage is usually good. The reporting also shows thatimprovement in energy efficiency has been achieved.

Table 14 Coverage and results of the LTA in industry

NE

TH

ER

-LA

ND

S1)

NO

RW

AY

SW

ED

EN

2)

BE

LGIU

MW

ALL

OO

NR

EG

ION

3)

BE

LGIU

MF

LAN

DE

RS

RE

GIO

N4)

FIN

LAN

D5)

DE

NM

AR

K

UK

IRE

LAN

D

LTA covered energyuse in industry

85% -90%

12 % 56% 90% 9% (butinadditiontobenchmarkingagreementscovering80%)

85% Energyuse ofthosein LTA329,5TWh

80%

scheme started in 1990(LTA1)2000(LTA2)

2004 2004 2000-02

1997 1996,2002 +EMS

2001 LIEN1993,2006LTA.

planned lifetime 2000-2012

2009(2014)

2009(2014)

2010(2012)

2007 ? 2017 2020+

yearly saving in % 2% 1,7% 3% 1% ormoreeveryyear

4%(heat+fuels inindustry),2%(electr.used inindustry)

1,9% 4%year 1LTA

1) The Netherlands: The yearly saving is an estimate and based on the actual achievement compared to abaseline year2) Sweden: The yearly saving calculated for the participating enterprises3) Walloon region: The monitored saving potential in 2006 was 9,6% since the beginning of the scheme,representing a 1,5% saving per year (not all agreements have the same starting year)4) Flanders region: The scheme is new, so no measured results are available yet. The aim is 4,6% savingin 6 years.5) Finland: The figures are for the first generation of voluntary agreements in industry (1997–2007) at theend of year 2006 (mainly including energy intensive industry). A new scheme (2008–2016) has beenlaunched in the beginning of 2008.

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Bertoldi is somewhat sceptical about the results and emphasises the quality of reporting data:

“It has been commonly reported that national agreements have reached the agreed target, but thekey question remains whether the agreed targets were little more than business-as-usual orwhether meeting the targets implied an additional effort by the industry. Strong support andinvolvement by national authorities, coupled with real benefits for participants, as in theNetherlands or the UK, contribute substantially to the results of the voluntary agreements. Alsoclear and enforceable reporting mechanisms are needed to monitor the voluntary agreements andallow public scrutiny: where these have been applied (e.g. the Netherlands, Belgium, Finland,etc.) the agreements have been better accepted. Public authorities need to check the reportedresults frequently and publish public reports to be discussed with stakeholders.”

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4 Assessment of LTA experiencesThe comments and experiences shown in this chapter have been collected from the interviews ofthe country experts in countries with existing LTAs and in countries with no LTA scheme yet.Also the material from the BESS-project has been used.

Some comments are direct quotes from the answers, some have been edited by the authors of thispaper.

4.1 The successful elements in a LTA

4.1.1 General success factors

The BESS-project identifies some success factors for a long-term agreement scheme:

“Successful elements

− culture of co-operation between industry is a facilitating factor− ability of industry to take collective action− culture of collaborations and sharing information is necessary− regulatory threat is necessary− self regulation aspect (allowing companies to decide how targets are met)− agreements create an umbrella for energy efficiency promotion and a link to other policy

measures− joining an LTA activates companies to strive towards improved energy efficiency− LTAs are efficient from the economic perspective, helping in the realisation of energy saving

potential

Elements of success (listed by Dowd, US Department of energy)

− credible baseline− clear timetable− clearly defined and challenging goals− effective integration of LTA with supporting policy measures− reliable monitoring and reporting− effective involvement of third parties− adequate level of public disclosure and transparency− stable governance− legally binding or credible regulatory threat− sanctioning mechanisms− negative market consequences

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Seven golden rules for voluntary agreements

− good negotiation position of the government− clear and quantified targets− clear timetables− long lasting government support− for large energy intensive companies− physical energy efficiency monitoring− clear monitoring guidelines− independent verification”

To conclude: Initiating a LTA is easier when there is good co-operation between authorities andindustry and when the LTA can be integrated to supporting policy measures. The agreementscheme needs to have effective carrots and sticks, a defined long-term timeline and adequatetransparency. The goals should be challenging but not discouraging. The monitoring procedureshould guarantee confidentiality.

4.1.2 Good communication

A good relationship, trust and open dialogue between authorities and the industrial associations isa key element in the LTA in many countries. When the overall atmosphere is positive and there isroom for new ideas, the negotiations for establishing and developing an agreement scheme are ona solid basis. When the sector associations have a permanent contact to the field and the powerand the mandate to negotiate, the opinion of industry influences the design of the agreements andnegotiation of targets.

There are experiences, however, that at the beginning there was has not been obvious co-operation between authorities and industry but the LTA created the framework for thatcooperation. In particular the administration is now much more aware of problems encounteredby industry and much more supportive of industry.

The advantage of involving sector associations in the design phase is that the associations have agood knowledge of the “field” and usually there is fruitful communication between theassociation and its members. The associations are able to interpret government regulations andguidance and can relay this information to businesses in simpler terms than the authorities. Theagreements should promote energy efficiency without harming competitiveness - therefore theassociations’ voice should be heard already in the early negotiations.

In some countries LTA’s are actually presented by sector associations as a service that theyprovide to their members.

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4.1.3 Simple administration

The experiences about agreement structures show that having different goals or even differentagreement schemes for energy intensive industry and SMEs is better in the long run than havingone overall scheme for a very heterogenous group of participants. Due to more simplifiedadministration and lower running costs, cost-effectiveness is better in framework or collectiveagreements than in individual company-specific agreements.

In the longest-running agreement schemes the administration and routine operations havedeveloped on the way and it has been possible to reduce administration costs by simplifyingroutines. The agreement schemes seem to be good examples of learning-by-doing and of gainingexperience as the agreement scheme progresses.

The oldest agreement schemes have been running from early 1990’s and as the IT-environmenthas developed, introducing electronic tools for reporting, etc. has eased the administrative workload significantly.

The general opinion from the participating companies in the existing LTAs is that the benefits ofthe agreement outweigh the administrative costs on company level.

4.1.4 Motivating targets

The fiscal incentive (usually tax exemption) offered in the LTA scheme is usually economicallymotivating for the participating industries.

It is acknowledged in all countries that usually the LTA raises the importance of energyefficiency within the participating company. Setting company-specific, individual targetsincreases motivation - trying to achieve overall general targets may not be easy.

The commitments in the accession documents / joining agreements must be very precise - there isusually no expertise in SMEs concerning energy efficiency issues. Complicated terminology,unclear targets and too easy or too challenging commitments are not motivating.

4.1.5 Efficient monitoring and reporting

The existing agreement schemes would not be able to show any progress or results without aproper monitoring system. Sufficient resources are needed for developing, maintaining andrunning the monitoring system and for yearly reporting. The continuous need for resources (timeand money) should not be neglected in the design of a LTA.

According to surveys and interviews among the participants the reporting procedure is seen as theheaviest task in the agreement. A reporting procedure using a web-based tool makes reportingeasy and fast, but strict deadlines and good guidelines are needed for getting the participant andsector data in time for the reporting procedure.

The monitoring system handles large quantities of participant data and having the correct input intime requires some effort from all participants.

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4.1.6 Support to participants

When the agreement scheme is in the implementation phase, the associations need sufficientresources to provide support to the participants. Government funding is needed for theassociations to be involved in marketing, data collection, reporting and advisory services - this isnot a high cost compared to the advantages.

One area in the LTA development should not be neglected: involving the participants in thedevelopment work. Financial or other support is needed to special working groups within theLTA in order to create common project opportunities, best practise reviews, BAT technologyinvestigations, etc. The commitment of participants - especially of the forerunners and keyenterprises - in tool development and other joint venture projects is essential in the early phasesof the agreement scheme. The willingness to share information and success stories within thesector or network is very important for the agreement scheme.

