Measuring and reporting energy savings for the Energy Services Directive – how it can be done Results and recommendations from the EMEEES project
Wuppertal Institute on behalf of the EMEEES Consortium
Wuppertal
30 June 2009
The Project in brief The objective of this project is to assist the European Commission in developing harmonised evaluation methods. It aims to design methods to evaluate the measures implemented to achieve the 9% energy savings target set out in the EU Directive (2006/32/EC) (ESD) on energy end-use efficiency and energy services. The assistance by the project and its partners is delivered through practical advice, technical support and results. It includes the development of concrete methods for the evaluation of single programmes, services and measures (mostly bottom-up), as well as schemes for monitoring the overall impact of all measures implemented in a Member State (combination of bottom-up and top-down). Consortium The project is co-ordinated by the Wuppertal Institute. The 21 project partners are: Project Partner
Country
Wuppertal Institute for Climate, Environment and Energy (WI)
DE
Agence de l’Environnement et de la Maitrise de l’Energie (ADEME)
FR
SenterNovem
NL
Energy research Centre of the Netherlands (ECN)
NL
Enerdata sas
FR
Fraunhofer-Institut für System- und Innovationsforschung (FhG-ISI)
DE
SRC International A/S (SRCI)
DK
Politecnico di Milano, Dipartimento di Energetica, eERG
IT
AGH University of Science and Technology (AGH-UST)
PL
Österreichische Energieagentur – Austrian Energy Agency (A.E.A.)
AT
Ekodoma
LV
Istituto di Studi per l’Integrazione dei Sistemi (ISIS)
IT
Swedish Energy Agency (STEM)
SE
Association pour la Recherche et le Développement des Méthodes et Processus Industriels (ARMINES)
FR
Electricité de France (EdF)
FR
Enova SF
NO
Motiva Oy
FI
Department for Environment, Food and Rural Affairs (DEFRA)
UK
ISR – University of Coimbra (ISR-UC)
PT
DONG Energy (DONG)
DK
Centre for Renewable Energy Sources (CRES)
EL
Contact Dr. Stefan Thomas, Dr. Ralf Schüle Wuppertal Institute for Climate, Environment and Energy Döppersberg 19 42103 Wuppertal, Germany
Tel.: +49 (0)202-2492-110 Fax.: +49 (0)202-2492-250 Email:
[email protected] URL: www.evaluate-energy-savings.eu www.wupperinst.org
The sole responsibility for the content of this publication lies with the authors. It does not necessarily reflect the opinion of the European Communities. The European Commission is not responsible for any use that may be made of the information contained therein.
Measuring and reporting energy savings for the ESD – how it can be done
Measuring and reporting energy savings for the Energy Services Directive – how it can be done Presented by the EMEEES project consortium; drafted by Stefan Thomas, Wuppertal Institute
Contents Executive Summary ..........................................................................................5 1 Introduction.................................................................................................14 1.1 The ESD and the EMEEES project...........................................................14 1.2 Results of the project ................................................................................15 1.3 Structure and contents of the report .........................................................15 2 How to calculate energy savings for the ESD? .......................................17 2.1 What are ESD energy savings, and why do calculation methods matter?17 2.1.1 Requirements of the ESD for monitoring and evaluation of energy savings ..........................................................................................................17 2.1.2 What are energy savings in 2016? ........................................................18 2.1.3 Open issues and their potential impacts on the energy savings achieved by the ESD ........................................................................................................19 2.2 Principles and useful terminology for ESD calculation and harmonisation ... ..............................................................................................................20 2.2.1 2.2.2 2.2.3 2.2.4
Guiding principles for EMEEES in the development of methods ...........20 Can energy savings be measured at all?...............................................21 Addressing harmonisation issues ..........................................................22 What is the subject of an evaluation method? .......................................24
2.3 Bottom-up calculation methods.................................................................25 2.3.1 Four steps in the calculation process.....................................................26 2.3.2 Three levels of harmonisation................................................................28 2.3.3 Five general bottom-up methods ...........................................................29 2.4 EMEEES bottom-up case applications .....................................................31 2.5 Top-down calculation methods .................................................................32 2.6 EMEEES top-down cases.........................................................................35 2.6.1 Additional energy savings ......................................................................35 2.6.2 All energy savings..................................................................................37 2.6.3 Applicable top-down calculation methods..............................................37 2.7 Integration: selection and consistency of methods ...................................38
