Irmeli Mikkonen. "Voluntary tools for increasing energy efficiency"

Voluntary Energy Efficiency Agreements in FinlandSTEP Thematic Seminar21 March 2014 Limerick, Ireland

Irmeli Mikkonen, Motiva Oy 321 March 2014

Energy Conservation Agreements 1997–2007Energy Efficiency Agreements 2008 - 2016• Voluntary, no legislative obligations

• A flexible tool to implement national energy and climate strategy and some EU policies related to the energy efficiency

• An alternative and complementary means for regulation and taxes

• Benefits for companies and other organisations to join agreements• Flexible, target oriented and systematic procedure to improve

energy efficiency and to save in costs

• Possibility to prove energy efficiency to environmental authorities

• Energy audits and energy efficiency investments for those joined the agreement scheme are subsidised by the government

• Sites and organisations report annually their energy efficiency actions


ENERGY EFFICIENCY AGREEMENTS FOR OIL SECTOR – HÖYLÄ III

ENERGY EFFICIENCY AGREEMENT AND ENERGY PROGRAMME FOR MUNICIPAL SECTOR

ENERGY EFFICIENCY AGREEMENTS FOR BUSINESS SECTOR 2008-2016

INDUSTRY

SERVICES

ENERGY SECTORMUNICIPALITIES

JOINT MUNICIPALITIES

DISTRIBUTION OF LIQUID HEATINGAND TRANSPORT FUELS

OIL HEATED BUILDINGS

ENERGY EFFICIENCY AGREEMENTS FOR PROPERTY AND BUILDING SECTOR 2010-2016

HOUSING PROPERTIES

COMMERCIAL PROPERTIES

ENERGY EFFICIENCY AGREEMENTS FOR TRANSPORT SECTOR

GOODS TRANSPORT AND LOGISTICS

PUBLIC TRANSPORT

ENERGY PROGRAMME FOR FINNISH FARMS2010-2016

FARMS

Voluntary Energy Efficiency Agreements 2008 – 2016

Irmeli Mikkonen, Motiva Oy 5

Energy Efficiency Agreement and Programme in Municipal Sector 2008 – 2016

MEE – Association – MotivaFRAMEWORK AGREEMENT

Municipalities

JointM

unicipalities

Municipalities over 20 000 inhabitantsJoint municipalities over 20 000 MWh/a

Municipality’sACCESSION DOCUMENT

ENERGY EFFICIENCY PROGRAMME (KEO)

Cities

Motiva’sPARTICIPANT REGISTER

Municipality* joins

MEE – City/Municipality/Joint municipalityENERGY EFFICIENCY AGREEMENT (KETS)

Municipalities 5 000–20 000 inhabitantsJoint municipalities 5 000–20 000 MWh/a can choose between Agreement or Programme

ENERGY EFFICIENCY AGREEMENT (KETS)

Signed by Municipality*

Signed by MEE

ENERGY EFFICIENCY PROGRAMME (KEO)

AGRE

EMEN

T SC

HEM

E

Municipalities

JointM

unicipalities

Cities

Municipalities over 5 000 inhabitantsJoint municipalities over 5 000 MWh/a

*also a City or a Joint municipality

21 March 2014


Continuous Improvement – a Key Element in Agreements Energy Efficiency Management System

5. Management review

4. Surveillanceand remedial action

1. Energy policy

2. Planning

3. Implementation and execution

Plan → Do → Check → Act -principal

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Obligations of a Party Joining the Agreement• Implementation of the Energy Efficiency Management System

• in energy intensive industry and power production

• Setting targets

• Energy audits and analyses

• Implementation of the Energy Conservation Plan

• Energy conservation investments

• Energy efficiency in all investments and procurements

• Development of follow-up system for energy consumption

• Training of employees

• Communication – internal and external

• Annual reporting

21 March 2014


Benefits of Joining the Agreement• Improved Energy Efficiency • Decrease in Energy Costs • Less Environmental Impacts• Subsidies for Energy Audits and Energy Efficiency Investments• Verification of Energy Efficiency for Environmental Permits• Better Public Image

→ Competitiveness Increases

21 March 2014


Establishing a Successful Energy Efficiency Agreement Scheme

21 March 2014


Establishing a Successful Energy Efficiency Agreement Scheme•What is the timeline?•Who are the key players?•What kind of an agreement?•What are the important steps of the implementation?• How to monitor the results?