4.1.7 Combining to existing activities

In many countries existing energy auditing schemes and energy management schemes have beenused as tools in the LTA. This has proved to be a good way of combining several energyefficiency instruments to act together. Subsidies for energy audits and professional advice forcreating energy management are attracting incentives especially for SMEs.

When an energy management system is required within the LTA, it should be based on the samestructure and terminology as quality and environmental management systems which are familiarto the participating industries already. It is important that energy management is integrated to thedaily routines of the company, it requires participation in energy efficiency improvements by allstaff in normal operations.

The evaluation reports of several LTA schemes mention that the agreement itself - and especiallythe energy management required in the agreement - puts energy efficiency high on theparticipating company’s agenda and helps to raise the profile of energy efficiency withinbusinesses. The contractual status of the LTA ensures that energy saving issues become topicregularly addressed by directorial boards. A good energy saving plan / EMS proves to be usefuland effective when energy prices begin to increase.

4.1.8 Personal enthusiasm

Best practices for LTA design and administration, tool development and reporting can be created,but it is impossible to learn from manuals the organisational commitment and personalenthusiasm that is needed in all key player organisations when a LTA scheme is designed andimplemented. The evaluation reports of several existing LTA schemes prove that withoutpersonal commitment, expertise and communication skills good results would not have beenachieved.

For participating enterprises, commitment from the top management is essential for theimplementation of any energy efficiency improvements. Without real enthusiasm and faith in themission no real results can be expected.

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4.2 The main barriers and weaknesses

4.2.1 General weaknesses

The BESS-project identifies the following barriers:

“Criticism (items from BESS report selected by the authors of the EULTA WP2 report authors)

− monitoring on sectoral level include the influence of structural changes and autonomousefficiency progress

− independent ex-post evaluations are not often carried out to study economic efficiency of theLTA scheme

− transparency: the reporting may not show the real efforts of the participants− soft factors (such as increased awareness of energy efficiency issues) are not considered in

the evaluations− if too much free-riding, LTAs lose credibility− risk of information leakage− extending LTAs to small companies leads to high administration, promotion and monitoring

costs - achieved increase in energy saving is marginal− risk of high negotiation and communication costs

Shortcomings (listed by World Energy Council and presented in the BESS-report)− target setting difficult including complicated baseline considerations− monitoring− independent evaluation− participation of independent third parties− communication to the public”

Bertoldi’s paper mentions the following barriers:

“Along with the advantages of the VA approach discussed above, there are also certain risks, themajor one being that targets are not demanding and reflect little more than business-as-usual(BAU): this may happen in particular in the case of self-regulation or unilateral commitment, ifthe target is not negotiated, or if the public authorities have incomplete information to establishthe saving potential and its costs to industry.

Moreover an open negotiation process, where other stakeholders are invited to comment on thetarget, avoids the conclusion of ‘close’ deals cut between the public authority and industry, whichmay endorse little more than the BAU.

In addition VAs do no assure that targets are met: the only possible remedy to this major flaw ofVAs are sanctions (which have to be substantial and proportionate to non-compliance) and“shame”.

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Furthermore proper monitoring of compliance must be established, and all the reports should beopen for public scrutiny. To avoid under- or non-compliance it is certainly helpful to introducegeneral ‘framework’ targets (e.g. CO2 emissions reduction targets) through legislation and onlythen introduce VAs when it comes to attaining targets.”

4.2.2 Uncertainty in government policies

In many countries authorities prefer to choose regulation as an instrument and there is noexperiences with partnerships between authorities and companies. The policy framework may notprovide the financial incentives to support the agreement scheme (offering carrots that areinteresting to the participating enterprises).

In national policies there may also be a long-term uncertainty in government policy choices - andif industry is willing to initiate LTAs there may not be certainty of the agreement scheme beinglong-lived. There may also be complexities in evaluating the possible results from the agreementscheme if there are several overlapping policies (concerning climate change and energyefficiency) such as emission trading, energy taxes and long term agreements.

The opinion of sector associations is that the policy mix impacting on businesses should be assimple as possible and still provide the required incentives.

4.2.3 Uncertainties in target-setting and cost-effectiveness

The target-setting in the beginning of the agreement scheme may be a strong barrier if there is noreliable information for evaluating the possible saving potential and the cost-effectiveness of thescheme. The associations need reliable data and a risk analysis in evaluating the saving potentialwhen negotiating the targets and the commitments. The sectors may be very heterogeneous andfinding common targets, introducing best practices and benchmarking may be difficult.

The risk is that the targets may not be as challenging as they could be or the targets are notspecific enough. It is important that the targets and fiscal incentives are attractive enough to driveenergy efficiency to the next level. If the authority has no carrots to offer, the participatingcompanies may not see any point in joining the agreement.

Defining the baseline and the absolute or relative savings is complicated and there should beenough data and competence when designing the scheme clear rules are needed. The results maybe difficult to see because complex calculations are needed to incorporate product mix / outputalgorithms and participant entries / exits during the monitoring period. If the agreement schemeand especially the monitoring is not properly planned, the lack of reliable data and rules may leadto difficulties later when trying to evaluate the effectiveness of the scheme.

The main fear in the initiation phase of the scheme is, that the actual effect beyond business-as-usual is very difficult to show, only a proportion of the reported results are usually additionalsavings achieved by the agreements.

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4.2.4 Missing knowledge and tools

The countries with no LTA may not have the knowledge and experience on voluntaryagreements. The experiences on LTA implementation are not easily accessible for SME industryassociations or for national authorities responsible for GHG reduction in these sectors.

The toolkit that will be prepared in the WP3 of the EULTA Uptake -project will consist of anumber of instruments to be selected by an industrial association and/or national government,willing to implement LTAs to achieve its national or sectoral energy efficiency improvementtargets or GHG emissions reduction targets.

The interviews show clearly that there is a need for collecting best practises from other countriesand establishing a promotion platform in the internet. The toolkit should provide a interactiveworking space for the stakeholders and enhance commitment and proactive attitude fromauthorities and industry.

4.2.5 Limited resources in administration

In many countries there is no experience of communication between industry and authority andthere may be a strong prejudice against co-operation. The lack of information, experience andcapacity in the administration and sector associations may also be a barrier.

The participating companies need explanations, technical and financial support to fulfil thecommitments, this means that support from other key players in the agreement scheme is neededand there may not be resources to provide the help. The scheme may not be suitable for smallenterprises and good coverage is difficult to achieve without a high marketing effort in thebeginning. Weak and inactive branch organisations may not be able to promote and market theLTA effectively.

A high administrative cost can be expected in the beginning of the scheme and there may not beresources for doing all the development work that is needed. It may be necessary to proceed stepby step, which makes the design of the LTA scheme even more challenging.

4.2.6 Limited resources in participating enterprises

The sector associations may fear that the commitments in the LTA may lead to high costs insmall companies. Usually the smaller the company, the less there is time and resources for otherissues than the main business. If the resources (human and financial) needed to implement theagreement are underestimated when joining the LTA, the result may be a large number of non-committed participants.

In the participating companies the costs for fulfilling the commitments in the agreements are highespecially when measuring equipment for saving potential verification or verification of EMS areconcerned. Also the cost and time needed to establish, implement, maintain and improve anenergy saving plan or energy management system is considered a heavy burden.

If energy auditing is required, the cost of the audit may be too high compared to the savingpotential found in the audit. In a long-running scheme with goals on continuous improvement it isincreasingly difficult to identify profitable saving projects.

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4.2.7 Confidentiality risks

Some interviews mention the reporting and co-operation having a confidentiality risk. Themonitoring and reporting procedure should be operated by an independent body which isapproved by all key players in the agreement.

