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White certificates as a tool to promote energy efficiency in industry

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White certificates (WhCs) or, more generally, energy efficiency obligation schemes (EEOs) are used in many EU countries as a policy measure to reach energy efficiency targets. Some of the first schemes (UK, Italy, France, Denmark) have been capable to reach positive results over the years, although with important differences, as clearly demonstrated by the IEE ENSPOL project. Only the Danish and the Italian schemes show a predominance of industrial projects. The Italian scheme, in particular, in the last three years has produced 80% of the white certificates from the industrial sector. The energy savings are transformed in certificates keeping into account the additionality, with respect to the market and regulatory baseline, and the technical lifetime of the project (through the so called tau coefficient). The presence of a tradable market ensures an important involvement of voluntary parties and supported the development of a dedicated energy service market. This EEO scheme, which started effectively in 2004, provides a target of 7.6 Mtoe of annual savings in 2016 and showed a progressive shift from the tertiary and household sectors and a prevalent use of simplified procedures for the assessment of energy savings, to the industrial sector and a predominant use of metered savings procedures. The scheme is thus an interesting example of a policy measure capable of achieving significant results in the industrial sector and it could be useful to analyse the main design rules that influenced this result. Based on FIRE activities and experience, with a focus on the industrial sector, the paper will illustrate the main facts and results and how additionality, non energy benefits at system level, certificates trading, scheme costs, and measurement and verification procedures have been dealt with. The paper will also address the issues that will lead to a major redesign of the Italian scheme in 2016.
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ECEEE INDUSTRIAL SUMMER STUDY PROCEEDINGS 151
White certificates as a tool to promote
energy eciency in industry
Dario Di Santo
FIRE – Italian Federation for the Rational Use of Energy
Via Anguillarese 301
00123 Roma
Italy
disanto@fire-italia.org
Enrico Biele
FIRE – Italian Federation for the Rational Use of Energy
biele@fire-italia.org
Daniele Forni
FIRE – Italian Federation for the Rational Use of Energy
forni@fire-italia.org
Keywords
white certicates, energy eciency obligation, industrial ener-
gy saving, ESCO market development, cost-eective measures,
energy eciency assessment, additionality
Abstract
White certicates (WhCs) or, more generally, energy eciency
obligation schemes (EEOs) are used in many EU countries as a
policy measure to reach energy eciency targets. Some of the
rst schemes (UK, Italy, France, Denmark) have been capable
to reach positive results over the years, although with impor-
tant dierences, as clearly demonstrated by the IEE ENSPOL
project. Only the Danish and the Italian schemes show a pre-
dominance of industrial projects.
e Italian scheme, in particular, in the last three years has
produced 80% of the white certicates from the industrial sec-
tor. e energy savings are transformed in certicates keeping
into account the additionality, with respect to the market and
regulatory baseline, and the technical lifetime of the project
(through the so called tau coecient). e presence of a trad-
able market ensures an important involvement of voluntary
parties and supported the development of a dedicated energy
service market.
is EEO scheme, which started eectively in 2004, provides
a target of 7.6Mtoe1 of annual savings in 2016 and showed a
progressive shi from the tertiary and household sectors and a
prevalent use of simplied procedures for the assessment of en-
ergy savings, to the industrial sector and a predominant use of
1. Toe: primary ton of oil equivalent. In the Italian scheme it corresponds roughly
to 5.3MWhe and 11.6MWht.
metered savings procedures. e scheme is thus an interesting
example of a policy measure capable of achieving signicant
results in the industrial sector and it could be useful to analyse
the main design rules that inuenced this result.
Based on FIRE2 activities and experience, with a focus on
the industrial sector, the paper will illustrate the main facts and
results and how additionality, non energy benets at system
level, certicates trading, scheme costs, and measurement and
verication procedures have been dealt with. e paper will
also address the issues that will lead to a major redesign of the
Italian scheme in 2016.
Introduction
e 2012/27/EU directive on energy eciency (EED) dedicates
article7 to the energy savings targets and support schemes.
In particular Member States are required to save 1.5% annu-
ally with respect to the total energy sold to nal costumers by
distributors or by all retail energy sales companies, averaged
over the most recent three-year period prior to 1 January 2013.
Member States have the possibility to exclude transport and
companies under the emission trading scheme. In order to
reach this target Member States shall either impose an obliga-
tion to some parties (e.g. distributors, traders, nal users, etc.)
2. The Italian Federation for energy eciency – FIRE – is an independent non-
profit organization founded in 1987, whose purpose is to promote the ecient use
of energy.FIRE has around 450 members, which cover all the energy sector (e.g.
energy eciency technologies producers, power producers, distributors, ESCOs,
large and medium enterprises, universities and research centers, energy manag-
ers and energy professionals). Since 1992 FIRE manages the Italian energy man-
ager network on behalf of the Ministry of Economic Development. For information:
www.fire-italia.org/fire-in-english.
1-141-16 DI SANTO ET AL
152 INDUSTRIAL EFFICIENCY 2016
1. POLICIES AND PROGRAMMES
through an EEO scheme, or adopt alternative measures (e.g.
nancial schemes, loans, carbon taxes, voluntary agreements,
etc.), or a mix of both.
e ENSPOL project (www.enspol.eu)3, which lasted from
2014 to 2016, was dedicated to the analysis of all the EU sup-
port schemes covered by EED art.7, both existing and planned.
Reports and guidelines covering all the aspects of EEO schemes
and alternative measures (e.g. obliged parties, measurement
of energy savings, baseline and additionality, controls, costs,
etc.) are available in the project website [13,19]. Besides a web
platform (www.article7eed.eu) is available to confront the dif-
ferent schemes or go into details of a single measure. Both the
ENSPOL website and platform are useful resources for experts
and practitioners interested in EE support schemes and people
interested in these topics, but not already familiar with them,
are strongly encouraged to access the ENSPOL resources prior
to read this paper.
is paper is based on the activities implemented by the au-
thors in FIRE about energy eciency policies and in particular
white certicates4. Besides being partner of the ENSPOL pro-
ject, FIRE is also involved in the EU-MERCI project (www.eu-
merci.eu), aimed at analysing the industrial case studies collected
through some of art.7 EED schemes and disseminating and
promoting the best practices. e paper will briey summarise
the basis of the Italian WhC scheme, illustrate the main results
obtained since its creation in 2001 and eective launch in 2004
– with a focus on the role of the industrial sector –, and go into
details about how the scheme deals with the main issues related
to EEO schemes. Aerwards, the paper will explain some of the
problems the scheme incurred during the last three years and in-
troduce the new guidelines that will be released in 2016 in order
to proceed towards the 2020 target. e conclusions will show
the importance of a continuous improvement approach to reach
the best results with complex schemes such as the Italian WhCs.
3. FIRE was the Italian partner of the ENSPOL project, financed under the Intel-
ligent energy for Europe programme.
4. The activities performed by FIRE about WhC: participation in institutional work-
ing groups and auditions, management of the national WhC observatory in coop-
eration with GSE, surveys, researches and advanced training, also in cooperation
with ENEA, information campaigns, also in cooperation with the Ministry of Envi-
ronment, and national annual conferences.
More information on how EEO schemes work and useful
comparisons among them can be found in [1, 2, 3, 5, 6, 9, 12,
13, 14, 15, 18, 19].
Basics about the Italian WhC scheme
e Italian WhC scheme [4, 7, 8, 10, 11, 13, 21, 22] is an EEO
in which the electricity and gas distributors with more than
50,000clients are obliged to reach increasing annual energy
eciency targets (Figure1)5. It is a exible mechanism, since
the EE savings can be obtained through interventions from
market operators (i.e. non obliged distributors, ESCOs, com-
panies with energy manager or energy management system),
managed by GSE6.
White certicates are used to certify the savings and obliged
distributors can buy them from voluntary parties besides ob-
taining them directly. All energy eciency projects in all sec-
tors are allowed. e exchange of white certicates between
obliged and voluntary parties takes place on a dedicated plat-
form managed by the GME7, either as a spot market exchange,
or as a bilateral agreement over the counter. e WhC scheme
can thus work as an incentive for the voluntary parties, consid-
ering that the WhC price can vary over the time and that there
are no assurances that the certicates can be sold every year8.
