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The White Certificates system in Italy: results and perspectives

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Presentation during the seminar "Policies for energy efficiency in buildings", Energy Delta Convention 2008, Groningen, NL

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The White Certificates system in Italy: results and perspectives

  1. 1. The White Certificates system in Italy: results and perspectives Daniele RUSSOLILLO Fondazione per l’Ambiente
  2. 2. FA | www.fondazioneambiente.org
  3. 3. Summary | the topics covered… <ul><li>Some short notes about the Italian system (Ref. M.Pavan, 2008, Tradable energy efficiency certificates: the Italian experience, Energy Efficiency DOI10.1007/s12053-008-9022-x) </li></ul><ul><li>Quantitative data related to the implementation </li></ul><ul><li>Policy issues at stake </li></ul><ul><li>WhC, Fiscal policy and EPDB-like actions </li></ul>
  4. 4. THE ITALIAN SYSTEM | Key elements 1/2 Before Dec. 2007 After Dec. 2007 2005-2009 2005-20 12 Regulatory period: 2.9 Mtoe/y in 2009 3.2 Mtoe/y in 2009 Savings total national target Gas (#21) & Elt (#10) Distributors serving at least 100k customers at the end of 2001 Gas ( #62 ) and Elt( #14 ) Distributors serving at least 50k customers at the year t-2 Obliged parties a) ALL distributors b) Companies controlled by Distributors c) ESPs ans ESCOs a), b), c) + d) industrial & non industrial customers that have to appoint an energy manager Who can be granted WhC Type I(elt),II(gas),III(else) issued by GME (E.M.O.) upon AEEG verification (ex-post, 5 yrs lifetime ) No changes applied Certificates (1WhC, 1 toe)
  5. 5. THE ITALIAN SYSTEM | Key elements 2/2 Before Dec. 2007 After Dec. 2007 Spot market + OTC; ( unrestricted banking between 2005-2009 ) Spot market + OTC; (unrestricted banking extended to 2010-2012 ) Trading Financial penalty, but not defined in units (i.e. €/toe); No changes applied Penalty Eligibility: Distributors Responsible: AEEG Level: 100€/toe (can be updated) Ceiling: up to the target No changes applied Cost-recovery a) Deemed savings b) Partial ex-post eng. Methods c) Full monitoring plan (has to be approved by AEEG) No changes applied Monitoring&Verification
  6. 6. THE ITALIAN SYSTEM | Targets (Elt Sector) Source: Italian Regulatory Authority for Electricity and Gas (AEEG)
  7. 7. Source: Elaboration from AEEG (Decision EEN 1-08) THE ITALIAN SYSTEM | 2008 Targets (Elt Sector)
  8. 8. Source: Italian Regulatory Authority for Electricity and Gas (AEEG) THE ITALIAN SYSTEM | Targets (Gas Sector)
  9. 9. Source: Elaboration from AEEG (Decision EEN 8-08) THE ITALIAN SYSTEM | 2008 Targets (Gas Sector)
  10. 10. RESULTS | 2005-2008 Supply and Demand Source: Elaboration from GME Data
  11. 11. RESULTS | 2005-2007 Results Source: AEEG (M. Pavan, October 2008) <ul><li>2 million toe saved against a target of 1,1 million toe </li></ul><ul><ul><li>78% electricity savings ; 18% natural gas savings; 4% other fuels savings </li></ul></ul><ul><ul><li>90% of savings delivered via projects for which simplified M&V methodologies exists ( mostly deemed savings ) </li></ul></ul><ul><ul><li>75% of savings delivered by ESPs (including ESCOs) </li></ul></ul><ul><ul><li>significant trading, mostly OTC </li></ul></ul>
  12. 12. RESULTS | 2005-2007 Results: projects structure Source: AEEG (M. Pavan, October 2008)
  13. 13. RESULTS | Prices (Spot and OTC) March06 – Oct08 Source: AEEG
  14. 14. RESULTS | WhC Trading in 2008 (SPOT ~ 36%OTC) If we do not consider bilateral contracts between companies belonging to the same industrial group, the percentage rises to 63% (GME, S.Alaimo) Source: GME
  15. 15. RESULTS | OTC Trades (April – September 2008) Source: GME (S. Alaimo)
  16. 16. POLICY ISSUES AT STAKE | Scarcity from 2010++ ? Source: Elaboration from the consultation paper DCO 32-08 (AEEG)
  17. 17. POLICY ISSUES AT STAKE | Key elements <ul><li>OTC and Spot Market (E.g. distributors are offered cost-recovery-linked proposals for forward contracts by some broker: what about the nature of the measures ?) </li></ul><ul><li>Risk of windfall profits… </li></ul><ul><li>Is there a need for a price corridor (cap&floor) in order to maintain the stability of the mechanism? </li></ul><ul><li>Continuous research of a balance between economic efficiency/simplicity/low transaction costs/robust methodology (E.g. CFLs lesson… learned? ) </li></ul><ul><li>Strong need of policy coordination in all institutional levels and of information campaigns ( citizenship, local policy makers, administrators of large public facilities… ) </li></ul>
  18. 18. POLICY ISSUES AT STAKE | Coming soon… <ul><li>Third AEEG annual report on WhCs to be published in few weeks (December 2008, www.autorita.energia.it) </li></ul><ul><li>Consultation on the update of the cost recovery level calculation to be closed on the first of December 2008 </li></ul>
  19. 19. WhC & EPBD | In Italy… Source: Elaboration from the consultation paper DCO 32-08 (AEEG) <ul><li>Deep difference between the general awareness about WhCs vs. fiscal discounts (36% for retrofitting and 55% for En. Eff. Measures in buildings, for projects up to 2010; more than 60.000 projects have been communicated to ENEA from Jan 2007 to Jan 2008 just for the 55% mechanism!). Citizens aren’t aware of the WhC system </li></ul><ul><li>More research and policy coordination actions are needed to link WhCs and EPBD, especially for the recent re-cast (ref. MEMO/08/693, November 2008) of the directive. …fingers crossed for BuildWhite IEE submission </li></ul>
  20. 20. For more information, please contact: Daniele RUSSOLILLO [email_address] Fondazione per l’Ambiente Via Pomba 23, I-10123, Torino, Italy Tel +39 011 571 47 50 Fax +39 011 571 47 51 www.fondazioneambiente.org Thank you for your kind attention | Contacts

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