The white certificates scheme in Italy: how it works

White certificates in Italy

Dario Di Santo, FIRE

Berlin, 8 September 2014

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www.fire-italia.org

The Italian Federation for the Rational use of Energy is a no-profit association founded in 1987 that promotes energy efficiency, supporting energy manager, ESCOs and other companies dealing with energy. !Besides the activities directed to its nearly 450 members, FIRE operates under an implementing agreement with the Ministry of Economic Development to manage the Italian energy manager network since 1992. !In order to promote energy efficiency FIRE cooperates and deals with public authorities, energy technology and service companies, consultants, medium and large consumers, universities and associations to promote best practices and improve the legislation. !FIRE manages SECEM - an accredited body - to certify the Energy management experts according to the standard UNI CEI 11339.

FIRE: the association for energy efficiency

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www.fire-italia.org


Some members of FIRE:

ABB S.p.A. - Acea S.p.A. - API - AXPO S.p.A. - Banca d'Italia - Banca Popolare di Sondrio - Beghelli S.p.A. - Bticino S.p.A. - Finlombarda S.p.A. - C.G.T. S.p.A. - Citroën Italia S.p.A. - Comune di Aosta - Comune di Padova - Comune di Savona - Comune di Venezia - Cofely S.p.A. - CONI Servizi S.p.A. - CONSIP S.p.A. - Egidio Galbani S.p.a. - ENEL Distribuzione S.p.A. - ENI S.p.A. - Ferrero S.p.A. - Fiat Group Automobiles - Fiera Milano S.p.A.- FINCO - FIPER - GSE S.p.A. - Guerrato S.p.A. - Heinz Italia S.p.A. - Hera S.p.A. - Intesa Sanpaolo S.p.A. - ISPRA - Italgas S.p.A. - Lidl Italia s.r.l. - Mediamarket S.p.A. - Nestlè Italiana S.p.A. - Newco Energia S.p.A. - Osram S.p.A. - Pirelli Industrie Pneumatici S.p.A. - Politecnico di Torino - Provincia di Cremona - Provincia di Firenze- RAI S.p.A. - Raffineria di Ancona S.p.A.- Regione Autonoma Friuli Venezia Giulia - SAGAT S.p.A. - Schneider Electric S.p.A. - Siemens S.p.A. - Siram S.p.A. - Sorgenia S.p.A. - STMicroelectronics S.p.A. - Telecom Italia S.p.A. - Trenitalia S.p.A. - Turboden S.p.A. - Università Cattolica del Sacro Cuore - Università Campus Bio-Medico di Roma - Università Cattolica Sacro Cuore-Sede Roma - Università degli studi di Genova - Università degli studi di Roma Tor Vergata - Università di Pisa - Università degli Studi di Salerno - Vodafone Omnitel N.V. - Wind Telecomunicazioni S.p.A.

Our membership include organization and professionals both from the supply and the demand side of energy efficiency services and solutions.

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Besides being involved in many European projects, listed next, FIRE implement surveys and market studies on energy related topics, information and dissemination campaigns, and advanced training.

Some of FIRE clients over the years: Ministry of Environment, ENEA, GSE, RSE, large organizations (such as Centria, ENEL, Ferrovie dello Stato, FIAT, Finmeccanica, Galbani, H3G, Telecom Italia, Unioncamere), universities, associations, energy agencies and exhibition organizers.

SME Energy Check-Up


www.fire-italia.org

White certificates

Tax deductions 50% e 65% (until 31 December 2014, then 50%)

Italian incentives for energy efficiency

Energy efficiency Thermal RES Electrical RES

RES tariffs (D.M. 6 luglio 2012)

Thermal account (D.M. 28 dicembre 2012)

Other options (Elena, Jessica, EEEF, structural funds, local funds, etc.)

CHP-DH

Fonte: FIRE.

CHP: high efficiency cogeneration DH: district heating

RES: renewable energy sources EEEF: European energy efficiency fund 5

EEO and alternative schemes for Italy

Source: Italian notification about art. 7 of EED directive.

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WhC and 20-20-20 Programme

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!"!!!!

!5,0!!

!10,0!!

!15,0!!

!20,0!!

!25,0!!

2005!2006!2007!2008!2009!2010!2011!2012!2013!2014!2015!2016!2017!2018!2019!2020!

Na#onal'energy'efficiency'targets'and'WhC'targets''(Mtoe'of'primary'energy'and'millions'of'cer#ficates)'

WhC!targets!as!Mtoe! WhC!targets!as!number!of!white!cerAficates!NaAonal!energy!efficiency!targets! Source:!FIRE.!

Na#onal'energy'strategy'target'as'art.'7'EED'direc#ve'

2006/32/EC'direc#ve'target'

The WhC scheme for obliged parties

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GSE applies for WhC

Energy savings

End-user

GME

GSE

WhC obliteration

DSO

Authorises WhC emission

Tranfers WhC

1st step: obtaining WhC

2nd step: target compliance

Obliged parties: DSOs with more than 50.000 clients.

DSO

WhC flows cash flows relations between parties

project implementation agreement

ENEA-RSE

WhC project evaluation

Source: FIRE.

The WhC scheme for voluntary parties

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AEEG Applies for WhC

Energy savings

End-user

GME

AEEG

WhC obliteration

Distributor

Authorises WhC emission

Tranfers WhC

1st step: obtaining WhC

2nd step: target complaiance

Voluntary parties: companies connected with obliged DSOs, small distributors, ESCOs, consumers with appointed energy manager (or EMS for small and medium end-users).