Each certicate corresponds to one toe of annual savings. Fig-
ure2 shows the annual target expressed both as number of cer-
ticates and as toe. e dierence between the two values is due
both to the tau coecient and to an increasing amount of savings
that will come from projects that dont receive white certicates
(e.g. interventions on the electricity and gas grids, savings related
to mandatory energy audits for non SMEs and ISO50001, etc.).
e savings are additional, meaning that only savings over a
regulatory and market baseline are accounted for, and gener-
5. Global targets are split among the obliged distributors considering the energy
delivered in the previous year by each of them.
6. Italian Energy systems manager (public company in charge of operating the
Italian scheme).
7. Italian Energy market manager (public company owned by GSE in charge of the
Italian power exchange IPEX and of environmental and energy eciency markets,
that is emission trading, green and white certificates).
8. In case of oversupply the price of the certificates drops and it can become dif-
ficult to sell the owned certificates.
Figure 1. Basics of the Italian WhC scheme.
1. POLICIES AND PROGRAMMES
ECEEE INDUSTRIAL SUMMER STUDY PROCEEDINGS 153
1-141-16 DI SANTO ET AL
ate white certicates for ve years9. e number of certicates
issued annually is the sum of the yearly savings over the WhC
lifespan and of the savings from the sixth year to the end of the
technology lifespan appropriately reallocated due to the tau co-
ecient, as shown by Figure3 (for further information on the
tau coecient [10, 13]).
e costs incurred by the obliged distributors, being regu-
lated companies, are partially reimbursed through a tari reim-
bursement component dened by AEEGSI10 and linked to the
weighted average price of the certicates in the spot market the
previous year (for more information, see [13, 18]). at means
that the cost of the scheme can be calculated as the product of
the cancelled certicates11 and the tari reimbursement com-
ponent. In 2014 the cost was around 600millioneuros, with
5,8million of cancelled certicates, whereas in 2015 it should
rise around 700millioneuros. e costs incurred by GSE for
information, evaluation and control should be below 10mil-
lioneuros.
Measurement of energy savings
Presently three methodologies for the measurement and veri-
cation of energy savings are used:
Deemed saving;
Scaled savings;
Metered savings.
9. For building envelope projects the duration is eight years and for high eciency
cogeneration, as defined in the EED, ten years.
10. Italian Authority for electricity, gas and hydric systems (in charge of defining
the tari reimbursement for obliged parties and of applying fines in case of un-
reached targets within the Italian WhC scheme).
11. A certificate is cancelled when is presented by an obliged distributor to GSE
to fulfil its target.
e rst one requires no meters and savings are assessed in
terms on installed units. e procedure is simple and white
certicates are issued quarterly and placed on the GME account
of the proponent. Deemed savings have played an important
role in the rst years of the scheme, when they used to account
for over 90% of the savings.
Scaled savings are limited to particular technologies, charac-
terised by a good level of standardization, but also by the need to
link the savings to the eective use. us they provide for an al-
gorithm used to evaluate the savings based on the measurements
derived from dedicated meters12. e baseline and additionality
are evaluated in a standardised way as for deemed savings.
Metered savings require the proponent to present a project
and measurement and verication (M&V) proposal (known
as PPPM in Italy), in which the solution to be implemented,
M&V procedure, consumption baseline and additionality, and
algorithm to evaluate the savings with respect to the metered
quantities are dened. Aer the PPPM is approved, the project
can request the white certicates by communicating – usually
annually or twice a year – the metered quantities, as in the case
of scaled savings.
During the years the role and usage of metered savings has
been increasing, with the important advantage of ensuring that
most of the accounted savings are measured. Figure4 illustrates
the trends of the three M&V methodologies over the years. It is
worth noticing the sudden fall of the assessed savings in 2015,
both for new projects and for the total. is outcome is ex-
plained below, in the main issues paragraph.
Generally deemed saving and scaled savings procedures
worked quite well, requiring in some cases a revision of the
additionality coecient or the withdraw of particular les aer
some years of use to take into account the evolution of the mar-
12. For example, a centralised boiler installed in a oce building requires the
measure of the thermal energy produced and of the fuel and electricity used.











               
Targetsascer*ficatesandannualsavings
(dataupdatedtoMarch2016expressedasthousands)
 

Figure 2. Targets over time. The values about 2017–2020 are based on the art.7 EED notification and can vary.
1-141-16 DI SANTO ET AL
154 INDUSTRIAL EFFICIENCY 2016
1. POLICIES AND PROGRAMMES
ket and the diusion of the related technologies (e.g. compact
uorescent lamps, aerators, etc.) [4, 13, 16]. Nevertheless some
particular technologies procedures were characterised by im
-
portant issues. Some of them, such as heat pumps for the resi-
dential sector or natural gas cars, showed little use due to the
cost of the requested documents with respect to the expected
value of the white certicates. Others, on the contrary, had a
large success due to some defects in the requirements, which
translated in undesired eects13.
Metered savings worked quite well, increasing their share
of the total savings over 80%. e main issues that are under
investigation are related to the energy consumption baseline
14
(the new guidelines will introduce stricter requirements on its
calculation) and to the reliability of the installed meters.
Results
e Italian WhC scheme in over ten years has been capable
of producing impressive results in terms of total savings, data
collection, qualication of market operators. e main gures
[16, 20]:
targets from 200ktoe in 2005 to 7,600ktoe in 2016;
over 22millions cumulated savings and 36millions issued
white certicates till 2015;
13. For example, due to a flaw in the UPS file, some rogue traders started giving
low quality UPS for free to end users, aiming at the good margin granted by WhC to
such low cost devices. The file was then withdrawn by the Ministry.
14. Please notice that with “baseline” we refer to the threshold that makes sav-
ings additional (additionality baseline), whereas with “consumption baseline” we
refer to the energy consumption before the energy eciency intervention. The two
baselines can coincide in particular cases, but usually the additionality baseline
is higher as the consumption baseline due to minimum requirements, technology
evolution and market trends.
≈85% of savings are metered and ≈82% are metered saving
projects (in 2007 ≈90% were deemed savings);
≈62% of the savings assessed in 2015 are related to the in-
dustrial sector;
average dimension of each proposal between 300 and
550toe in the last three years;
4,693operators registered in 2015 to the GSE platform, of
which 1,233presented projects;
ESCOs have been the main actor in presenting projects both
in terms of registered subjects (3,693), proposals (96%) and
toe (70%, whereas 25% come from companies with energy
manager);
exible managing agencies needed to deal with the growing
proposals (13,717requests for certicates presented in 2014
and 1,034PPPMs VS ≈150 in 2007 and ≈550 in 2012);
cost eectiveness is high (0.017 euro/kWh according to
ENEA15 annual report on energy eciency).
Figure5 illustrates the trend of the issued certicates and sav-
ings, compared with the annual targets. In 2015 the average
tau coecient has been equal to2.9 (calculated as total annual
certicates divided by total annual toe). Since the introduction
of this coecient in 2011 the value of annual issued certicates
is no more equal to the value of the savings, due to the anticipa-
tion of future savings.
15. Italian Agency for new technologies, energy and environment (in charge of
information campaigns for WhC and supporting GSE in verifications, audits and
controls).
Figure 3. The tau coecient explained.
1. POLICIES AND PROGRAMMES
ECEEE INDUSTRIAL SUMMER STUDY PROCEEDINGS 155
1-141-16 DI SANTO ET AL
Two eects emerge from Figure5: the drop of certicates in
2015, aer years of continuous improvements, and the reduc-
tion trend of annual savings starting from 2012. e rst is a
consequence of the 2012 guidelines that allowed the presenta-
tion of PPPMs only before the start of the EE project begin-
ning with 201316. e second is most probably due to a mix
16. Previously there was no particular limit: it was for example possible to present
a project implemented even 3–4years before. The reason of this choice is related
to the long time it took to launch the scheme (2005 instead of 2002 as provided
by the first ministerial decrees) and to the need to allow project implemented in
the meantime to access the mechanism.
of factors: completion of the ve years lifespan for many large
projects, less low hanging fruits remain to be collected in the
industrial sector, the evolution of the market reduced the addi-
tionality of some solutions (e.g. heat recovery), the new guide-
lines increased the period of time from the submission of the
PPPM to the request of certicates, the introduction of stricter
rules in the verication and control activities. is decline of
the annual savings is unlikely to be reversed considering the
evolution of these factors. It will be interesting to see if the sav-
ings’ trend will be a continuous decline or a stabilisation in the
next years.