There may also be unwillingness to co-operate and share information with other companies in thesame sector, because all companies in the sector are competitors and confidentiality of data isimportant.

4.2.8 Heavy reporting

A proper reporting and monitoring procedure is necessary to prove that the agreement scheme isefficient and reaching its goals in improving energy efficiency - this is a fact acknowledged byall. However, there is some criticism towards the reporting and the procedure is considered as aweakness in many interviews.

The reporting is not a problem if clear rules have been given, how to calculate and report thesavings. The guidelines for the participants on what part of the energy use is included in thereporting must be clear to avoid mistakes and problems in evaluating results. If the reported dataneeds to be validated by external auditors the cost will be high.

The quality of the reporting data may be poor and this will lead to inaccurate and unreliablereporting results. The company-level data should be extensively checked before sending furtherin the reporting procedure and accuracy / sensibility checks are needed in the monitoring systemin order to ensure that data is coherent.

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5 Identified necessary tools

The long-term agreement planning and implementation procedure has been defined along atimeline in order to identify phases of development and the various tasks to be performed at eachstep of the procedure. Tools are thus related to one (or more than one) of the phases identified,and shows the need for tools in the different phases of the LTA scheme lifespan.The following phases have been identified :Phase 0 : PreparationPhase 1: Initiation of the processPhase 2 : Negotiation of the agreementPhase 3 : Implementation of the agreementPhase 4 : Evaluation

Time-frame 12-18 months Time-frame 3…5…9… years

Development of financial incentives

Upkeep & developmentDevelopment of monitoring system

Visual image design

Timetable set Agreement signed Evaluation Go/no-go decisionfor new LTA

MarketingGeneral marketing Marketing of new LTA

Information dissemination

Support to participating companies

Development and pilot projects New projects

NewLTA

4Evaluation

3Implementation

2Negotiation

1Initiation

0Preparation

Go/no-godecision

Phases are briefly described here and relevant tools are identified.

5.1 Phase 0: PreparationThis early phase scans the possibilities of establishing a long-term agreement scheme in thenational framework. The key question in this phase is: are LTAs possible and what are thebenefits of establishing a scheme? At the end of this phase there should be a clear decision: to go(or not to go) forward with establishing an agreement scheme.

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5.2 Phase 1: InitiationThe initiation phase of the LTA design process includes the preliminary negotiations when theimpacts of the possible agreement scheme are evaluated and the roles and schedules in thepreparation process are discussed. The actual content of the agreement is not yet under discussionduring this phase.

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5.3 Phase 2: NegotiationThe negotiation phase concentrates on the preparation of the agreement, its structure, content andthe fine-tuning needed when finalising the agreement documents. This phase also includes morethorough cost-effectiveness and impact assessments. The actual LTA preparation phase ends inthe signing of the agreements.

This phase also includes other activities that are going on in parallel to the actual agreementpreparation – these include marketing of the LTA and the preparation of the monitoring andreporting system.

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5.4 Phase 3: ImplementationThe implementation phase is the operational lifespan of the agreement. It begins when theagreements have been signed and ends when the scheme is either terminated or modified into thenext generation of agreements.

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5.5 Phase 4: EvaluationThe evaluation phase in the LTA lifespan begins at the half-way mark of the LTA lifespan, whenthe first evaluation of the scheme is made. The phase ends when the decision is taken to start anew generation of LTAs or to terminate the agreement scheme.

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6 Tool requirements

6.1 Requirements for tools in phase 0: Preparation

6.1.1 TOOL 0.1: What is a LTA (general introduction)

purpose of tool to describe the main features of a long-term agreement scheme and thekey terminology

potential user of tool anybody, with no earlier knowledge on LTAs

phase of LTA planning when applicable Phase 0 (scanning) and Phase 1 (initiation)

tool-specific requirements must be a very simple presentation of the key issues and mainterminology

accessibility / user interface requirements only for those looking for very general information

needs for updating no needs for regular updating

status of the tool in WP2 draft material for the tool has been made in the EULTA Uptake -projectWP2 and will be developed further in WP3

Assessment of tool pros and cons

+ introduces the key features in very simple terminology, showing the possible parties involved and the benefitsthe agreement scheme brings

+ useful for the parties initiating a LTA and not having any earlier knowledge on the topic

− may seem too trivial information for “advanced users”, definitions are usually very fruitful for hair-splitting

6.1.2 TOOL 0.2: Overview of existing LTAs

purpose of tool to introduce briefly the long-term agreement schemes in the differentEuropean countries

potential user of tool anybody, with no earlier knowledge on LTAs

phase of LTA planning when applicable Phase 0 (scanning) and Phase 1 (initiation)

tool-specific requirements an overall picture of the different LTAs, showing main features withoutgoing into details

accessibility / user interface requirements none

needs for updating will need updating when new LTAs are introduced or revised



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+ introduces the key features of LTAs, different agreement types, showing the parties involved and the benefitsthe agreement scheme can bring

+ useful for the parties initiating a LTA and not having any earlier knowledge on the topic

− does not include detailed information on national policies, cost-effectiveness, sector-specific results, etc. thatthe more advanced reader might expect to find

6.1.3 TOOL 0.3: List of links to existing LTA websites

purpose of tool to present links to existing LTA websites in Europe

potential user of tool anybody, all parties involved in LTA planning

phase of LTA planning when mainlyapplicable

all phases

tool-specific requirements should include the links to the best-known LTAs and to websites inEnglish - the websites in other languages should be marked clearly

accessibility / user interface requirements only for those looking for general information

needs for updating needs regular updating, has links to existing websites that may change



+ “nice-to-know-material” for anybody anytime

+ gives the toolkit user the possibility to look at examples without having to search for links

− the user should know that the existing LTAs are national applications and can not be copied directly

6.1.4 TOOL 0.4: Typical roles of key players

purpose of tool to introduce the tasks the key players in the LTA usually have



Phase 0 (Scanning), Phase 1 (Initiation) and Phase 2 (Negotiation)

tool-specific requirements can the tasks be illustrated in one word or a short sentence, maybe alonger explanation needed as a link to the word

accessibility / user interface requirements could even be one of the main pages from which the user will navigate tothe other tools

should be accessible from different places


status of the tool draft material for the tool has been made in the EULTA Uptake -projectWP2 and will be developed further in WP3


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+ helps the parties involved in the LTA to foresee the need for resources in the planning and implementationphase

+ works as a checklist when evaluating who will take care of which task

− the different roles can be divided between the players in various ways, depending on the resources of theplayers, the structure of the agreement and the culture in the country, so no “state-of-the-art” list can be given

− the user may misunderstand the list as a ready task list to be attached to the agreement - it is just a collection oftasks, not even a full list of all possible tasks that can be handled in many different ways

− if not applied: some task areas may be neglected and when they appear in the negotiations or during theimplementation phase there may not be resources available or this may lead to a delay in the signing in theagreement and to mid-term re-definition of tasks in the agreement

6.1.5 TOOL 0.5: Pros and cons of the different policy options

purpose of tool to describe the differences of energy policy options and to introduce thedifferent types of national policy frameworks where LTAs are in use

potential user of tool all parties involved in LTA planning


Phase 0 (scanning) and Phase 1 (initiation)

tool-specific requirements should be a simple presentation of the main features of the differentpolicies, the possible combinations and overlaps, pros and cons

accessibility / user interface requirements may not interest those working with an existing LTA

is not relevant at the later phases of LTA scheme planning




+ guides the plannerer of the LTA scheme to consider the different options and overlapping policies whenconsidering the drivers for the LTA

+ points out clearly that there are no easy answers and that a country-specific analysis is needed to find the rightsolution

− the policy framework is a strictly national issue and depends on the legislative, economic and politicalenvironment and also the atmosphere and co-operation between the authorities and industry, so no “state-of-the-art” solution can be given

