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Energy efficiency target setting Experience at world, european and french levels

II Latin American and the Caribbean Energy Efficiency Seminar-FIER 27-29th October 2009; La Havanne , Cuba. Energy efficiency target setting Experience at world, european and french levels. Dr Didier Bosseboeuf; ADEME (France) Bruno Lapillonne Enerdata (France). 1. Agenda. Introduction

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Energy efficiency target setting Experience at world, european and french levels

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  1. II Latin American and the Caribbean Energy Efficiency Seminar-FIER 27-29th October 2009; La Havanne , Cuba Energy efficiency target setting Experience at world, european and french levels Dr Didier Bosseboeuf; ADEME (France) Bruno Lapillonne Enerdata (France) 1

  2. Agenda Introduction The need of target setting What type of target are used? EE Target implementation over the world (WEC study on energy efficiency) The european experience on target setting (the ODYSSEE and EMEEES projects from the EU) The Energy Service Directive target Principles Methodology (TD versus BU) The triple objective 20, 20, 20 in 2020 Sectoral targets in France Conclusion

  3. WEC recommands to set up a monitoring system including the setting up of energy efficiency (EE) target. “Monitoring the impact of measures through target setting, ex-post evaluation, as well assessment of energy efficiency trends through indicators should continue and be strengthened so as to reveal possible shortfalls”. At EU level (ie; at regional level), there are several EE targets. Many countries introduced EE targets as part of the energy efficiency law. A target is important to motivate professionals and to monitor results of the EE policies. The need for an energy efficiency target

  4. Characteristics of the energy efficiency targets There are mainly 3 different definitions or concepts of EE target. The last one is the most stringent one because it includes the effect of the activity. Energy intensity improvement Energy savings (levels of improvement, total versus policy related savings, top down or bottom up) Energy demand improvement Indicative versus binding target Coupled or not with CO2 and renewables Global or sectoral, regional or national Different times horizons. More stringent for long term. Generally 2010; 2020 and 2050. Dynamic Sexy Politically acceptable and endorsed

  5. The world implementation of target Results from the WEC/ADEME survey

  6. 2007 WEC survey on energy efficiency policies: 76 countries Europe : 32 Middle-East: 5 America: 9 Africa :12 Asia-Pacific : 17

  7. WEC survey : energy efficiency programmes with quantitative targets • Increasingly programmes include ambitious quantitative targets: • that generally require yearly monitoring and reporting obligations • Slightly less than half of the countries have a national programme on energy efficiency with quantitative target : • around 55% in OECD and non OECD Asia • much less in other regions • In all EU countries: indicative new energy saving target of 1%/year • In addition most Annex 1 countries have national strategy for CO2 reduction

  8. WEC survey : Mode of expression of policy targets • Rate of energy savings or efficiency improvement: EU-ESD, Netherlands,Slovenia, Spain, New Zealand, Japan, Vietnam (Sweden for buildings, UK for households, Mongolia for energy sector) • Volumes of energy savings(in GWh, Mtoe): Spain, France, Italy, UK, Norway, Iran, Sri Lanka, Philippines, Thailand, Algeria, Morocco, Tunisia • Rate of energy intensity decrease(%/year or %): e.g. France, Germany, Bulgaria, Czech Rep., Hungary, Russia, China, Taiwan China, Tunisia) • Rate of reduction in energy consumption(%) (e.g. Finland, Switzerland, Korea) • Energy consumption elasticity(e.g. Estonia, Thailand, Indonesia)

  9. Variation of primary energy intensity by country in Latin America (1990-2008) (%/year) Source: Enerdata

  10. A dynamic target ? Energy intensities are generally decreasing with development and converging … except in non OECDoil producing countries and in some countries with significant energy resources (e.g. Thailand, Brazil) Final energy intensity trends and GDP per capita* Source: Enerdata *Variation between 1990 and 2006

  11. The european experience on EE target setting The Energy service directive target The triple 20 target

  12. The Energy Service Directive Target: Article 4 and Annexes I, II, Indicative target, but the reporting of its monitoring is mandatory in the National Energy Efficiency Action Plan (NEAP) Measured as from 1.1.2008. 9-year 9% target (cumulative annual savings). Intermediate target for 3rd year. Base for calculating target is 5-year average of unadjusted final consumption (no climatic corrections) Conversion table in Annex II (2.5 for electricity or 1 or national coefficient): Early actions initiated not earlier than 1995

