EU Directive on Energy End-Use and Services

European Commission, Directorate-General for Energy and Transport n° 119.04.2006
European Commission
Copenhagen
19.04.2006
EU Directive onEU Directive on
Energy EndEnergy End--useuse
Efficiency andEfficiency and
Energy ServicesEnergy Services
Håvard Vaggen Malvik
DG Energy and Transport

European Commission
Main Energy Priorities
1. Increasing energy efficiency
2. Achieving a properly functioning
internal market for gas and electricity
3. Promoting renewable energy
4. Strengthening nuclear safety and
security
5. Security of Europe’s energy supplies and
further developing external energy
policy relations
6. Improving the links between energy
policies and environmental and
research policies
Mr. Andris Piebalgs
Energy Commissioner

TheThe EnergyEnergy EfficiencyEfficiency DirectiveDirective
Proposal adopted by Com.: 10.12.2003
2nd Reading Agreement 30.11.2005
Adoption by Council (A-point): 14.03.2006
Signature by Council and EP: 05.04.2006
Entry into force: May 2006
Transposition deadline: May 2008
First Committee meeting: June 2006
Co-decision: Timeframe

To promote cost-effective energy efficiency in EU
Member States through obligations and the
removal of institutional, financial and legal
barriers.
To promote the development of a sustainable
market for energy efficiency and energy services.
Article 1: Objective

Covers all energy end-use suppliers (distributors
and retailers of electricity, natural gas, LNG, LPG,
district heating & cooling, heating oil, coal, lignite, peat,
biomass, and transport fuels).
Aviation fuels and maritime bunkers excluded.
Small companies < 75 GWh/yr. may be excluded from
Art. 6 and 13.
Covers all energy end-use sectors:
- domestic, agricultural, public and tertiary sectors
- non-energy intensive industries and transport
Emissions Trading sector excluded.
Article 2: Scope

9-year 9 % indicative target (1% cumulative annual
savings) measured from 1.1.2008 until 31.12.2016.
Fixed amount of energy (TWh) calculated as 1% of
5-year average of unadjusted final consumption.
Credit for some “early actions” >1995 (1991). But
effects must be measurable after 2008.
All measures must be verifiable and measurable or
estimable. (Details in Annexes I, II, III and IV.)
The Commission to revisit a White Certificate System
Article 4: The target

Calculating the targetCalculating the target
0
200
400
600
800
1000
1200
1400 1999
2000
2001
2002
2003
reference
targetsavings
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Mtoe
consumption savings
target savings
9% of reference consumption
reference consumption
= 5 years average

Accumulation of savingsAccumulation of savings
0
10
20
30
40
50
60
70
80
90
1001999
2001
2003
2004
2006
2008
2010
2012
2014
2016
Mtoe
indicative savings target savings
intermediate target
app. 3%
final target
9 %

The Public Sector in Member States will be obliged to:
fulfil an exemplary role;
publish energy efficiency guidelines as assessment
criteria in tendering for public contracts;
select two mandatory measures from a list in
Annex VI, requiring energy-efficient public
procurement, energy audits and energy
performance contracting.
Article 5: Public Sector Obligations

Member States and suppliers to promote energy
services & energy efficiency measures.
Obligation for energy distribution and/or retail
energy sales companies to choose between:
a) energy services, energy audits, energy efficiency measures
or contribute to an energy efficiency fund.
b) voluntary agreements and/or market oriented schemes
Energy companies to help remove market barriers,
and not hinder EE market development.
Article 6: Obligation on Energy Suppliers

MS to make sure that information about this
Directive is widely distributed to relevant market
actors.
MS to establish appropriate conditions for
providing information to final customers.
The Commission to facilitate best practice
exchange and dissemination.
Article 7: Availability of Information

Qualification, accreditation and certification of
energy service providers to ensure technical
competence.
Linked to the energy service & energy audit option
in Article 6.
Article 8: Qualification & Accreditation

Removal of legislation that restricts use of financial
instruments for energy savings
Promotion of financial instruments for energy
savings, e.g. third-party financing and energy
performance contracting.
Article 9: Financial instruments

For tariffs and regulations for net-bound energy,
regulators to use tariff structures that avoid
unnecessary volume driving incentives.
Schemes and tariffs with a social aim may be
permitted.
Article 10: Distribution tariffs

Promotion of the establishment of energy
efficiency funds or funding mechanisms.
Funds to target high risk sectors.
To be open to all providers of energy efficiency
improvement measures.
Article 11: Funding mechanisms

TheThe EnergyEnergy EfficiancyEfficiancy DirectiveDirective
Member States to ensure the wide availability of
high quality independent energy audit schemes.
To be carried out in an independent manner.
Availability of audits to be ensured in markets
where they are not sold commercially.
Article 12: Energy Audits