Voluntary player

Voluntary company

GME market

WhC trading

Direct contracting (OTC)

WhC flows cash flows relations between parties

project implementation agreement

ENEA-RSE

WhC project evaluation

Source: FIRE.

WhC for dummies

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DSOs with more than 50.000 clientsObliged parties (SO)

DSOs with less than 50.000 clients Companies linked to or controlled from DSOs Energy service providers SSE Companies with appointed energy manager EM Company with no EM obligation with EMS

Voluntary parties (SV)

1 WhC (also called TEE) = 1 additional toeWhC energy equivalent

5 years 8 years for building envelope related actions 10 years for high efficiency cogeneration

Duration of WhC issuing

Depends on the market (95-115 €/toe recently)WhC economic equivalent

Modalità standardizzata - deemed savings projects Modalità analitica - simplified monitoring projects Modalità a consuntivo - monitoring plan projects

Saving evaluation

Energy efficiency improvements and savingsAllowed actions

WhC for dummies

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Type I - electricity savings Type II - gas savings Type III - other fuels savings (no transport) Type IV - other fuels savings transport D.S. Type V - other fuels savings transport E.E. & M.P.

Types of certificates

Both till 2016Duration and validity of WhC

Primary energy efficiency improvements Targets

It depends on a standard fuel mix price trend. Till now the range has been: 86.98-110.27 €/toe. It considers WhC market prices since 2014

DSO tariff reimbursement

It is the the ratio between the useful life of the project and the standard WhC project life (5 or 8 years). It ranges between 1,00 and 4,58. It depends on the technology group as collected in the ministerial decrees tables.

Coefficient tau

WhC are released quarterly for deemed savings. After the measure are collected for the other projects (the timetable can be freely chosen, provided it is at least annually.

WhC release timetable

A continuous improvement approach

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D.M. 24 aprile 2001

Delibera 103/03

D.M. 20 luglio 2004

D.M. 21 dicembre 2007

D.Lgs. 115/2008

Delibera EEN 9/2011

D.M. 28 dicembre 2012

D.Lgs. 79/99

Source: FIRE.

The voluntary parties

Energy manager Energy managers are the experts dedicated to energy efficiency within an organization. To work well:

•they require the right position within the organization chart and supporting policies and procedures (the best is a ccomp l i shed under an ene rgy management system according to the ISO 50001 standard);

•their duties cover monitoring of energy consumption, energy supply, energy management, EE investment proposals.

ESCO

ESCOs are a key operator to support end-user in implementing and running EE projects:

•they of fer energy performance contracts (EPC) with third party financing (TPF);

•some of them have been able to use t h e W h C s c h e m e t o a c q u i r e competences in the industrial field and have begun offering EPC contracts also to industries.

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Energy managers in Italy

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RAPPORTO SUGLI ENERGY MANAGER IN ITALIA: EVOLUZIONE DEL RUOLO E STATISTICHE

2013 pagina 36 di 67

CLASSI'DI'ATTIVITÀ' 2003' 2004' 2005' 2006' 2007' 2008' 2009' 2010' 2011' 2012' 2013'

Agricoltura' !36!! !42!! !52!! !50!! !47!! !48!! !51!! !57!! !53!! !67!! !74!!

Attività'industriali' !623!! !618!! !642!! !649!! !637!! !639!! !632!! !608!! !615!! !604!! !650!!di$cui$Manifatturiere$ $620$$ $615$$ $637$$ $645$$ $632$$ $632$$ $624$$ $599$$ $614$$ $591$$ $600$$

Energia'e'servizi'a'rete'(*)' !179!! !168!! !174!! !174!! !176!! !305!! !328!! !292!! !299!! !316!! !323!!

Civile'(Residenze'e'Servizi)' !852!! !891!! !900!! !830!! !836!! !727!! !790!! !758!! !726!! !728!! !786!!di$cui$nella$P.A.$ $222$$ $231$$ $225$$ $190$$ $190$$ $180$$ $187$$ $153$$ $161$$ $165$$ $201$$

Trasporti' !332!! !364!! !357!! !359!! !374!! !411!! !418!! !408!! !409!! !412!! !385!!TOTALE' '2.022'' '2.083'' '2.125'' '2.062'' '2.070'' '2.130'' '2.219'' '2.123'' '2.102'' '2.127'' '2.218''(*)$Dal$2008$le$attività$del$ciclo$dei$rifiuti$sono$state$spostate$dal$settore$civile$al$settore$delle$industrie$con$servizi$a$rete.$

Nota$aggiuntiva:$I$dati$indicati$comprendono$i$responsabili$locali$nominati$dalle$aziende$multisito.$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$Fonte:!FIRE.!

Tabella 3. Andamento delle nomine compresi soggetti obbligati. 2003 dati provvisori. Fonte: FIRE

EM'OBBLIGATI'TOTALI'

PRIMARI! LOCALI! TOTALI!!1.685!! !416!! !2.101!!

EM'OBBLIGATI'ENTRO'30/4'PRIMARI!! LOCALI! TOTALI!

!1.531!! !399!! !1.930!!

EM'OBBLIGATI'IN'RITARDO'PRIMARI! LOCALI! TOTALI!

!154!! !17!! !171!!

EM'NON'OBBLIGATI'PRIMARI! LOCALI! TOTALI!

!533!! !102!! !635!!

EM'TOTALI'PRIMARI! LOCALI! TOTALI!

