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9ИНФОРМАЦИЯ В ОБЛАСТИ АЛЬТЕРНАТИВНОЙ ЭНЕРГЕТИКИ
INFORMATION ON RENEWABLE ENERGY
§
REVIEW OF ENERGY EFFICIENCY LAWS AND POLICY PROVISIONS IN 22 COUNTRIES AND TWO REGIONS: RECOMMENDATIONS FOR POLICYMAKERS*
A.V. Pasoyan Alliance to Save Energy Armenia office: Tumanyan str. 8, Suite 430, Yerevan 375010 Headquarters in the U.S.: 1200 18th St., NW, Suite 900, DC 20036 Tel./Fax: 3741.547312, mobile: 3749(1)415677, e-mail: astghine@arminco.com; apasoyan@ase.org
http://www.ase.org, http://www.munee.org
Education: M.A., Environmental Management, Brown University, Center for Environmental Studies, Providence, RI, 2001. B.A. Management and International Economic Relations, State Institute of Economics, Department of General Economics, Yerevan, Armenia, 1999.
Field of activity and professional interests: Specialist in energy efficiency policy in CEE&CIS, managing overall research effort on policy and technical trends and issues in the Urban Heating sector, as well as managing and effort to create secondary legislation for the Energy efficiency and renewable energy law in Armenia. This includes economic modeling skills and investment climate for energy efficiency in Armenia and other countries in transition. Managing effort to assist housing associations in Armenia and Moldova to look at heating and various energy efficiency options.
Membership: Member and Consultant, International Interdisciplinary Environmental Association, Assumption College, U.S.A. Coordinator, Yerevan Cambridge Sister Cities Association. Publications: 10 publications.
Abstract
The present report is a summary review of existing energy efficiency laws and regulations in 22 countries and two regions including: the Commonwealth of Independent States (CIS), Bulgaria, Czech Republic, Armenia, Denmark, Estonia, the European Union (EU), France, Germany, Georgia, Great Britain, Japan, Kyrgyzstan, Moldova, the Netherlands, Poland, Romania, the Russian Federation, Sweden, Turkey, Ukraine, Bulgaria, Armenia, the Czech Republic and the United States of America (U.S.A).This information was collected as part of Alliance to Save Energy efforts to draft primary energy saving and renewable energy legislation for Armenia during 2003 within the frames of technical assistance from the United States Agency for International Development under the Municipal Network for Energy Efficiency. The study was further supplemented by the Alliance Serbia office efforts in RENUER countries.
The majority of surveyed countries' Governments started supporting policy attempts to improve energy efficiency (EE) starting from the 1990's, some attempts stayed rhetoric, some merely reformulated the Soviet energy "norms" and little changed in reality, while some policies were taking hold and achieving real change. These reforms were stimulated by the rising energy prices, growing energy demands, propaganda of sustainable energy with environmental consciousness growing after Rio Summit, and for the Southeast Europe and Central Asia - the collapse of the Soviet Union with the consequent market liberalization which eliminated the energy market distortions and subsidies, creating real need for efficient use of energy resources.
In most instances, the Energy Efficiency Law is designed on the basis of an energy sector development strategy, which can be either an independent document, or the strategy principles may be defined in the Energy Law of the country. Such strategy document presents a government consensus on the importance of energy efficiency, and specific objectives to be accomplished with the implementation of EE measures. For some countries energy efficiency is a means for achieving energy security, reducing reliance on fuel imports, solving local and regional environmental problems, reducing the energy intensity of the economy, while achieving economic savings through application of energy efficient technologies.
The legal documents containing the state EE policy provisions vary from country to country. In some cases the overall Energy Law contains a section on Energy Efficiency, in others EE Law (may be called Energy Conservation Law, or Energy Saving Law or Energy Management Law) is a separate legal document, in others renewable energy promotion is included in the legal act promoting EE.
The summary contains information pertaining to a variety of energy efficiency laws and regulations, including (i) equipment energy efficiency standards, certification and labeling, (ii) industrial and power generation regulations, (iii) economic and financial incentives for energy efficiency measures, (iv) sanctions for wasteful energy practices, (v) energy audits and supervision; (vi) energy efficiency funds, (vii) energy efficiency institutions; and (viii) other fields regulated.
The report further discusses the performance of some of these laws and provides recommendations for policy makers in other countries across the region based on in-
Статья поступила в редакцию 18.10.2005. The article has entered in publishing office 18.10.2005.
* Статья была представлена в виде доклада на Второй конференции по возобновляемой энергетики «Энергия будущего», проходившей в Ереване 27-28 июня 2005 г.
sights from our partners in Bulgaria, the Czech Republic, Poland, Romania and Serbia. The recommendations have focused on the challenge of creating an enabling environment for an energy efficient market.
General Energy Efficiency Policies
The majority of surveyed countries' Governments started supporting policy attempts to improve energy efficiency (EE) starting from the 1990's, some attempts stayed rhetoric, some merely reformulated the Soviet energy "norms" and little changed in reality, while some policies were taking hold and achieving real change. These reforms were stimulated by the rising energy prices, growing energy demands, propaganda of sustainable energy with environmental consciousness growing after Rio Summit, and for the Southeast Europe and Central Asia - the collapse of the Soviet Union with the consequent market liberalization which eliminated the energy market distortions and subsidies, creating real need for efficient use of energy resources.
The general accomplishment of the EE policy developments were:
• formalizing of the energy efficiency as a separate sphere of regulation;
• conceptualizing the state policy principles in the sphere of energy efficiency;
• prioritizing the sectors with higher EE potential, and defining EE incentives and sanctions for wasteful energy use;
• creating real financial and institutional structures for the promotion of energy efficiency, with allocated staff and budget;
• defining the development of short-term and long-term energy efficiency programs as a national priority;
• assigning responsibility for promotion of energy efficiency on national, regional and municipal levels.
In most instances, the Energy Efficiency Law is designed on the basis of an energy sector development strategy, which can be either an independent document, or the strategy principles may be defined in the Energy Law of the country. Such strategy document presents a government consensus on the importance of energy efficiency, and specific objectives to be accomplished with the implementation of EE measures. For some countries energy efficiency is a means for achieving energy security, reducing reliance on fuel imports, solving local and regional environmental problems, reducing the energy intensity of the economy, while achieving economic savings through application of energy efficient technologies.
The legal documents containing the state EE policy provisions vary from country to country. In some cases the overall Energy Law contains a section on Energy Efficiency, in others EE Law (may be called Energy Conservation Law, or Energy Saving Law or Energy Management Law) is a separate legal document, in others renewable energy promotion is included in the legal act promoting EE.
The Laws tend to be declarative if not followed with the establishment or empowerment of a designated institution or an agency responsible for:
• the enforcement of the state energy efficiency policy principles;
• development of short- and long-term EE programs and targets;
• coordination of EE efforts throughout the different sectors of the economy;
• development and enforcement of EE standards and indicators;
• certification of energy auditors and EE equipments and constructions; TA»
• fee collection and fundraising aimed at generation h of resources and funds required for providing EE fi- | nancial incentives; Cen
• lobbying of energy efficiency reforms and raising | awareness on EE Issues, etc. j=
c
The following section presents the findings of some £ research and analysis of the effectiveness of energy g and energy efficiency laws from around the Southeast | Europe. ^
o o
The effectiveness of Energy and Energy ® Efficiency Laws in Central Europe
Alliance, in conjunction with several partner energy efficiency agencies and organizations including APER, ENEFFECT, SEVEn, FEWE and the Slovenian Energy Efficiency Agency conducted a survey sought to answer the following key questions:
• are there energy/energy efficiency laws separate or combined;
• what results have come form the laws (positive and negative);
• if little has happened, why and what would make the laws stronger;
• what is the impact of having a separate law (if any); and
• would they recommend a combined or separate law.
Table 1 presents a summary of the general answers
to each question.
The survey found that the structure of the energy efficiency legislation, part of or separate from the larger energy law, mattered little in the effectiveness of improving the energy efficiency situation in the country. Slovenia, with one combined law, attributes their success to the need to synchronize standards with the European Union and strong secondary legislation. The Czech Republic, according to SEVEn, with two laws, also attributes their new standards to the pull of the EU, along with Government buy-in. Poland, with one combined law, also credits the EU integration process. Romania, with two laws, has an ineffective implementing body for energy efficiency. Serbia, with no law at all but an agency created by decree, ^ has done nothing at the regulatory level to improve the <t energy efficiency situation of the country. J
The specific results in each country vary, and with- | out any connection to the one or two law issue. Bulgaria, ^ for instance, created an energy efficiency fund with the I World Bank's support that had no connection to the leg- £ islation; while improving standards, which is included in c the laws, has not been done. Serbia has also just created | a significant World Bank energy efficiency fund in con- m nection with the government agency but not as a result g of any law. Slovenia has a large education program and @ implements a number of small projects, including an efficient windows project for homes. Czech has implemented the EU appliance labeling system and minimum energy standards, and enforcement, for industry and buildings, having a significant impact on the demand side. FEWE claims Poland has an ineffective state agency that has little funding for energy efficiency measures.
Our interviews, along with our experience in the region, brought us to several conclusions that might be useful for countries seeking to develop energy efficiency legislation.