  13. The Energy Services Directive Target: Cumulative savings (Example) target savings 9% of reference consumption reference consumption = 5 years average Note: indicative estimates based on 2001-2005; 2006-2016 estimated

  14. Measurement & Verification (M&V) of the ESD target Top-down systemsof energy efficiency indicators can shown past improvements, including effects of horizontal measures and market transformation. Bottom-up calculationsof energy efficiency measures to show estimated or metered impact of measures taken. Benchmarkingof selected energy efficiency indicators (including from bottom-up measures and top-down systems).

  15. The ESD M & V with Bottom-Up: Pros and Cons Bottom-up promotes pro-active policy approach. Bottom-up works ex ante, i.e. no statistical lag. Bottom-up is closer to “real savings”. Can be used in all end-use sectors, starting with residential and tertiary (using EPBD databases), followed by industry, then transport Early actions can be modelled bottom-up (e.g. MURE). Bottom-up will require simplifications (average or discounted lifetimes); some flexibility needed for lifetimes & values of measures to reflect different national conditions. Re-bound effects can be modelled, based on studies Risk of double counting.

  16. ESD M & V with Top-Down: Pros and Cons Top-down can be complement for horizontal measures. Top-down (e.g. ODEX) needs refining for some parts. Top-down include market transformation/multiplier effects (“spill over effect”) and free-driver effects. Top-down can help track reinforcing/interaction effects. Account for the impact of price changes, that may need to be evaluated

  17. Top-down evaluation method: what the directive says about the savings to be considered? Industry to exclude ETS establishments: need to adapt the industrial consumption (statistical issue not methodological one) “Adjustments to be made for extraneous factors, such as degree-days, structural changes, product mix, etc. to derive a measure that gives a fair indication of total energy efficiency improvement” already made in ODYSSEE some improvements could be made for “hidden structure effects”,but often constrained by data availability in a sufficient number of countries “Energy savings target of 9 % … to be reachedby way of energy services and other energy efficiency improvement measures” ODYSSEE calculate total energy savings  how to only get savings linked to energy services and policy measures? In other words, how indicators should be cleaned from factors not linked to energy services and measures?

  18. Summary of effectsto be cleaned from total energy savings and not linked to ESD eligible measures Hidden structure effects Total energy savings from top down evaluation Price effect Autonomous progress Direct rebound effect ESD energy savings from top down evaluation Old/other policies

  19. Methods to remove other factorsfrom total top-downenergy savings Estimation of energy savings in year t (e.g. 2012) Step 1 Step 2 Step 3 Total savings minus trend and price savings Savings from measures and taxes (ESD° Total energy savings Savings from taxes Econometric estimates

  20. Adjusted final energy intensities (2006/2007) Final energy intensities adjusted for differences in prices (ppp),climate and industry & economic structures narrow difference between countries

  21. The target should be different across countriesdue the large gap among EU countries in the overall energy efficiency trends, despite convergence in economies and P&Ms implementation For 5 countries , energy efficiency improvement around 2%/year since 1997 10 countries with improvement higher than 1%/y. 4 countries without improvement. The ESD target

  22. The triple objective 20;20;20 in 2020 of the EU action plan In the EU climate change action plan, the EU has defined a triple objectives towards the year 2020. 20% reduction of CO2 emissions from 2000 20% of penetration of renewables at final end uses 20% of energy savings The 2 first objectives are mandatory, and are combined with a burden sharing system which have been hardly negociated among Members states. The energy efficiency isonly indicative The easyness for reaching each of the target depends on the national circonstancies (ex nuclear in France, hydro in Sweden, reneables in greece etc). However, in general, the CO2 target and renewables targets cannot be reached if the energy efficincey target is not reached first, particularly for countries with few fuel substitution potentials.