!2.218!! !518!! !2.736!!Tabella 4. Energy manager nominati nel 2013. Dati provvisori sui non obbligati. Fonte: FIRE.

RAPPORTO SUGLI ENERGY MANAGER IN ITALIA: EVOLUZIONE DEL RUOLO E STATISTICHE

2013 pagina 36 di 67

CLASSI'DI'ATTIVITÀ' 2003' 2004' 2005' 2006' 2007' 2008' 2009' 2010' 2011' 2012' 2013'

Agricoltura' !36!! !42!! !52!! !50!! !47!! !48!! !51!! !57!! !53!! !67!! !74!!

Attività'industriali' !623!! !618!! !642!! !649!! !637!! !639!! !632!! !608!! !615!! !604!! !650!!di$cui$Manifatturiere$ $620$$ $615$$ $637$$ $645$$ $632$$ $632$$ $624$$ $599$$ $614$$ $591$$ $600$$

Energia'e'servizi'a'rete'(*)' !179!! !168!! !174!! !174!! !176!! !305!! !328!! !292!! !299!! !316!! !323!!

Civile'(Residenze'e'Servizi)' !852!! !891!! !900!! !830!! !836!! !727!! !790!! !758!! !726!! !728!! !786!!di$cui$nella$P.A.$ $222$$ $231$$ $225$$ $190$$ $190$$ $180$$ $187$$ $153$$ $161$$ $165$$ $201$$

Trasporti' !332!! !364!! !357!! !359!! !374!! !411!! !418!! !408!! !409!! !412!! !385!!TOTALE' '2.022'' '2.083'' '2.125'' '2.062'' '2.070'' '2.130'' '2.219'' '2.123'' '2.102'' '2.127'' '2.218''(*)$Dal$2008$le$attività$del$ciclo$dei$rifiuti$sono$state$spostate$dal$settore$civile$al$settore$delle$industrie$con$servizi$a$rete.$

Nota$aggiuntiva:$I$dati$indicati$comprendono$i$responsabili$locali$nominati$dalle$aziende$multisito.$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$Fonte:!FIRE.!

Tabella 3. Andamento delle nomine compresi soggetti obbligati. 2003 dati provvisori. Fonte: FIRE

EM'OBBLIGATI'TOTALI'

PRIMARI! LOCALI! TOTALI!!1.685!! !416!! !2.101!!

EM'OBBLIGATI'ENTRO'30/4'PRIMARI!! LOCALI! TOTALI!

!1.531!! !399!! !1.930!!

EM'OBBLIGATI'IN'RITARDO'PRIMARI! LOCALI! TOTALI!

!154!! !17!! !171!!

EM'NON'OBBLIGATI'PRIMARI! LOCALI! TOTALI!

!533!! !102!! !635!!

EM'TOTALI'PRIMARI! LOCALI! TOTALI!

!2.218!! !518!! !2.736!!Tabella 4. Energy manager nominati nel 2013. Dati provvisori sui non obbligati. Fonte: FIRE.

Slight increase of appointed

energy managers along the years.

Public administration non

compliant.

Energy management expert (EGE)

15

EGE: expert energy manager that can be certified under an accredited scheme in Italy (according to standard UNI CEI 11339).

Energy manager ESCO

Energy auditor Consultant

EGE

ESCOs

16

EE technologies suppliers Banks

End-user

ESCO

TPF through ESCO

ESCOs offer: energy performance contracts; third party financing (TPF); integrated energy service.

EE saving

Fonte: FIRE

TPF through banks

Energy bill savings Financing Service fee Energy service

EPC, energy performance contract

17

Source: FIRE.Source: FIRE.

WhC: from general ESPCOs to ESCOs

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EPC+TPF+integrated approach

ESPCOs within WhC

50-100

≈3.000

UNI CEI 11352:2014

UNI CEI 11352 is the Italian standard to

certify ESCOs.

Additional savings

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Consumption baseline: ex-ante consumption, market average or mandatory standard

Ener

gy c

onsu

mpt

ion

ex-ante consumption

ex-post consumption

Counted savings in WhC scheme

Uncounted savings in WhC scheme

Time

Source: FIRE.

The tau coefficient

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0"

50"

100"

150"

200"

250"

300"

350"

400"

1" 2" 3" 4" 5" 6" 7" 8" 9" 10" 11" 12" 13" 14" 15" 16" 17" 18" 19" 20"

How$the$tau$coefficient$works$Hipothesis:$annual$saving$100$toe,$tau=3,36$

WhC"with"tau"

WhC"no"tau"

"Fonte:"FIRE"

WhC lifespan

Technology lifespan

2% annual discount

Minimum project dimension

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Minimum dimension required to present a project

Possibility to join different actions in one project

Number of involved clients Homogenous methods Non homogenous methods

Single client Deemed savings Engineering estimates Monitoring plans Monitoring plans

Many clients Deemed savings Engineering estimates Monitoring plans Not allowed

Project evaluation method Global savings (with tau)

Deemed savings 20 toe

Engineering estimates 40 toe

Monitoring plans 60 toe

Saving evaluation methods

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Deemed savings projects (progetti standard): the saving is evaluated with respect to the number of installed reference units (e.g. square meter, kW, number of installed units). No measures are required. Only standardized solutions can be included in a deemed saving file. The proponent presents an RVC once.

Simplified monitoring projects (progetti analitici): the saving is evaluated with respect to some measured quantities through a dedicated algorithm defined in a dedicated file. Required meters are also indicated in the dedicated file. The proponent presents an RVC at least once a year.