Figure 4. Contribution of the dierent M&V procedures to the total savings.
Table 1. Comparison among the dierent M&V methods.
Deemed savings Scaled savings Metered savings
The method is easy to use and facilitates
the evaluation.
Savings are not measured and
monitoring can be complex if multiple
solutions are considered.
Required documentation: choice to go
easy or bureaucratic, which usually
implies a failure, unless the incentive is
very high.
On eld controls are expensive.
Effort required to evaluate baselines,
additionality, and other needed
information.
High cost-effectiveness.
Possibility to pre-evaluate EE products
in order to ensure the required
performance.
The method is easy to use and facilitates
the evaluation.
Savings are measured.
Required documentation: choice to go
easy or bureaucratic, which usually
implies a failure, unless the incentive is
very high.
On eld controls are usually a viable
option.
Effort required to evaluate baselines,
additionality, algorithms and meters to be
used, and the other needed information.
High cost-effectiveness.
Simplied monitoring plans?
The method is usually complex,
especially if additionality or detailed
adjustments are present.
Savings are measured.
Required documentation: is usually
substantial, but the size of the project
allows it.
On eld controls are usually a viable
option.
Effort required to evaluate baselines,
additionality, algorithms and meters
to be used, and the other needed
information for both the proponents and
the evaluators. Shall data be available
for everybody?
Very exible, but potentially costly and
complicated (viable for high targets).
1-141-16 DI SANTO ET AL
156 INDUSTRIAL EFFICIENCY 2016
1. POLICIES AND PROGRAMMES
It is also worth noticing that the tau coecient didn’t appar-
ently have the eect of accelerating the savings. Figure4 and
Figure5 show that new metered savings proposals started ris-
ing between 2009 and 2010 and didn’t display any acceleration
aer 2011.
Moreover, the introduction of the tau coecient has the ef-
fect to rise the system cost of the saved toe, both in terms of
total costs (increasing the number of years over which the sav-
ings are assessed) and annual costs (anticipating over the WhC
lifespan the savings over the h year). At the same price, an
average tau of2.9 means that the toe that used to cost around
one hundred euros now costs almost three hundred euros. is
can be accepted if it is proved that the multiplier is useful in
terms of presented projects. Something that is dicult to be
conrmed.
An important aspect of the Italian scheme is the trade of cer-
ticates between obliged and voluntary parties. is inuences
both the total cost of the scheme and the possibility of working
as an incentive for ESCOs and end-user companies. Figure6 il-
lustrates the trend of the spot market price over the years17. Re-
garding the liquidity of the spot market, 43% of the certicates
have been exchanged on the real time platform in 2015 and in
the period 1
st
June 2014–31
st
May 2015 9.1millioncerticates
17. Prices varies depending on the saved energy source. The huge dierences
in the first years were due to the obligation for electricity and gas distributors to
fulfil at least 50% of their targets with savings related to the respective distributed
energy sources: the scarcity of certificates linked to gas savings determined their
higher prices. Since 2008 all types of certificates can be used and thus prices are
almost equal (but not exactly the same since dierent types of certificates are
traded separately on the spot market). For further information on this, see [4, 9,
13, 16, 21].
have been exchanged, to be compared with the 6.8millions of
issued certicates and the 6.7millioncerticates of the target
[16]. e price on the bilateral market is quite similar (slightly
lower mainly because of intra-groups exchange at zero or low
price). e drop of certicates in 2015 translated in a strong
increase in the price starting from February 2016. e avail-
able certicates don’t represent an issue in terms of reaching the
exibility thresholds of the distributors’ targets18, but evidently
many operators expect a short market with respect to the 2016
obligation.
Why the industrial sector took the lead
e Italian scheme started with a large majority of projects
related to the civil sector, as usual in almost all the white cer-
ticates schemes. Over the years, as Figure7 shows, the role of
the industrial sector in terms of achieved savings has rapidly
grown, becoming the main sector (in terms of issued certi-
cates the gure is even higher, due to a slightly higher sectorial
tau, over 62%).
e industrial sector started to rise in 2009, with a strong
acceleration in 2012. As stated in the previous chapter, the tau
coecient didn’t apparently accelerate the savings, but had a
clear eect on the participation of the industrial sector to the
scheme. Interestingly, the savings for the industrial sector in
2015 seem to be in the trajectory of a linear growth with the
18. Distributors have time till May31st to present the required certificates. This
is the reason why the white vertical bands are represented in Figure6. Besides,
distributors are fined if they are not able to cover at least 60% of the target for a
given year. The quota of the target that remains uncovered is added to the follow-
ing year target.
Figure 5. Annual and cumulated savings, certificates and targets.
1. POLICIES AND PROGRAMMES
ECEEE INDUSTRIAL SUMMER STUDY PROCEEDINGS 157
1-141-16 DI SANTO ET AL
2009–2011 trend. In between the steep rise can be explained as
the dopant eect of the tau coecient, that helped the indus-
trial enterprises overcoming the perceived barrier of complex-
ity associated with the white certicate scheme.
Moreover, this result could be expected. FIRE, in its reply to
the 2003 consultation to the rst WhC guidelines stated that
the scheme appeared to be biased toward the industrial sector
in terms of simple economics. e reasoning, illustrated in de-
tails in [11], is that the shorter pay-back time in the industrial
sector increases the weight of white certicates with respect to
the investment CAPEX.
e reason of the slow participation of the industrial sector
in the rst phase can be easily explained with the longer time
needed to digest the complexity of concepts like additionality
and to start making some baseline measurements in the pro-
cesses due to energy requalication.
Figure 6. White certificate price over the years and distributors reimbursement value.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2007 2008 2009 2010 2011 2012* 2013 2014 2015
Breakdownofsavingsamongsectors(%)
(Source:FIREonAEEGSIandGSEdata;2012datarefersonlytoJan-May)
Industry Householdsandservices PubliclighBng Transport
Figure 7. Breakdown of WhC savings among dierent sectors over the years.
1-141-16 DI SANTO ET AL
158 INDUSTRIAL EFFICIENCY 2016
1. POLICIES AND PROGRAMMES
Main issues
An incentive scheme running over a long-time obviously has
to deal with various challenges during the years. e revisions
of the guidelines over the years – in 2004, 2007, 2011, and
2012 – have been essential to overcome such problems in the
past, ensuring the evolution and growth of the scheme. e
introduction of the new guidelines, expected since 2014, has
been delayed for many reasons. e eect is that presently the
scheme is facing some important challenges in the last decade.
e main ones are:
the reduction of the annual savings;
the rise of the total cost of the scheme;
the shared responsibilities between ESCOs and clients;
the diculties in evaluating the consumption baseline and
the additionality in the industrial sector;
the uncertainty related to the introduction of the new guide-
lines and targets;
the materiality of the scheme for certain projects.
e rst point has been discussed in the previous chapter. e
rise of the cost of the scheme is not per se a negative eect, since
it can be justied by the rising targets and by more complex
projects. But of course it means that the tari component that
every end-user pays to reimburse part of the costs incurred
by the distributors increase over time. e drop of certicates
in the last year has apparently reduced the cost of the system,
but of course this can be oset by the increase in the white
certicates price. Figure6 shows the increase of the WhC price
in the rst ve months of 2016 due to a number of available
certicates lower than expected by market operators. e eect
has been an increase of the weighted average price from 105to
116euro/toe.