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2.7.1 Selection of bottom-up or top-down methods by end use or sector.......39 2.7.2 Selection of bottom-up or top-down methods by type of EEI measure..41 2.7.3 Consistency between bottom-up and top-down methods ......................41 2.8 Existing evaluation and monitoring methods in the EU.............................43 2.9 Need for further research and development .............................................46 2.10 Evaluation of costs and benefits .............................................................47 3 How to monitor and report to the European Commission? ...................51 3.1 The overall monitoring and reporting process...........................................51 3.2 Coverage of end uses and sectors as well as overlap between EMEEES bottom-up case applications and top-down cases.............................................53 3.3 Applicability of EMEEES bottom-up case applications and top-down cases by EU Member State .........................................................................................55 3.3.1 Application of top-down and bottom-up methods for countries..............55 3.3.2 Meeting ESD demands with EMEEES cases ........................................57 3.3.3 Comments on applicability from the national workshops and the Final Conference ........................................................................................................58 3.4 Feedback from the Pilot tests on applicability of methods ........................59 4 How can the European Commission judge the results? ........................63 4.1 The tool for NEEAP assessment ..............................................................63 4.2 Test assessments of the energy savings expected in selected NEEAPs .63 4.2.1 4.2.2 4.2.3 4.2.4
Germany ................................................................................................64 Italy ........................................................................................................65 Austria....................................................................................................65 Conclusions ...........................................................................................67
4.3 How to compare individual evaluation results?.........................................68 5 Conclusions ................................................................................................70 6 References ..................................................................................................74 7 Ackowledgements ......................................................................................76 8 Appendices .................................................................................................78 8.1 Appendix 1: List of EMEEES Reports and Bottom-up Case Applications 78 8.2 Appendix 2: Proposal for a reporting checklist for bottom-up evaluations 81 Appendix to the Bottom-up Reporting Checklist: Non-exhaustive list of energy efficiency improvement measures and mechanisms.........................................86 8.3 Appendix 3: Proposal for a reporting checklist for top-down evaluations .87 8.4 Appendix 4: why the harmonised system of evaluation methods needs to be able to calculate both additional and all energy savings ..............................90
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8.5 Appendix 5: Types of evaluation methods vs types of EEI measures ......93
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Executive Summary The primary objective of the EU Directive on energy end-use efficiency and energy services (2006/32/EC), also abbreviated as ‘Energy Services Directive’ or ESD, is to stimulate activities by the Member States and the market actors to save energy in final use. Clearly, monitoring and evaluation of the energy savings is very relevant and important for the impact the Energy Services Directive may finally have. The Directive requires the Member States to adopt cumulative annual energy savings targets to be achieved by 2016. Some have adopted the indicative 9 % target, some have even adopted higher targets. The targets are calculated in relation to the average overall annual energy consumption in a Member State in the base period 2001 to 2006, excluding final energy consumption in the industrial undertakings subject to the EU emissions trading scheme and for military purposes. The targets are expressed as an amount of annual energy consumption saved through energy efficiency improvement measures. The Member States have to prove to the European Commission that they have saved enough energy to reach their targets. Consequently, the methods and tools, by which the Member States calculate, evaluate, and report their energy savings towards achieving the targets adopted for the Directive are very important. The results from individual Member States must be comparable to build confidence that all have taken comparable effort to stimulate the markets for energy services and energy end-use efficiency in general. At the same time, the effort for monitoring, evaluation, calculation, and reporting must be limited to a reasonable level. However, it should be kept in mind that there is a trade-off between effort and precision. The higher the precision, the fairer the comparison between the results presented by Member States. Therefore, there is also a trade-off between effort and fairness.
