Italian white certificates scheme Rino Romani ENEA Environment Department

Italian white certificates scheme Summary: Energy efficiency decrees Eligible projects White certificates Sanctions Measurements and verification of energy savings Main results

Casaccia Italian economy’s energy intensity

Casaccia Energy efficiency decrees (1/6) Issued in April 2001 Innovative strategy that combines a command and control approach with a market based instrument

Casaccia Energy efficiency decrees (2/6) Distribution System Operators * (DSO) are required to achieve quantitative targets of energy efficiency improvements in end- uses The way for achieving these objectives is left to the market forces (energy efficiency titles or white certificates) * < customers at Dec. 2001

Casaccia Energy efficiency decrees (3/6) On July 2004 was issued an amended version of the two decrees with the following main changes: –Modifications in the distribution of annual quantitative targets; –Postponement of the implementation period (from 2005 to 2009) –Introduction of flexible mechanism in the deadline for achieving the annual savings

Casaccia Energy efficiency decrees (4/6) Annual Targets (Mtoe) electricitygas yearannualcomulativeannualcomulative 20050, ,10,20,10, ,20,40,20, ,40,80,30, ,81,60,61,3

Casaccia Time persistence of energy savings

Casaccia Energy efficiency decrees (5/6) The annual target (*) for each DSO at (t) year is proportional at the share of energy distributed in the year (t-2) by each distributors (*) at least 50% of savings must be achieved in the field where DSO works

Casaccia Energy efficiency decrees (6/6) Energy saving targets can be achieved through projects implemented by: –DSO, directly or via controlled companies –Energy Service Companies (ESCOs)

Casaccia Eligible projects All energy saving projects

Casaccia Energy Efficiency Titles (TEE) or White Certificates (WhC) 1 WhC for 1 toe of saved primary energy

Casaccia White Certificates (WhC) WhC are issued by Electricity Market Operator (GME) once it has been certified that a defined amount of energy saving will be attained by project implementation

Casaccia Typology of WhC Type 1: certificates savings of electricity Type 2: certificates savings of gas Type 3: certificates savings of other fuels

Casaccia Sanctions proportional and in any case greater than the investment needed to compensate the non- compliance established and applied by the Authority for Electric Energy and Gas (AEEG)

Casaccia Process to recognize energy saving Implementation of the project Request of verification Assessment and certification Issue of WhC Exchange of WhC Transfer of WhC to AEEG Economic contribution DSO and ESCO Entitled project AEEG GME DSO and ESCO DSO AEEG to DSO Phases and Actors

Casaccia Measurements and Verification of energy savings (M&V) The definition of technical rules, the implementation, monitoring and enforcement of the whole mechanism are under the responsibility of the Authority for Electric Energy and Gas (AEEG)

Casaccia Measurements and Verification of energy savings (M&V) The AEEG developed three evaluation methods: –Default method (no measurement; installed units are considered according to their average energy saving) –Engineering method (some measurement of technical features) –Energy monitoring plan (direct measurement of consumption before and after the project)

Casaccia Measurements and Verification of energy savings (M&V) Project threshold (Mtoe/year) Method DefaultEngineeringEnergy monitoring DSO/ESCOs 25 ESCOs50100 DSO100200

Casaccia First year period (2005) (1/2) Main results: 300 projects implemented; 0.28 Mtoe of energy saving achieved (with respect to a target of 0.15 Mtoe); 0,75 Mton of CO2 reduced (equivalent to a CO2 emitted from a central power of 160 MW)

Casaccia First year period (2005) (2/2) Main results: about 50% of projects have been implemented by distribution system operators, while the other 50% by ESCOs; more than 400 ESCOs achieved the authorisation to operate in the scheme by the Regulatory Authority

Casaccia Second year period (2006) Target: about toe of energy saving of which: in the electricity sector in the gas sector

Casaccia Measurements and Verification of energy savings (M&V) On January 2006, in implementation of the Ministerial Decrees, the Authority has decided to draw on the services of ENEA (Italian National Agency for New Technologies, Energy and the Environment).

Casaccia Measurements and Verification of energy savings (M&V) The main activities carried out by Enea will be: 1)technical verification and evaluation of the projects; 2)monitoring to ensure that the energy saving projects under evaluation are being implemented correctly; 3)the adoption and up-dating of detailed, standardised technical worksheets for use in evaluating projects and quantifying results.

Casaccia Italian white certificates system Thanks for your attention