6.1.6 TOOL 0.6: Key questions before establishing an LTA scheme

purpose of tool to guide the LTA planners to evaluate the basic questions and to makejustified and sensible choices from the very beginning

potential user of tool all parties involved in LTA planning , particularly the authority

phase of LTA planning when mainly Phase 0 (scanning)

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applicable

tool-specific requirements the key questions must be carefully chosen in order not to confuse theuser

some of the questions are generic but some depend on the national policyframework

accessibility / user interface requirements for those looking for the very first ideas when considering thepossibilities a LTA scheme could offer




+ defines the very basic questions the key players planning a LTA must agree on in the early phase of theplanning

+ leads to think about the aims and the means by introducing the options and the consequences of the choices

− the user should be familiar with the national policy framework and its options before trying to answer thequestions

− needs a country-specific analysis to find the right solution, the questions and especially the answers depend onthe national environment and no model answers can be given

− if not applied: the main aim and the restrictions set by the national policy framework may not be clear to theparties involved in the LTA planning , key issues may be brought up in the negotiations at a later phase whenthe choices have been made already

6.1.7 TOOL 0.7: Guidebook for LTA planning and implementation

purpose of tool to describe the main phases and tasks of the LTA planning andimplementation



Phase 0 (scanning), Phase 1 (initiation), Phase 2 (negotiation)

tool-specific requirements should be easy to read and to print

accessibility / user interface requirements may not interest those working with an existing LTA

is not relevant at the later phases of LTA scheme planning



the guidebook is a printable version of this report chapter 4 (without thetool specifications)


+ guides the planner of the LTA scheme to consider the different choices that must be made during the planning

+ introduces the experiences from existing LTAs

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+ points out clearly that there are no easy answers and that a country-specific analysis is needed to find the rightsolution

− if not applied: some phases of planning may be omitted and this will lead to extra work, participant complaintsor unpredicted costs at a later phase

6.2 Requirements for tools in phase 1: Initiation

6.2.1 TOOL 1.1: LTA planning and implementation timeline and tasks

purpose of tool to introduce the tasks of the LTA planning and implementation processand the LTA lifetime so that the resources and time needed for theplanning will not be underestimated



Phase 1 (Initiation) and Phase 2 (Negotiation)

tool-specific requirements should be a clear presentation of the different phases in the LTAplanning and implementation

the procedure should be as well defined as possible, showing the tasksclearly but not including too much distracting information

accessibility / user interface requirements possibly one of the main tools in the toolkit

should be accessible via different routes in the toolkit

could even be one of the main pages from which the user will navigate tothe other tools


status of the tool ideas for tool have been listed in the EULTA Uptake -project WP2 andwill be developed further in WP3


+ shows the parties involved in the planning what kind of tasks are ahead and what kind of resources will beneeded

+ a clear presentation of the tasks and the timeframe needed in the planning of a LTA

+ serves as a checklist for the LTA planning in Phase 1 (Initiation) and Phase 2 (Negotiation)

− there are many different national applications of a LTA and the procedure may not show all tasks for a country-specific case

− the user should be familiar with the aim and the general principles of the LTA before starting the planningprocedure

− if not applied: some tasks or areas may be forgotten in the planning process and this may lead to needs for mid-term modifications in the LTA

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6.2.2 TOOL 1.2: Cost analysis

purpose of tool to introduce the main costs in the LTA planning and implementation andto give the LTA parties an idea on how to estimate the cost-effectivenessof the scheme

potential user of tool authority, confederation of industries, sector associations



tool-specific requirements should give a clear picture of the cost elements and the magnitude ofcosts

should include all relevant parameters, be easy to use and generic

the target should be to illustrate the actual EUR per saved TWh figuresfrom different existing LTAs

costs cover mostly working hours and wages may differ much from onecountry to another. Estimates of hours should also provided or referenceshould be made to wage rates used.

accessibility / user interface requirements accessible when you are looking for this specific topic

needs for updating will need updating as there are more experiences from updated and newLTAs



+ gives the LTA scheme planners a realistic approach to the cost-benefit assessment

− the tool can be misunderstood and lead to unrealistically high or underestimated expectations about the cost-effectiveness of the LTA

− this is a tool to be used by very few people, only those looking for this very specific information and whounderstand how it can be used

− if not applied: the costs of establishing and running the LTA scheme may come as a surprise and the scheme has tobe terminated because there is no money reserved for it

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6.2.3 TOOL 1.3: Target setting and impact assessment calculation examples

purpose of tool to give the LTA scheme planners an idea on how to analyse what kind ofresults can be expected and how to calculate the impacts (on energyefficiency, CO2, etc) of the scheme

potential user of tool authority, confederation of industries, sector associations


Phase 0 (Scanning), Phase 1 (Initiation) and Phase 2 (Negotiation)

tool-specific requirements should include all relevant parameters, be easy to use and generic

accessibility / user interface requirements accessible when you are looking for this specific topic


status of the tool calculation examples and tools from existing LTAs


+ gives the LTA scheme planners a realistic approach to estimating the impacts of the scheme

+ examples of existing tools will give a clear picture of what kind of assessments should be made

− the tool can be misunderstood and lead to unrealistically high expectations about the impact of the LTA

− this is a tool to be used by very few people, only those looking for this very specific information and whounderstand what it can be used for

− if not applied: there may be unrealistic expectations of the results that can be achieved by the LTA scheme

6.3 Requirements for tools in phase 2:Negotiation

6.3.1 TOOL 2.1: List of terminology

purpose of tool to help the LTA scheme designers in the negotiations




tool-specific requirements the list should cover the most important concepts and terminologyrelated to LTAs

accessibility / user interface requirements none


status of the tool no draft tool, the list of terminology in this report could be used


+ helps in comprehending the key elements and makes sure that all parties are talking about the same thing

− may seem trivial for those not needing this information

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6.3.2 TOOL 2.2: Agreement structure options

purpose of tool to show the different possibilities of running a LTA, including pros andcons




tool-specific requirements the tool should describe the administrative structure and also thepracticalities on a rough level: how does the company join theagreement, what are the documents to be signed, etc.

should present the pros and cons of the different agreement structures

should include a clear graphic illustration of the options and also of themodules and functions within the different agreement types

accessibility / user interface requirements this is one of the key questions in the early phases of negotiation

should be accessible from different places

should link to the list of FAQ

needs for updating may need updating in case some new agreement structure option comesup

status of the tool No draft for tool made in EULTA Uptake -project WP2

Figures from existing LTAs can be used


+ gives a clear picture of the different agreement structures and the pros and cons

+ illustrates how the different agreement structures function in practice

+ it is important to analyse the different agreement structures in the national environment, what are the pros andcons, what are the resources and which alternative will have the best cost effectiveness

− the user should be familiar with the national framework and the aim and the general principles of the LTAbefore starting the planning procedure

− if not applied: some alternatives may be neglected and the selected agreement structure may not suit the needsand will lead to heavy administration

6.3.3 TOOL 2.3: Model table of content for agreement document

purpose of tool to give an example of the issues to be included in the agreementdocument

potential user of tool anybody, all parties involved in LTA planning , authority


Phase 2 (Negotiation)

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tool-specific requirements the model table of content should be as complete as possible

maybe different versions are needed for different agreement structures?

should include links to existing agreement documents (in English andother languages)

accessibility / user interface requirements should be fairly easy to find in the toolkit




+ works as the first template when planning the agreement document

+ functions as a checklist for what issues should be covered

− the model table of content is a list of things to include in the agreement, the national applications may be verydifferent from the model

− using the model may limit resourcefulness and block off elements that might be useful in the national context