What are energy savings for the Energy Services Directive? The potential for energy efficiency improvement measures that save more money than they cost is large enough to achieve at least 9 % by 2016 in each Member State. The EU Action Plan for Energy Efficiency of 2006 has estimated that from 2005 and 2020, between 25 % and 30 % of energy savings are possible in the four major end-use sectors (residential, tertiary, industry, and transport). Within the nine years period 2008 to 2016 covered by the Energy Services Directive, that would be equivalent to between 15 and 18 %. And those savings come in addition to savings due to ‚autonomous improvement’, such as normal replacement of technology stock, as the EU Action Plan states. Furthermore, the action plan estimates ‘it is still technically and economically feasible to save at least 20% of total primary energy by 2020 on top of what would be achieved by price effects and structural changes in the economy, natural replacement of technology and measures already in place’. This cost-effective potential includes
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savings both in end-use sectors and at the level of energy transformation but translates to at least 12 % within nine years. However, what exactly is the meaning of the 9 % or more of cumulative annual energy savings? The Energy Services Directive does not mention that they shall be additional to ‚autonomous improvement’. Furthermore, the Directive contains a paragraph on ‚early action’ since 1995, which can be interpreted in two ways. It could either mean to reassure that new energy savings in the 2008 to 2016 period due to ‚early measures’ can be counted towards the target; an example would be energy savings from an energy-efficient building refurbishment in 2010, which is economically attractive due to an energy tax enacted in 1999. Or this paragraph can be read as to allow inclusion of ‚early energy savings’, e.g., from a building refurbishment in 2005 stimulated by the 1999 tax reform. What could be the consequence of these two unclarities? The EU Action Plan for Energy Efficiency has estimated the ‚autonomous improvement’ to be 0.85 % per year, or 7.4 % in the period 2008 to 2016. And in the period 1995 to 2016, it would be 17.1 %1. In other words: if energy savings counting towards the targets are not required to be additional to ‚autonomous improvement’ AND ‚early energy savings’ are allowed, a Member State may not need to prove any new energy savings in addition to ‚autonomous improvement’. But would this be a wise decision, given that the costeffective potential for new energy savings additional to ‚autonomous improvement’ within 2008 to 2016 is most likely even higher than 9 %? The European Commission and the regulatory Committee created for the implementation of the Directive have not yet published a decision on how to deal exactly with these two issues, and it is not in the competence of the EMEEES project to decide this. The methods and case applications developed by EMEEES, therefore, enable Member States to both calculate all energy savings (including those through ‘autonomous improvement’) and the additional energy savings (excluding those through ‘autonomous improvement’). Furthermore, the methods and case applications enable Member States to assess whether early energy savings achieved before 2008 still exist in 2016. This does not prejudice the choice of calculating all or additional energy savings, nor whether early energy savings should count towards the ESD target or not.
The EMEEES project This is the environment, in which this project has worked to devise how energy savings can be calculated. From November 2006 to April 2009, the IEE2 project “Evaluation 1
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The result for 2016 must not be calculated by adding up 0.85% of the initial value 21 times for 21 years, but by multiplying 99.15 % (100% - 0.85%) 21 times and then comparing the result to 100 %. Programme Intelligent Energy Europe of the European Commission: http://ec.europa.eu/energy/intelligent/index_en.html
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and Monitoring for the EU Directive on Energy End-Use Efficiency and Energy Services” (EMEEES) worked on a set of calculation methods and case applications, with 21 partners and co-ordinated by the Wuppertal Institute. The project partners were able to bring strong experience in evaluation methodology and practice as well as different perspectives to the consortium. They included energy agencies, a ministry, two energy companies, and several research institutes and consultancies; they are listed on the back of the front page and in the acknowledgements. The objective of this project was to assist the European Commission in the elaboration of evaluation methods through delivering practical advice, support, and results. This included the development of concrete methods for the evaluation of single programmes, services and measures, as well as with schemes for monitoring the overall impact of all measures implemented in a Member State. Altogether, EMEEES was focused on the energy savings impact evaluation of measures, not on process and cost/benefit evaluation. This report presents the EMEEES project consortium’s findings. The many detailed reports, tools, and guidelines that the project prepared are listed in Appendix 1. They are available for download at www.evaluate-energy-savings.eu.