In case of non conformities or other problems concerning a
proposal, with a request to return the money to GSE, problems
can arise if the proponent is an ESCO. e issue can be looked
at from two sides. On the one hand, if an end-user changes
something of the project with respect to the proposal – or,
worse, the plant is being shut down – the ESCO can be harmed
without having the possibility to avoid the issue. On the other
hand, in such cases GSE will request the ESCO to return the
money; money that almost entirely have been forwarded to
the end-user19. is can translate in serious nancial problems
for the ESCO, especially in case of large projects. To reduce
such problems it is fundamental to have adequate contracts in
place between the parties, an obvious consideration that unfor-
tunately many small ESCOs have not taken into account. e
new guidelines will try to overcome this issue, possibly asking
for nancial guarantees (e.g. sureties) for large projects.
e measurement of the energy savings is a complex activ-
ity. Not surprisingly protocols such as the IPMVP20 have been
created over the years. In the case of an EEO and metered sav-
ings, the issue is magnied since a common approach is needed
and it is impossible to opt for dierent level of complexity and
19. ESCOs usually keep a small percentage of the issued certificates, in the order
of some percentage point.
20. For information about the IPMVP protocol: www.evo-world.org.
precision on a case by case method. Besides there is the need
to evaluate the additionality of the single projects, an activity
that can appear relatively easy in the household and service sec-
tors, but that can be quite dicult in the industrial one. Both
these aspects are under discussion: the consumption baseline
since in the last decade sometimes baselines established on an
insucient set of data have been accepted21, the additionality
because there are a lot of variables to be considered and it is of-
ten complex to compare dierent production processes even in
the same industrial sector
22
. Apart from the choices of MiSE
23
in the new guidelines in terms of more precise requirements, it
is fundamental to dedicate time to meetings with the industrial
stakeholder, an approach that GSE has started to adopt in 2016.
e uncertainties about the new targets and guidelines is an
important factor, especially since the more rigorous approach
in terms of verication and control adopted by GSE has disori-
ented many operators. is will be discussed in the next chap-
ter.
Finally, the materiality of the scheme has never been evalu-
ated in details. In the rst phase, with extremely convenient
deemed saving les, the decision to invest in those technologies
was totally driven by the scheme and thus the materiality was
really high. In the last year, with many convenient industrial
projects, there is the possibility that some projects are carried
out just as they are attractive on their own, even without the
additional benet of the white certicates. It is impossible to
evaluate the materiality on the basis of some interviews or eco-
nomic evaluation; nevertheless it is an issue that should deserve
more attention.
Verification and control
As discussed in the previous chapter, verication and control
(V&C) is an important and delicate activity within any EEO
scheme. Most of the measures analysed under the ENSPOL
project don’t have in place strong procedures on this respect,
and most of the schemes consider mainly documental controls
and no or very limited on-site controls. is can be explained
in many cases since most of the admitted solutions are related
to deemed savings in the building sector, something dicult
and costly to approach with on-site controls due to the diuse
nature of the interventions. Nevertheless, this represent an is-
sue since no controls means higher risk of non conformities or
non adequate installations.
For almost ten years in Italy the situation has been similar to
other EEO schemes: all the proposals were subjected to a docu-
mental analysis, but then no on-site controls. e guidelines in-
troduced in 201224 stressed the importance of V&C, requiring a
relevant action both on documental analysis (verication) and
on detailed documental and on-site control. Figure8 represents
the present procedure.
21. That is based on a limited month of ex-ante measurements and on insucient
or questionable adjustment factors.
22. Also the reference to the best available technologies of the industrial emis-
sion directive (IED, formerly IPPC) sometimes is not easy, especially for small and
medium enterprises.
23. Italian Ministry for Economic Development (in charge of defining the Italian
scheme targets and guidelines).
24. Ministerial decree 28December 2012.
1. POLICIES AND PROGRAMMES
ECEEE INDUSTRIAL SUMMER STUDY PROCEEDINGS 159
1-141-16 DI SANTO ET AL
counter informing on the situation in terms of presented, veri-
ed and approved projects is updated on the main GSE website
every week (Table2 shows some data extracted in April 2016).
e main issues incurred in the verication and control pro-
cess are:
requests for additional information and/or documentation
not listed in the deemed saving and scaled saving les or in
the PPPMs;
request for proof of CAPEX of the implemented project and
the cost of energy for PPPMs;
issues linked to the shared responsibilities;
issues related to the closure or modication of plants prior
the end of the technical life.
Verications before the release of 2012 guidelines were mainly
related to the information and documentation indicated in
the les or PPPMs. Aer the introduction of the new guide-
lines, GSE – which assumed the management of the scheme in
2013 – started a more rigorous approach. In particular, many
All the proposals are investigated prior to recognize the re-
quested white certicates. is ensures that the requested doc-
umentation has been presented and that the project is sound
and compliant with the deemed saving or scaled saving les or
with the approved PPPM. GSE can then subject the project to
a documental and/or on-site control. e projects to be con-
trolled are indicated in a plan submitted annually to MiSE.
In 2014 GSE started with 56 controls (11 on-site), includ-
ing high efciency cogeneration. In 2015 the controls raised
to 146 (23 on-site), of which 95 were completed and 59 had
a negative outcome, resulting in an administrative procedure
to recover the money received by the proponents25. In an ef-
fort to increase transparency, GSE created a website to monitor
the results of all the controls, including the ones referred to re-
newable energy sources, CHP, and other support schemes26. A
25. It should be noted that GSE chose categories of projects that were expected
to show issues. So this figure should not be considered a picture of the general
situation.
26. The website is http://bancadativerifiche.gse.it. To give some figure, in 2014
GSE made overall 3,792controls (3,008on-site).
Figure 8. Control and verification process activities. Source: FIRE.
Table2. Status of the proposals presented since 2015 at the end of April 2016.
Proposals PPPM Requests of
certicates Total
Verication completed
Approved
Rejected
Other (suspended, retired or not receivable)
752
467
261
24
10,037
9,622
251
164
10,789
10,089
512
188
Under verication 247 728 975
Total 999 10,765 11,764
1-141-16 DI SANTO ET AL
160 INDUSTRIAL EFFICIENCY 2016
1. POLICIES AND PROGRAMMES
On the issue of the revision of the tau coecient, the con-
sultation document proposes two options: reduction of the
technical life up to 15years, with recognition of white certi-
cates for the same period of time, or certicates life of 5years
with the introduction of a rewarding factor between1.5 and2.0
for complex projects with long pay-back time. e rst option
– which appears to be the chosen one – has the advantage of
avoiding issues in case of anticipated shut down of the incen-
tivised plant (simply no more requests for certicates will be
issued), while guaranteeing more certicates for complex and
long time projects. e disadvantage with respect to the present
situation is that is even more dicult to rely on the certicates
as an incentive, since on longer periods of time the uncertain-
ties on the WhC price trends are higher.
In relation to additionality and consumption baseline, MiSE
anticipated that more dened criteria will be introduced in or-
der to reduce uncertainty and litigation. In the consultation was
also proposed to consider the incurred investment cost as an
element to dene the market baseline on, in order to avoid the
over-compensation of some investments. As illustrated in the
previous chapter, GSE opted to put in place this rule on its own.
With regard to the eligibility of technological solutions,
MiSE proposed to exclude the civil sector technologies already
covered by alternative measures (for rationality purposes, since
it is already forbidden to access more than one support scheme
for the same project) and to introduce or expand the possibil-
ity to present interventions linked to electricity and water net-
works, mobility and transport, and behavioural changes, with
methods to be dened in the new guidelines. Finally, for renew-
able sources it is expected to take into account only the energy
eciency improvement, and not the replacement of fossil fuels
(thus decisively reducing the impact of these sources, especially
in the industrial sector).
In terms of ownership of the project, MiSE proposed that
only end-users may submit proposals, unless ESCOs play an
active role in the implementation and management of the pro-
ject (e.g. with an energy performance contract, EPC), and only
in presence of adequate economic and nancial capacity com-
pared with the size of the project. e alternative is to continue
to accept ESCOs proposal by requiring adequate securities, but
the result will be similar to the rst option, considering the cost
of securities. So in the end the result should be a limitation of
the role of ESCO as proponents, leaving nevertheless the possi-
bility to act as consultants. e idea is to leave open the support
for certied ESCOs to propose and use EPC contracts.