¡5 The Type of Law Does Not Matter
<
^ We found no connection that would suggest a com-
£ bined or separate energy/energy efficiency law has a
^ greater or lesser impact on a countries ability to improve
nica their energy efficiency situation or even the regulatory
ech framework of the country, including developing and im-
o plementing codes and standards.
c
& Having a Law Makes a Difference
CO
o While the type of law may not matter, having a law © that allows for energy efficiency improvements is important. None of the countries we researched could have made the improvements they made at the regulatory level without a law allowing it. Now, energy efficiency can happen without a legal framework, as the Serbia fund suggests, but these funds without ongoing regulatory leadership will not affect the whole country. It is therefore important that Macedonia pass a law that includes energy efficiency as an important goal and allows for improved codes and standards, funds and other flexible mechanisms.
а. Other Laws Can Have a Significant Impact on Energy Efficiency
While no substitution for dealing with energy efficiency directly, we should note that often other laws and outside influences play a significant role in improving the energy efficiency of a country. Poland's municipal law had an important positive impact on energy efficiency. Conversely, however, Serbia's municipal banking law had a very important negative impact. Inserting the importance of energy efficiency into a law could have enTable 1. Survey Results
sured it would have been considered before Serbia's law, which effectively banned long term borrowing by municipalities, was passed.
The Importance of People and Champions
Transitioning country ministries have notoriously small staffs and short memories. New ministers do not necessarily feel accountable to the laws passed by the former government and with institutions micro-managed from the top, this plays an important role in terms of enforcement of any law created. As impressive as Romania's laws are, for instance, they are largely not being implemented. The enforcement mechanism is nonexistent.
It is very important to have people in the government who want the new law and who understand its importance to the country (in terms of jobs, imports, subsidies, etc.). The successes from around the region generally stem from people. For instance, Serbia has not been able to develop an effective energy regulatory framework because the political will does not exist, but a few dedicated individuals were able to develop the World Bank fund. Romania has not had a very effective energy regime but a few individuals at the ministry of natural resources have made Romania the leader in climate change and Joint Implementation. Czech is one of the few places where the institutions have really bought into the concept of energy efficiency holistically.
Creating the buy-in regarding energy efficiency from as senior a level as possible is probably the most important factor in determining whether an energy efficiency framework will be successful. If the minister, deputy minister or some other senior level person is not a champion, has not fully accepted how and why energy efficiency is an important solution to his/her problems, it is unlikely a law will be successfully implemented. This is a lesson we learned after the successful push to pass the Romania energy efficiency
Country, Source / Question Romania (APER) Bulgaria (ENEFFECT) Poland (FEWE) Czech (SEVEn) Slovenia (SEEA) Serbia (Alliance)
Energy or EE Law Separate Separate Combined Separate Combined None
Laws been effective No. Poor agency, lack funding Good law, not imp. Somewhat Yes, very Yes, very n/a
Specific EE improvements (not necessarily as a result of the law) Fuel standards, some projects WB EE fund, some projects, no standards EU standards EU standards, industry, buildings EU standards, residential projects WB EE fund, other donations
Why so much/ little progress EE law has no connection to economic strategy No funds, other support, other laws hurt EE (muni law) Ineffective state agency, lack funds Government accepts, understands EE Agency works but lacks funding for large projects No law, ineffective agency, too many ministers
What would make them stronger EE must be seen as important by Government, not just EE people Funding, coordinating legislation, public awareness Better agency, funding source from consumers is wrong approach Municipal energy audits are required but too costly Independent funding source Energy law, proactive Agency, Gov buy-in to EE and energy reform
Has separate or combined law impacted implementation Too many laws, to confusing, not enough secondary legislation Structure is fine, implementation is the issue No Laws are compatible and implemented together One law works fine n/a
Recommend separate or combined laws Combined, Law should treat all energy sources, should be umbrella Separate, industry too big for one law Separate Combined, secondary legislation is most important Combined, secondary legislation can solve problems, one law logical Combined, whatever is fastest, secondary legislation, implementation is most important
Table 2. Defining Goals, Strategies, Policies, and Policy Instruments
Goal Overarching framework Promoting energy efficiency
Strategies Broad paths to reach a goal Using energy provisions and use to foster efficient use of energy
Prerequisite policies Courses of action to implement strategies Making markets work more effective by: • Restructuring the energy sector • Attracting private capital • Phasing out subsidies for conventional energy supply and consumption • Internalizing externalities • Strengthening regulations • Supporting energy sector innovation • Accelerating the deployment of sustainable energy technologies • Building institutional and human capacity in sustainable energy • Improving international cooperation and linkages between trade and the environment.
EE Policy instruments required Specific measures used • Efficiency standards • Public procurement policies • Voluntary agreements • Appliance labeling • Externality taxes and incentives (such as carbon taxes and early retirement incentives for older, less efficient, more polluting energy-using devices) • Fuel switching • Obligation to buy energy from renewable sources • Obligation to supply energy from renewable sources • Systems benefit charges (otherwise known as public benefits funds) • Supporting research and development demonstration projects • Lowering the cost of new technologies for more rapid deployment • Raising tariffs to cost-recovery levels • Create and/or strengthen regulatory institutions; and • Addressing the realities of social needs and financial risks in emerging markets and developing countries.
law. While the regulatory agency is somewhat better than in the past, it is fair to say the institution had not bought in to the idea of change and reform and it took a few years to get the situation we have now, which is marginal at best.
Enforcement and Funding is Crucial
Most of the laws developed throughout the region speak highly of energy efficiency and its importance to the future of the country. They also allow for the creation of strong policies, codes, funds, regulations, etc. But without the funding to see the law through to implementation and enforcement, along with a champion (see above), the law has little chance of success. Passage of the law must be viewed as only the first step of the process.
Recommendations for policy-makers
Energy vs. Energy Efficiency Legislation
Given that there appears no inherent benefit of having separate legislation and the time it takes to craft and pass legislation, it is suggested taking the fastest means to codify energy efficiency in legislation. If an energy law is presently being considered, adding an energy efficiency component to it ought to suffice. However, in case of Armenia, it was specifically recommended by the Government and the Armenian Energy Efficiency Council to have a separate Energy Efficiency Law, considering that the Energy Law of 1997 had specific objectives of energy sector restructuring and over the past several years had completed its mission and has no legislative tasks to associate energy efficiency with. This can also be found the case in other countries of the CIS, where the energy reforms of 90's were aimed at liberalizing the energy market and eliminating the state energy control (GosEnergoNadzors). Table 2 presents the goals, strategies and policies to be pursued in the two-step energy policy reforms worldwide, where Energy Law restructures the energy sector, and the energy efficiency policies second with relevant instrument.
Approach, Strategy
In terms championship for the promotion of energy efficiency legislation, the strongest recommendation is to initiate the process by advising the senior government officials about energy efficiency, the legal framework, and its importance to the country on a daily basis from concept through to implementation.
One or two advisers in the ministry could help develop the legislation, research certain issues, create analysis of what the economic impacts of regulations would be and, importantly, educate the ministry officials about the benefits of energy efficiency and build the buy-in on the issue.
Energy Efficiency Components of a Law
As part of our initial research and analysis we reviewed the specific aspects of what sections had been included in effective laws, already passed in the region. It is important to note, that most laws are written pretty generally, allowing for the development of codes and standards, enforcement, funds, etc. and creation of a body (or enable the ministry) to develop the specific secondary legislation or regulations. The sources used were the unofficial translations of the national laws (no official translations are available), the terms and definitions used are adapted, where possible, to comply with internationally accepted energy terminology.
Illustrative Menu of Components of the Law and Policy Options
General Provisions and Objectives - Conceptual statements defining the policy framework and purpose of the law, its field of regulation.
Definitions - Brief definitions new concepts being introduced by the law. These usually include, among oth-
ers, "energy management", "energy audit", and other technical energy terms.
State Energy Efficiency Policy - Principles of the state energy efficiency policy defined or refer-j*. ral to a separate Energy Policy document defining <c both the objectives of the efficient use of energy and 2 the ways to accomplish those objectives. Assigns 1 the rights and responsibility of individuals and le-ñ gal entities in the promotion of energy efficiency in 1 the country.
0 0
u Energy Efficiency Programs - Short-term ad long-
tc
'I term programs of energy efficiency measures for im-$ plementation by the government or with the governed ment assistance, as well as mandatory energy efficiency g measures for large energy consumers, or energy management programs including public education, rebates, low-interest loans, metering and control, research and development, government procurement, education, etc.
Standards and codes - Various national, state and local minimum energy performance standards imposed on various types of equipment, appliances, buildings and perhaps power plants.
Certification and Labeling programs - After certification of compliance to state energy performance standards by authorized agencies, Energy labeling programs could include adding equipment, upgrading label requirements or improved test procedures for a variety of federal and state labeling programs including (for example) EPA's Energy Star, Energy Rated Homes of America, FCC's Energy Guide, and EPA's vehicle miles-per-gal-lon ratings.
Sanctions and taxes - Various federal, state and local taxes on various energy resources at various rates. Could include tax increases, new taxes, elimination of tax exemptions and deductions, elimination of tax credits, decelerated depreciation, etc. The full range of taxes could be included, including income taxes, sales taxes, severance taxes, property taxes, etc. Sanctions may apply to excess units of energy consumption.
Tax incentives - Various federal, state and local tax < incentives for purchase and use of energy-saving equip-h ment, vehicles and facilities. Could include tax exempli tions, deductions, credits, accelerated depreciation, etc. Tax incentives could be applied to the full range of tax
1 types, including income taxes, sales taxes, severance tax-
| es, property taxes, etc.