Calculation of energy savings for the Energy Services Directive with the methods developed by EMEEES Within the limitations mentioned above, EMEEES has been able to prepare general methods for bottom-up and top-down calculation methods plus guidelines for ensuring consistency between the results of bottom-up and top-down calculations. Bottom-up methods start from data at the level of a specific energy efficiency improvement measure (e.g., energy savings per participant and number of participants) and then aggregate results from all the measures. Top-down methods start from global data (e.g., national statistics for energy consumption or equipment sales), then going down to more disaggregated data when necessary (e.g., energy efficiency indicators already corrected for some structural or weather effects). The project furthermore developed 20 bottom-up case applications and 14 topdown cases of these general methods, which together already cover the largest part of potential ESD energy savings from the energy efficiency improvement measures the Member States have pledged to implement in their national Energy Efficiency Action Plans. For example, we estimate that with our total set of bottom-up case applications, more than 90% coverage of the energy use subject to the ESD can be achieved. Some of the developed methodologies were since tested through pilot cases. Therefore, EMEEES has been able to confirm that evaluation of energy efficiency improvement measures and calculation of ESD energy savings is possible. In summary, we recommend to use the following methods:
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Top-down calculation methods can be used for electric appliances and vehicles, for which there is a well-defined statistical indicator of the average specific annual energy consumption per unit of appliance or per vehicle, and for solar water heaters. In these cases, the indicator is well-suited to capture the effects of the whole package of measures, including multiplier3 (market transformation) effects. Bottom-up calculations are possible for appliances and vehicles, too, but it is often difficult to calculate multiplier (and free-rider4) effects with them. For top-down calculation on appliances and vehicles, a reference trend can be defined for these specific energy consumption indicators to calculate additional energy savings; this reference trend should either be an EU harmonised trend or a national trend based on an EU harmonised coefficient (e.g., for elasticity to increases in market energy prices5). Furthermore, the base year value may be assumed to be a proxy for the correct reference trend for calculating all energy savings for these indicators.
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Top-down methods are the way to calculate the effects of energy taxation6 and add them to the effects of bottom-up calculations for a sector, but only if these bottom-up calculations exclude free-rider effects. The energy savings due to taxation must not be added to results of top-down calculations on sectors or end-use equipment, if the latter already include an analysis to calculate the effects of energy taxation.
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It is the best and often the only possible way to use bottom-up calculation methods for all other end-use sectors, end-uses, and energy efficiency improvement measures. This is particularly the case for buildings, for the industry and tertiary sectors with their larger final consumers that are easier to monitor, and for modal shifts and eco-driving in transport. In these areas, structural effects can often not be corrected for in top-down indicators, or it will need costly bottom-up modelling and gathering the necessary data for that modelling to do the required corrections: Neither of the two reference trends mentioned above for appliances and vehicles are usually possible for top-down indicators measuring the energy consumption of a sector
The multiplier (or spill-over) effect enhances the initial effect of EEI measures. According to Annex IV-5 of the ESD the multiplier effect means that “the market will implement a measure automatically without any further involvement from the authorities or agencies referred to in Article 4-4 or any private-sector energy services provider”. The free-rider effect regards market actors who make use of facilities or support, provided for by EEI programmes, policies, or energy services, but would have taken energy-saving actions anyway. The free-rider effect is not mentioned in the ESD. It must be corrected for, if the aim is to calculate additional energy savings. We found that it was usually not statistically meaningful to calculate national values for the price elasticity of the different indicators. Therefore, we propose to use EU harmonised coefficients, although price elasticity is likely to differ between Member States. This includes general taxes on energy, but not fiscal incentives targeting specific energy efficiency investments, such as tax deductions or rapid depriciation rules. These incentives are specific measures and should be covered by calculations specific to a sector, end use, or type of end-use action.