Monitoring plan projects (progetti a consuntivo): the method is similar to the previous one, but the algorithm, the baseline, the additional saving coefficient, and the needed meters should be preliminarily proposed by the applicant PPPM and approved from GSE (with ENEA-RSE). After the PPPM is accepted the proponent will get WhC by presenting an RVC at least once a year.

Saving evaluation method

Deemed savings !Engineering estimates !Monitoring plan

PPPM

D.S. file

E.E. file

RVC: Request to verify and certify the savings PPPM: Project proposal and M&V procedure

Monitoring plans 2005-‐2007:

≈10% 2013: 82%

“Grandi progetti”

D.M. 28 dicembre 2012 introduced also the so called “Grandi progetti” that is large projects with more than 35 ktoe of annual savings.

These projects, which should be infrastructural and have a technical life of more than 20 years, follow a different approval procedure.

These projects grant two advantages:

a multiplier of the savings up to 50% depending on the amount of the annual savings, the sector (higher within metropolitan areas), and the innovation and CO2 reduction levels;

the possibility to opt for a fixed price tariff based on the WhC market price.

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Art. 10, comma 1: “Per gli interventi infrastrutturali, anche asserviti a sistemi di risparmio energetico, trasporti e processi industriali che comportino un risparmio di energia elettrica o di gas stimato annuo superiore a 35.000 tep e che abbiano una vita tecnica superiore a venti anni, il proponente richiede al Ministero dello sviluppo economico l'attivazione della procedura di valutazione, ai fini dell'accesso al meccanismo dei certificati bianchi, presentando il progetto di intervento”.

Presenta PPPM

Entro 120 giorni al massimo esprime parere sulla proposta, definisce il sistema di misura e

i TEE rilasciabili

Soggetto proponente (progetto con R> 35 ktep)

Fonte figura:

MSE

•  Di concerto col MATTM;

•  Acquisito il parere della

regione interessata;

•  Col supporto tecnico di

GSE, ENEA, RSE.

In questo tipo di progetti entra direttamente in gioco il Ministero delle Sviluppo Economico.

In accordance with M i n i s t r y o f e n v i r o n m e n t a n d involved Region. With GSE, ENEA and RSE technical support

Within 120 days defines the saving assessment procedure and the WhC

Presents PPPM Project proponent (more than 35 ktoe)

Time chart

Action Implementation

RVC presentation RVC

approved by GSE

!WhC issued !

WhC transaction

!WhC obliteration

PPPM presentation PPPM

approved by GSE

Within 180 days

Within 60 days

No time limitations

Within May 31st of

the year after the targeted

one

Within 60 days (silence

procedure)

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Some infographics

72% WhC coming from ESP

25% WhC coming from companies with energy manager

Target 2013-‐2016:

from 5.5 to 9.5 Mln WhC

82% WhC from monitoring plans

in 2013

6.7 Mln of WhC issued in

2013

50% natural gas savings

25% electricity 25% other fuels

Weighted average price on market

30

45

60

75

90

105

120

2005 2007 2009 2011 2013

28 Mln WhC issued from the start to 31

May 2014

tau from 1 to 4.58

Industrial projects were 80% in 2013

Source: FIRE.

63 obliged DSOs 508 companies

presented projects in 2013

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Tariff recovery for

DSOs from 86 to 110 €/toe over

the years

Breakdown of WhC issued in 2013

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0"

100.000"

200.000"

300.000"

400.000"

500.000"

600.000"

700.000"

800.000"

900.000"

1.000.000"

0"

500.000"

1.000.000"

1.500.000"

2.000.000"

2.500.000"

3.000.000"

3.500.000"

4.000.000"

4.500.000"

5.000.000"

2006" 2007" 2008" 2009" 2010" 2011" 2012" 2013"

Savings(related(to(new(projects((toe)(

Total(savings((toe

)(

Breakdown(of(issued(WhC(by(saving(evalua?on(methodology(

Deemed"savings"projects" Simplified"monitoring"projects" Monitoring"plan"projects"New"deemed"savings"projects" New"simplified"monitoring"projects" New"monitoring"plan"projects"

Source:"FIRE"on"GSE"data."Source:"FIRE"on"GSE"data."

Breakdown of WhC issued in 2013

48%$

22%$

8%$

5%$

5%$

5%$

2%$5%$

Breakdown*of*WhC*issued*in*2013*

IND*T$Heat$genera3on$and$recovery$for$industrial$processes$

IND*FF$Other$industrial$energy$efficiency$solu3ons$

CIV*T$Hea3ng$,$air$condi3oning$and$DHW$produc3on$for$agricolture$and$civil$sector$

IND*E$Drive$systems$(engines,$inverters,$etc.),$automa3on$and$power$factor$correc3on$

IND*GEN$Electricity$genera3on$and$recovery$for$industrial$processes$

CIV*FC$Building$envelope$

IPRIV*RET$Ligh3ng$for$exis3ng$private$end*users$buildings$

Other$

Source:$FIRE$on$GSE$data.$

Industrial projects in 2013: 80%

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Simplified evaluation procedures: industry

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# Solution File type Unit Requested units per toe

7T Photovoltaics under 20 kW DS kW 1-‐2

9T Inverters for pumping systems DS kW 1-‐16

16T Inverters for pumping systems over 22 kW SMP -‐ -‐

30E Electric motors IE3 DS kW 9-‐135

31E Inverters for compressed air SMP -‐ -‐

33E Power factor correction for motors DS Motor 1-‐189

34E Mechanical steam recompression systems SMP -‐ -‐

35E Industrial coolers SMP - -

36E UPSs DS kVA 2-‐36

For deemed savings projects (DS) a range is present since the values depend on some variables, such as the number of working shifts, the weather zone, the power range, etc. Per le schede analitiche è impossibile indicare dei valori. For simplified monitoring projects (SMP) no values are indicated, since they depend on the application of the saving algorithm to the indicated variables (e.g. fuel consumption, heat demand, etc).

