Voluntary Energy Efficiency Agreements in FinlandSTEP Thematic Seminar21 March 2014 Limerick, Ireland
Irmeli Mikkonen, Motiva Oy 321 March 2014
Energy Conservation Agreements 1997–2007Energy Efficiency Agreements 2008 - 2016• Voluntary, no legislative obligations
• A flexible tool to implement national energy and climate strategy and some EU policies related to the energy efficiency
• An alternative and complementary means for regulation and taxes
• Benefits for companies and other organisations to join agreements• Flexible, target oriented and systematic procedure to improve
energy efficiency and to save in costs
• Possibility to prove energy efficiency to environmental authorities
• Energy audits and energy efficiency investments for those joined the agreement scheme are subsidised by the government
• Sites and organisations report annually their energy efficiency actions
Irmeli Mikkonen, Motiva Oy 421 March 2014
ENERGY EFFICIENCY AGREEMENTS FOR OIL SECTOR – HÖYLÄ III
ENERGY EFFICIENCY AGREEMENT AND ENERGY PROGRAMME FOR MUNICIPAL SECTOR
ENERGY EFFICIENCY AGREEMENTS FOR BUSINESS SECTOR 2008-2016
INDUSTRY
SERVICES
ENERGY SECTORMUNICIPALITIES
JOINT MUNICIPALITIES
DISTRIBUTION OF LIQUID HEATINGAND TRANSPORT FUELS
OIL HEATED BUILDINGS
ENERGY EFFICIENCY AGREEMENTS FOR PROPERTY AND BUILDING SECTOR 2010-2016
HOUSING PROPERTIES
COMMERCIAL PROPERTIES
ENERGY EFFICIENCY AGREEMENTS FOR TRANSPORT SECTOR
GOODS TRANSPORT AND LOGISTICS
PUBLIC TRANSPORT
ENERGY PROGRAMME FOR FINNISH FARMS2010-2016
FARMS
Voluntary Energy Efficiency Agreements 2008 – 2016
Irmeli Mikkonen, Motiva Oy 5
Energy Efficiency Agreement and Programme in Municipal Sector 2008 – 2016
MEE – Association – MotivaFRAMEWORK AGREEMENT
Municipalities
JointM
unicipalities
Municipalities over 20 000 inhabitantsJoint municipalities over 20 000 MWh/a
Municipality’sACCESSION DOCUMENT
ENERGY EFFICIENCY PROGRAMME (KEO)
Cities
Motiva’sPARTICIPANT REGISTER
Municipality* joins
MEE – City/Municipality/Joint municipalityENERGY EFFICIENCY AGREEMENT (KETS)
Municipalities 5 000–20 000 inhabitantsJoint municipalities 5 000–20 000 MWh/a can choose between Agreement or Programme
ENERGY EFFICIENCY AGREEMENT (KETS)
Signed by Municipality*
Signed by MEE
ENERGY EFFICIENCY PROGRAMME (KEO)
AGRE
EMEN
T SC
HEM
E
Municipalities
JointM
unicipalities
Cities
Municipalities over 5 000 inhabitantsJoint municipalities over 5 000 MWh/a
*also a City or a Joint municipality
21 March 2014
Irmeli Mikkonen, Motiva Oy 6
Continuous Improvement – a Key Element in Agreements Energy Efficiency Management System
5. Management review
4. Surveillanceand remedial action
1. Energy policy
2. Planning
3. Implementation and execution
Plan → Do → Check → Act -principal
21 March 2014
Irmeli Mikkonen, Motiva Oy 7
Obligations of a Party Joining the Agreement• Implementation of the Energy Efficiency Management System
• in energy intensive industry and power production
• Setting targets
• Energy audits and analyses
• Implementation of the Energy Conservation Plan
• Energy conservation investments
• Energy efficiency in all investments and procurements
• Development of follow-up system for energy consumption
• Training of employees
• Communication – internal and external
• Annual reporting
21 March 2014
Irmeli Mikkonen, Motiva Oy 8
Benefits of Joining the Agreement• Improved Energy Efficiency • Decrease in Energy Costs • Less Environmental Impacts• Subsidies for Energy Audits and Energy Efficiency Investments• Verification of Energy Efficiency for Environmental Permits• Better Public Image
→ Competitiveness Increases
21 March 2014
Irmeli Mikkonen, Motiva Oy 9
Establishing a Successful Energy Efficiency Agreement Scheme
21 March 2014
Irmeli Mikkonen, Motiva Oy 10
Establishing a Successful Energy Efficiency Agreement Scheme•What is the timeline?•Who are the key players?•What kind of an agreement?•What are the important steps of the implementation?• How to monitor the results?