21 March 2014


Key Players and Their Responsibilities

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AUTHORITY• large scale aims, big picture• goals for agreements• development• legislation• EU directive interfaces• financial incentives• evaluation

SECTOR ASSOCIATION• goals for sector agreements• development• marketing, motivation• monitoring, reporting• participation in reporting• co-operation forums• guidance, training

PARTICIPANT / COMPANY• goals for company• energy use scan, audits• saving measures• energy monitoring • training of staff• reporting• co-operation • development of own

performance

AGENCY / OPERATOR• monitoring system development &

operation• database, classification of data• data collection, processing,

evaluation• reporting• guidance, training• marketing, motivationCONSULTANTS, ENERGY AUDITORSESCOs

11


New LTA

4 Evaluation

3 Implementation

2 Negotiation

1 Initiation

0Scanning

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

Development of financial incentives

Upkeep & developmentDevelopment of monitoring system

Visual image design

Marketing General marketing Marketing of new LTA

Information dissemination

Support to participating companies

Development and pilot projects New projects

Timetable set LTA signed EvaluationGo/no-go decision for new LTA

Go/no-go decision

Timeline of an Energy Efficiency Agreement Source: IEE EU-LTA Uptake

21 March 2014

Successful Elements of a Long-term Agreement (LTA)Good communication• between authorities and industrial associations• associations represent their members• co-operation, open discussionSimple administration• low costs without risking quality• better cost-effectiveness• different targets or even LTAs for energy intensive industry

and SMEs• learning by doingMotivating targets• financial incentives are needed to motivate participating

companies• challenging company-specific targets• precisely phrased commitments

21 March 2014 Irmeli Mikkonen, Motiva Oy 13

Successful Elements in a Long-term Agreement (LTA)Efficient monitoring and reporting• needed to prove the effectiveness of the LTA• resources for developing, maintaining & running• good guidelines and strict deadlines are needed • web-based tool makes reporting easier • good quality of input data is essential

Support to participants• from association or operator• financial support - direct or indirect• marketing, reporting • advice, tools, best practices, working groups…• development projects !


Successful Elements of a Long-term AgreementCombining with existing activities• administration / participant• energy auditing, energy management• existing energy efficiency subsidy schemes• “LTA puts energy efficiency on the agenda”

Personal enthusiasm• key player representatives & participating companies• faith, commitment, expertise, communication skills


Main Barriers and Weaknesses

• Uncertainty in government policies• Uncertainties in target-setting and cost-effectiveness• Lack of knowledge and tools• Limited resources in administration• Limited resources in participating companies• Confidentiality risks• Heavy reporting



Interim Results 2008 – 2012 Industries Municipalities Property and Building

Sector

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21 March 2014

Energy Efficiency Agreements 2008-2016Agreement with Finnish industries: • Covers now about 80% of the total use of energy in Finnish

industry• Energy intensive industry

• Almost 100% of the energy use

• Energy production• More than 95% of electricity production

• Small and middle sized companies (food, chemistry, plastic, wood, technology)• Depending on a sector: 35–70% of the energy use



Annual Impact of Implemented MeasuresIndustries Municipalities Property and Building Sector

• savings in heating energy and fuels 5.85 TWh

• electricity savings 2.25 TWh

• savings in energy costs €344 million

• carbon dioxide (CO2) emissions reduced nearly by 2.5 million tonnes

The savings equal to 2.1 % of Finland’s total energy consumption (378 TWh in 2012)

21 March 2014


Realised Energy SavingsIndustries Municipalities Property and Building Sector

21 March 2014

7% IN OTHER SECTORS:- Municipal Sector- Energy Service Sector- Property & Building Sector- Private Service Sector

73%

INDUSTRY

20%ENERGY PRODUCTION


Energy Efficiency InvestmentsIndustries Municipalities Property and Building Sector

21 March 2014

10% OTHER SECTORS: - Energy Service Sector - Property & Building Sector - Private Service Sector

46%

INDUSTRY

34%ENERGY PRODUCTION

10% MUNICIPAL SECTOR


Investment Subsidies GrantedIndustries Municipalities Property and Building Sector

21 March 2014

2008 2009 2010 2011 20120

10

20

30

40

50

60

050100150200250300350400450500

2572

151

304

434

Investointituki, sopimusyritykset ja -yhteisöt yhteensäInvestointitukihankkeiden lukumäärä, sopimusyritykset ja -yhteisöt yhteensä

Investment subsidiesNumber of Sites

Million € Cumulative


2008 2009 2010 2011 20120123456789

02004006008001,0001,2001,4001,6001,800

121

414

832

1,204

1,623

Energiakatselmustuki, sopimusyritykset ja -yhteisöt yhteensä (kumulatiivinen)Energiakatselmuskohteiden lukumäärä, sopimusyritykset ja -yhteisöt yhteensä (kumulatiivinen)

Million € Cumulative

SubsidiesNumber of Sites

Number of Energy Audits Launched and Subsidies Granted in TotalIndustries Municipalities Property and Building Sector


Volumes of Energy Audited Service Sector Buildings

21 March 2014

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

20

40

60

80

100

120

140

160

180

Milllion m3

MunicipalitiesPrivate Service Sector

www.energyefficiencyagreements.fi