Simplified evaluation procedures: civil

29

# Solution File type Unit Requested units

per toe2T Electric DHW heaters -‐> gas DHW heaters DS Boiler 53T High efficiency boilers for single apartments DS Boiler 3-‐274T High efficiency DHW DS Boiler 65T Double glazing windows DS m 13-‐1726T Wall and roof insulation DS m 27-‐1.1457T Photovoltaics under 20 kW DS kW 1-‐28T Solar thermal for DHW DS m 2-‐810T Natural gas decompression SMP - -15T Air to air heat pumps DS Apartment 1-‐2219T Air conditioners under 12 kW DS kW 99-‐22220T Wall and roof insulation for cooling DS m 430-‐1.71822T District heating SMP - -26T Centralized cooling systems SMP - -27T DHW heat pumps DS Heat pump 3-‐632E Inverters for HVAC systems SMP - -36E UPSs DS kVA 2-‐3637E Biomass boilers for single apartment DS Apartment 1-‐538E Building automation systems DS m 105-‐1.573Please refer to the note in the previous slide.

Monitoring plans: the main results from 2005 to 2013 FIRE conducted on behalf of ENEA a deep analysis of the PPPMs presented from the beginning of the WhC scheme till July 2012 (Tomassetti et al. 2013). The reasons behind the study were the lack of information about PPPMs, mainly due to the structure of the proposals database (DB). The DB in fact was not structured in order to make an automatic analysis of PPPMs feasible. To help evaluating PPPMs GSE is presently working on a improvement of the DB, but the process will require some time. Thus, in order to obtain more information about the PPPMs projects ENEA commissioned a first survey to cover PPPMs presented between 2005 and July 2012. Due to the poor structure of the PPPM database, FIRE had to create a new excel database in order to breakdown the information included in the DB and be able to confront and analyse the content. The results, which are not easy to summarise, are available in (Tomassetti et al. 2013). Here a synthesis is provided. Proponents Number of

presented PPPMs Total expected savings (ktoe)

Average project size (toe)

ESCOs and consultants 524 924 1,700 EMs 47 396 8,000 DSOs 36 30 800 Total 607 1,350 2,225 Table 1. Breakdown of presented PPPMs (2005-2012) by proponent.

Table 1 shows that ESCOs play the main role in presenting PPPMs, with an 86% quota. Projects presented by companies with an appointed energy manager (EMs) are larger, with an average size of 8,000 toe. This suggests that the end-user company prefers to act directly only when the forecasted cash flow is quite high and it is considered convenient to train their personnel to act without the involvement of an ESCO or a DSO. There are nevertheless EMs that presented directly the project, but asked for the support of an ESCO or consultant to prepare it. This confirms the complexity of the PPPM procedure and the need of information and training activities aimed at facilitating the preparation of a proposal.

Figure 9. Sector and technology breakdown in terms of presented PPPMs.

The sector breakdown shows a wide application, with all the energy intensive sectors represented. Petrochemical, building materials and agro-food are characterised by larger project sizes. The technology breakdown shows an homogeneous situation, with most of the available solutions presented. Energy efficiency involving heat consumption tends to have a larger project size, as it can be expected.

STEEL%METALLURGICAL%

PETROCHEMICAL%PHARMACEUTICAL%

CHEMISTRY%

BUILDING%MATERIALS%

AGRO4FOOD%

ENERGY%/%SERVICES%/%WASTE%TREATMENT%

RESIDENTIAL%COMMERCIAL%

GLASS%

PAPER%AND%PRINTING% ICT%

AUTOMOTIVE%MECHANICS%WOOD%

TEXTILE%AND%TANNING%

Sector'breakdown'for'number'of'PPPMs'

Source:%FIRE.%

Energy%efficiency%heat%19%%

�Energy%efficiency%electricity%

28%%%

Heat%recovery%15%%

%CogeneraRon%

17%%

Use%of%biomass%6%%

Solvent%treatment%1%%

Civil%sector%technologies%

14%%

PPPM'technology'breakdown''

Source:%FIRE.%

Monitoring plans: the main results from 2005 to 2013 FIRE conducted on behalf of ENEA a deep analysis of the PPPMs presented from the beginning of the WhC scheme till July 2012 (Tomassetti et al. 2013). The reasons behind the study were the lack of information about PPPMs, mainly due to the structure of the proposals database (DB). The DB in fact was not structured in order to make an automatic analysis of PPPMs feasible. To help evaluating PPPMs GSE is presently working on a improvement of the DB, but the process will require some time. Thus, in order to obtain more information about the PPPMs projects ENEA commissioned a first survey to cover PPPMs presented between 2005 and July 2012. Due to the poor structure of the PPPM database, FIRE had to create a new excel database in order to breakdown the information included in the DB and be able to confront and analyse the content. The results, which are not easy to summarise, are available in (Tomassetti et al. 2013). Here a synthesis is provided. Proponents Number of

presented PPPMs Total expected savings (ktoe)

Average project size (toe)

ESCOs and consultants 524 924 1,700 EMs 47 396 8,000 DSOs 36 30 800 Total 607 1,350 2,225 Table 1. Breakdown of presented PPPMs (2005-2012) by proponent.