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per unit of production or per employee. For indicators measuring the diffusion of energy-efficient transport modes or combined heat and power in industry, the situation will depend on the country. For most of these sectoral or diffusion indicators, some Member States may see ‘apparent total’ savings when comparing the current value of an indicator with its value in the base year, while others may not. The reason for this is that either these countries really do not have savings, or their savings are hidden by structural changes that cannot be corrected for due to lack of data. Using ‘apparent total’ savings as a proxy for all energy savings for these top-down indicators would, therefore, lead to inconsistent and arbitrary measures of energy savings between Member States. This will disable the use of top-down methods in such cases. By contrast, bottom-up calculations are usually feasible. This recommendation is based on our analysis of case applications for bottom-up and top-down methods (cf. sections 2.3 to 2.6), as well as on practical experience in many countries and our pilot tests (cf. section 3.4). They are based on the general trend of findings from these sources. Bottom-up calculation needs specific monitoring but can provide information on the effectiveness and cost-effectiveness of measures, on potential improvements, and on greenhouse gas emission reductions additional to baseline projections. However, calculation of multiplier and free-rider effects with bottom-up methods can be costly, particularly for appliances and vehicles, for which the multiplier effects are particularly important. Furthermore, they work into the opposite direction, hence partly cancel out each other. Calculation of both multiplier and free-rider effects could, therefore, be restricted to measures either yielding at least 40 million kWh of annual electricity savings or 100 million kWh of annual energy savings of other fuels, or at least 5 percent of a Member State’s ESD energy savings target. Top-down calculation starts from using existing statistical data and can be easier to apply, particularly in areas, for which many and overlapping energy efficiency improvement measures exist. However, it is often difficult to define the reference trend as stated above, or the indicator is not showing energy savings at all without costly corrections. Therefore, the quality of data available in a country will finally determine which bottom-up or top-down methods are best to apply for evaluating the energy savings for the ESD from a sector, an energy end use, an end-use action, or a measure. How to ensure consistency between top-down and bottom-up calculations The ESD monitoring system can include both bottom-up or top-down methods for monitoring and evaluation with one Member State. In order for it to be a harmonised system, the results of either bottom-up or top-down calculation must be consistent
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and comparable with each other. This requires that the elements of calculation need to be chosen in a consistent manner for both bottom-up and top-down calculations, and for the two evaluation targets introduced above: additional energy savings and all energy savings. This section presents the elements that would ensure consistency, in the tables ES1 and ES2 below. It must be noted that only the elements of bottom-up and topdown calculations in either of the two columns of the tables: all energy savings and additional energy savings, respectively, are consistent with each other. Using the elements of bottom-up calculation from one and those of top-down from the other column of the tables would be highly inconsistent. Table ES1: Elements of bottom-up calculation for all or additional energy savings
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Table ES2: Elements of top-down calculation for all or additional energy savings
The overall process of evaluating energy savings for the Energy Services Directive EU Member States can choose from the EMEEES bottom-up case applications and top-down cases, use own existing or new methods, or develop their own case applications of the general methods descibed by EMEEES when fulfilling the demands of the ESD: •
proving that the 9% or higher savings target has been met for 2016 (or the intermediate target for 2010)
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showing that bottom-up methods applied cover at least 20-30% of the energy use covered by the ESD
•
taking account of overlap in the scope of top-down cases and bottom-up case applications focusing on the same targeted energy use, in order to avoid double counting of energy savings.
Figure ES1 shows how, in an interactive five-step process, countries can choose a set of methods that meets the ESD demands.