0 I—
" Grants and Loans - State and federal grant and
! loan programs (usually administered through the En-
<o ergy Efficiency Agency and/or funded through the
<D
g EE Fund) could include energy efficient mortgage © programs, low-interest loan or guarantee programs. Programs could target government facilities as well as others.
Transitional Clauses - Provisions for establishing organizations, assigning tasks for development of specific pieces of secondary legislation, and amending other relevant laws.
Regulatory spheres
The above policy instruments, as appropriate in each country, are grouped in several main regulation spheres, which outline the areas of government policy intervention outlined in the following section.
This section describes these regulatory spheres followed by matrix, which indicates the availability of a particular regulation in each of the surveyed 22 countries.
1. Equipment standards, certification and labeling
- Provisions that define the technical standards for devices, equipment, machine-tools and technologies with high energy consumption, buildings as well as in other fields as assigned by the Government, usually integrated into the national standards' system. This section also summarizes provisions that establish procedures and other guidance evaluating the performance of energy consumers and appliances and establishing minimum energy performance standards for appliances, equipment and buildings. The certification and labeling provisions base on the compliance with national energy efficiency standards, mandatory or voluntary for compliance by producers and importers of such appliances, equipment and building constructors.
2. Industrial & power generation regulations - This section summarizes provisions pertaining to energy use by industry, including electricity generation, transmission and distribution. In some instances, the laws may contain specific regulations and requirements for monitoring and reporting for the efficiency of heat and power generation processes, CHP, and fuel use in the process of generation.
3. Economic and financial incentives for energy efficiency measures — This section summarizes provisions for financial, tax or customs incentives and privileges (including accelerated deprecation), as well as favorable crediting for energy efficiency-related activities, producers of energy saving equipment, appliances and materials, metering & control means, management of fuels and energy consumption, etc.
4. Sanctions for wasteful energy practices - This section summarizes provisions that penalize or regulate wasteful energy-related practices through administrative or financial sanctions. Economic sanctions are imposed on legal and physical entities for (i) wasteful use and direct fuels and energy loss; (ii) violation of energy audit requirements; (iii) non-compliance with state EE standards after notification, warning and/ or directives for compliance by the state authorized agency; (iv) non-compliance with energy management and energy efficiency measures directed by state authorities for mandatory implementation; etc.
5. Audits and supervision — Rules and procedures for conducting energy audits and producing conclusions on the efficiency of energy consumption at particular sites with the auditors' conclusions to be used for development energy efficiency programs and providing EE incentives. This section also defines the re-
Table 3. Summary matrix of different regulation areas in surveyed countries. (The cells marked with "N/A" indicate the areas where the studied countries do not have energy efficiency regulations and legal provisions.)
Countries
Regulatory spheres Romania Ukraine Moldova Russian Federation Kyrgyzstan Poland Georgia (draft) Japan U.S.A CIS model law Great Britain European Union Turkey France Netherlands Germany Estonia Sweden Denmark Bulgaria Czech Rep. (Energy Management Law) Armenia
Standardization, Certification, & Codes + + + + + + + + + + + + + N/A N/A N/A N/A N/A N/A + + +
Generation Sector Regulations + + N/A + + + + + + + + N/A N/A N/A + N/A N/A + + N/A + +
Economic and Financial Mechanisms + + + + + + + + + + + + N/A + + + + + + + + +
Sanctions + + + + + + N/A + N/A + N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A + N/A
Audits and Supervision + + + + + N/A N/A N/A N/A + + + N/A N/A N/A N/A N/A N/A + + + +
EE Funds + + N/A + N/A N/A N/A N/A + + + + N/A N/A + N/A + N/A N/A + N/A N/A
EE Agencies + + N/A + N/A + N/A N/A + + + + N/A + + N/A N/A N/A N/A + N/A N/A
Other + N/A N/A N/A N/A + + + N/A + N/A N/A N/A N/A N/A N/A N/A N/A N/A + N/A +
The following tables provide "at-a-glance" descriptions of specific clauses regulating different areas of energy efficiency policy described above.
Countries wil ;h specific regulations
Regulatory sphere [ 1 ] Romania Ukraine Moldova Russian Federation Kyrgyzstan Poland Georgia (draft law) Japan U.S.A CIS model law Great Britain Bulgaria Armenia Czech Republic U H Turkey
Standards, Certification, Labelling and Codes + + + + + + + + + + + + + + + +
quirement and limitations for energy auditors, their certification and professional requirements for conducting energy audits.
6. Energy efficiency funds - This section summarizes government-subsidized financing programs that target energy efficiency projects, including low-interest loan funds, loan guarantee programs, and more. The energy efficiency funding can occur from a separate extra-budgetary fund, which attracts budgetary and non-budgetary finances, in the absence of such funds, the state energy efficiency programs can be finances directly form the state budget. The administration, reporting requirement and direction of the funds is defined by the appropriate clause of the law, usually being granted to the EE agency or the relevant authorized Ministry.
7. Energy efficiency institutions - This section identifies the key agency (or agencies) responsible for the development, implementation and enforcement of energy efficiency-related laws and regulations. This agency can be established specifically for the implementation of the law, or the law enforcement can be assigned to the branch Ministry, with secondary roles allocated to other rele-
vant government organizations. The EE agency or the "state authorized body" can also be assigned the functions of (i) developing energy efficiency standards; (ii) conducting certification and labeling; (iii) administering the EE funds; (iv) certifying and/or licensing energy auditors; developing short-term and long-term energy efficiency programs; (v) reporting on the implementation of the EE programs and activities of state EE fund; (vi) TA» coordinating the EE activities in different branch- t es of economy; etc. £
8. Other - This section summarizes a range of -
miscellaneous laws, regulations and programs |
not included in other categories (e.g. consum- c
er awareness programs, transitional claus- ific
es, etc). |
Romania g
O
The state defines the maximal and minimal allowed ^ levels of efficiency of energy use.
The producers and importers of equipment are not allowed to sell products, which do not correspond to the state EE standards and do not have documentation of certification. The producers and importers must apply for bench-testing and auditing. After the completion of audits and tests, the producers and importers receive cer-
tificates verifying the compliance of their products with the state EE standard requirements.
New and existing buildings must comply with the building EE standard requirements.
i Ukraine
<
* The state (mandatory) energy standards indicate the | net rational energy consumption rates, define the methyl? ods for determining energy demand and organization-
re
al-methodological aspects of energy saving; define data g collection methods for identifying energy losses; set reo quirements for EE technologies, secondary energy use | and renewable energy sources. Certification of energy ef-$ ficient buildings and facilities conducted on the basis of o EE standards. The energy usage indicators for the most ^ energy-intensive production and technological processes are entered into a national standards registry.
Energy efficiency codes and standards serve as the basis for imposing economic sanctions for inefficient use of fuel and energy resources, and production of inefficient appliances and equipment.
Fuels and energy consumption norms and rates should be included in the technical passports (technical document included in the packaging for a product describing the technical features, specification and energy performance) of equipment, regime charts, technological instructions and user manuals, and also in the technical conditions and passports for all types of fuels and energy consuming equipment and appliances.
Progressive norms of fuels and energy consumption shall be valid until the system of energy standards is made effective.
The Cabinet of Ministers issues a list of the types of energy saving equipment and corresponding norms of depreciation that are allowable for tax deductions.
Moldova
Energy efficiency performance shall be included in state standards for equipment, appliances and buildings (standards currently under development for equipment and appliances, for building construction materials - already enforced). Performance standards for energy suppliers of power, heat energy and natural gas are included in state standards. The law contains a provision for certification and labeling of certain energy consuming equipment and energy resources.
< St
^ Russian Federation
0
| Energy efficiency performance requirements for
^ energy-using appliances are included in the state
■§ standards.
JZ
to The normative-technical documents accompanying o the equipment traded must contain information on ef-| ficiency indicators for the energy resource export, pro-<o cessing, transporting, storage and use, as well as effi-g ciency indicators of energy consumption in industrial @ processes, heating, air conditioning, hot water supply, and lighting.
Any energy appliance is subject to mandatory certification and/or labeling to indicate its compliance with the state standards.
The construction and the operation of certified energy equipment with the capacity less than 300 kW heat energy or 100 kW power energy does not require a license.
Kyrgyzstan Mandatory standardization applies to all fuel and energy generating, transforming and consuming appliances.
The normative-technical documents must contain information on efficiency indicators for the energy resource export, processing, transporting, storage and use, as well as the efficiency indicators of energy consumption in industrial processes, heating, air conditioning, hot water supply, and lighting.
The EE norms for energy consumption are subject to revision every 3 years, to take into consideration improvements in technologies.
Energy appliances are subject to mandatory certification and compliance with the state standards, and must be technically documented and labeled.
Poland
All designed, imported, produced, constructed equipment must guarantee efficient use of energy and comply with the state EE standards defined by the 1993 Research and Certification Act, and 1994 and 1995 amendments.
The technical documents for all imported or produced equipment and merchandise must contain information on the fuel and energy consumption parameters of the product. All domestically produced or imported appliances must bear labels or technical descriptions including the EE indicators of the product. Products not containing such information, labels or technical documentation are not allowed for sale.
Georgia (draft)
The draft contains strict weatherization standards for building construction.
The draft provides for application of mandatory EE standards for energy intensive industries and their enforcement through energy management.