Table 1 shows that ESCOs play the main role in presenting PPPMs, with an 86% quota. Projects presented by companies with an appointed energy manager (EMs) are larger, with an average size of 8,000 toe. This suggests that the end-user company prefers to act directly only when the forecasted cash flow is quite high and it is considered convenient to train their personnel to act without the involvement of an ESCO or a DSO. There are nevertheless EMs that presented directly the project, but asked for the support of an ESCO or consultant to prepare it. This confirms the complexity of the PPPM procedure and the need of information and training activities aimed at facilitating the preparation of a proposal.

Figure 9. Sector and technology breakdown in terms of presented PPPMs.

The sector breakdown shows a wide application, with all the energy intensive sectors represented. Petrochemical, building materials and agro-food are characterised by larger project sizes. The technology breakdown shows an homogeneous situation, with most of the available solutions presented. Energy efficiency involving heat consumption tends to have a larger project size, as it can be expected.

STEEL%METALLURGICAL%

PETROCHEMICAL%PHARMACEUTICAL%

CHEMISTRY%

BUILDING%MATERIALS%

AGRO4FOOD%

ENERGY%/%SERVICES%/%WASTE%TREATMENT%

RESIDENTIAL%COMMERCIAL%

GLASS%

PAPER%AND%PRINTING% ICT%

AUTOMOTIVE%MECHANICS%WOOD%

TEXTILE%AND%TANNING%

Sector'breakdown'for'number'of'PPPMs'

Source:%FIRE.%

Energy%efficiency%heat%19%%

�Energy%efficiency%electricity%

28%%%

Heat%recovery%15%%

%CogeneraRon%

17%%

Use%of%biomass%6%%

Solvent%treatment%1%%

Civil%sector%technologies%

14%%

PPPM'technology'breakdown''

Source:%FIRE.%

30

PPPMs breakdown (FIRE-ENEA analysis 2005-2012)

Figure 11. The ten larger projects presented from 2005 to 2012.

Figure 12. Comparison between expected and effective savings.

From a more detailed analysis, the greatest variation between the expected and the effective savings was found in the predictions of thermal efficiency (Table 2) and three typical situations have been identified, as shown in Figure 12. Case 1 refers to projects in sectors that were affected by the financial crisis, such as building materials and the manufacturing industry. After an initial increase of the savings, the reduction of the production determined a reduction in the savings, mostly due to the rising weight of fixed costs. Process modifications, like the ones included in Case 2, showed a continuous rise of the savings, most probably due to the step by step improvement of the projects settings, strictly linked to the industrial process11. The last case refers to typical horizontal solutions, such as lighting, heating, and

11 Lines in Errore. L'origine riferimento non è stata trovata. are indicative, since it was impossible and meaningless to build an average curve.

87#

28#

25#

24#

23#

22#

22#

20#

18#

0# 5# 10# 15# 20# 25# 30# 35# 40# 45# 50# 55# 60# 65# 70# 75# 80# 85# 90# 95# 100#

blast#furnace#(steel)#

hot#rolling#(steel)#

annealing#furnace#(steel)#

regenera=ve#burners#(steel)##

oxygen#produc=on#onCsite#(steel)##

gas#cogenera=on#for#district#hea=ng#(energy#produc=on)#

CCCG#(petrolchemical)#

CCCG#(rubber#and#plas=c)#

heat#recovery#for#electricity#produc=on#(chemical)#

heat#recovery#(petrolchemical)#

Savings([ktoe/year](

Larger(projects([ktoe/year](

Source:#FIRE.#

C>#200#

Source: FIRE

31


Case 1: e.g. building materials, manufacturing industry

Case 2: e.g. furnace glass, membranes, RDF

Case 3: e.g. lighting, heating, cooling

Expected

Effective

Expected

Effective

EffectiveExpected

Savings correlated with the market

Savings correlated with the solution learning curve

Constant saving (weather related)

32

Difference between PPPM and RVC savings: 1.4%

electricity, -‐8.3% gas, 16.6% fuels


FIRE analysis on 2005-2012 PPPMs commissioned by ENEA

33

the Italian scheme, a result that was expected when the scheme was designed, but that became a fact not as a consequence of having initially limited the presentation of WhC project to energy service providers9, but of having an interesting economic return coupled with the complexity of the PPPMs10.

Figure 7. EIWhC for the 47 PPPMs that report the investment costs.

Figure 8. EIWhC for the most indicative sectors, with at least 20% of PPPMs with the CAPEX indicated.

9 Companies with energy manager were admitted only at the end of 2007. 10 Were it easy to present a PPPM, the role of EMs would have been the prominent one, whereas ESPs represent around 70% of the market even nowadays.

0"

50.000"

100.000"

150.000"

200.000"

250.000"

0%"

50%"

100%"

150%"

200%"

250%"

300%"

350%"

400%"

450%"

1" 2" 3" 4" 5" 6" 7" 8" 9" 10"11"12"13"14"15"16"17"18"19"20"21"22"23"24"25"26"27"28"29"30"31"32"33"34"35"36"37"38"39"40"41"42"43"44"45"46"47"

WhC$earnings$/$capex$WhC$cash$flow$are$discounted$at$5%$on$the$5$year$incen9ve$lifespan$

WhC"earnings"/capex" Average" toe"

0%#

5%#

10%#

15%#

20%#

25%#

30%#Cement#

Steel#

Electronics#

Glass#

Average'WhC'earnings'/'CAPEX'ra2o'(sectors'for'which'CAPEX'is'reported'at'least'in'20%'of'PPPMs)'

the Italian scheme, a result that was expected when the scheme was designed, but that became a fact not as a consequence of having initially limited the presentation of WhC project to energy service providers9, but of having an interesting economic return coupled with the complexity of the PPPMs10.