− if not applied: some task areas may be neglected and when they appear during the implementation phase theremay not be resources available or this may lead to mid-term modifications in the agreement or complicatedinterpretations

6.3.4 TOOL 2.4: Checklist for the agreement document finalisation phase

purpose of tool to help the LTA scheme planners when finalising the agreementdocuments

potential user of tool all parties involved in LTA planning , the party in charge of theagreement document planning



tool-specific requirements the list should cover all related aspects and be as complete as possible

accessibility / user interface requirements only for those looking for this specific information




+ helps in scheduling the agreement document planning

+ works as a checklist for the things to do in the final phase of document preparation


− some relevant point may be missed if not included in the list

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6.3.5 TOOL 2.5: Minimum requirements for reporting

purpose of tool to define the minimum level of the monitoring system so that the resultsof the LTA scheme can be shown in progress reporting

potential user of tool anybody, all parties involved in LTA planning , the party in charge of themonitoring and reporting procedure planning


All phases, especially Phase 1 (Initiation) and Phase 2 (Negotiation)

tool-specific requirements the tool must give a clear picture of the different options for monitoringand what is the possible output

the required output from the system should be one starting point

should discuss the different national statistics and other linked reportingtools and the requirements from e.g. the ESD

the costs of the different levels of monitoring should be clearly presented

must be a clear presentation, not too detailed and not too technical butshowing the options and consequences

accessibility / user interface requirements an important element in the LTA planning procedure and also verylikely to be in the top list of FAQ

links to yearly reporting examples?




+ guides the LTA scheme planners to evaluate the different levels of monitoring, the pros and cons involved

+ helps in the modelling of the monitoring level: what are the required outputs and what data is needed as inputto get this output

− establishing a light monitoring procedure may be easy and cheap but the consequences must be seen

− the user should be familiar with the energy use in industry and energy monitoring procedures

− the user should be aware of the reporting procedures already existing in the country and what kind of statisticsare available, when preparing a monitoring system, it is easy to ask for data which is not available

− If not applied: there is the possibility of re-inventing the wheel, wasting resources instead of making use ofexisting ideas and material, or creating a monitoring system that will not serve the desired purposes

6.3.6 TOOL 2.6: Examples of marketing material

purpose of tool to give the LTA scheme planners an idea on what kind of marketingmaterial can be used

potential user of tool anybody, all parties involved in LTA planning , the party in charge of theplanning of marketing material

phase of LTA planning when mainly Phase 1 (Initiation) and Phase 2 (Negotiation)

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applicable

tool-specific requirements list of material with links to the documents

accessibility / user interface requirements should be in a separate folder containing examples and in a subfolder formarketing material

needs for updating needs some updating, new marketing material is produced in severalcountries

status of the tool examples for the tool has been collected in the EULTA Uptake -projectWP2 and will be developed further in WP3


+ examples are useful when preparing material

− language barriers

− if not applied: the experiences from other LTAs are not used and the material preparation may not include allrelevant points of view

6.3.7 TOOL 2.7: Checklist for LTA scheme visual image design

purpose of tool to help the LTA scheme designers to take into account this specific issue

potential user of tool all parties involved in LTA planning , the party in charge of the task



tool-specific requirements should give some ideas for creating the visual image and the guidelinesrelated to using it

should include some examples or links to websites



status of the tool ideas for tool have been created in the EULTA Uptake -project WP2 andwill be developed further in WP3


+ keeps this detail on the agenda, might be forgotten otherwise


6.4 Requirements for tools in phase 3: Implementation

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6.4.1 TOOL 3.1: Example list of supporting tools for SMEs

purpose of tool to give the LTA scheme planners an idea on what kind of tools areavailable and can be developed for the participating companies

potential user of tool anybody, all parties involved in LTA planning , the party in charge of theparticipant support


whenever, negotiation phase

tool-specific requirements either: a list of possible tools from BESS-project

or: a list of existing tools with some explanations about the use, links torelated information on other websites (national LTA sites and othersources)

should include energy management guides, energy auditing guides, etc.

should include the principles of continuous improvement

accessibility / user interface requirements if the toolkit encourages SMEs to look for information, this sectionshould be fairly easy to find

needs for updating needs some updating, new tools are created every year in variouscountries

status of the tool examples for the tool have been collected in the EULTA Uptake -projectWP2 and will be developed further in WP3


+ examples are useful when planning tools, some of the tools may be applicable as they are


− the main users of the toolkit are authorities and associations, not SMEs, the SME user may feel out of place on theLTA website?

− if not applied: there is the possibility of re-inventing the wheel, wasting resources instead of making use of existingideas and material

6.4.2 TOOL 3.2: Technical questions

purpose of tool to give the LTA scheme planners an idea on what kind of technicalquestions will be faced during the implementation of the LTA



whenever, negotiation or implementation phase

benefits to user will give the user an idea what kind of practical and technical questionswill need answers

tool-specific requirements a list of issues to consider

links to examples on existing LTA websites

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accessibility / user interface requirements

needs for updating no needs for updating but some issues may come up in new and revisedLTAs

status of the tool no draft material for the tool has been made in the EULTA Uptake -project WP2 - will be developed further in WP3

Assessment of pros and cons

+ useful when discussing the supporting tools for participants and e.g. when planning the monitoring andreporting system


− if not applied: the questions may come up as a surprise and there are no resources to provide answers when thescheme is already running

6.4.3 TOOL 3.3: Examples of yearly reporting

purpose of tool to give the LTA scheme planners an idea on what kind of yearlyreporting is needed in the LTA



whenever, negotiation phase

benefits to user

tool-specific requirements list of yearly reports with links to the documents

accessibility / user interface requirements

needs for updating needs some updating, new yearly reports are produced in severalcountries

status of the tool examples for the tool have been collected in the EULTA Uptake -projectWP2 and will be developed further in WP3


+ useful when planning the monitoring and reporting system, illustrates the information needs in a LTA

+ shows what kind of effort is needed for processing the monitoring data into an yearly report


− If not applied: there is the possibility underestimating the resources needed for the planning of yearly reports andunrealistic time-schedules may be planned for the reporting procedure

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6.5 Requirements for tools in phase 4: Evaluation

6.5.1 TOOL 4.1: Model table of content for evaluation report

purpose of tool to give an example of the issues to be included in the evaluation work

potential user of tool anybody, all parties involved in LTA planning , the party planning ordoing the evaluation


Phase 3 (Implementation) and Phase 4 (Evaluation)

tool-specific requirements the table of content should be as complete as possible

should include links to existing agreement documents (in English andother languages)





+ helps the LTA scheme administration in planning the evaluation

+ functions as a checklist for the evaluator

− the model table of content is an example of things to be included in the evaluation report, the national interests maybe very different from the model

− using the model may limit resourcefulness and block off elements that might be useful in the national context

− if not applied: it will be difficult to evaluate what kind of things should be taken into account when analysing theproperties of the LTA before planning the changes for the next generation of agreements

6.5.2 TOOL 4.2: Experiences from existing LTAs, examples of evaluation reports

purpose of tool to give the LTA administrators an idea on what kind of evaluation isneeded when modifying and/or planning the next generation of LTAs

potential user of tool anybody, all parties involved in LTA planning , the party planning ordoing the evaluation


Phase 3 (Implementation) and Phase 4 (Evaluation)

tool-specific requirements list of evaluation reports with links to the documents

accessibility / user interface requirements connected to Tool 4.1

needs for updating needs some updating, new evaluation reports are produced in severalcountries

status of the tool examples for the tool have been collected in the EULTA Uptake -project

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WP2 and will be developed further in WP3


+ helps the LTA scheme administration in planning the evaluation

+ works like a checklist for the evaluator

- language barriers

− some of the issues covered in the evaluations are very country-specific and related to the particular application ofthe LTA