Finally, the document proposes the introduction of a new
methodology for the assessment of savings (PPPMS, or stand-
ardised PPPM, designed for widespread homogeneous projects
with possibility of metering on a sample of interventions), more
stringent criteria for the measurement of the savings for me-
tered projects, the possibility of having discounts on the fee to
pay to submit a proposal for projects linked to the energy audits
carried out under EED art.8, and strengthened verication and
control activities.
e measures proposed in the consultation document ap-
pear to solve many of the existing problems and to increase the
cost eectiveness and materiality of the scheme. Nevertheless,
the eects on the trend of proposals and certied savings are
all to be seen, depending on the actual guidelines and on the
capability of involving new projects and solutions.
small ESCOs found it dicult to provide the additional infor-
mation requested by GSE, due to a too simplistic approach to
the scheme27. is is the reason of the high percentage of non
conformities cited above. Nevertheless, the new approach, aer
this initial traumatic phase, will traduce in an improved quality
of the projects and of the proposals, and will also favour the
qualication of small ESCOs.
Among the additional information, especially for requests
of white certicates linked to industrial PPPMs, GSE started
asking for economic information, such as the CAPEX of the
implemented project and the cost of energy. e resulting pay-
back time was used28, together with the regulatory and market
baseline, to determine the additionality. is request has been
largely contested by ESCOs and large companies, since previ-
ously it was an optional data and the 2012 guidelines didn’t re-
quire it29. GSE in practice anticipated one of the proposal con-
tained in the consultation document about the new guidelines,
aimed at excluding from the scheme projects characterised by
a short pay-back time. Nevertheless, many legal disputes start-
ed on this aspect. It is worth noticing that the possible issue
of over-incentivised projects was presented by us both in an
ECEEE and in an IEPPEC papers in 2014 [10, 11].
As mentioned in the previous chapter, when a project is pre-
sented by an ESCO some issue may arise in case of non con-
formities or of modication to the project. is created some
problems in terms of controls and potentially it can be a serious
aw of the system if not resolved with the new guidelines.
e last point is due to the tau coecient. Since it anticipates
the savings from the sixth year to the technical lifetime of the
project, if this is stopped before reaching the expected dura-
tion (usually 15or 20years) GSE will require the return of the
money received and linked to the tau coecient. is is one of
reasons why MiSE will eliminate the tau coecient in the new
guidelines.
The new scheme guidelines consultation
In Summer 2015 MiSE opened a consultation on the directions
to follow for the new WhC scheme guidelines. e reasons be-
hind the introduction of new guidelines are summarized in the
document in consultation [16]. e main ones are: the need to
increase the eectiveness of the scheme, the uncertain deni-
tion of additionality in the industrial sector, the need to review
the technical life under which white certicates are generated,
the responsibilities on project management when the proposals
are not presented by the end user, the contrast of speculative
behaviour. While writing this paper the new guidelines are yet
to come, so the main points under consultation are discussed
with some news gathered at MiSE public presentation during
FIRE annual conference [22].
27. As an example, some ESCOs had to withdraw their proposals since they were
not capable to provide documents such as the certification of performance of the
installed windows or insulation materials, only because the document were not
mentioned in the deemed saving file.
28. There is no public available information on the projects’ pay-back time, apart
from what illustrated in [11].
29. For example in a workshop on April6th AICEP, an association of energy inten-
sive industries, declared that of 59projects presented in 2015 by its members
– with a potential of 275,000tep/year – 50% of the new PPPMs and 30% of the
request of certificates related to accepted PPPMs have not been approved by GSE.
1. POLICIES AND PROGRAMMES
ECEEE INDUSTRIAL SUMMER STUDY PROCEEDINGS 161
1-141-16 DI SANTO ET AL
with the reports on the socio-economical frameworks in the
examined countries [13]. An interesting outcome of the ENS-
POL project has been the increased sharing of information and
experiences among Member States policy makers, even beyond
the initiatives provided by the project (such as the EU observa-
tory, the multi-national workshops and the webinars).
Usually EEO schemes are complex and need some years of
ne tuning to work in the desired way (they can also fail, ob-
viously, as some cases demonstrate [13]. Besides, alternative
measures (such as grants, loans, tax deductions, etc.) can be
preferable to reach results in a short time, i.e. 3–4years. So the
pros and cons of an EEO should be adequately investigated.
If the objective is to create a support scheme capable of in-
volving all the sectors and the technologies, then white certi-
cates can prove eective and exible. One of the experiences
derived from the ENSPOL project is that there is no scheme
that is intrinsically more cost-eective than others, since much
depends on how, where, and when it is implemented. What
makes the dierence is the care and the commitment that
policy makers and managing agencies put into the action (see
also [13,14,19]).
us many issues will have to be faced over the years in such
schemes, but they can be overcome, provided timely interven-
tions from policy makers and a large involvement of the stake-
holder community are ensured. As shown also by the other
schemes analysed under the ENSPOL project, a continuous
improvement approach is fundamental to reach the targets and
ensure the higher cost eectiveness.
References and useful links
REFERENCES
[1] P. Bertoldi, S. Rezessy, “Tradable certicates for energy
savings (white certicates) – theory and practice”, 2006,
European Commission Joint Research Centre, Institute
for Environment and Sustainability, June 2006.
[2] R. Haas, N. Sagbauer, G. Resch, “What can we learn
from tradable green certicate markets for trading white
certicates?”, eceee 2009 Summer Study – Act! Innovate!
Deliver! Reducing energy demand sustainably, June 2009.
[3] N. Eyre, M. Pavan, L. Bodineau, “Energy company
obligations to save energy in Italy, the UK and France:
what have we learnt?”, eceee 2009 Summer Study – Act!
Innovate! Deliver! Reducing energy demand sustainably,
June 2009.
[4] D. Di Santo, D. Forni, V. Venturini, E. Biele, “e White
Certicate scheme: the Italian experience and proposals
for improvement”, eceee 2011 Summer Study – Energy
eciency rst: e foundation of a low-carbon society,
June 2011.
[5] “European Workshop on Experiences and Policies
on Energy Saving Obligations and White Certicates”
proceedings, http://re.jrc.ec.europa.eu/energyeciency/
events/WhC_Workshop.htm, 27–28 January 2011.
[6] RAP (e Regulatory Assistance Project), “Best Practices
in Designing and Implementing Energy Eciency
Obligation Schemes. Research Report Task XXII of the
International Energy Agency Demand Side Management
Programme, June 2012.
Conclusions
e Italian experience with white certicates is a positive one
and shows that such a scheme can have many pluses:
exibility, in terms of eligible technologies, sectors and mar-
ket operators, etc.;
capacity, being capable of covering a good percentage of the
national targets30;
market support, since voluntary parties can play a leading
role and use such a scheme both to increase their know-how
in complex sectors like the industry and to capitalize and
start oering advanced energy services, such as EPC;
policy making support, due to the huge number of valuable
data collected through PPPMs;
statistics, in terms of assessment of metered energy savings.
On the other hand some points should be considered:
the complexity is high, especially involving the industrial
and transport sectors, and worthy the eort only in case of
ambitious targets;
appreciable results will require time to , so the scheme
should be designed with a medium or long time vision;
as in other schemes, there is the need of an enlarging man-
agement structure and care should be taken in writing the
rules as to reduce the risk to have all the proposals submit-
ted in the same period of time to avoid unmanageable peaks
in the verication activities;
information and support activities31 are vital to ensure the
success of the scheme.
e idea to make comparisons with other EEO schemes is in-
triguing, and many attempts have been made in this direction
by many organizations (e.g. [1, 5, 6, 9, 12, 14, 20]) and projects
(like the already mentioned ENSPOL [13, 14, 19]). e wide
range of dierent parameters to be taken into account, however,
makes such comparison quite dicult and usually not eective,
unless related to specic aspects of particular schemes. Targets,
obliged and voluntary parties, M&V procedures, controls, ad-
mitted sectors and technologies, etc. are indeed dened in dif-
ferent ways. It is not a surprise then that ambitious programs
like the idea of dening the rules of a common EEO scheme
cherished by a CEN/CLC JWG2 was abandoned in front of too
many dierences and options and transformed in a report on
the existing EEOs [9].