Figure 7. EIWhC for the 47 PPPMs that report the investment costs.

Figure 8. EIWhC for the most indicative sectors, with at least 20% of PPPMs with the CAPEX indicated.

9 Companies with energy manager were admitted only at the end of 2007. 10 Were it easy to present a PPPM, the role of EMs would have been the prominent one, whereas ESPs represent around 70% of the market even nowadays.

0"

50.000"

100.000"

150.000"

200.000"

250.000"

0%"

50%"

100%"

150%"

200%"

250%"

300%"

350%"

400%"

450%"

1" 2" 3" 4" 5" 6" 7" 8" 9" 10"11"12"13"14"15"16"17"18"19"20"21"22"23"24"25"26"27"28"29"30"31"32"33"34"35"36"37"38"39"40"41"42"43"44"45"46"47"

WhC$earnings$/$capex$WhC$cash$flow$are$discounted$at$5%$on$the$5$year$incen9ve$lifespan$

WhC"earnings"/capex" Average" toe"

0%#

5%#

10%#

15%#

20%#

25%#

30%#Cement#

Steel#

Electronics#

Glass#

Average'WhC'earnings'/'CAPEX'ra2o'(sectors'for'which'CAPEX'is'reported'at'least'in'20%'of'PPPMs)'

Data, being faculta_ve, are not

reliable and currently an inves_ga_on is being done on this

issue.

PPPM presentation trend

14#

33#

47#

0#

5#

10#

15#

20#

25#

30#

35#

40#

45#

50#

2005)2010# 2011# 2012#(incomplete)#

Monthly#average#PPPM#proposals#

Source: FIRE on AEEGSI data.

34

The evaluation effort can rise

theory rapidly. Be ready to manage

it!

PPPM: cement industry example

35!

CE

MB

UR

EA

U BA

T Reference D

ocument

Page 26

Chapter 3

Figure 1. Cement manufacturing process (dry process) [22]

Source: Reference Document on Best Available Techniques in the Cement, Lime and Magnesium Oxide Manufacturing Industries, EC, 2010.

Italy is among the largest cement producers in Europe.

With a total production of 36.3 million tons of cement it was in 2009 the main producer, despite the significant decline in recent years (-15.6% in 2008).

The production facilities are located throughout the country and currently total 88 manufacturing units, of which 58 are full-cycle and 30 are grinding factories.

There are 80 active rotary kilns, all based on the dry or semi-dry technology that enables the achievement of greater energy efficiency.

36

The cement industry is clearly one of the most interesting for the WhC scheme in terms of potential certificates and it serves well as an example of WhC implementation in the industrial sector. !The data and the assumptions on this presentation are taken from the guideline for the cement industry created by ENEA and FIRE and are published on the website www.efficienzaenergetica.enea.it.


Source: ENEA-FIRE study on PPPM in the cement industry.

http://www.efficienzaenergetica.enea.it

Despite remarkable advances in technology, in terms of energy efficiency, there are still margins for improvement.

The BAT considered in the cement industry BRef indicate a value of 3,000 MJ/t of clinker for thermal energy and 90 kWh/t of cement for electricity.

The savings that would result from the transformation of the entire cement factories park is about 300 MJ/t of clinker. Given the annual national production of 36.3 million tons of cement, a clinker/cement ratio of 0.75, and assuming an approximate percentage of plants renovation of 50%, the global saving will be around 100 ktoe/year.

For the consumption of electrical energy, considered over the entire production line, the possible reduction from the baseline is about 25 kWh/t of cement. Considering again a penetration rate of 50% the global saving will be around 85 ktoe/year.

37



38



39

The good number of applications demonstrates that even if monitoring plans are complex, they can successfully be used, especially when the available savings are good enough to justify the effort. In Italy, there is a minimum threshold to present a single EE measure of 60 toe, that at present WhC prices corresponds to 6,000 €/year for five years. The table shows typical savings between 15 and 3,500 toe.



40

In order to prepare a monitoring plan the following points must be addressed: - process description; - description of the EE solution; - identification of the baseline, and thus of additional savings; - definition of the algorithm to calculate the energy savings; - description of the M&V system. Usually the third and fourth points are the most difficult to address, for different reasons.



41

For new plants (or a complete renovation of an existing plant) the reference is the market average, i.e. the typical solution proposed in that period of time for the same intervention. As mentioned above, currently it is the dry process with multiple stage preheater and precalciner. For the renovation of an existing plants, provided an hardware intervention is implemented and not only an improvement of the plant management or of the regulation of the energy devices, the baseline reference is the higher between the specific consumption of the ex-ante plant and the specific consumption of the current practice in the same industrial sector.



The algorithm is not an issue technically, but it is important that it is chosen taking into account the necessity to normalise the savings with the industrial production – the clinker in this case – and to ensure that the effect of the EE intervention is correctly isolated from other energy consumption.

Most problems that arise in this connection are due to an insufficient number of meters or to their incorrect positioning. But there are may also be errors in the definition of the savings formula.