− if not applied: it will be difficult to evaluate what kind of things should be taken into account when analysing theproperties of the LTA before planning the changes for the next generation of agreements

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7 Tool summaries

7.1 PHASE 0 : PREPARATION

Tool#

Title Purpose Potential user Phase when applicable

0.1 What is a Long-TermAgreement (LTA)?

Describes main features andkey terminology

Anybody, those withno previousknowledge of LTAs

Phase 0 (preparation)Phase 1 (initiation)

0.2 Overview of existingLTAs

Brief introduction of LTAsin various Europeancountries

Anybody, those withno previousknowledge of LTAs


0.3 List of links to existingLTA websites in Europe

Provides links to existingLTA websites in Europe

Anybody, all partiesinvolved in LTApreparation

All phases

0.4 Typical role of keyplayers

Introduces the tasks ofusual key players

Anybody, all partiesinvolved in LTApreparation

Phase 0 (preparation)Phase 1 (initiation)Phase 2 (negotiation)

0.5 LTAs as a policy option Describes differences inpolicy options andintroduces national policyframeworks where LTAsare used

All parties involved inLTA preparation


0.6 Key questions beforeestablishing an LTAscheme

Guides planners to evaluatebasic questions and makeadequate choices from thevery beginning

All parties involved inLTA preparation,particularly theauthority

Phase 0 (preparation)

0.7 Guidebook for LTAdesign

Present tool : describes themain phases and tasks ofLTA planning and lifespan



0.8 Create confidencebetween partners

Tips and suggestions tocreate confidence andwillingness to cooperatebetween partners


All phases

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7.2 PHASE 1 : INITIATION

Tool#


1.1 LTA procedure timelineand tasks

Introduces tasks for LTAplanning andimplementation process andthe LTA lifespan, so thatthe required resources andtime are not underestimated

Anybody, all partiesinvolved in LTAplanning

Phase 1 (initiation)Phase 2 (negotiation)

1.2 Cost analysis Introduces main costs inLTA planning andimplementation and givesparties an idea of how toestimate the cost-effectiveness of the scheme

Authority,confederation ofindustries, sectorassociations


1.3 EU legislation anddirectives

To identyfy the relevance ofLTAs in relation withEuropean legislation anddirectives


Phase 1 (initiation) andPhase 2 (negotiation)

1.4 Target-setting and impactassessment calculationexamples

Gives an idea of how todecide what kind of resultscan be expected and how tocalculate the impacts (onenergy efficiency, CO2,etc)of the scheme



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7.3 PHASE 2 : NEGOTIATION

Tool#


2.1 List of terminology Helps the designers innegotiations



2.2 Agreement schemeoptions

Shows the variouspossibilities of running anLTA, including pros andcons



2.3 Model table of contentsfor an LTA

Gives an example of theissues to be included in theagreement document

Anybody, all partiesinvolved in LTApreparation, authority

Phase 2 (negotiation)

2.4 Checklist for theagreement documentfinalisation phase

Helps LTA planners whenfinalising the agreementdocument

All parties involved inLTA planning, theparty in charge of theagreement documentplanning


2.5 Minimum requirementsfor reporting monitoringdata

Defines the minimum levelof the monitoring system sothat LTA results can beshown in progress reporting

Anybody, all partiesinvolved in LTAplanning, the party incharge of themonitoring andreporting procedureplanning

All phases, especiallyPhase 1 (initiation)Phase 2 (negotiation)

2.6 Examples of promotionalmaterial

Shows what kind ofpromotional/marketingmaterial can be used

Anybody, all partiesinvolved in LTAplanning, those incharge of the planningof promotionalmaterial


2.7 Checklist for the visualimage design

Helps LTA planners to takeissues into account

All parties involved inLTA preparation, theparty in charge of thetask


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7.4 PHASE 3 : IMPLEMENTATION

Tool#


3.1 Example list ofsupporting tools forSMEs

Gives planners an idea ofwhat kind of tools areavailable or can bedeveloped for participatingtarget groups

Anybody, all partiesinvolved in LTAplanning, the party incharge of theparticipant support

Whenever,Phase 2 (negotiation)

3.2 Practical questions Gives LTA planners an ideaon what kind ofpractical/technical questionswill arise during LTAimplementation

Anybody, all partiesinvolved in LTApreparation, the partyin charge of planningthe monitoring andreporting procedures

Phase 2 (negotiation)Phase 3 (implementation)

3.3 Examples of annualreporting

Gives an idea of what kindof annual reporting isneeded under the LTA

Anybody, all partiesinvolved in LTApreparation, the partyin charge of planningthe monitoring andreporting procedures

Whenever, Phase 3(implementation)

7.5 PHASE 4 : EVALUATION

Tool#


4.1 Model table of contentsfor evaluation report ofan LTA scheme

Gives an example of theissues to be included in theevaluation work

Anybody, all partiesinvolved in LTApreparation, the partyplanning or doing theevaluation

Phase 3 (implementation)Phase 4 (evaluation)

4.2 Experiences fromexisting LTAs, examplesof evaluation reports

Gives LTA administratorsan idea of what kind ofevaluation is needed whenmodifying and developing anew generation of LTAs

Anybody, all partiesinvolved in LTApreparation, the partyplanning orimplementing theevaluation


4.3 Examples of evaluationreports

Gives LTA administratorsan idea of what kind ofevaluation is needed whenmodifying and developing anew generation of LTAs

Anybody, all partiesinvolved in LTApreparation, the partyplanning orimplementing theevaluation


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7.6 Tools abstracts : discover a digest of the tools

7.6.1 TOOL 0.1: What is a Long-Term Agreement (LTA) ?

There is no unique definition of an LTA. There are many different forms that have been used invarious EC Member States: conventions between public authorities and enterprises, with orwithout the involvement of representative associations; sometimes, these are purely one-sideddeclarations by target groups or associations, without the participation of public authorities...

Discover the various approaches, how they differ and what they have in common, i.e.: voluntaryconventions on a defined timeframe, involving commitments from participants.

Go back to table

Other relevant tools :

TOOL 0.2 : Overview of existing LTAs

TOOL 0.4 : Typical roles of key players

TOOL 0.5 : LTAs as a policy option

TOOL 1.1 : LTA planning and implementation timeline and tasks

TOOL 2.1. : List of terminology

TOOL 2.2 : Agreement scheme options

TOOL 2.6 : Examples of promotional material

TOOL 4.2 : Experiences from existing LTAs, evaluation reports

TOOL 4.3 : Examples of evaluation reports

7.6.2 TOOL 0.2: Overview of existing LTAs

This tool reviews and compares the characteristics of LTAs existing in Member States: their mainaims and features, sectors targeted, how LTAs are introduced (or not) into national legislations,what are the motivations for enterprises to join an LTA, and what kind of incentives may bebrought forward to support the promotion of LTAs. The tool also briefly compares the structureof the agreements (company-specific, agreement with associations, etc.) and presents results.

Go back to table

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TOOL 0.3 : List of links to existing LTA websites in Europe

TOOL 1.3 : EU legislation and directives


TOOL 4.3 : Examples of evaluation reports

7.6.3 TOOL 0.3: List of links to existing LTA websites in Europe

This tool includes a selection of websites that provide explanations and materials on the existingLTAs in Europe. However, many are written in national languages.

Go back to table




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7.6.4 TOOL 0.4: Typical role of key players

Traditionally there are four types of players in an LTA: authorities, companies, but also sectorassociations and possibly an independent energy agency or a consulting independent operator.Authorities and companies are parties to the convention and make commitments within theagreement.

The role of sector associations may be very different from one country to another: fromimplementing the basic promotion of the agreement, up to being in charge of a large part of theadministrative burden for the companies, and sometimes collecting data and organising thereporting.

The energy agency or independent agency acts as a link between partners, collecting data,providing the methodological support and ensuring confidentiality of data.