Japan
The EE standards are developed by the Ministry of International Trade and Industry.
Standards define the energy intensity norms for industrial production. EE standards apply to produced and imported cars and residential appliances. Mandatory building codes define energy efficient weatherization and insulation standards require home-owners' compliance with housing construction rules to avoid energy loss and to guarantee efficient use of residential energy.
In addition, the Minister of Construction may implement measures for providing consulting services to management companies and home-owners in the design and construction processes.
United States
Mandatory energy labelling of appliances was authorized by the Energy Policy and Conservation Act (EP-CA) in 1975; the related Energy-Guide programme took effect in May 1980. Labels were required on refrigerators, freezers, dishwashers, water heaters, room air conditioners, clothes washers and furnaces. Later on labels have been required on fluorescent lamp ballast, fluorescent lamps, compact fluorescent lamps (CFLs), general service incandescent lamps.
The National Appliance Energy Conservation Act (NAECA) set efficiency standards and established sched-
ules for mandatory review in 1987. Standards came into force for most major types of residential energy equipment really during the 90s. Residential products covered under NAECA were almost similar to the labelled appliances. Some standards set minimum energy efficiency levels while others were prescriptive.
First significant national appliance standards took effect under NAECA in 1990. These were for refrigerators, freezers, water heaters and room air conditioners. They were updated effective in 1993 and once again in 2001.
Section 113(b) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2623(b)) was amended by adding at the end the following:
Distributed Generation - Each electric utility shall provide distributed generation, combined heat and power, and district heating and cooling systems competitive access to the local distribution grid and competitive pricing of service, and shall use simplified standard contracts for the interconnection of generating facilities that have a power production capacity of 250 kilowatts or less.
Distribution Interconnections - No electric utility may refuse to interconnect a generating facility with the distribution facilities of the electric utility if the owner or operator of the generating facility complies with technical standards adopted by the State regulatory authority and agrees to pay the costs established by such State regulatory authority.
Minimum Fuel and Technology Diversity Standard - Each electric utility shall develop a plan to minimize dependence on one fuel source and to ensure that the electric energy it sells to consumers is generated using a diverse range of fuels and technologies, including renewable technologies.
Fossil Fuel Efficiency - Each electric utility shall develop and implement a ten-year plan to increase the efficiency of its fossil fuel generation and shall monitor and report to its State regulatory authority excessive greenhouse gas emissions resulting from the inefficient operation of its fossil fuel generating plants.
Titles VIII on Fuels and Vehicles and Title IX on Energy Efficiency And Assistance To Low Income Consumers of the Energy Policy Act of 2003 define a full range of provisions for energy efficiency standards, building codes and housing efficiency standards, federal building performance standards and federal procurement of EE products, energy star programs and industrial energy efficiency standards, vehicle fuel efficiency indi-cators,etc.
Commonwealth of Independent States (model Law)
State EE regulations are based upon the development, control and enforcement of efficiency standards for the use of fuel and energy resources. State EE standards should be developed for all energy intensive merchandise and technological processes. State standards incorporate EE indicators. The EE indicators must be included in the corresponding normative-technical documentation for all products, including fuel & energy consumption for residential electric, HVAC, lighting, transportation appliances, building construction and materials, etc.
Norms and regulations for sector-by-sector energy losses are included in the technical documents for energy appliances, transmission, distribution and storage
means (passports, regime maps, technological and O&M orders, technical conditions).
Energy consuming products are due for mandatory certification in accordance with corresponding EE indicators.
After certification, the product or the accompanying < technical documentation bear information about the en- t ergy efficiency performance indicator and the product's |
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correspondence to the EE standard. ¿
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Great Britain f
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The regulatory agency defined by the Law on Gas and «É Electric Energy is responsible for ensuring energy efficiency in the country. The regulatory agency defines EE ^
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European Union
The Council Directive 78/170/EEC form 14 May 1978 defines requirements for generators of heat and hot water as well as the insulation of their distribution networks at new and existing non-industrial facilities.
The Council Directive 79/531/EEC from 14 May 1979 defines directives for labeling of residential electric stoves.
The Council Directive 82/604/EEC from 28 July 1982 proposes introduction of regulatory, managerial and administrative mechanisms, as well as national norms and standards facilitating the free flow (import/export) of EE goods and services.
The Council Resolution from 9 June 1980 mandates:
• Enforcement and control of weatherization standards for building heating networks.
• Labeling of residential appliances.
• Consumption standards for institutions and commercial buildings.
• Introduction of standard procedures for measuring energy consumption levels for transportation vehicles, and, if necessary, implementation of fuel saving measures.
The Council Directive 93/76/EEC from 13 September 1993 imposes mandatory building energy certification in all member states, with proposed measures for improving the energy efficiency, where possible.
The European Parliament Directive 96/57/EC from 3 September 19936 (VERIFY YEAR) defines the EE re- £ quirements for residential refrigerators, freezers and J
attached appliances. |
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New buildings must be constructed in compliance c with EE standards and have energy certificates, show- | ing the EE indicators. ¿5
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Bulgaria
The Minister of Energy and Energy Resources and the Minister of the Regional development and Public Works organized the development and enforcement of technical requirements and norms (building codes) for annual energy consumption at different sites.
The law also provided for the preparation and refinement of standards in the field of energy efficiency for the purpose of their harmonization with European standards and stimulation of the promotion of energy efficiency by the energy consumers (this requirement has not been carried out to date).
Every building may be certified by the order of an ordinance for certification of the buildings, issued by the Minister of Energy and Energy Resources and the Minister of the Regional development and Public Works. Each commissioned site - state or municipal property, with gross floor area above
1000 sq m shall be a subject to certification. The certificate shall be issued for a period of up to 10 years and shall be put at a visible place.
Czech Republic
Energy labels are required to be visibly placed on energy appliances prior to their market entry. The labels include data in Czech language on the specific energy consumption of the energy appliance, its energy efficiency in relation to the lowest and the highest values of energy efficiency for the given type of energy appliances, as well as on possible negative impact that its operation may have on the environment and the health of people.
Manufacturers, importers or distributors 5 may launch on the market only such energy appliances that meet the minimum energy efficiency requirements as set forth in the applicable regulation. This requirement shall be considered fulfilled if a given energy appliance complies with the applicable harmonised Czech energy efficiency technical standards.
In the documentation attached to the application for a building permit (as well as for building alteration permit), the owner of a building or the community of owners of [housing] units shall, under general requirements for structures, provide evidence of compliance with economical consumption of energy for heating purposes expressed as permissible values of thermal characteristics of the building, thermal resistance, air and humidity propagation of the structure, have been met.
The law requires the building owners or the community of unit owners to equip the internal heating system of the building with devices regulating heat energy supplies to end consumers in the extent established by regulation. The end consumer shall make it possible to install, maintain and check such devices. The heating must comply with the established rules and conditions.
Armenia
National Standardization Service shall adopt in the manner established by the Republic of Armenia Law "On
Standardization" the energy saving national standards, which shall classify:
• Energy efficiency indicators of energy devices;
• Energy efficiency indicators of energy resource development, production, processing, transformation, transportation, storage and consumption;
• Energy efficiency indicators of technical complexes for heating, lighting, ventilation, water supply and sewerage in buildings and constructions;
• Energy efficiency indicators of production/industrial processes;
• Environmental indicators of energy efficiency.
The certification of energy devices is voluntary and
is conducted at expense of the legal and physical persons using, producing and importing energy devices. Legal (physical) persons using, producing and importing energy devices can submit those in the manner established by the Republic of Armenia law "On Certification of Compliance of Goods and Services with Normative Requirements" for voluntary certification based on energy efficiency indicators defined by the national standards. Based on results of voluntary certification of compliance, the labelling of energy devices shall be carried out in accordance with the energy efficiency indicators.
Romania
Organizations with over 1000 tons of oil equivalent of annual energy consumption are obliged to implement energy efficiency programs.
Energy generation, transmission or distribution companies must reduce the use of energy and fuel and assist in the development of renewable energy.
Transportation companies and companies owning over 10 cars must develop energy management and monitoring programs.
The consumers that use more than 200 tons of oil equivalent per year are obliged to develop an energy balance for each authorized natural or legal person every 2 years.
The consumers of more than 1000 tons of fuel equivalent energy have to designate a responsible person for energy efficiency, develop annual energy balances for each natural and legal entity, and develop action plans for the reduction of energy consumption.
Ukraine
Tax incentives for energy savings are provided to enterprises producing of energy saving equipment, appliances and materials, metering, control and management devices for fuel and energy consumption.
< 5
Countries wil ;h specific regulations
Regulatory sphere [ 1 ] Romania Ukraine Moldova Russian Federation Kyrgyzstan Poland Georgia (draft law) Japan U.S.A CIS model law Great Britain Bulgaria Armenia Czech Republic U E Turkey
Industrial and Power Generation Sector + + + + + + + + + + + + + + + +
Russian Federation
Benefits are granted to:
• The producers and consumers implementing energy conservation measures;
• The manufacturers and consumers of energy resources who exceed state EE performance standards.
The non-regional electric and heat power producers can transmit their energy to the electricity grid, in coordination with power supply companies; the latter must accept this energy at a set price.
The regional energy regulatory authorities must set energy tariffs that would guarantee the necessary capital payback for the equipment operating on renewable energy applied within the framework of EE projects.
