FIZIKĀLĀS ENERĢĒTIKAS INSTITŪTS

New Latvian Energy Efficiency Law and Alternative measures Ivars Kudrenickis and Gaidis Klavs

Institute of Physical EnergeticsEnergy system analyses and optimisation departmentFirst meeting of the project “ODYSSEE-MURE, a decision support tool for energy efficiency policy evaluation”

8-9 September 2016, Helsinki, Finland

FIZIKĀLĀS ENERĢĒTIKAS INSTITŪTS

Alternative measures 2020

FIZIKĀLĀS ENERĢĒTIKAS INSTITŪTSAlternative measures include:• Investment measures, co-financed by

EU Funds, state budget – green investment scheme

EU ETS auctioning (currently)UNFCCC Kyoto protocol emissions trading (2014-2015)

• Measures stated by the actual legislation (e.g. EnergyEfficiency Law): – Energy audits in large companies,– Energy management systems in entities – largeelectricity consumers and municipalities,– Voluntary agreements on energy efficiencyimprovement measures– others

It is anticipated that alternative measures might cover 40-45% of the EED Article7 obliged 2020 target.

FIZIKĀLĀS ENERĢĒTIKAS INSTITŪTS

Calculated cumulative savings to 2020: implemented projects to 2015

Currently calculated cumulative savings cover around 6% from 2020 target (9896 GWh)

FIZIKĀLĀS ENERĢĒTIKAS INSTITŪTS

Planned path and evaluated cumulative savings

FIZIKĀLĀS ENERĢĒTIKAS INSTITŪTS

Development of Monitoring & Verification procedure• Latvia has a bottom-up M&V system in place since2010 to monitor energy savings of NEEAPs under theprevious EED. Ex-post metered savings are calculated forpublic budget (EU Funds, national green investmentscheme) co-financed projects.• Existing M&V system has been focused mainly to energysavings evaluations in buildings, as well as in specialcases of industry .• Currently, the existing M&V system is further developed,by including evaluation of large variety of EE measures.• The IT Tool for M&V is under implementation withinthe framework of H2020 project ‘’multEE: FacilitatingMulti-level governance for energy efficiency’’

FIZIKĀLĀS ENERĢĒTIKAS INSTITŪTS

Latvia ENERGY EFFICIENCY LAW

FIZIKĀLĀS ENERĢĒTIKAS INSTITŪTS

Issues covered by the Law• Energy Efficiency Obligation Scheme• Energy Efficiency Funds• Voluntary agreements on energy efficiencyimprovements• Energy auditing. Energy audits in companies • Energy management system in entities – large electricity consumers. Energy Efficiency Duty • Energy Efficiency Services• Energy Efficiency Monitoring• Provision of Final Consumers with Information

FIZIKĀLĀS ENERĢĒTIKAS INSTITŪTS

Energy Audits and Energy Efficiency Improvement in Large Companies• large company - if employs more than 249 employees, or has annual turnover more than 50 MEUR and annual total balance 43 MEUR, • the energy audit shall cover at least 90% of the total final energy consumption of the large company• The first energy audit shall be performed up to 31 March 2017, or during one year after the inclusion in the list of large companies, the regular audit shall be performed each 4 years• The large company shall implement up to the 1st

April 2020 at least three energy efficiency measures which have the highest energy savings or the highest economical return and which are stated by energy audit or by certified energy management or environmental management systems.• The registration of energy audits within the informativesystem of the Ministry of Economics shall be started notlater than 1st July 2017.

FIZIKĀLĀS ENERĢĒTIKAS INSTITŪTSEnergy Management Systems in Entities –Large Electricity Consumers (LEC)• LEC - if annual electricity consumption is above 500 MWh (only own consumption, the electricity sold to another consumers is not accounted).

• LEC has the duty to implement up to the 1st April 2018 and maintain certified (according the standard) energy management system which shall cover at least 90% of the total final energy consumption of the LEC. The LECs which have already implemented environmental management system might supplement this system (up to 29 September 2016) in a way its provide evaluation of energy consumption.• The alternative to energy management system is to perform the regular energy audits, at least each 4 years, the first energy audit shall be performed up to 1 April 2018.• The LEC shall implement up to the 1st April 2022 at least three energy efficiency measures, which have the highest energy savings or the highest economical return, stated by energy audit or by certified energy management or environmental management systems.