In just a few pages, this tool briefly describes the tasks that can be dedicated to those key players,thus allowing you to select the distribution of tasks most suitable for your country.

Go back to table


TOOL 0.8 : Create confidence between partners

TOOL 2.2 : Agreement scheme options

7.6.5 TOOL 0.5: LTAs as a policy option

This tool describes the legal environment within which the LTA could take place. It reviews thevarious regulations and financial incentives that may exist within national legislations, thenbriefly discusses the motivations and advantages that companies (as well as authorities) may findin joining/implementing an LTA. It also highlights key conditions for successful LTAs.

Go back to table


TOOL 0.6 : Key questions before establishing an LTA scheme

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TOOL 0.7 : Guidebook for LTA planning and implementation

7.6.6 TOOL 0.6: Key questions before establishing an LTA scheme

This tool reviews a list of key questions to be answered before designing an LTA. It helps tocorrectly define the aims of this policy choice.

Questions cover the group of enterprises that should be targeted, the way objectives should beselected and stated, the kinds of incentives that should (or should not) be proposed...

Obviously, Tool 0.6 is primarily designed for authorities, but it may also provide usefulinformation for other parties.

It is advisable to read Tool 0.5 before reading Tool 0.6.

Go back to table




TOOL 2.4 : Checklist for the agreement document finalisation phase

TOOL 2.5 : Minimum requirements for reporting monitoring data

TOOL 3.1 : Example list of supporting tools for SMEs

TOOL 3.2 : Practical questions

TOOL 4.1 : Model table of contents for evaluation reports

TOOL 0.7: Guidebook for LTA planning and implementation

This tool is included here so that the list is complete, but it is the tool you are currently reading.


All tools

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7.6.7 TOOL 0.8: Create confidence between partners

Confidence between participants is crucial in the process of creating an LTA, especially becausethe agreement covers data which may be considered confidential by companies.

The preparation of an LTA, as well as its implementation, brings together people from industryand the administration, who are not accustomed to establishing a common project, or who mayeven have had antagonistic relationships in the past.

There is no common rule for success. Therefore, the tool calls the attention of partners to thatparticular aspect of an LTA preparation and uses examples to show how conditions for initiatingan LTA were met, and how confidence between partners was established.

Go back to table


TOOL 0.4 : Typical roles of key players

7.6.8 TOOL 1.1: LTA planning and implementation timeframe

This tool covers the five phases identified in the development of LTAs as stated at the beginningof the present tool: preparation, initiation, negotiation, implementation and evaluation. For eachphase, it establishes a step-by-step list of tasks, defining the tasks for key actors, and sets theterms of the convention.

The tool is a useful checklist for LTA planners. It includes a very practical table listingsuccessive actions and identifying the workload that each action requires from authorities andindustrial partners alike.

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TOOL 0.7 : Guidebook for LTA planning and implementation

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TOOL 1.2 : Cost analysis

TOOL 1.4 : Target setting and impact assessment calculation examples

TOOL 2.3 : Model table of contents for agreement document

7.6.9 TOOL 1.2: Cost analysis

This tool identifies the various costs incurred during the preparation and implementation of anLTA, as well as the potential profits. The operation is performed for both the Government andthe industrial partners. Estimates of costs and profits are provided, based on LTA experiences invarious EC countries. However, data must be treated with caution, because the situationsencountered in Member States can differ considerably.

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TOOL 1.1 : LTA planning and implmentation timeline and tasks

7.6.10 TOOL 1.3: EU legislation and directives

This tool briefly describes the content and aim of basic EU legislative texts and directivesconcerning energy efficiency and environmental protection. They constitute the legal frameworkwithin which LTAs may be developed. Some of these texts refer explicitly to LTAs as a policyoption that could be applied in order to meet legal requirements.

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TOOL 1.4: Target setting and impact assessment calculation examples

TOOL 2.1: List of terminology

TOOL 2.2: Agreement scheme options

TOOL 2.5: Minimum requirements for reporting monitoring data

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7.6.11 TOOL 1.4: Target-setting and impact assessment calculation examples

The definition of targets must be linked to the availability of data needed to measure whether ornot these targets are met. Targets should be SMART (Specific, Measurable, Appropriate,Realistic and Timed).

The tool reviews what kind of targets may be defined and how progress towards targets may bemeasured. Among other things, it covers the EC EMEEES monitoring methods, the whitecertificates approach and the definition of benchmarks.

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Other relevant tool :


7.6.12 TOOL 2.1: List of terminology

This tool includes a table showing basic definitions that should be clearly understood by allpartners before defining the terms of an agreement. Partners should refer to this list in order toensure a common comprehension of the terms contained in the contract.

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TOOL 0.1 : What is an LTA?


TOOL 3.2: Practical questions

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7.6.13 TOOL 2.2: Agreement scheme options

There is no single method of establishing an LTA. They are generally framework agreementsmade between authorities and sector associations. However, other schemes may occur, dependingon particular interests or conditions. This tool briefly describes various options: framework,company-specific, cluster, generic or even freelance agreements.

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TOOL 1.3: EU legislation and directives

TOOL 2.3: Model table of contents for a long-term agreement

7.6.14 TOOL 2.3: Model table of contents for a long-term agreement

This tool is a very useful and practical tool for preparing the text of an agreement. It lists thevarious articles of the convention and states each of the various items that should be covered.Readers can use it as a basic template, but also as a checklist to ensure that everything is includedin the document.

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TOOL 2.4: Checklist for the agreement document finalisation phase



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7.6.15 TOOL 2.4: Checklist for the agreement document finalisation phase

Let's assume that your agreement has been negotiated, the final text is approved and thedocument is ready for signature. This tool includes a short checklist to verify that all aspects areclear and agreed upon by all partners, to ensure a successful signing ceremony.

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7.6.16 TOOL 2.5: Minimum requirements for reporting monitoring data

Reporting is an essential part of the LTA implementation. This tool guides planners in evaluatingthe different levels of monitoring required, identifying needs, but also calling attention to dataalready available or monitored within the framework of other obligations. Use this tool to designmonitoring and follow-up procedures, avoiding double counting, and avoiding the need toreinvent the wheel.

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TOOL 1.3: EU legislation and directives



TOOL 3.3: Examples of annual reporting

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7.6.17 TOOL 2.6: Examples of promotional material

Promoting LTAs is important to attract new participants, inform authorities and society in generaland make the European Commission and the other Member States aware of the policy taken inyour country concerning energy-efficiency improvements.

This tool identifies a series of promotional materials (brochures, websites, ...) developed invarious EC countries. Most of them are in English.

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TOOL 0.1 : What is an LTA?



TOOL 2.7: Checklist for the visual image design

7.6.18 TOOL 2.7: Checklist for the visual image design

Image design is notably related to the promotion of LTAs. The image also helps in creating aglobal community between all partners to the LTA.

This tool presents a few images used to promote LTAs and includes several recommendations forthe designer.

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TOOL 2.6: Examples of promotional material

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7.6.19 TOOL 3.1: Example of supporting tools for SMEs

EU-LTA Uptake is not the only documentation effort concerning LTAs. This tool identifiesmaterial developed mainly in the EC, which may help SMEs to gain a better understanding of theissues covered by LTAs. They are classified in four categories: general information, examples offormal documents, energy audits, and energy management .

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7.6.20 TOOL 3.2: Practical questions

Refer to this tool at any time during the LTA planning and implementation process. It containsanswers to a set of practical and technical questions that you are likely to face at any time. Itstarts with a set of basic methodological rules and continues with some 30 questions coveringbasic monitoring procedures, follow-up indices, how to take into account changes in product mixor pruduction equipment, plant closure or new partners joining the agreement, energy exportsfrom a site, or renewable energy production.