Kyrgyzstan
The non-regional electric and heat power producers can transmit their energy to the electricity grid, in coordination with power supply companies; the latter must accept this energy at a set price.
The electric and heat energy tariffs must be set at such a level that guarantees the pre-defined capital payback timeframes for the equipment operating on renewable, secondary or waste energy.
For the equipment that uses renewable energy sources, secondary sources and waste, the prices for electric and heat energy have to allow for the pay back of the capital investment for construction within a set period of time determined by national government.
Poland
Users of equipment and merchandise not containing EE performance information must undergo additional qualification testing and be granted a certificate from the Qualifications Committee. The Committee includes:
• the Energy Regulatory Commission Chair;
• relevant ministries in charge or electric and heat power energy, oil and gas consuming equipment and merchandise;
• Minister of Transport and Navy, if the qualifying equipment is on railroads or ships;
• Minister of Economy, in agreement with other relevant ministries, must assign mandatory supervision over the performance.
Georgia
Key principles defined by the Law on Environmental Protection.
The principles of regulation pertaining to the sphere of energy saving shall be further incorporated into the National Environmental Action Plan, National Climate Change Action Plan, Energy Policy Principles and Law on Energy Saving.
Japan
The Ministry of International Trade and Industry identifies the "Factories with Special Energy Management Assignment" (i.e. large energy consumers, which use over 3,000Cal annually in the crude oil equivalent or over 12GWh electricity), as the promotion of EE is most important in such factories.
If obvious inefficiency in energy use is registered at a factory with this special assignment, the Ministry of International Trade and Industry, in conjunction with the relevant branch ministries will direct the factory operator to develop a program for improving EE at the factory. In case of failure to comply, the Ministry releases an < order for compliance, with a hearing of stakeholder com- ¡i mittee opinions in advance. |
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United States 1
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JZ
The regulation of long-term wholesale procurement £ shall promote the solution of the following four issues: ë
• Ensure that the energy purchased from the whole- J sale energy market is cheaper than if produced at its m own prospective plants, 8
• Contribute to the reduction of producer debt gener- @ ation in the cash flows,
• Propose new mechanisms for the improvement of the wholesale markets,
The introduced cogeneration and small power production purchase and sale requirements included:
Termination of mandatory purchase and sale requirements - Section 210 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 824a-3) was later amended by adding at the end the following:
• Termination of mandatory purchase and sale requirements;
• Obligation to purchase- After the date of enactment of this subsection, no electric utility is required to enter into a new contract or obligation to purchase electric energy from a qualifying cogeneration facility or a qualifying small power production facility under this section if the Commission finds that the qualifying cogeneration facility or qualifying small power production facility has access to independently administered, auction-based day ahead and real time wholesale markets for the sale of electric energy;
• Obligation to sell- After the date of enactment of this subsection, no electric utility is required to enter into a new contract or obligation to sell electric energy to a qualifying cogeneration facility or a qualifying small power production facility under this section if competing retail electric suppliers are able to provide electric energy to the qualifying co-generation facility or qualifying small power production facility;
• Introduction of cost recovery principle; <t
• To ensure recovery by an electric utility that pur- J chases electric energy or capacity from a qualifying | facility pursuant to any legally enforceable obliga- ^ tion entered into or imposed under this section before | the date of enactment of this subsection, of all pru- c dently incurred costs associated with the purchases, £ the Commission shall issue and enforce such regula- | tions as may be required to ensure that the electric m utility shall collect the prudently incurred costs as- g sociated with such purchases; @
• Elimination of ownership limitations;
• Qualifying small power production facility' means a small power production facility that the Commission determines, by rule, meets such requirements (including requirements respecting minimum size, fuel use, and fuel efficiency) as the Commission may, by rule, prescribe;
• Introduction of net metering provisions - Each electric utility shall make available upon request net metering service to any electric consumer that the electric utility serves;
• Introduction of RATES AND CHARGES for electric utilities - Electric utilities shall charge the owner or operator of an on-site generating facility rates and charges that are identical to those that would be charged other electric consumers of the electric utility in the same rate class; and shall not charge the owner or operator of an on-site generating facility any additional standby, capacity, interconnection, or other rate or charge;
• Measurement- An electric utility that sells electric energy to the owner or operator of an on-site generating facility shall measure the quantity of electric energy produced by the on-site facility and the quantity of electric energy consumed by the owner or operator of an on-site generating facility during a billing period in accordance with normal metering practices;
• Electric energy supplied exceeding electric energy generated - If the quantity of electric energy sold by the electric utility to an on-site generating facility exceeds the quantity of electric energy supplied by the on-site generating facility to the electric utility during the billing period, the electric utility may bill the owner or operator for the net quantity of electric energy sold, in accordance with normal metering practices;
• Electric energy generated exceeding electric energy supplied - If the quantity of electric energy supplied by the on-site generating facility to the electric utility exceeds the quantity of electric energy sold by the electric utility to the on-site generating facility during the billing period;
• Introduction of safety and performance standards-An eligible on-site generating facility and net metering system used by an electric consumer shall meet all applicable safety, performance, reliability, and interconnection standards established by the National Electrical Code, the Institute of Electrical and Electronics Engineers, and Underwriters Laboratories.
CIS model law
All enterprises with energy consumption over the level defined by the government shall undergo energy audits.
The government collects statistics and produces energy balances for energy resource use and composition in the reported period.
Great Britain
In accordance with the Law on Gas and Electricity, in 1994 the regulatory agency demanded energy saving of 6,100GWh by the energy supplier enterprises. This was accomplished due to:
• Weatherization of walls, energy efficiency lighting, installation of double-glazing, weather-stripping in residential buildings;
• Introduction of small co-generated heat and electricity production schemes and efficient lighting and heating in schools;
• Introduction of efficient lighting in public areas;
• Installation of efficient lighting, night window shade-curtains and efficient refrigerators in small enterprises.
Netherlands
The government publicizes the list and criteria for energy efficient technologies eligible for government support. Technologies must be:
• new and innovative;
• guarantee energy saving or use of renewable energy;
• the energy saving measures must guarantee not less than 0.5 cubic meters of natural gas (or other fuel equivalent) saving per invested 0.45 euros.
Sweden
The government shall develop and apply compensation schemes to guarantee competitiveness of combined generation stations.
Denmark
Financial assistance will be provided to industrial enterprises based on the conclusions of an energy auditor and the action plan for improvement. The plan has to include the planned measures, management arrangements, staff training, EE equipment procurement policy, etc. The payback period shall not exceed 4 years.
Armenia
The statistics national body shall carry out recording [counting] of developed, produced, imported, processed, transformed, transported, stored and consumed energy carriers for the purposes of submission of energy balances in the manner established by the Republic of Armenia law "On State Statistics".
The Natural Monopolies' Regulation Commission of the Republic of Armenia shall define the conditions for integrated operation/activities between the autonomous producers using renewable energy resources and the electric energy network with the pre-condition of electric energy exchange (net metering).
Countries with specified regulations
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Energy Efficiency Agencies + + + + + + + + + +
Czech Republic (Energy Law)
When establishing new facilities for electricity or heat generation, energy generators must ensure minimum efficiency levels as set forth in the applicable regulation. The same obligation shall apply to the generators that alter or modify an existing facility for electricity or heat generation within the scope stipulated by specific legislation.
When establishing new facilities for the transmission and distribution of electricity or for the distribution of heat, or for the indoor distribution of electricity or heat, energy distributors shall not exceed the maximum energy losses set forth in the applicable regulation. The same obligation shall apply to the distributors that alter or modify an existing facility for electricity or heat distribution within the scope stipulated by specific legislation.
Heat and Power Generation:
• When building a new source or modifying or altering an existing source, all heat generators with the total output of their source over 5 MWt shall submit the documentation of the structure to an energy audit to consider the possibility of starting electricity generation.
• When building a new source or modifying or altering an existing source, all the electricity generators using thermal processes with the total output of their source over 10 MWe shall submit the documentation of the structure to an energy audit to consider the possibility of starting heat supplies. Where gas turbines are used, this obligation shall apply to the outputs over 2 MWe; in case of combustion engines it shall apply to the outputs over 0.8 MWe.
• Where the generator pursuant to above subsections to carry out the heat and power generation, he shall observe the rules applying to the design of the facilities and to energy use efficiency.
• The regulator defines details for the preparation and implementation of combined heat and power generation.
Romania
The establishment of the Romanian Energy Conservation Agency authorized to enforce state policy in the sector of energy efficiency. The organization and the scope of work of the Romanian Energy Conservation Agency was the responsibility of the Government due in 60 days after the present law enforcement. The objectives of the Agency are the development and implementation of the state energy efficiency policy.
Ukraine
Active agencies include: • State Energy Efficiency Committee
• Energy Efficiency Agency, key activities of which include:
• control of efficient use of energy,
• enforcement of state energy efficiency policy and coordination of line (?) ministry efforts,
• introduction of energy management structure, ^ including training of energy managers, t
• attracting investments for energy efficiency | projects. cj
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State Energy and Energy Efficiency Inspection £ Department. |
Poland I
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The environmental protection bank provides financ- o ing for the development of clean technologies and for en- ^ ergy-saving projects in buildings.
USA
Regulatory bodies bear responsibility for implementation of EE measures. ESCOs are widespread.
CIS model law
Energy-saving measures, including research and design, that are ratified by state or authorized organizations (agency) are financed from state or local budgets, state or local energy-saving (energy efficiency) funds, own and borrowed financial resources, etc.