Even assessing the cost eectiveness of a scheme is a dicult
task, considering the aspects to consider (costs, sectors and
technologies involved, targets, additionality and materiality,
non energy benets, etc.) and the lack of reliable information in
many cases [12]. Nevertheless the analysis of so many schemes
provides a lot of useful information for policy makers both on
positive and negative factors, especially if evaluated together
30. MiSE stated in the notifications of art.7 EED that WhC shall cover 60% of the
Italian 2020 targets.
31. Besides information and training activities, which are crucial, it is important
to put in place workgroups to discuss complex issues such as baseline and
additionality with the stakeholders. This will simplify and improve both the
proposals submission and the verification activities.
1-141-16 DI SANTO ET AL
162 INDUSTRIAL EFFICIENCY 2016
1. POLICIES AND PROGRAMMES
[17] MiSE, “Proposte per il potenziamento e la qualica del
meccanismo dei Certicati Bianchi”, www.sviluppoeco-
nomico.gov.it/images/stories/documenti/Proposte_ag-
giornamento_meccanismo_CB.pdf, July 2015.
[18] Workshop “Workshop on G7 Energy Ministerial Conclu-
sions”, Berlin, 11 November 2015.
[19] ENSPOL webinars on measurement and verication of
energy eciency savings, additionality and materiality,
lessons learnt from EEOs and alternative approaches,
obliged parties, costs and nancing of EEOs, http://ens-
pol.eu/events/webinars, 2015–2016.
[20] N. Labanca, P. Bertoldi, “Energy Savings Calculation
Methods under Article 7 of the Energy Eciency Di-
rective”, http://publications.jrc.ec.europa.eu/repository/
bitstream/JRC99698/report%20on%20eed%20art%20
7%20-%20publishable.pdf, January 2016.
[21] GSE, “Rapporto Annuale sul meccanismo dei
Certicati Bianchi”, www.gse.it//it/CerticatiBianchi,
March 2016.
[22] FIRE conference “Certicati bianchi: titoli di ecienza a
portata di mano, Roma, www.certicati-bianchi.com, 12
April 2016 (previous editions of the conference proceed-
ings are also available on www.re-italia.org).
LINKS OF INSTITUTIONS RELATED TO WHITE CERTIFICATES IN ITALY
MiSE, Ministry of Economic Development, www.sviluppo-
economico.gov.it
AEEGSI, Italian Authority for electricity, gas and hydric sys-
tems, www.autorita.energia.it
GSE, Italian energy services operator, www.gse.it
ENEA, Italian Agency for new technologies, energy and envi-
ronment, www.enea.it
GME, Italian energy market operator, www.mercatoelettrico.
org
RSE, Energy System Research center, www.rse-web.it
[7] “White certicate for the industrial sector”, D. Di Santo,
D. Forni, E. Biele, ECEEE 2012 Industrial Summer Study –
Industry: A third of Europes energy use, September 2012.
[8] E. Biele, S. D’Ambrosio, D. Di Santo, G. Tomassetti,
“Metodo a consuntivo: analisi delle proposte di progetto
e di programma di misura 2005–2012”, www.re-italia.
org/analisi-delle-proposte-progetto-programma-misura-
pppm-dei-certicati-bianchi-2005-2012, 2013.
[9] CEN/CLC/TR 16567 “White certicates”, CEN-CLC, 2013.
[10] D. Di Santo, G. Tomassetti, D. Forni, E. Biele, S.
D’Ambrosio, “Italian white certicate: the shi towards
industry”, eceee 2014 Industrial Summer Study – Retool
for a competitive and sustainable industry, June 2014.
[11] D. Di Santo, G. Tomassetti, E. Biele, S. D’Ambrosio,
“White certicates in industry: the Italian experience,
IEPPEC conference in Berlin, September 2014.
[12] Ricardo-AEA, “Study evaluating the national policy
measures and methodologies to implement Article 7 of
the Energy Eciency Directive”, http://rekk.hu/downlo-
ads/projects/Final%20Report%20on%20Article%207%20
EED.pdf, February 2015.
[13] ENSPOL, reports on EEOs and alternative measures
under art. 7 EED and on Member States context proles,
http://enspol.eu/results, 2015.
[14] P. Bertoldi et al, “How is article 7 of the Energy Eciency
Directive being implemented? An analysis of national en-
ergy eciency obligation schemes”, eceee 2015 Summer
Study – First Fuel Now, June 2015.
[15] Workshop “Applying common methods and principles
for calculating the impact of energy eciency obligations
schemes or other policy measures under Article 7 of the
Energy Eciency Directive”, Bruxelles, 10 June 2015.
[16] AEEGSI, “Stato e prospettive del meccanismo dei titoli
di ecienza energetica, www.autorita.energia.it/allegati/
docs/15/309-15.pdf, June 2015.
... The Italian WhC scheme [2,3,4,5,6,7,9,12,14,15] is an EEO in which the electricity and gas distributors with more than 50,000 clients are obliged to reach increasing annual energy efficiency targets. It is a flexible mechanism -since the energy efficiency savings can be obtained through interventions from market operators (i.e. ...
... • Monitoring plans projects (MPP, a type of metered savings), which remain similar to the past [12], but with additional requirements for the consumption baseline that has to be based on meters capable of at least daily measures of the savings and on recorded data for at least one year (exceptions are possible in terms of shorter monitoring periods, but should be adequately justified and a precautionary approach should be applied). ...
... The reason of the rise of the industrial sector can be imputed to two facts (see also [6,7,12]): a) the higher convenience of industrial projects, usually characterised by shorter pay-back times than interventions in other sectors, and b) the larger dimension in terms of savings, which make it easier to reach the minimum project size admitted by the guidelines. On the other hand, industrial projects required some years before increasing in quota due mostly to the higher complexity (only a few standard projects files available, requiring thus the use of metered saving projects [9,12,14]). ...
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Energy efficiency obligation schemes (EEOs) are used in many EU countries as a policy measure to reach energy efficiency targets. Some of the first EEOs (UK, Italy, France, Denmark) have been capable to reach positive results over the years, as clearly demonstrated by the ENSPOL project. The Italian mechanism, in particular, is an interesting example of white certificate scheme (WhC), since it is one of the most long-lasting schemes (operatively started in 2005), has ambitious targets, covers all sectors and energy efficiency solutions, and has many flexibility options in place (e.g. non-obliged parties, tradable market, bankability, etc.). Another point of interest is Italian WhC development over the years. In the first phase, most of the projects were related to buildings with deemed savings as energy savings assessment method. Then the industrial sector rose constantly, till covering 80 % of the savings in 2014, mostly assessed through metered savings procedures. In the last three years, the buildings sector has started to recover, while metered savings have remained the most used energy savings evaluation procedure. This last development is mainly due to some regulatory decision and to the modification of the assessment of additionality for many industrial projects categories. The paper will illustrate the reasons behind these developments , the issues that have arisen over the recent years, and the decisions taken to address them through a major redesign of the Italian scheme that has been introduced with new ministerial guidelines in 2017: many aspects-such as targets, base-line and additionality, saving assessment, and measurement, verification and control procedures-has been deeply affected. The paper will cover such themes, focusing in particular on the industrial side and highlighting themes like cost effectiveness, energy savings assessment, and how baseline and additionality have been dealt with over the years.
... Member states can also rely on alternative policy measures; see [8] for a discussion of the national contributions to the EU 2020 target. White certificates fall within the category of EEOS and are used as a policy measure to reach EE targets; some of the first schemes (i.e., those of the UK, Italy, France, and Denmark) have thus far yielded positive results [9]. A recent study presents a critical review of Europe's experience with white certificate obligations [10] and proves that EEOS are essential tools for achieving EE and the decarbonization of production systems [11]. ...
... It is helpful to analyze the elements that have positively and negatively influence the scheme [42]. Italy was among the first countries in the world to apply this market tool to promote end-use EE [9], and, following its introduction, the structure of the scheme and its regulations have been the subject of analysis by the European Commission, the International Energy Agency, and a growing number of countries worldwide. For example, with Directive 32/2006, the European Commission indicated white certificates as one of the tools that member states can use to lower energy consumption. ...
