ITALY - Case Example EE Policy measure: INFORMATION Category: EE CERTIFICATES GENT Meeting- April 2003

NEW POLICY FRAMEWORK-1 TWO TWIN MINISTERIAL DECREES ON ENERGY EFFICIENCY (24 April 2001) Mandatory quantitative energy savings targets at national level ( Primary energy ) Specific targets on each Electric Energy and Gas Distributor

NEW POLICY FRAMEWORK-2 Target annual compliance control by Regulatory Authority of Electricity and Gas (AEEG) - sanctions for non compliance Energy Efficiency Certificates (EEC) Energy Efficiency Certificates (EEC) certificates issued by AEEG to Distributors and Escos Institution of an EEC market

National targets uMandatory quantitative energy savings targets at national level uMandatory quantitative energy savings targets at national level (Primary energy) YearTargets [Mtoe/yr] ElectricityGas 20020,10 0, ,50 0, ,900, ,201, ,601,30 uAt least 50% via a reduction of electricity and gas end-uses uImplementation: Authority for Electricity and Gas (AEEG)

Distributors’ targets -1 uSpecific targets on each Distributor Threshold: > customers as at Apportioned on the basis of the quantity of electricity/gas distributed to final customers compared to the national total, in the previous year 50 % minimum via reduction of electricity and gas consumption Specific regional targets can be added by Regional Administrations

Distributors’ targets -2 uAnnual compliance control by AEEG uSanctions for non compliance (Proportional and in any case greater than investments needed to compensate the non- compliance)

Energy Efficiency certificates (EEC) uIssued by AEEG (unit: tep) uTo distributors and ESCOs uEx-post and on annual basis after verification of energy savings achieved uTradable via bilateral contracts or in the EEC market uBanking allowed over five years

ELIGIBLE PROJECTS Targets have to be achieved via the implementation of energy savings projects uOnly demand-side actions uIllustrative list of 14 classes of projects (with more than 35 sub-classes) uMaximum lifetime: 5 year uSupply-side project not eligible

Actions in charge of Distributors -1 u Prepare an optimised plane for projects/programs implementation ( according to Autority indications ) taking into account costs/benefits evaluations u Choose third society for agreements ( Escos, commercial apparata networks..)

Actions in charge of Distributors -2 u Organise promotion actions towards clients (information, incentives, financing..) u Organise the collection of the required data for energy savings evaluation

Actions in charge of Distributors -3 uDocument the results and submit the documentation to the Regulatory Authority for Electricity and Gas for certification uNegotiate purchase or selling energy efficiency certificates in the new EEC market

CASE DESCRIPTION -1 u Program sponsor u Program sponsor: Energy Distributors/Escos u Dates u Dates: Start 2001End 2006 u Market actors u Market actors: End Users ( Industrial, Residential, Commercial )

CASE DESCRIPTION -2 u Technologies Targeted u Technologies Targeted: see table u Policy measure employed u Policy measure employed: Information- EE certificates (+ subsequent other measures: incentives, financing...) u Status of documentation u Status of documentation: ex-ante evaluation methods defined, balanced data not yet available

EVALUATION METHODS -1 Three valuation approaches: uDEFAULT APPROACH (ex-ante energy savings evaluation - no on-field measurements) uENGINEERING APPROACH (some on-field measurements required) uENERGY MONITORING PLAN (subjected to pre-approval)

EVALUATION METHODS -2 Consideration of: ufree riders udelivery mechanism upersistence of savings

BASELINES u SUBSTITUTIONS u NEW INSTALLATIONS

BASELINES-Substitutions Hypothesis: savings evaluated for the same given energetic service substituted Technology substituted Technology more diffused Technology more diffused Technology representative average Technology in use representative average Technology in use

BASELINES-New installations Energy savings=  Energy Consumption between: ubetter existing technology /immediately lower technology (ex. Boilers 4 and 3 stars) u better existing technology / average technology on the market or more diffused technology (ex. Refrigerators, dish-washers..)

Programs /ex-ante evaluation methods

Programs /ex-ante evaluation methods

Programs /ex-ante evaluation methods

INDICATORS -1 u SPECIFIC GROSS PRIMARY ENERGY SAVINGS SGprE [tep/year /physical unit] u Gross Savings to be corrected in order to take into account: Ü natural trends of diffusion Ü impact of delivery mechanism different than installation Ü persistence of savings (proposed % with respect to the previous year) Ü life cycle of energy consuming apparata (generally non considered for long life apparata)

INDICATORS -2 Gross savings to be corrected by at least two factors: -a) free riders -b) delivery mechanism ( i = i th delivery method) [a and b to be defined after consultation] uNet Specific Primary Energy Savings (i th delivery method ) NSprE = SGprE (1 – a – bi)