Great Britain
The British Energy-Saving Trust is financed by allocations from energy prices.
European Union
The Council resolution from 06/09/1980 provides financial support for small and medium-sized businesses, as well as for research, development and demonstration projects. In the member-countries with the most advanced markets (e.g. Germany, Austria, Scandinavian countries, the Netherlands, etc.) ESCOs are widespread and tax benefits are provided for them.
France
ADEME agency is operating in the energy-saving field. ESCOs are widespread.
Netherlands
The Green Fund has been operating since 1995. <
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Romania ^
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Energy-saving is financed from the Energy Development i Fund, Research and Development Fund as well as from the En- re ergy Saving Agency. j=
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Financial sources are the following: state and local budgets, £ grants provided by international assistance programs. =
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Countries with specified regulations
Regulatory sphere [4]
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Energy Efficiency Funds
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Consumers can receive financial assistance from special funds in order to increase energy efficiency. The residential energy efficiency assistance should not exceed 50% of the fund disbursements. The government must approve this financing.
Ukraine
The following entities are operating:
• Energy-saving state extra-budgetary fund,
• EE agency for energy-saving state extra-budgetary fund.
Financial sources are the following: municipal budgets, the World Bank, SIDA, EBRD.
Russia
Russian energy-saving state extra-budgetary fund has been established.
The government through the Energy and Fuel Ministry provides financing to authorized customers. Financial sources are the following:
• federal budget earmarked sources,
• local energy-saving funds and budgetary sources,
• energy-saving inter-agency fund sources.
USA
From 1970 to 1980 energy-saving programs were financed from state and federal budgets, as well as from special funds financed by oil companies. The main goal of the program was to provide assistance to residential consumers and, particularly, to low-income populations.
CIS model law
State and local energy-saving funds activities are regulated by acting legislation.
Financial sources are the following:
• Allocations from companies consuming fuel and energy resources (as a part of consumed energy resource cost);
• Allocations from the companies in which energy consumption exceeds a certain limit;
• State and local budgets;
• Sanction fees paid by consumers exceeding the energy consumption limits );
• Companies target allocations;
• Voluntary allocations and payments from physical and legal persons;
• Other sources not prohibited by acting law.
Great Britain
Since 1990, Great Britain's government policy is directed toward more market-based mechanisms.
EU
Within the framework of "Thermie" program, which is being implemented by European Commission, a new fund has been established. The purpose of the fund is to develop new technologies and finance pilot projects in the field of energy-saving. Similar funds are established in France, Germany, Netherlands, Portugal, Norway as well as in the USA.
Netherlands
The "Green Fund" has been operational since 1995 and provides financing for environmental projects in the Netherlands and Western European countries. Such projects include: gardening, nature protection and environmental technologies development as well as energy projects. No less than 70% of fund resources must be spent on nature protection and reforestation programs.
Estonia
Energy-saving fund functioning under the auspices of the Energy Department of the Ministry of Economy.
Bulgaria
An "Energy Efficiency" Fund shall be established for financing the activities on enhancement of energy efficiency. The Fund shall be a legal body with headquarters in Sofia; and shall administer financial resources granted for investment projects for development of the energy efficiency in accordance with the priorities provided under the adopted by the Council of Ministers national long-term and short-term energy efficiency programs. (The Government has not yet established such a Fund).
The Fund resources shall be spent on: (1) funding of projects for development of energy efficiency in Bulgaria; (2) Guarantee activity on credits granted by financial-credit institutions under energy efficiency projects; and (3) Fund support according to annual revenue and cost budget, adopted by the Governing Board. The law further defines the appointment procedures for the Fund management and board.
Romania
Special fund is established for the energy sector development.
The fund provides financial assistance to consumers for implementing energy efficiency measures, such expenses must account for not more than 50% of that fund resources. The Government approves the financing from the fund.
The share of company income directed for energy efficiency investments is income tax exempt.
The loans for energy efficiency projects are provided at the interest rate equivalent to 75% of commercial banks rates. The difference is compensated annually by the state budget.
Countries with specified regulations
Regulatory sphere [5]
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Economic and Financial Mechanism
The imports of devices, machinery, equipment and technologies that increase energy efficiency are exempt from customs duties.
The companies voluntarily providing energy services can receive a profit tax reduction of 50% starting from their start-up date. The existing companies receive this tax incentive from the date of enforcement of the present law.
Ukraine
Money from the energy saving funds shall be used to finance energy efficiency measures including energy saving research and development work, share participation in the implementation of energy saving programs designed for economic restructuring, development and application of energy efficient technologies and equipment, granting credit benefits and subsidies for development and implementation of energy efficient measures and programs.
Money from energy saving funds shall be also used to promote renewable energy, conducting state energy audits, personnel training and re-training, setting energy standards and norms, participation in providing technical assistance to enterprises for energy accounting, control and management.
Money from energy saving funds shall not be included in the budget.
Priority credits shall be given to provide energy saving measures implemented in accordance with recommendations given by local state energy inspection bodies including research and development expenses, experimental models and appliance development, implementation of highly efficient industrial technological processes, equipment and materials.
Under this initiative, favorable loans shall be provided to enterprises and consumers for acquisition of fuel and energy for energy saving technologies, equipment, materials, measuring, control and management devices for fuels and energy consumption, and also investments in construction of energy efficient buildings and facilities, provided the appropriate expert decision made by energy saving managing bodies.
The amount of interest rate reduction depends on energy efficiency of the implemented measures. The loss incurred by the crediting institution will be compensated from the energy saving fund.
Sources of financing energy efficiency measures shall be energy saving fund, enterprises', institutions' and organizations' own and loaned resources, the State Budget of Ukraine, local budgets and other sources.
Tax benefits shall be granted to enterprises that use equipment operated on alternative and renewable energy sources.
Moldova
The local energy conservation equipment manufacturers are granted with VAT exemption and 50% sales tax cut for 5 years for the sale of the EE equipment.
The energy generation companies with generation capacity not exceeding 20 MW can sell the excess power at market price.
The list of energy efficient equipment favored under the present Law shall be included in the State Budget of the current year.
State Energy Conservation Fund will be established for financing energy efficiency projects.
Controlling Committee will be established to supervise the financial flows of the State Energy Conservation Fund.
The resources received from the State Energy Con- ¡2
servation Fund will be tax exempt. ^
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Russian Federation ^
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The energy conservation programs are financed by | the state budget, by the budget of local agents, by lo- ^ cal and foreign investors in accordance with the legal framework. $
Seasonal tariffs are used for natural gas, electric pow- o er, as well as 24 hour differentiated tariff apply for pro- ^ moting the energy efficiency.
Regional energy commissions establish heat and power tariffs to guarantee consumers' economically reasonable expenses for energy efficiency.
The legal entities with energy consumption below the contractual provisions are exempt from penalty, which is transferred to energy supplier if reduction of use is due to energy conservation.
State or authorized body can provide guaranties to the foreign investors in the range of funds allocated from the state budget for financing energy conversation measures.
Kyrgyzstan
The assigned Governmental Agency shall apply high tariffs of energy resources to all agencies with excessive energy use, regardless of the organizational and ownership type.
Poland
National and local EE funds are formed from the collected fees and penalties.
Ten percent of Poland's foreign debt was restructured through the debt-for-environment swap, and the established environmental fund finances energy efficiency and renewable energy projects.
Georgia
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The tax legislation provides for two types of environ- <
mental taxes: natural resource use tax (ranges between i
0.01 and 0.05% of the resource value) and pollution tax I
($0.005/ton CO2 and $2.25 million/ton benzapyrene). ^
Other taxes apply depending on specific industrial j=
processes and vehicle types. h
Since 1997, tax incentives apply for imports of ener- e
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gy efficiency equipment (meters).
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The draft EE law provides for: g
• grants through contractual agreements between the 8 government and industrial consumers;
• bonuses to individual energy efficiency initiatives;
• compensations for creating energy information systems, energy audits, consulting and trainings;
• compensations for energy saving and environmental pilot projects, research and development work in the field of new energy efficient technologies.
Japan
The approved (by the relevant Ministry etc.) energy
efficiency measures are supported through significantly
soft loans, loan guarantees (from the Fund for SupportA» ing Structural Regulation of Industries) and through AT special tax agreements.
£ The taxation scheme under the acting energy-restruc-entr turing program provides for 7% tax reduction or 30% al C special reduction in the first year.
■§ The Japanese Government can provide soft loans for ech energy efficient equipment providers through Japanese fic T Government capital banks.
ent Japanese Government capital banks provide loans for rn energyefficientbuildingconstructers(5.5-6.8% inter-g est rate for 10-35 year period).
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The United States of America
Three types of economic incentives are applied:
• increasing the competitiveness of renewable energy resources: tax incentives and compensations;
• making DSM investments cost-efficient for energy suppliers;
• increasing the competitiveness of energy suppliers through unbundling of large energy companies and opening third-party access to distribution networks.
Tax incentives are applied in the following spheres
as follows:
• Residential Appliances: $50-100 tax deduction for producers of energy efficient washers and refrigerators. This tax benefit also applies to producers of new generation equipment.
• Construction materials: 20% compensation for modernization of construction technologies, including high efficiency fireplaces, stationary fuel appliances, high efficiency transformers, gas-fired heat pumps etc.