Article
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Market-based instruments such as white certificates offer the potential to increase efficiency gains, reduce primary energy consumption and make energy systems more resilient. The purpose of this paper is to provide insights into the white certificate scheme through a case study analysis. In light of increasing decarbonization and energy efficiency targets, it is important to rethink the role that policy instruments play in the energy transition, including the energy efficiency obligation schemes within which white certificate schemes fall. We focus on Italy’s white certificate scheme because it is among the longest-lived and has achieved notable results. The scheme is characterized by annually increasing energy savings targets, flexibility, the opportunity to include many interventions, and the role of energy services companies. We provide evidence based on an empirical survey and fill the research gap left by the latest updates to the scheme along with an appraisal of those updates, which covers prominent scheme innovations such as its stability mechanism. Our research can serve as a baseline for policymakers in designing white certificate schemes in countries with little related previous experience and provide useful information from countries where similar schemes have been implemented to fine-tune similar market-based mechanisms to improve energy efficiency.
... Italy is considered one of the most outstanding models in energy efficiency, since it has successful energy efficiency obligation schemes, especially in the industrial context [37,38]. Over the years, 80% of White Certificates have been produced in the industrial sector [38]. ...
... Italy is considered one of the most outstanding models in energy efficiency, since it has successful energy efficiency obligation schemes, especially in the industrial context [37,38]. Over the years, 80% of White Certificates have been produced in the industrial sector [38]. In order to achieve the objectives during the 2014-2020 period, Italy relies mainly on the White Certificate obligation scheme, which was created in 2001 but has been applied since 2005 [39]. ...
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Over the years, electricity consumption behavior in Brazil has been analyzed due to financial and social problems. In this context, it is important to simulate energy prices of the energy efficiency auctions in the Brazilian electricity market. The Markov Chain Monte Carlo (MCMC) method generated simulations. Then, the Kernel method and the Gaussian mixture model used to estimate the density distribution of energy price, and the MCMC method were crucial in providing approximations of the original data and clearly analyzing its impact. Therefore, this paper presents an approach to generate samples of auction energy prices in the energy efficiency market, using the MCMC method through the Metropolis-Hastings algorithm. The results show that this approach can be used to generate energy price samples.
... Italy is commonly cited as a good example of successful EEOSs, especially in the context of industrial projects [44,65]. Unlike in other Member States, the Italian schemes show predominance in industry. ...
... Unlike in other Member States, the Italian schemes show predominance in industry. For instance, over the years 80% of the White Certificates are produced from the industrial sector [65]. In order to reach the targets over the period 2014e2020, Italy mainly relies on the White Certificate obligation scheme (also known as TEE e "titoli di efficienza energetica", meaning "energy efficiency certificates"), which was created in 2001, but was effectively enforced from 2005 [66]. ...
Article
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Energy efficiency, which is one of the pillars of the EU's Energy Union strategy, has been proposed as a solution, namely as a highly effective pathway to improve economic competitiveness and sustainability of the European economy, lower emissions, reduce energy dependency and increase security of supply, and job creation. The paper reviews the EU strategies and policies on energy efficiency and argues that further focus should be placed on industrial energy efficiency. Despite a decline in energy consumption in recent years in industry, this sector is one of the largest users of energy in the EU. Therefore, the paper reviews the extent to which the European and national policies in the selected jurisdictions, such as Italy and the UK address energy efficiency in industry and whether there are any measures in place to promote it.
... The Italian WhC scheme (Di Santo et al. 2011, 2014b, various authors 2015, Di Santo, Biele, and Forni 2016, Stede 2017, Di Santo, Biele, and De Chicchis 2018 is an EEO in which the electricity and gas distributors with more than 50,000 clients are obliged to reach increasing annual energy efficiency targets. It is a flexible mechanism -since the energy efficiency savings can be obtained through interventions from market operators (i.e. ...
... As Di Santo, Biele, and Forni (2016) illustrated, the control and verification procedure is quite strict and GSE contributed at making it more effective both by improving the documentation required to proponents and by increasing the number of projects subjected ex-post to detailed checks. An important result was the discovery of very large frauds in 2017 16 . ...
Conference Paper
Full-text available
Energy efficiency obligation schemes (EEOs) are used in many EU countries as a policy measure to reach energy efficiency targets. Some of the first EEO (UK, Italy, France, Denmark) have been capable to reach positive results over the years, as shown by the ENSPOL and EPATEE projects. The Italian mechanism, in particular, is an interesting example of white certificate scheme (WhC), since it is one of the most long-lasting schemes (operatively started in 2005), has ambitious targets, covers all sectors and energy efficiency solutions, and has many flexibility options in place (e.g. non-obliged parties, tradable market, bankability, etc.). Another point of interest is WhC development over the years. In the first phase, most of the projects were related to buildings with deemed savings as energy savings assessment method. Then the industrial sector rose constantly, till covering 80% of the savings in 2014, mostly assessed through metered savings procedures. In the last three years deemed savings procedures have started to recover, while metered savings have remained the most used energy savings evaluation procedure. This last development was not expected and is mainly due to some regulatory decision and to the modification of the assessment of additionality for many industrial projects categories, due to the diffusion of certain energy efficiency solutions and to changes in the methodological approach. The paper will illustrate the reasons behind these developments, the issues that have arisen over the recent years, and the decisions taken to address them through a major redesign of the Italian scheme that has been introduced with new ministerial guidelines in 2017: many aspects-such as targets, baseline and additionality, saving assessment, and measurement, verification and control procedures-has been deeply affected. The paper will cover such themes under an evaluation point of view, highlighting the savings achieved with respect to the national targets, the differences among sectors, how indicators like additional energy savings, costs, cost effectiveness, and employment have evolved over time, the role of the involved stakeholders (utilities, ESCOs, end-users, etc.), and the effects of tight verification and control procedures.
Conference Paper
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The Italian White Certificates scheme (WhC) was introduced in 2001 and has been effectively working since 2005. It has been characterised by the coverage of all sectors and energy efficiency solutions, and many flexibility options in place (e.g. non-obliged-a.k.a eligible-parties, tradable market for white certificates, bankability, flexibility on obliged parties targets, etc.). With more than 29 million tonnes of oil equivalent (toe) of energy savings cumulated by the end of 2021, it has considerably contributed to the national energy efficiency targets. The scheme has undergone important changes first in 2012, then in 2017, both for the targets and the operating guidelines. These modifications, combined with energy market developments , resulted in a reduced capability of producing the expected certificates and in an increasingly shorter WhC market that resulted in rising prices, thus putting at risk both the compliance with the targets and the operation of the scheme itself. For this reason, a deep revision of the scheme was introduced in 2021, trying to solve and overcome the risk of collapse and to relaunch the scheme in accordance with the National Energy and Climate Plan. The paper will illustrate the main changes of the scheme guidelines, the reason why they were adopted, and the first results of their application over one year from their introduction .
Article
Carbon pricing is widely recognized as the most economically efficient policy to reduce greenhouse gas emissions. However, its high-cost visibility creates political challenges for its implementation at a sufficiently stringent level to achieve deep decarbonization. Flexible regulations, such as renewable portfolio standards and low-carbon fuels standards, incorporate flexibility mechanisms similar to carbon pricing, but seem to face lessor political acceptability barriers. Unlike prescriptive (command-and-control) regulations, flexible regulations do not require technologically-specific compliance pathways and allow credit trading to reduce costs and incentivize innovation. Despite their potential for driving the decarbonization transition, there is comparatively little research on the design and impact of flexible regulations implemented to date. This comparative policy analysis examines government policy documents and academic literature to identify flexible climate regulations implemented in OECD countries and evaluates their implementation context, design characteristics, effectiveness, and public support. In total, 61 unique flexible regulations were identified across 11 countries and 42 sub-national jurisdictions that can be classified into six categories. Findings suggest that as jurisdictions seek to strengthen their climate policy portfolios, flexible regulations can provide a relatively cost effective, broadly supported, and complementary tool to achieve deep emissions reductions, so long as policies are well-designed and interaction and equity impacts are considered.
