Italian white certificates scheme R Romani M Liberatori

Italian white certificates scheme R. Romani & M. Liberatori ENEA Environment Department romani@casaccia. enea. it maura. liberatori@casaccia. enea. it Casaccia 09. 01. 2007

Italian white certificates scheme Summary: • Energy efficiency decrees • Eligible projects • White certificates • Sanctions • Measurements and verification of energy savings • Main results Casaccia 09. 01. 2007

Italian economy’s energy intensity Casaccia 09. 01. 2007 3

Energy efficiency decrees (1/6) • Issued in April 2001 • Innovative strategy that combines a command control approach with a market based instrument Casaccia 09. 01. 2007 4

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 09. 01. 2007 5

Energy efficiency decrees (2/6) • Distribution System Operators* (DSO) are required to achieve quantitative targets of energy efficiency improvements in enduses • The way for achieving these objectives is left to the market forces (energy efficiency titles or white certificates) * < 100. 000 customers at Dec. 2001 Casaccia 09. 01. 2007 6

Energy efficiency decrees (4/6) Annual Targets (Mtoe) year 2005 2006 2007 2008 2009 electricity annual comulative 0, 1 0, 2 0, 4 0, 8 1, 6 gas annual comulative 0, 1 0, 2 0, 4 0, 3 0, 7 0, 6 1, 3 Casaccia 09. 01. 2007 7

Time persistence of energy savings Casaccia 09. 01. 2007 8

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 09. 01. 2007 9

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 09. 01. 2007 10

Eligible projects • All energy saving projects Casaccia 09. 01. 2007 11

Eligible projects (examples) • improvements of energy efficiency in lighting; • combined heat and power systems; • district heating/cooling system; • high efficient boilers; • photovoltaic plants; • household appliances; Casaccia 09. 01. 2007 12

Eligible projects (examples) • • heat pumps; air conditioning; thermal insulation system in buildings; solar plants for hot water; high efficiency motors; variable speed drive; etc. . Casaccia 09. 01. 2007 13

Energy Efficiency Titles (TEE) or White Certificates (Wh. C) • 1 Wh. C for 1 toe of saved primary energy Casaccia 09. 01. 2007 14

White Certificates (Wh. C) • Wh. C 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 09. 01. 2007 15

Typology of Wh. C • Type 1: certificates savings of electricity • Type 2: certificates savings of gas • Type 3: certificates savings of other fuels Casaccia 09. 01. 2007 16

Sanctions • proportional and in any case greater than the investment needed to compensate the noncompliance • established and applied by the Authority for Electric Energy and Gas (AEEG) Casaccia 09. 01. 2007 17

Process to recognize energy saving Phases and Actors Implementation of the project DSO and ESCO Request of verification Entitled project Assessment and certification AEEG Issue of Wh. C GME Exchange of Wh. C Transfer of Wh. C to AEEG DSO and ESCO DSO Casaccia 09. 01. 2007 AEEG to DSO Economic contribution 18

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 09. 01. 2007 19

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 09. 01. 2007 20

Measurements and Verification of energy savings (M&V) Project threshold (Mtoe/year) Method Default Engineering Energy monitoring DSO/ESCOs 25 ESCOs 50 100 DSO 100 200 Casaccia 09. 01. 2007 21

Projects evaluated by Default Method (examples of 22 developed formats) • Replacement of incandescent lamps by CFL; • Replacement of electric boilers by gas boilers for heating sanitary water; • Installation of high efficient boilers; • Thermal insulation systems in buildings; • Photovoltaic plants (<20 k. W power); • Variable speed drivers • High efficiency electric motors; • Etc… Casaccia 09. 01. 2007 22

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 09. 01. 2007 23

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 09. 01. 2007 24

Main results 2005 • Many ESCOs authorised (700 till now) • • 1000 projects implemented; 0. 28 Mtoe of energy saving achieved (with respect to a target of 0. 15 Mtoe); 0, 75 Mton of CO 2 reduced (equivalent to a CO 2 emitted from a central power of 160 MW) • Casaccia 09. 01. 2007 25

Distribution of national target among obliged electricity DSO Target 2005 (tep) • • • Acegas-Aps S. p. a, Trieste AEM Distribuzione Energia Elettrica S. p. a, Milano AEM Torino Distribuzione S. p. a. , Torino ASM Brescia S. p. a. , Brescia ACEA Distribuzione S. p. a, Roma Azienda Energetica S. p. a. , Bolzano Deval S. p. a. , Aosta Enel Distribuzione S. p. a. , Roma Enìa S. p. a. , Parma Hera S. p. a, Modena Total Casaccia 09. 01. 2007 297 2. 827 1. 263 461 3. 897 340 225 87. 849 336 359 97. 854 0, 3% 2, 9% 1, 3% 0, 5% 4, 0% 0, 3% 0, 2% 89, 8% 0, 3% 0, 4% 100% 26