• Commercial buildings: $2.25 property tax reduction per square foot of space if 50% or more saving was achieved in the space heating and cooling systems (compared to the acting standards).
• Combined generation of heat and electric energy: up to 10% refund or 7 year accelerated depreciation can be applied in cases of 60-70% efficiency of the appliance (depending on size).
^ • Hybrid electric, electric-battery or fuel-fired auto-<t mobiles: Tax deduction of $5,000 for hybrid-elec-® tric or electric-battery vehicles, and up to $8,000
ent deduction for hybrid fuel-fired vehicles. The size of al C the deduction is linked to the fuel saving and emis-'§ sion quantity.
| • New Homes: Two-tier benefit - $750-1,000 for ific homes complying with the set energy consumption
ient standards, and $2,000-2,500 for energy consump-<o tion equal to or below 50% of the set standards.
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® CIS model law
Economic mechanisms shall ensure:
• energy efficiency orientation of the companies' management, research, development and economic activities;
• financing of energy efficiency projects and programs;
• providing refunds and grants; tax, customs, loan and other benefits for EE projects to legal and physical entities.
The measures ratified by the Government or the authorized organization (Agency), including R&D activities, are financed from the State budget, community budgets, state and regional energy efficiency funds, own and borrowed financial resources, etc.
National and district energy efficiency funds are created in accordance with the acting legislation. The financial sources for the funds include:
• fuel consumption fees (as a fuel cost percentage) from fuel consuming enterprises;
• payments from profits of energy intensive enterprises (with energy consumption above the national standard);
• national and regional district budget resources;
• penalties for excessive energy use;
• targeted funds of individual enterprises;
• voluntary payments of physical and legal entities,
• other legally allowed sources.
The types of tax incentives provided include:
• short term - up to 6 months, followed by re-approval by the authorized agency;
• long-term, without time restriction, which is terminated in case of violation of state norms and standards.
• Tax incentives apply to:
• producers of energy efficient technologies and appliances;
• corporate users of energy efficient technologies and appliances;
• clients for energy efficient building construction projects;
• R&D organizations.
Profit tax deduction in the size of funds directed for production or application of EE technologies.
Great Britain
Since 1990, the Great Britain Government policy is aimed at application of market-oriented schemes. After privatization of the energy supply companies, and EE tax component was included in the managed cost of energy supplied to consumers. The raised funds formed the EE Fund, managed by the Energy Efficiency Trust. The funds raised under this scheme do not enter the national budget.
European Union
The European Council Directive dated 28 July 1982 is aimed at encouraging energy efficiency investments, and lists the following for the accomplishment of this goal:
• consider the encouragement of EE investments in the final consumption price setting in countries with regulated energy prices;
• encourage gas and electricity companies which ensure stable tariff structure;
• apply financial and tax incentives mechanisms to encourage purchase of consumer EE appliances;
• apply incentive mechanisms to encourage implementation of EE measures in residential sector electricity and heat power supplier companies.
The European Council Resolution dated 9 June 1980 is aimed to provide:
financial support for EE measures in existing buildings;
financial and tax incentives to SMEs for EE measures;
financial support for commercial production of EE equipment and technologies;
stimulate application of EE measures in the electricity generation and heat energy use in industrial processes.
dustrial enterprises. For companies producing over 25 GWh are taxed at 4 euros per 1 kg of NOx emissions.
To guarantee the competitiveness of large boiler houses vs. small boiler houses, the companies are provided financial assistance proportionate to the quantity of generated energy.
The Environmental Fund revenues from nitrous oxide taxes finance 20% of investments aimed at NOx emission reduction.
France
Accelerated depreciation of main assets.
Income tax crediting for building weatherization and individual boiler substitutions.
Netherlands
Accelerated depreciation of main assets.
Income tax crediting for energy efficiency investments.
Tax Free Green Fund Financing: Active from 1995 and operates in the Netherlands, less developed and Western European countries for funding environmental projects.
These would include tree-planting and environmental protection, development of environmental technologies, including energy efficient ones. Not less than 70% of the fund resources should be allocated for environmental and reforestation projects.
Germany
Excise tax exemption for introduction of energy efficient light-bulbs.
Profit tax deduction for centralized heat supply by energy stations.
Subsidies for use of energy efficient light-bulbs.
Denmark
Energy taxes are associated with:
• amount of CO2 and SO2 emissions;
• amount of used energy.
The taxes are collected from all types of consumers of oil, gas, coal fuels, heat and electric power retail prices. Only few public sector end-users of fuel are eligible for tax exemptions (e.g. public transportation). Certain benefits are provided to non-carbon energy technologies and co-generated electric power stations. In 1996, the carbon tax was 13.46 euros per ton of CO2. The tax revenues are used for energy auditing and EE measures.
To receive the financial assistance, a company should present the conclusion of independent energy auditor and the EE action plan. If the company implements all the committed activities based on the action plan, the government signs a contract with the company guaranteeing partial refund of incurred expenses in the form of a carbon tax deduction.
The sulfur dioxide tax is equal to 1.35 euros/kg. The tax was gradually introduced into application during 1996-2000. For coal-fired boilers and stations the period is extended to 20 years.
The consumed electricity tax is 0.03 euro/kWh, with the exception of CHP stations. Only the final consumption is taxed, and there is no tax on the electricity losses between the generation station and the end-use meter.
Estonia
State budget funds allocated for EE measures. Also extensive donor financing available for EE.
Few tax incentives for EE and lower VAT rate applied for district heating.
Introduction of rational price-setting mechanism for energy resources, which introduced some market signals for improved energy efficiency.
EU EE standards introduced in Estonian legislation.
Sweden
Nitrous oxide tax imposed on the heat and/or electric energy generation through fuel-burning stations and in-
Bulgaria
The electric, thermal and natural gas energy consumers in building -block of flats - may establish legal entities / associations according to the terms under Article 152 of the Energy Act, which may apply for financing of projects for promotion of energy efficiency through the "Energy Efficiency Fund".
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Armenia ¡5
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Countries with specified regulations
Regulatory sphere [6] Romania Ukraine Moldova Russian Federation Kyrgyzstan Poland Japan U.S.A CIS model law Great Britain European Union Turkey France Netherlands Germany Estonia Sweden Denmark
Sanctions for Wasteful Energy Practices + + + + + + + + + + + + + + + + + +
vice does not calculate or charge value added tax" to include energy efficient products.
Energy examination/audit positive conclusion shall be the basis for the provision of privileges to be defined under the tax and customs legislation of the Republic
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al C To implement the National Program for Economical nica Energy Management and Use of Renewable and Second-ech ary Energy Sources subsidies may be granted from the c Te national budget in support of:
ntifi a) conservation measures to increase the efficiency cie of the exploitation of energy;
b) development of combined heat and power o generation;
© c) upgrade of energy generation and distribution facilities;
d) state-of-the-art technologies and materials needed for conservation measures;
e) promotion of the use of renewable and secondary energy sources;
f) education, training and counseling in the field of energy management;
g) science, research and development in the field of energy management;
h) drafting of the Territorial Energy Policies.
Romania
In case of non-compliance with the corresponding requirements of the present law, penalties of different size indicated by the law are charged and directed straight to the state budget according to the following criteria:
• Non-compliance with the national energy efficiency standards;
• Non-compliance with the state requirement to develop and implement energy efficiency programs;
• Import and marketing of equipment non-compliant with state energy efficiency standards.
The authorized Romanian Agency for Energy Conservation enforces the sanctions, including confiscation.
Ukraine
Economic sanctions shall be imposed on legal and physical entities for:(a) wasteful use and direct fuels and energy losses;(b) untimely fulfillment of audits of fuel and energy use efficiency;(c) non-fulfillment or untimely fulfillment of state management bodies' directives aimed at improving situation with wasteful and careless fuels and energy use. » Administrative and civil responsibility for violation ATA of the legislation on energy saving shall be imposed on «T entities responsible for:
ntre (a) non-compliance with requirements to maintain Cen and improve the technical level of energy consumption cal equipment and energy supply systems; hni (b) refusal to timely submit complete information, Tec and also falsification of accounting data and reports on g energy saving;
! (c) violation of the Ukrainian legislation when $ conducting energy audits including submitting § deliberately incorrect expert decisions; ^ (d) failure to fulfill the state energy expert examination ® decisions;
(e) financing, production and operating new technologies and equipment not correspondent to the state energy standards and audits;
(f) violation of established energy saving regulations when designing, producing, reconstructing, operating, exploiting enterprises, premises, means of transportation and other objects;
(g) inefficient fuels and energy use with regular exceeding of standard energy levels and violating other regulations on efficient use of energy and fuels;
(h) violation of terms of payments for inefficient use of fuels and energy;
(i) failure to fulfil directives of bodies exercising energy saving control and creating obstacles for normal work of these bodies.
Moldova
The violation of the current law will be penalized according to the existing legislation.
For the wasteful consumption and direct losses of energy resources, the Empowered Authority shall apply sanctions in accordance with legislation to enterprises, institutions and organizations.
Russian Federation
Regardless of the organizational and ownership type, high tariffs of energy resources can be charged to the organizations that overuse energy resources beyond the limits established by the corresponding body of the Government.
Organizations which consume more than 6000 tons of oil equivalent, or more than 1000 tons of motor fuel per year are subject to mandatory energy investigation regardless of their institutional-legal type.
The investigation for the organizations that consume less than the amount mentioned above is established by the decision of local executive bodies.