Conference Paper
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The Italian White certificates scheme (WhC) was introduced in 2001 and has been effectively working since 2005. It has been characterised by rising targets, all sectors and energy efficiency solutions covered (at least in the first decade), and many flexibility options in place (e.g. non-obliged-a.k.a eligible-parties, tradable market for white certificates, bankability, flexibility on obliged parties targets, etc.). With more than 26 million tons of oil equivalent (toe) of energy savings cumulated by the end of 2017 it has contributed to the national energy efficiency targets. The scheme underwent important changes first in 2012, then in 2017, both for the targets and the operating guidelines. These modifications, combined with energy market developments, resulted in a reduced capability of producing the expected certificates and in an increasingly shorter WhC market, thus putting at risk both the compliance with the targets and the operation of the scheme itself. The paper will illustrate the main issues that affected the scheme over the years, in particular in the recent years, the effects produced by 2017 guidelines, and the need to adopt new rules in 2018 to avoid a collapse driven by skyrocketing market prices and an insufficient number of certificates to reach even the minimum targets (i.e. considering the flexibility given to the obliged distributors to postpone part of them for 1-2 years). An historical excursus which can be useful to understand the challenges that an Energy Efficiency Obligation scheme (EEO) with tradable market can pose to policy makers and also the potential in terms of results. The paper will cover the main modifications and the issues arisen over the years and illustrate the effects of the new rules introduced in 2018, providing figures on the results in terms of issued certificates and market price. Besides, the cost-effectiveness of the scheme will be evaluated , considering the different phases (with and without the tau coefficient, the multiplier introduced in 2011 and abandoned in 2017).
Conference Paper
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The Italian White Certificate scheme is one of the most complete examples of baseline and trade incentive schemes existing in Europe, created with the aim of promoting energy efficiency measures on final energy uses. The first draft was defined by Ministerial decrees in July 2004. The scheme provides for electricity and natural gas DSOs 1 the obligation to achieve yearly energy saving targets certified by the presentation of a corresponding number of white certificates (each equal to one toe). The DSOs can reach their target either by implementing energy efficiency solutions among end-users or by buying white certificate from other DSOs, ESCOs or companies that have an appointed energy manager as provided by Italian law 10/1991. During the first years of application, the scheme encountered some initial difficulties and has been corrected and modified with ad hoc legislative acts in December 2007 and in May 2008. Recently, it has become difficult to find white certificates on the market, due to the configuration of the scheme more than to market dynamics, and there is the necessity to change the scheme. It is time to make a brief assessment of the White Certificate scheme, evaluating its effectiveness in promoting energy efficiency in comparison to the experiences of other EU member States. 1. DSo: distribution system operator. Strengths and weaknesses, achieved results and suggestions to improve the current scheme will be addressed.
Conference Paper
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The Italian white certificates scheme (WhC) has been in place for nine years and a lot of experience has been gathered. More than this, it has become an effective mechanism, mostly based on measured energy savings, to promote and implement energy efficiency in industry. The scheme is based on an energy efficiency obligation, imposed on electricity and gas distributors, and on a tradable market for certificates, thus acting as an incentive for medium and large end-users and energy service companies (the voluntary parties). The WhC targets started from 0.2 Mtoe/year in 2005 and shall reach 7.6 Mtoe/year in 2016, covering more than 60% of the national target set by the 2006/32/EC directive. After the first phase dominated by deemed saving projects - in particular CFL lamps and other civil sector applications - "progetti a consuntivo" (a.k.a. monitoring plans) in the industrial sector have started to rise under the effect of the "tau" coefficient, the multiplier introduced in 2011 that adds to the yearly additional savings the discounted future savings for technologies with a lifespan of more than 5 years (WhCs are usually released for a lifetime of 5 years). The result has been dramatic: in 2013 around 95% of the certificates due to new projects has been related to energy efficiency in the industrial sector. An interesting point is that all this projects are monitored and savings are effectively measured through on-site metering. The proposed paper shows in detail this transformation and how a WhC scheme has been able to become effective for industrial energy efficiency projects. The paper is based on an extensive research carried on from FIRE on monitoring plans, showing what kind of interventions have been implemented, how they performed compared to the expected savings, and what kind of advice can be given to other countries that are considering the introduction of an energy efficiency obligation (EEO) scheme according to the 2012/27/EU directive.
Conference Paper
Full-text available
The Italian white certificates scheme (WhC) has been in place for nine years and a lot of experience has been gathered. More than this, it has become an effective mechanism, mostly based on measured energy savings, to promote and implement energy efficiency in industry. The scheme is based on an energy efficiency obligation, imposed on electricity and gas distributors, and on a tradable market for certificates, thus acting as an incentive for medium and large end-users and energy service companies (the voluntary parties). The WhC targets shall reach 7.6 Mtoe/year in 2016 and are expected to cover around 60% of the national target set by the 2012/27/EU directive. After the first phase dominated by deemed saving projects - in particular CFL lamps and other civil sector applications - "progetti a consuntivo" (a.k.a. monitoring plans) in the industrial sector have started to rise under the effect of the "tau" coefficient, the multiplier introduced in 2011 that adds to the yearly additional savings the discounted future savings for technologies with a lifespan of more than 5 years (WhCs are usually released for a lifetime of 5 years). The result has been dramatic: in 2013 around 95% of the certificates due to new projects has been related to energy efficiency in the industrial sector. The paper shows in detail this transformation and how a WhC scheme has been able to become effective for industrial energy efficiency projects. The paper is based on an extensive research carried on from FIRE on monitoring plans, under a contract with ENEA.
Conference Paper
Full-text available
The Energy Efficiency Directive (EED) is the main policy instrument at the EU level to reach the 20 % energy saving goal in 2020. Article 7 is a key pillar of the EED, which requires Member States (MS) to introduce energy efficiency obligation schemes (EEOSs). Under the EEOS, energy companies must save an annual 1.5 % of their energy sales with additional energy efficiency projects. This Article also offers MS the option to introduce alternative policy measures to EEOS, provided that these measures deliver equivalent energy savings. In December 2013, MS reported to the European Commission the implementation plans for Article 7 and they have or are planning to introduce EEOS and/or alternative measures to reach the 1.5 % energy saving goal. Four MS are planning to rely on EEOS alone, 14 will use a mixture of EEOS plus alternative measures, and 10 MS will use only alternative measures. The paper describes the EEOS introduced and planned by MSs in terms of sectoral coverage, obligated actors, eligible projects, monitoring and verification (M&V), baseline and additional-ity, sanctions, trading rules if any, and public authorities' role. A comparison among the different national EEOS is made, and their common features highlighted. Key issues including the time scale needed to introduce an effective EEOS, type and number of obligated partners, changing business models of energy companies and scale of expenditure are discussed. EEOS are expected to deliver more savings, in more countries , at the same time as the opportunities to install low cost, mass-market, 'additional' efficiency options are reducing. This challenge will affect all MS, and to meet it they are encouraged to keep learning from each other.
What can we learn from tradable green certificate markets for trading white certificates?
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R. Haas, N. Sagbauer, G. Resch, "What can we learn from tradable green certificate markets for trading white certificates?", eceee 2009 Summer Study -Act! Innovate! Deliver! Reducing energy demand sustainably, June 2009.
Energy company obligations to save energy in Italy, the UK and France: what have we learnt?", eceee 2009 Summer Study-Act! Innovate! Deliver! Reducing energy demand sustainably
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Best Practices in Designing and Implementing Energy Efficiency Obligation Schemes. Research Report Task XXII of the International Energy Agency Demand Side Management Programme
RAP (The Regulatory Assistance Project), "Best Practices in Designing and Implementing Energy Efficiency Obligation Schemes. Research Report Task XXII of the International Energy Agency Demand Side Management Programme", June 2012.
Proposte per il potenziamento e la qualifica del meccanismo dei Certificati Bianchi
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MiSE, "Proposte per il potenziamento e la qualifica del meccanismo dei Certificati Bianchi", www.sviluppoeconomico.gov.it/images/stories/documenti/Proposte_ag-giornamento_meccanismo_CB.pdf, July 2015.