Energy suppliers to provide to electricity, natural gas,
DH/C and domestic hot water customers, when technically
possible and cost effective: competitively priced individual
meters that accurately reflects consumption + information
on actual time of use.
With meter replacement, such meters shall always be
provided, unless technically impossible or not cost-
effective in relation to long-term savings potential.
When a new connection is made as a result of a new
building or a « major renovation », such meters shall
always be provided.
Article 13: Metering

Billing performed by energy suppliers shall be based
on actual energy consumption and presented in clear
and understandable terms.
Appropriate information shall be made available
with the bill to provide customer with comprehensive
account of current energy costs.
Billing on the basis of actual consumption shall be
performed frequently enough to enable customer to
regulate his own energy consumption.
Article 13: Billing

Energy suppliers to provide in or with their bills,
contracts, transactions or receipts at distribution stations:
Current actual prices and actual energy consumption;
Comparisons with previous year's consumption, preferably
in graphical form;
Comparisons with comparable average normalised or
benchmarked user in same user category;
Contact information for energy efficiency improvement
measures, end-user profiles and objective technical
specifications for energy-using equipment.
Article 13: Billing (cont.)

National Energy Efficiency Action Plans to be
developed by Member States
First EEAP by 30 June 2007
Second EEAP by on 30 June 2011
Third EEAP by on 30 June 2014
Commission to report on the EEAP’s within 6
months.
The first EEAP to be forward looking, the next ones
to cover past results and future measures.
Article 14: Reporting

By 1.1.2008, Committee to further refine and
complement harmonised bottom-up model covering
between 20 and 30%.
By 1.1.2012 bottom-up model to cover a
“significantly higher level” of final consumption.
By 30 June 2008 develop a set of harmonised EE
indicators based on those listed in Annex V.
An amended or new directive to be tabled in
2013/2014.
Article 15: Review and adaptation

A committee with Member State representatives to
be formed to help Commission further develop a
harmonised bottom-up/top-down system to
measure savings target.
The Committee will adapt Annex II, III, IV and V
to technical progress.
First Committee meeting in June 2006.
Article 16: Comitology

Residential and tertiary, industry, transport.
Cross-sectoral measures such as standards, labelling,
metering, training and education.
Horizontal measures such as regulations, taxes, and
focused information campaigns.
Measures must be clearly measured and verified or
estimated according to guidelines in Annex IV.
Annex III: List of eligible measures

Harmonised calculation model using combination of
top-down and bottom-up methods.
Top-down calculations to be adjusted for degree
days, structural changes, product mix and other
extraneous factors.
Existing models such as ODEX as starting point.
Bottom-up method should be simplified and
standardised methods should be used.
With top-down and bottom-up together, risk of
double- counting to be avoided.
Annex IV: General M & V Framework

Com. to replace list of lifetimes late in 2006
CEN may be involved (Workshop Agreement)
Long-term measures to (i.e., longer than 9 years) to
be encouraged.
But short-term measures acceptable and should be
agreed upon before + 9 years measures.
Lifetime discounting issues to be solved.
Next step: Harmonised definitions for M & V
Upcoming work: First tasks

Upcoming tenders from Commission:
Energy Efficiency Potential Study covering all
MS + EEA (App. 350.000 Euro)
Development of bottom-up & top down
methodology + Directive Helpdesk (App. 1.25
mill. Euro)
Both tenders to be signed in 2006.
Supporting instruments

ConclusionsConclusions
Much subsidiarity is left to the Member State
on how to reach the indicative targets.
EEAPs; the Member State’s will have to re-
think their energy efficiency policies and
measures.
The bottom up model will increase its
importance during the target period.
The result; more focus on cost effective and
measurable / verifiable measures.

ConclusionsConclusions
The energy savings targets would be a strong
driver in developing new energy efficiency
markets.
Numerous new business areas, including new
energy services, energy auditing, smart
metering, billing and financial instruments for
energy savings will emerge.
New markets + harmonised energy savings
calculation methodology would pave the way
for higher national targets.

Sources of information:
EP and Council websites:
http://www.europarl.eu.int/meetdocs/2004_2009/o
rganes/ITRE/ITRE_meetinglist.htm
http://register.consilium.eu.int/servlet/driver?typ=
&page=Simple&lang=EN&cmsid=638
Commission staff following the Directive:
Randall Bowie: randall.bowie@cec.eiu.int
Håvard Vaggen Malvik: havard.malvik@cec.eu.int

IEE supports more than 200 on-going projects, of which several
are related to the EE&ES Directive:
ODYSSEE-MURE to monitor energy efficiency improvements in EU-25
European Platform for the Promotion of Energy Performance Contracting
(« Eurocontract »)
PRIME etc.
Next Call for Proposals to be published in May 2006
Follow-up program under CIP foreseen for 2007-2013
More information availiable at:
http://europa.eu.int/comm/energy/intelligent/index_en.html

Thanks
for the
attention!
Havard.Malvik@cec.eu.int

EU Directive on Energy End-Use and Services

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