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TOOL 0.6 : Key questions before stablishing an LTA scheme


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7.6.21 TOOL 3.3: Examples of annual reporting

While Tool 2.5 includes basic requirements that reporting procedures should satisfy, this toolenables you to go further and see how annual reports are designed at company and sector levelsin existing LTA agreements in European countries.

However, many websites referred to in this tool are only available in national languages.

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7.6.22 TOOL 4.1: Model table of contents for an evaluation report of an LTA scheme

The evaluation process is an important step. It provides useful information on successes andfailures, and usually includes a series of recommendations to improve the LTA process or toinitiate a second phase. Because it is implemented at mid-term, the evaluation process may alsohelp to identify potential problems or additional energy-saving possibilities.

Tool 4.1 suggests topics to be covered by the evaluation: did the LTA cover a considerable partof the energy consumption? are results satisactory? how did LTAs modify the national energypolicy framework? how is the process judged by the parties?...

This tool primarily refers to existing experiences and evaluation reports, which are indicated inTool 4.3. An analysis of those experiences is covered in Tool 4.2.

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TOOL 1.4 : Target-setting and impact assessment calculation examples

TOOL 4.2: Experiences from existing LTAs, based on evaluation reports

TOOL 4.3: Examples of evaluation reports

7.7 TOOL 4.2: Experiences from existing LTAs - based on evaluation reports

Tool 4.2. performs a useful synthesis of various evaluation experiences in several Europeancountries. It identifies the main common features, the success factors, as well as obstacles andweaknesses. In a few pages, readers can discover the various advantages that can be expectedfrom LTAs and also become aware of problems and possible ways to resolve them.

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TOOL 4.3: Examples of evaluation reports

7.8 TOOL 4.3: Examples of evaluation reports

Tool 4.3 completes the evaluation process by providing several links to evaluation reports inEuropean countries, specifying the language in which those documents are available.

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TOOL 4.2: Experiences from existing LTAs, based on evaluation reports

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8 Impact of LTA Uptake on EE policies

8.1 Initial statusDirective 2006/32/EC on Energy End-Use Efficiency and Energy Services (ESD) was adopted on5th April 2006 and pointed (in 6.b) that Member States shall “ensure that voluntary agreementsand/or other market-oriented schemes [...] exist or are set up”. Subsequently LTAs have beenincluded in 2/3rd of all National Energy Efficiency Action Plans (NEEAPs) in the EU.

Within this policy framework LTA Uptake was able to deliver its major expected output: 3signed energy efficiency LTAs between:

4. the Swedish National Government and the Swedish association of foundries (presented as apre agreement)

5. the Finish National Government and the Finish Hospitality Association6. the Dutch National Government and the Netherlands Association of Regional Water

Authorities

Experience during the 22 months of LTA Uptake however illustrates also a very reservedattitude of public authorities in non or less VA experienced countries. This regardless manyattempts of the project partners. In contrast with enthusiastic SME sector associations in thosecountries, mainly governments seem to feel the most barriers to bring their NEEAP intentionsinto practice.

Reasons for these reservations were not always very clear. Mostly they could be summarised as:• less priority/capacity in a hectic energy market of last year• unknown, unloved• fear for unpredictable effects on tax incomes and government expenses

More seems to be required than contacting them, invite them to a training and give presentationsto get them in charge and take responsibility to implementing its own NEEAP. For instance byinstalling a legislative framework, financial incentives for potential LTA participants. Or atminimum: to start some pilots and gain some experience on a small scale.

8.2 Changing attitudeOnly during the last months of the EU LTA uptake action, this attitude seems to change in thenon LTA experienced member states: Greece, Italy, Austria, Poland, Czech Republic, Slovenia,Romania and Bulgaria. This as a result of several dissemination and communication activities atnational and international level:

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• The SEW 2009 LTA Uptake toolbox validation conference in Brussels, where the LTAapproach has been appreciated by representatives and experts from governments, energyagencies and sector associations in February 2009

• The Concerted Action, Energy Services Directive 2nd plenary meeting in Vienna 17th and

18th March 2009, where governmental representatives of all member states whereexclusively informed about the LTA concept and supporting LTA Uptake toolkit;

• National conferences in Poland, Czech Republic and Bulgaria in the first half of 2009.• The preparation of a follow up proposal on EU LTA Uptake, named “Voluntary

Agreements by Energy Communities (VABEC).

During these events the value of the LTA concept and the LTA toolbox has been explained anddiscussed with the interested parties.

Another element that influenced the change of attitude was shifting the attention of pilotsrecruitment from a national to a regional and local level of LTA introduction. It was expected thata smaller local scale of LTA introduction makes the concept more surveyable and manageable fordecision makers.

8.3 Continuation and European outreachThe EULTA Uptake consortium used the Covenant of Mayors (CoM) signatories as source ofLTA pilot suppliers. In a mailing all CoM signatories were invited to submit a Letter of Interest(LOI), evidencing the willingness of both public authorities and energy consuming target groupsto start an LTA pilot in a possible follow up IEE action: VABEC.

In the mean time Kape and Enviros continuing their LTA pilot recruitment activities in Polandand Czech Republic at a national level. As a condition of possible continuation of LTA Uptakein VABEC, the possible LTA pilot parties in Poland and Czech Republic were also obliged tosign also an LOI.

These LOIs contains the minimum required common elements to be negotiated in an LTA:

4. SMART (Specific, Measurable, Achievable, Realistic and Timed) targets on energyefficiency improvement or CO2 reduction.

5. a way of periodical monitoring, reporting and evaluation to achieve these targets.6. Incentives and consequences of non compliance.

These pilot recruitment actions finally resulted in 7 LTA pilot projects to be performed in 6European member states with no or only less LTA experience.

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Overview of Letters of Intent of LTA parties.

VABEC aims a snow ball effect of LTA (pilots) all over Europe. After positive IEE evaluation,the Action will start with the 7 pilots mentioned and to be concluded in 7 additional signed LTAs.

Parallel the new consortium will recruit at least 20 more LTA pilots. Therefore two importantpublic authorities network organisations has been included: Energie-Cités and Climate Alliance.Together they are representing almost 3,000 local authorities with energy efficiency ambitions intheir home countries France and Germany but also in all other EU member states.

The partners who are in both LTA Uptake and VABEC represents via the LTA Uptake toolboxalso the long lasting LTA experience in the Netherlands, Finland and Denmark, illustrated in theprevious sections of this report. This experience will be used to support the pilots in lessexperienced member states. The map below illustrates this outreach also in a geographical way.

Member state

Partner LOIs singed between

1 Poland Kape Ministry of Economy Polish Chamber of Chemical Industry

2 Czech Republic

Enviros Ministry of Industry and Trade of the Czech Republic

Confederation of Industry of the Czech Republic

3 Bulgaria Sofena Municipality of Dobrich Regional Union of Backer and Confectioners

Municipality of Santa Perpetua de Mogoda

Stabilit Europa S.L.U (Plastic converter) 4 Spain ANAIP (Spanish Plastic converter Association) Municipality of Alcala la Real Deprosa Film S.L. (Plastic converter)

5 Greece Regional Energy Agency of Crete

Region of Crete Directorates of Primary and Secondary Education

6 Italy Municipality of Corciano

Municipality of Corciano 2 SME organisations, 2 Traders organisations and Consumer organisation

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At this moment the LTA approach urgently needs more success stories. Not only in some NorthWestern Member States, but much more in countries which have not an extensive VAexperience. The proposed project aims to collect such success stories to ease the convincing ofother potential LTA parties in neighbouring countries, regions and local authorities via their ownnetworks, but also via international networks like e.g. the Covenant of Mayors, internationalchambers of commerce, European sector organisations of regional and local public authoritiesand networks of energy agencies like EnR.

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