Since in the cement industry fuel and clinker consumption present high values – on the order of hundreds of thousands of tons per year – an accurate measurement may be difficult. To address this issue, one possibility is to refer to the measurement uncertainties listed in Annex VII of the Decision 2007/589/EC related to the emission trading scheme (directive 2003/87/EC).

The use of alternative fuels is still limited, so its effects on the final result is still not very significant, but considering the Italian interest in refuse derived fuel (RDF) from industrial and municipal waste, the implications of its use should be analysed, both with respect to WhC and ETS, and should lead to a different baseline for RDF fired plants.

42


With large EE interventions, like the ones considered in the cement industry, monitoring plans are working well. Industrial companies have come to understand the opportunity that WhC represent and are trying to join in.

More importantly, EE is finally going to be promoted by the mechanism. Monitoring plans have in fact already overtaken deemed savings and engineering estimates in Italy in the last year in terms of issued certificates.

Due to the complexity of the plans the proponents are improving their knowledge of the industrial sectors in which they operate, with positive effects on their potential to promote and replicate similar actions. Some of the proponents have indeed become full ESCOs this way, fulfilling one of the original aims of the WhC scheme in Italy.

A final important aspect: the real trigger to success of the scheme and of the involvement of industry is information and training. It is fundamental to devote sufficient economic and personnel resources to these activities. The advantages for the system in general are enormous compared with the cost of implementing these actions.

!

43

PPPM: some considerations

0"

10"

20"

30"

40"

50"

60"

70"

80"

90"

100"

110"

120"

130"

140"

150"

07/03/06"

16/05/06"

25/07/06"

24/10/06"

16/01/07"

27/03/07"

05/06/07"

28/08/07"

06/11/07"

29/01/08"

08/04/08"

17/06/08"

09/09/08"

18/11/08"

17/02/09"

28/04/09"

01/07/09"

22/09/09"

01/12/09"

02/03/10"

11/05/10"

20/07/10"

19/10/10"

11/01/11"

22/03/11"

31/05/11"

30/08/11"

15/11/11"

07/02/12"

17/04/12"

31/05/12"

07/08/12"

06/11/12"

05/02/13"

16/04/13"

25/06/13"

17/09/13"

03/12/13"

04/03/14"

13/05/14"

22/07/14"

WhC

's&price&(Euro)&

Market&session&data&

WhC&market&price&trend&

"May"31st"session"" "DSO's"reimbursement"" "Type"III"" "Type"II"" "Type"I""

Source:"FIRE"evaluaIon"based"on"GME"data"

WhC oversupply

WhC shortage

44

WhC market price trend

45

WhC: issued certificates VS targets

!40%%

!20%%

0%%

20%%

40%%

60%%

80%%

100%%

!4.000%%

!2.000%%

%!%%%%

%2.000%%

%4.000%%

%6.000%%

%8.000%%

%10.000%%

2005% 2006% 2007% 2008% 2009% 2010% 2011% 2012% 2013% 2014*% 2015% 2016%

%"

ktoe

"

Italian"WhC"targets"and"results"(data"updated"to"31"July"2014)"

Primary%energy%saving%targets%(ktoe)%EsAmated%available%WhC%based%on%projects%presented%in%the%previous%years%Issued%WhC%from%June%1st%to%May%31st%(ktoe)%Eccess%%or%missing%WhC%(ktoe)%(issuedWhC!targetWhC)/targetWhC%(%)%

Source:%FIRE%based%on%GME%data%

*%Provisional%data.%

Main challenges: Since 2014 only new projects can be presented (the PPPM shall be presented before the the energy efficiency action comes into operation). In 2016 the sum of the increasing target and of the end of the previous WhC lifecycle will sum up to almost 4 Mtoe.

Conclusions

Fonte: “RAEE 2012”, ENEA.

It works!

The most important lesson learnt is that such a scheme can not born perfect, but it needs continuos care and also some imperfections should be accepted during transitions.

46

Conclusions: by dealing with complex proposals ESPs learn much about industrial processes and they can replicate best prac_ces; knowledge and money allow some ESP to become a real ESCO with EPC and TPF for industrial process projects; effec_ve promo_on of EE projects in industry; limited mechanism cost (433 euro/5x2.5 toe=35 euro/toe).

The IEE Enspol project

The IEE ENSPOL project’s main aim is to support member states who intend to set up new EEO schemes or implement alternative measures, as well as inform about the on-going development of existing schemes, and support member states with an existing EEO scheme to improve it, learning from and building on existing experiences.

The specific objectives of ENSPOL are to: Assess the relative strengths and weaknesses of EEOs and alternative measures based on the existing experiences and plans of member states and make recommendations for the most appropriate approaches against different criteria and under different conditions. Improve the knowledge and capabilities of member states (both within and outside of the project) with regards to the different options available for implementation of Article 7 (EEOs and alternative measures). Ensure the effective engagement of the broad range of stakeholders with an interest in the implementation of Article 7 and promote a wide consultation at European level. 4.Complement and enhance the work of existing EU and member states initiatives concerned with the implementation of Article 7 EED.

The Enspol project has just started up and will go on till 2016.

47

Partners: JIN (NL) ABEA (BG) ADEME (FR) AEA (AT) CRES (GR) DEA (DK) EST (UK) FIRE (IT) KAPE (PL) OUCE (UK) SEI (UK) UPRC (GR) VITO (BE)

More information at: www.enspol.eu

Contract N°: IEE/13/824/SI2.675067

http://www.enspol.eu

Thank you!

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The white certificates scheme in Italy: how it works