Distribution of national target among obliged gas DSO » • • • • • • Acegas-Aps S. p. a, Trieste AEM Distribuzione Gas e Calore S. p. a, Milano AGSM Rete Gas S. r. l. , Verona A. M. Gas S. p. a. , Bari 273 AMG Energia S. p. a. , Palermo AMGA, S. p. a. , Genova ASCO Piave S. p. a. , Pieve di Soligo (Treviso) ASM Brescia S. p. a. , Brescia Azienda Energia e Servizi S. p. a, Torino Compagnia Napoletana S. p. a. , Napoli Consiag Reti S. r. l. , Prato ENEL Rete Gas S. p. a. , Milano Enìa S. p. a. , Parma Fiorentina. Gas S. p. a. , Firenze HERA S. p. a. Bologna Italcogim Reti S. p. a. , Milano Italgas S. p. a. , Torino SGR Reti S. p. a. , Rimini Siciliana Gas S. p. a, Palermo Toscana Gas S. p. a. , Pisa Totale Target 2005 (tep) 1. 358 3. 391 659 0, 5% 210 1. 181 2. 266 1. 022 2. 018 1. 445 1. 005 8. 325 2. 737 1. 717 5. 986 1. 960 20. 215 904 538 847 58. 057 2, 3% 5, 8% 1, 1% 0, 4% 2, 0% 3, 9% 1, 8% 3, 5% 2, 5% 1, 7% 14, 3% 4, 7% 3, 0% 10, 3% 3, 4% 34, 8% 1, 6% 0, 9% 1, 5% 100% Casaccia 09. 01. 2007 27

Demand side of the White Certificates Market • 20 Gas Distributors • 58, 057 toe • 10 Electricity Distributors • 97, 854 toe Casaccia 09. 01. 2007 28

Supply side of the White certificates Market • 573 electricity and/or gas distributors not target-bound about 700 ESCOs could partecipate to the Wh. Cs market • Actually only 118 have applied to be enrolled in the Register Casaccia 09. 01. 2007 29

First year results • over 350 requests to check and certify the savings achieved through …. • about 1, 000 conservation projects Casaccia 09. 01. 2007 30

First year period (2005) • 50% of projects have been implemented by distribution system operators, while the other 50% by ESCOs; Casaccia 09. 01. 2007 31

Tipology of Wh. Cs issued • Between Juanuary 2005 and May 2006, the Authority certified energy saving for 286. 837 toe, and GME issued consequently energy efficiency titles or Whc: • 214. 244 Type I (electricity saving) 75% of the total, four times the minimum quantity required from bounded electricity DSO • 62. 826 Type II (natural gas saving); 22% of the total, two times the quantity required from bounded gas DSO • 9. 767 Type III (solid, liquid and other gas fuels saving) 3% (for which no target bound was established). Casaccia 09. 01. 2007 32

Issued Wh. Cs for subject tipology • • Obliged electricity DSO 9, 1% Obliged gas DSO 23, 8% Not target bound distributors 2, 5% ESCOs 64, 6% Casaccia 09. 01. 2007 33

Total energy saving • The number of Wh. Cs of which has been asked the emission resulted higher than the sum of assigned targets (184%). Casaccia 09. 01. 2007 34

The main measures adopted • improvements of energy efficiency in public lighting (59% of total certified savings); • distributed energy generation (ie. Combined Heat and Power system, district heating/cooling system: about 17% of total certified savings); • improvements of energy efficiency in residential sector (ie. : lighting, high efficient boilers, photovoltaic (8%), household appliances, heat pumps, air conditioning; about 15%); • miscellaneous measures for heating in residential and commercial buildings (ie. : high efficient boilers, thermic isolation systems in buildings, solar plants for hot water: 7% circa); • miscellaneous measures on industrial sector (ie. : high Casaccia speed 09. 01. 2007 drive: about 2% of total 35 efficiency motors, variable saving).

Second year period to be verified on may 2007 Target: about 311. 000 toe of energy saving of which: • 191. 949 in the electricity sector • 119. 809 in the gas secor Casaccia 09. 01. 2007 36

Italian white certificates system Thanks for your attention Casaccia 09. 01. 2007 37