10 Dec 2019

Modernising energy efficiency obligation programmes

Workshop — Paris, France

The purpose of this workshop is to share experience gained by policy makers and programme implementers in the context of the changing nature of the energy sector.

Sessions will address lessons learned from a broader range of EEO designs, including trading mechanisms such as the Italian and French White Certificate programmes, as well as EEOs designed to deliver wider policy objectives, such as encouraging ‘deep building renovations.’

We will also explore the synergies that EEOs can have with other energy efficiency policies, such as tax incentives, standards and labels, etc. The workshop will also touch on emerging trends such as pay-for-performance programmes, which reward obligated parties for energy savings on an ongoing basis, using data from smart meters, rather than paying for the installation of measures in Year 1, as well as programmes designed to reward obligated parties for energy savings where and when it is needed from a GHG reduction, network constraint, and/or flexibility perspective.

Energy Efficiency Obligations (EEOs) play a key role in delivering energy policy goals, whether they be to save energy, access cost-effective energy resources, reduce carbon emissions, develop energy service markets or tackle fuel poverty. Recent research commissioned by the International Energy Agency (IEA), with support from the Regulatory Assistance Project (RAP), found that the number of EEOs globally has quadrupled over the last ten years, while investment stimulated by them has risen six-fold, to USD 26 billion in 2015, which is around 10-15% of global energy efficiency investment. This makes EEOs one of the most important policy instruments after standards in terms of driving uptake of energy efficiency.

As the popularity of EEOs increases and energy policy objectives evolve, new design and implementation questions are arising. In Europe, Members States are preparing their policy frameworks for the 2021-2030 period, including plans for expanding and adapting EEOs to address more ambitious and multi-faceted policy goals. In emerging economies, similar schemes are generated lessons learned that can be applied in other contexts – for example, the Perform Achieve Trade (PAT) in India and the Program for Energy Efficiency (PPE) in Brazil. Finally, EEOs in the United States and Australia are also adapting to include new measurement and verification (M&V) approaches that explicitly address the variations in the value of efficiency by time and place.