Presented by Stefano Alaimo, CESI Ricerca, Italy at the IEA DSM Programme workshop in Milan, Italy on 22 October 2008.

1. Italian White Certificates Market:
main results and experience gained
Stefano Alaimo
CESI RICERCA
Milan, 22 October 2008

2. 2
GME’s role outlined by Ministerial Decrees 20 July 2004 (as modified and
integrated) is:
to establish and manage a REGISTRY
(WhC emissions, bilateral transactions registration, WhC redemption)
to establish and manage an organized MARKETPLACE
REGISTRY MARKET
GME’s role in the WhC mechanism

3. Registry
Each Participant opens an account in the Registry
WhC are issued upon Regulator communication and
deposited on owner’s account
WhC are transferred from seller’s account to buyer’s
account after a transaction (bilateral or market based)
GME’s role
GME
Market
Registry
A B
Bilateral
contracts
Market
Continuos trading (one market session a week)
One trading book for each WhC type (electricity, gas,
primary energy certificates)
Guarantee deposit requested to buyers
Real-time link with Registry (no short selling or double
selling allowed)
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4. Operators and WhC issued4
Registry Operators up to now: 250 Markets Operators up to now: 198
From 2006 2008
type I 1.733.411 742.790
type II 419.279 197.636
type III 77.365 37.059
Total 2.230.055 977.485
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
1.600.000
1.800.000
type I type II type III
WhC issued
From 2006 2008

5. 5
Bilateral
Market
WhC traded
Market vs Bilateral
Since January 2008, percentage of WhC traded in the market is equal to 39%
of total volume (bilateral + market)
If we do not consider bilateral contracts between companies belonging to
the same industrial group, the percentage rises to 63%.

6. Bilateral transactions6
Bilateral Trades (Apr - Sept 08)
0
20.000
40.000
60.000
80.000
100.000
120.000
140.000
160.000
180.000
0 0,01-
9,99
10-
19,99
20-
29,99
30-
39,99
40-
49,99
50-
59,99
60-
69,99
70-
79,99
80-
89,99
90-
99,99
100 +
Prices (€)
Quantity

7. GME market prices7
WhC prices on GME marketplace
March 06 – Sept 08
Type I
Type II
Difference between type I and type II WhC for
obligation purpose ( type II limited to max 50% of
electricity obligation, type I viceversa)
Oversupply for WhC type I
Type I and type II WhC
can be used either for
electricity obligation or for
gas obligation without limits
If supply exceeds demand
of more than 5%, the
difference is given as an
additional target for obliged
parties the year after

8. WhC type I II III
Minimum price (€/toe) 35,00 35,00 10,00
Maximum price (€/toe) 77,00 84,00 40,00
Weigthed average price (€/toe) 63,02 66,13 21,00
n. WhC traded 278.240 81.419 6.440
GME market prices
Year 2008
8
Since 19 feb 2008:
Weigthed average price (€/toe) 65,78 65,27

9. 9
Market prices volatility
Difference (%) between average market price of one session compared to the previous session
Type I
Difference (%) between average market price of one session compared to the previous session
Type II

10. Main Electricity Distributors
Market share (1st half 2008)
Main Gas Distributors
Market share (1st half 2008)
Obliged parties GME market share10

11. WhC Supply/Demand analysis
Total 1.875.361 1.422.943 3.298.304
Total WhC issued so far 2.230.055
Electricity
Distributors
Annual
Target
Gas
Distributors
Annual
Target
Total
Annual
Target
Assigned
Year 2005 97.854 58.057 155.911
Year 2006 191.949 117.062 309.011
Year 2007 385.558 247.824 633.382
Year 2008 1.200.000 1.000.000 2.200.000
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12. Experience gained12
Once a market mechanism has been adopted to support energy efficiency, it is
important to have an organized market
It helps liquidity and information disclosure. Prices are more efficient from an
economic point of view, new investments are stimulated
In the italian experience, market signals have been useful to amend the rules and
re-establish market equilibrium
A price corridor (cap and floor) could be useful to mantain stability in the
mechanism.
A price floor can guarantee a minimum return of investment and a cap price can limit overall cost
of incentivization. The market sets the price level within the corridor

13. Gestore del Mercato Elettrico SpA
Viale Maresciallo Pilsudski, 92 - 00197 Roma
tel. + 39.06.8012.1 fax +39.06.8012.4102
E-mail: certificatibianchi@mercatoelettrico.org
Internet: www.mercatoelettrico.org
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