  23. The complex methodology for the 20% energy saving target calculation of the EU action plan

  24. Methodology of the 20% energy saving target at 2020 GDP growth: what consumption would be if energy intensity remained constant over the period of its value in 2005 (forecast is an annual GDP growth rate of 2.3%) Structure change: consequence of energy intensity decreasing due to economic activity structure effects (in particular more tertiary and less high consuming industries) Autonomous: effect of the decrease in energy intensity due to the natural replacement of technologies and the consequences of increases in energy prices Past policies: effect of the application of European directives up to 2006 New policies: effect of the directive on energy efficiency and energy services New policies beyond the directive: policies and new measures required to achieve the 20% target in 2020

  25. The sectoral targets The example of the “grenelle de l’environement” round table (France)

  26. The target setting could be based on sectoral targetsdue to the different trends across sectors18% energy efficiency improvement since 1990 (or 1.2%/year) in the EU-27 Larger gains in industry Few progress for households and transport

  27. Benchmark in the EU depends on the sectorEnergy efficiency improved on average by 1.7 % per year in industry in EU-27 countries since 1997 , but quite unevenly across countries . No progress in 3 countries (Italy, Spain, Malta) Lithuania, Poland and Bulgaria above 5%/year

  28. Benchmark in the EU depends on the sectorLarge discrepancies in the energy efficiency trends for households due to national circumstances (e.g. energy price, income and policies level)

  29. Adjustment of final energyintensity) Final energy intensities adjusted for differences in prices (ppp),climate and industry & economic structures narrow difference between countries (EU=100) (2006) EU-27 =100 Malta, Cyprus: non adjusted to EU climate; specific adjustments for Finland (industry) and Luxembourg (Transport)

  30. Freight transport target in France Increase off road transport market share from 14 to 25% to 2020 Enhancement of road transport Ecodriving, non-stop toll Ecotax per Km in 2011 Toll modulation according to Euro standard Support to rail transport: investments policy Investments increasing by 400M€ / year Railtracks capability for 1000m trains New services policy 3 Rail highway for trucks High speed freight trains Development of short haulage rail companies Support to inland waterways transport 4 billion € Support to fluvial transport investments (Seine- North Europe) Support to maritime transport (short sea highways) Port capacities development Improvement of rail and waterway capabilities with their hinterland 5 to 10% modal shift from road concerned

  31. Passenger transport targets High speed trains :european interconexion policy 2000 km of high speed tracks increase by 2020 2500km more to be defined Urban & suburban public transports investment policy From 300 to 1800 km of TCSP (other than Greater Paris) 18 billion € of investments First call for tenders : 36 towns, 50 projects, 365km, 6 billions € investment, 800M€ public funding Greater Paris Plan : improvement of existing network +130km new automatic metro Air transport (self supporting action) R&D program Reducing energy consumption per pass.km by 50% Reducing Nox emission by 80% Reducing noise by 50% Improvement of LTO procedure Improved cummuting with HST and urban transport No more new airport if an alternative HST exists Cars : cut off CO2 policy From 176 g CO2/km (fleet average) to 130 g in 2020 Average new vehicles in 2012 : 120g Specific program for carbon free vehicles (HEV & EV) : R&D, infrastructure, fleets

  32. Target in the transport sector High speed trains : 2000 km increase by 2020 Urban & suburban public transport : from 300 to 1800 km of TCSP (otherthanGreater Paris) 18 billion € of investments Cars : From 176 g CO2/km (fleetaverage) to 130 g in 2020 Average new vehicles in 2012 : 120g Increase of rail transport marketsharefrom 14 to 25% to 2020

  33. Conclusion : trends in target settings Growing use of target setting at national or regional level; More and more targets included in the national energy efficiency law; More and more targets expressed in terms of energy savings or energy demand stabilisation rather than in energy intensity terms; Sometimes target are mix (C02, renewables efficiency); Generally indicative instead of binding target due to the difficulty to get of political agreement on the methodology to M&V energy efficiency achievement and to fiw penalties; A regional binding target may lead to a burden sharing; The target becomes more stringent as far as the time horizon is longuer; Growing importance of sectoral target generally expressed in physical terms (gCO2/km), 50 Kwh M2); Targets are technicaly assessed trough the use of observed trends of energy efficiency indicators and energy saving potential assessement; However , a target setting even if it should be based on sound technical background is above all a political exercice. The political acceptance by stakeholders is crucial.

  34. Conclusion : a target is not always reached France & Portugal alone have reached the EU CO2 target 2008 for cars 140

  35. Thank you for your attention and for participating the survey (questionnaire answer) For more information: www.worldenergy.org www.ademe.fr www.odyssee-indicators.org

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