Kyrgyzstan
Regardless of the organizational and ownership type, high tariffs of energy resources established by the corresponding body of the Government can be applied towards the organizations that overuse energy resources.
Poland
Penalties apply to every case of:
• non-compliance with energy or gas regulation requirements;
• non-compliance with fuel storage requirements;
• failure to ensure energy and fuel supply limitations;
• ailure to operate stations, equipment and machinery in compliance with technical requirements;
• introduce equipment non-compliant with the internal market requirements;
• provide heat supply with violations of heat supply plan etc.
The Chair of the Energy Regulatory Commission sets the size of penalties for the energy companies. The penalties should not exceed 15% of the companies' income in the preceding year. The manager of the enterprise may also be penalized in the size not exceeding 300% of monthly salary.
Other companies are penalized in accordance with the state administrative code.
The illegal users of energy or fuel networks are also penalized.
Japan
In cases of non-rational (wasteful) energy use, a "public notice" is issued listing advice and assignments to the company owners aimed at developing an EE implementation plan. Implementation of the plan is compulsory. A penalty is imposed in case of failure to comply.
In cases of insufficient EE measures applied in a construction, the Minister of Construction can extend guidelines for improved energy efficiency to the building
Countries with specified regulations
Regulatory sphere [7] Romania Ukraine Moldova Russian Federation Kyrgyz-stan CIS model law Great Britain European Union Denmark Bulgaria Armenia Czech Republic
Audits and Supervision + + + + + + + + + + + +
owner, in case of failure to comply, the building can be nationalized.
A similar sanction applies to the transportation sector.
CIS model law
Economic sanctions are applied in cases of proven wasteful use of energy resources, as well as in cases of production of low-efficiency material production.
The State Energy Inspection or other authorized state agency can apply economic incentives, as defined by the law.
Increased tariffs can be applied to companies and organizations where wasteful use of energy has been registered. The State Energy Inspection or other authorized state agency can file an application for such tariff increase.
Czech Republic
Fine are provided by the law from CZK 100,000 up to CZK 5,000,000 for different types of violations of obligations laid out in the law for energy performance and energy efficiency requirements and standards for appliances and buildings.
Romania
Ministry of Public Works and Land Planning is controlling the energy efficiency state codes for buildings and establishing heat exchange coefficients for construction materials and for the total buildings.
The Consumers Protection Office jointly with the Romanian Energy Efficiency Agency assumes responsibility of the appliances , which shall be put up for sale for the residential sector. The Consumer Protection Office and Energy Efficiency Agency also agree with the Government regarding the follow-up of the law that is currently in force.
Managers of the public property buildings have to control heat supply efficiency, energy efficient construction material utilization, rational use of internal lighting, energy consumption management and metering, and for the buildings with surface more than 1500 m2, preparation of the energy balance for every five years.
Ukraine
Compulsory state energy saving audits (expert examination) shall be conducted for the purpose of:
• verifying compliance of management, investment and other activities with energy saving goals;
• studying compliance of pre-plan, pre-design, design and other decisions as stipulated in the legislation on energy saving, current energy standards and norms;
• making expert recommendations and decisions as to energy consumption and energy saving programs and projects.
A body authorized by the Cabinet of Ministers of Ukraine shall implement state energy saving audits.
Decisions of the state energy saving auditors are compulsory for consideration, and shall serve as the basis for evaluating consumers' applications for subsidies, tax and credit-financial privileges to be paid from the energy saving fund.
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Russia
The state oversees the auditing (monitoring and evaluation) of efficient use of energy resources.
The Government can conduct mandatory assessments of fuel and energy use efficiency. The Government decides the frequency of such assessments.
Kyrgyzstan The State Energy Inspection (SEI) licensed by the Government implements the auditing (monitoring and evaluation) of the efficient use of fuel and energy.
The Government can conduct mandatory assessments of fuel and energy use efficiency. The Government and State Energy Inspection decide the frequency of such assessments.
CIS model law
The Government defines the procedures and timeframes for conducting energy audits. The State Energy Inspection or other authorized state agency conducts energy audits. Companies with energy use exceeding the legally defined standards are subject to energy audits.
Great BritainEnergy audits are widely used at industrial enterprises and factories. The audits are funded by the target Fund of the Energy Efficiency Trust.
The EE projects proposed by conclusions of the National Auditing Agency (in the first phase of project proposals) have been evaluated to account for pure economic benefit of 387.5 million euro.
European Union
The Council Resolution from 9 June 1980 states that the Member countries must implement:
• mandatory regular inspection of compliance with EE standards in heating networks and newly con- TAT structed buildings; J
• industrial enterprise energy audits; |
• inspection of HVAC systems in institutions and com- " mercial consumer buildings. .§
The Council Directive 93/76/EEC dated 13 September |
1993 states that Member countries must implement ener- £
gy efficiency projects in the following directions: ;=
regular boiler inspection, ien
energy auditing of large energy consuming enterprises. «
Denmark S3
To receive financial assistance, a company needs to © present the conclusion of an independent energy auditor with an elaborate action plan.
Bulgaria
Subject to energy efficiency study (energy audits) shall be every energy consumer whose annual consumption is above the limits, determined in the law under the
terms and by order stipulated by a regulation for energy efficiency study of the Minister of Economy, Minister of Regional Development and Public Works and Minister of Energy and Energy Resources.
The energy audits are meant for identifying specific possibilities of reducing the energy consumption. The ^ energy efficiency audits shall ascertain: ^ Energyconsumption;
| 1.Level of technologies and the energy management; o 2.Savings of heat energy and the heat preservation « of the site;
ü 3.Compliance with energy efficiency standards and re-,2 quirements prescribed by the law.
£ The study for energy efficiency shall contain data and | recommendations for energy efficiency improvement. rn Where the energy efficiency study / audit established es violation of indices determined by by-laws under this N act the person carrying out the investigation shall notify the Agency and shall submit the documentation ascertaining the results of study.
The energy efficiency services connected with auditing, designing, construction, installation, modernization, maintenance and/or management and monitoring shall be carried out by natural or judicial persons, registered under the Commercial Act and they shall be carried out on the basis of written contracts, concluded with an energy consumer.
The law also regulates the licensing of energy auditors and defines a scale of penalties for violation of these procedural requirements.
Armenia
The purpose of energy examination/audit under the present Law is providing the person carrying out examination/audit with the opportunity to produce a conclusion on the real values of energy efficiency relative to values of defined by national standards.
Energy examination/audit shall be voluntary and carried out by the initiative and at the expense of legal and physical persons.
Energy examination/audit of projects carried out at the expense of state budget shall be implemented by the decision of the government of the Republic of Armenia by contract in the manner established by the law.
Energy examinations/audits shall be carried out by the expert laboratories certified in the manner established by the Republic of Armenia law "On Certification of Compliance of Goods and Services with Normative Requirements". The government of the Republic of Armenia shall approve the list of standards of the energy examination/auditing upon the submission by the authorized fi body on compliance certification.
h The law also regulates the licensing of energy audi-£ tors and energy auditing procedures. ® Energy examination/audit positive conclusion shall be ñ the basis for the provision of privileges defined under the | tax and customs legislation of the Republic of Armenia.
Í Czech Republic
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= The energy audits are conducted to collect information on energy utilization performance and produce rec-^ ommendations of energy-saving measures to be taken,
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Upon request, the owner of the audited building or energy facility shall transmit a copy of the Energy Audit Report to the Ministry, State Energy Inspection, region or municipality competent by virtue of the location of the audited building or energy facility provided that the audit is compulsory for such premises or a state subsidy has been granted to perform the audit. The energy audit shall be compulsory for:
• all natural or legal persons applying for a state subsidy under the State EE Subsidy Program;
• the state organizational units, the regional and municipal organization units and the bodies entirely or partly financed from the national budget with the total energy consumption per year higher than the value stipulated by regulation;
• all natural or legal entities, with the exception of the bodies entirely or partly financed from the national budget, with the total energy consumption per year higher than the value stipulated by regulation.
Any state organizations, the regional and municipal organizations and the bodies entirely or partly financed from the national budget shall comply with the measures and deadlines set forth in the Decision of the State Energy Inspection. Wherever a new or modified structure has the total energy consumption per year higher than the value stipulated by regulation, the building permit holder or the owner of the structure is obliged to provide for an energy audit.
The law also regulates the requirements for energy auditors and defines the procedural rules for conduct of energy audits.
Poland
The EE Law provided amendments to other laws and fields of regulation, including:
• Urban-planning legislation;
• State management and real estate privatization law;
• State budget law;
• Rural and inhabited areas electrification act;
• Energy management act.
Georgia (draft law)
As a result of several projects realized within the foreign support framework, the following priorities have been identified: Residential heating rehabilitation, metering and management systems improvement,
Industry new energy efficiency technologies application, implementation of energy management mechanisms, special projects realization,
Energy service sector gas and heat supply systems rehabilitation,
Transport Encourage natural gas usage as an alternative fuel for cars.
Japan
The term "Energy" used in the Law refers to fuels such as oil, natural gas and coal, as well as heat and electricity produced from usage of those fuels.
CIS model law
States must provide energy efficiency and energy-saving trainings in the programs of their higher an d secondary educational institutions. States must provide energy-saving awareness campaign through mass media.
Countries with specified regulations
Regulatory sphere [8] Romania Poland Georgia (draft law) Japan CIS model law
Other spheres regulated + + + + +