21 March 2014
Irmeli Mikkonen, Motiva Oy 11
Key Players and Their Responsibilities
21 March 2014
AUTHORITY• large scale aims, big picture• goals for agreements• development• legislation• EU directive interfaces• financial incentives• evaluation
SECTOR ASSOCIATION• goals for sector agreements• development• marketing, motivation• monitoring, reporting• participation in reporting• co-operation forums• guidance, training
PARTICIPANT / COMPANY• goals for company• energy use scan, audits• saving measures• energy monitoring • training of staff• reporting• co-operation • development of own
performance
AGENCY / OPERATOR• monitoring system development &
operation• database, classification of data• data collection, processing,
evaluation• reporting• guidance, training• marketing, motivationCONSULTANTS, ENERGY AUDITORSESCOs
11
Irmeli Mikkonen, Motiva Oy 12
New LTA
4 Evaluation
3 Implementation
2 Negotiation
1 Initiation
0Scanning
Time-frame 12-18 months Time-frame 3…5…9… years
Development of financial incentives
Upkeep & developmentDevelopment of monitoring system
Visual image design
Marketing General marketing Marketing of new LTA
Information dissemination
Support to participating companies
Development and pilot projects New projects
Timetable set LTA signed EvaluationGo/no-go decision for new LTA
Go/no-go decision
Timeline of an Energy Efficiency Agreement Source: IEE EU-LTA Uptake
21 March 2014
Successful Elements of a Long-term Agreement (LTA)Good communication• between authorities and industrial associations• associations represent their members• co-operation, open discussionSimple administration• low costs without risking quality• better cost-effectiveness• different targets or even LTAs for energy intensive industry
and SMEs• learning by doingMotivating targets• financial incentives are needed to motivate participating
companies• challenging company-specific targets• precisely phrased commitments
21 March 2014 Irmeli Mikkonen, Motiva Oy 13
Successful Elements in a Long-term Agreement (LTA)Efficient monitoring and reporting• needed to prove the effectiveness of the LTA• resources for developing, maintaining & running• good guidelines and strict deadlines are needed • web-based tool makes reporting easier • good quality of input data is essential
Support to participants• from association or operator• financial support - direct or indirect• marketing, reporting • advice, tools, best practices, working groups…• development projects !
21 March 2014 Irmeli Mikkonen, Motiva Oy 14
Successful Elements of a Long-term AgreementCombining with existing activities• administration / participant• energy auditing, energy management• existing energy efficiency subsidy schemes• “LTA puts energy efficiency on the agenda”
Personal enthusiasm• key player representatives & participating companies• faith, commitment, expertise, communication skills
21 March 2014 Irmeli Mikkonen, Motiva Oy 15
Main Barriers and Weaknesses
• Uncertainty in government policies• Uncertainties in target-setting and cost-effectiveness• Lack of knowledge and tools• Limited resources in administration• Limited resources in participating companies• Confidentiality risks• Heavy reporting
21 March 2014 Irmeli Mikkonen, Motiva Oy 16
Irmeli Mikkonen, Motiva Oy 17
Interim Results 2008 – 2012 Industries Municipalities Property and Building
Sector
21 March 2014
21 March 2014
Energy Efficiency Agreements 2008-2016Agreement with Finnish industries: • Covers now about 80% of the total use of energy in Finnish
industry• Energy intensive industry
• Almost 100% of the energy use
• Energy production• More than 95% of electricity production
• Small and middle sized companies (food, chemistry, plastic, wood, technology)• Depending on a sector: 35–70% of the energy use
Irmeli Mikkonen, Motiva Oy 19
Irmeli Mikkonen, Motiva Oy 20
Annual Impact of Implemented MeasuresIndustries Municipalities Property and Building Sector
• savings in heating energy and fuels 5.85 TWh
• electricity savings 2.25 TWh
• savings in energy costs €344 million
• carbon dioxide (CO2) emissions reduced nearly by 2.5 million tonnes
The savings equal to 2.1 % of Finland’s total energy consumption (378 TWh in 2012)
21 March 2014
Irmeli Mikkonen, Motiva Oy 21
Realised Energy SavingsIndustries Municipalities Property and Building Sector
21 March 2014
7% IN OTHER SECTORS:- Municipal Sector- Energy Service Sector- Property & Building Sector- Private Service Sector
73%
INDUSTRY
20%ENERGY PRODUCTION
Irmeli Mikkonen, Motiva Oy 22
Energy Efficiency InvestmentsIndustries Municipalities Property and Building Sector
21 March 2014
10% OTHER SECTORS: - Energy Service Sector - Property & Building Sector - Private Service Sector
46%
INDUSTRY
34%ENERGY PRODUCTION
10% MUNICIPAL SECTOR
Irmeli Mikkonen, Motiva Oy 23
Investment Subsidies GrantedIndustries Municipalities Property and Building Sector
21 March 2014
2008 2009 2010 2011 20120
10
20
30
40
50
60
050100150200250300350400450500
2572
151
304
434
Investointituki, sopimusyritykset ja -yhteisöt yhteensäInvestointitukihankkeiden lukumäärä, sopimusyritykset ja -yhteisöt yhteensä
Investment subsidiesNumber of Sites
Million € Cumulative
Irmeli Mikkonen, Motiva Oy 2421 March 2014
2008 2009 2010 2011 20120123456789
02004006008001,0001,2001,4001,6001,800
121
414
832
1,204
1,623
Energiakatselmustuki, sopimusyritykset ja -yhteisöt yhteensä (kumulatiivinen)Energiakatselmuskohteiden lukumäärä, sopimusyritykset ja -yhteisöt yhteensä (kumulatiivinen)
Million € Cumulative
SubsidiesNumber of Sites
Number of Energy Audits Launched and Subsidies Granted in TotalIndustries Municipalities Property and Building Sector
Irmeli Mikkonen, Motiva Oy 26
Volumes of Energy Audited Service Sector Buildings
21 March 2014
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120
20
40
60
80
100
120
140
160
180
Milllion m3
MunicipalitiesPrivate Service Sector
www.energyefficiencyagreements.fi