FIZIKĀLĀS ENERĢĒTIKAS INSTITŪTSEnergy Efficiency Duty –Large Electricity Consumers (LEC)

• Implementation of certified energy management system is stated as the favourable criterion which is taken into account when evaluating entities’ proposals regarding project’s co-financing by EU Funds, other public sources or other public support schemes (guarantees, subsidized interest rate, etc.)• In case the entity corresponds to the status of large company, the duties of large company enter• Estimated number of LECs in 2014 = 1149 (143 large companiesincluding)• The LEC, which is not fulfilling the noted in the Law duties, shall pay Energy Efficiency Duty. • The amount and procedure of this duty shall be described by the Cabinet of Ministers (Governmental) RegulationsDraft proposal for the Duty7% of the electricity cost in the previous year, calculated for eachconsumed MWh by applying Eurostat’s published average 1st and 2ndhalf-year electricity price in industry sector in the previous yearIts corresponds to 6.30 EUR/1 MWh consumed electricity (according2015 data)

FIZIKĀLĀS ENERĢĒTIKAS INSTITŪTSEnergy management systems in state administration institutions

• mandatory implementation of energy management system in those state direct administration institutions which have buildings with total heating area 10000 m2 and above - starting from 1st November 2017 or during one year after the noted provision come into force• other state administration institutions may design and implement energy management systems and energy efficiency plans voluntary

FIZIKĀLĀS ENERĢĒTIKAS INSTITŪTSEnergy management systems in municipalities

mandatory implementation of energy management systems in:• nine largest Latvia cities shall implement the certified (according to the standard) energy management system - starting from 1st April 2017• other Latvia municipalities shall implement energy management system (according the methodological guidelines by the Ministry of Economics) if they have the territorial development index 0.5 and above and population above 10000 inhabitants - starting from 1st November 2017 or during one year after the noted provisions come into force (7 municipalities corresponded to this criteria in year 2015).These municipalities cover altogether ~ 58% of Latvia population• other municipalities may implement energy management systems and energy efficiency plans voluntary

FIZIKĀLĀS ENERĢĒTIKAS INSTITŪTSNational Energy Efficiency Fund –shall be established

National Energy Efficiency Fund (NEEF) sources are stated: • payments done by the participants of Energy Efficiency Obligation Scheme (if the participants choose this alternative instead of implementation energy efficiency measures)• at least 90% of Energy Efficiency Duties paid by non-compliant with the Law large electricity consumers,• other sources.The sources of the NEEF shall be spent for:• support programmes to achieve end-use energy savings mandatory target,• public information and education programmes on energy efficiency.

FIZIKĀLĀS ENERĢĒTIKAS INSTITŪTSMunicipalities’ Energy Efficiency Funds –might be established

Municipality Energy Efficiency Fund (MEEF) sources are stated:• municipal budget• payments done by the participants of Energy Efficiency Obligation Scheme (if the participants choose this alternative instead of implementation energy efficiency measures)• other sourcesThe sources of the MEEF shall be spent for:• support to achieve end-use energy savings mandatory target,• implementation of energy efficiency measures foreseen by municipal development planning documents• implementation and maintenance of energy management system in municipality.The EEOS participant shall be registered in the administrative territory of the municipality and cannot be the administrator of the municipal energy efficiency fund.

FIZIKĀLĀS ENERĢĒTIKAS INSTITŪTSVoluntary Agreements on Improving Energy Efficiency

• As the Energy Efficiency Law had entered into force, the Government shall re-cast up to 1stOctober 2016 the existing Regulations No555 «Regulations Regarding Procedures for Entering into and Supervision of an Agreement Regarding Energy Efficiency Improvement»• Existing Regulations state:

– the agreement should have the target – at least 10% of EE improvement.– the achievement of the energy savings target should be justified by the EE action plan. – an agreement should be entered into for a time period of up to five years