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Measuring and reporting energy savings for the ESD – how it can be done
Figure ES1: The process of evaluating ESD energy savings
TD = top-down; BU = bottom-up
Towards a harmonised calculation model of energy savings for the Energy Services Directive? The ESD has required the European Commission to propose a harmonised calculation model of bottom-up and top-down calculation methods for ESD energy savings. Certainly, the Commission and the Member States could decide to use as many default or even harmonised values as possible. EMEEES has developed some proposals in this area. On the other hand, the accuracy will probably be higher if national level 2 and 3 calculations (bottom-up) and national reference trends (top-down) are used, but with harmonised rules for a) definition of formulas, parameters, monitoring, and calculation procedures, and b) harmonised reporting of results. This is certainly also an area, in which more experience needs to be collected in the next round of national Energy Efficiency Action Plans (NEEAPs) in 2011. These NEEAPs will include the first ex-post calculations of energy savings. We strongly recommend that the European Commission require harmonised reporting using at least a format such as the reporting checklists developed by EMEEES and presented in Appendices 2 and 3. Probably the most effective way to achieve harmonisation between Member States is to encourage and facilitate sharing of experience. If Member States learn from each other, this will lead to more harmonised practices. Harmonised reporting will be highly important to facilitate such sharing of experience and mutual learning.
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Harmonised reporting will also allow the Commission to better judge the plausibility and comparability of savings (and hence efforts) between Member States and in many cases also a verification of the reported energy savings using models such as the assessment tool that is another product of EMEEES. Finally, it should be noted that evaluation is not only possible, it is also necessary for the sake of continuous development and refinement of energy efficiency policies and other energy efficiency improvement measures. However, evaluation is an area where a single best method cannot be devised. Methods must evolve and be adapted to the measure and context at hand. The quality of evaluations will improve as experience accrues through learning-by-doing. This will not only benefit the costeffective implementation of the Directive, but also provide a basis for future and probably more ambitious energy efficiency policy efforts.
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1 Introduction 1.1 The ESD and the EMEEES project The Directive on energy end-use efficiency and energy services (2006/32/EC; for the remainder of this report abbreviated as the ESD) has required Member States to adopt an indicative target of 9 % of cumulative annual energy savings in 2016. It has also raised concerns among the Member States about how they could evaluate the energy savings from energy services and other energy efficiency improvement measures implemented in order to achieve their energy savings targets. The constitution of a regulatory Committee of the Member States and the European Commission (hereafter named ESD Committee) has therefore been included in the Directive to assist the European Commission in the task of elaborating common and harmonised methods for the evaluation of energy savings. Due to the difficulties related to this task, the Commission also needed support from independent experts. From November 2006 to April 2009, the IEE7 project “Evaluation and Monitoring for the EU Directive on Energy End-Use Efficiency and Energy Services” (EMEEES) worked on a set of calculation methods and case applications, with 21 partners and coordinated by the Wuppertal Institute. The project partners were able to bring strong experience in evaluation methodology and practice as well as different perspectives to the consortium. They included energy agencies, a ministry, two energy companies, and several research institutes and consultancies; they are listed on the back of cover page and in the acknowledgements. The objective of this project was to assist the Commission in the elaboration of evaluation methods through delivering practical advice, support, and results. This included the development of concrete methods for the evaluation of single programmes, services and measures (mostly bottom-up), as well as with schemes for monitoring the overall impact of all measures implemented in a Member State (combination of bottom-up and top-down methods8). Altogether, EMEEES was focused on the energy savings impact evaluation of measures, not on process and cost/benefit evaluation. For process evaluation, the policy theory or programme theory approach is very useful. It has been explored for energy efficiency policies in EU Member States in the AID-EE project (AID-EE, 2007). As for cost/benefit evaluation, we offer some information in chapter 2.9. Further information can be found, e.g., in a report coordinated by SRCI (1996).
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Programme Intelligent Energy Europe of the European Commission : http://ec.europa.eu/energy/intelligent/index_en.html Bottom-up methods start from data at the level of a specific energy efficiency improvement measure (e.g., energy savings per participant and number of participants) and then aggregate results from all the measures. Top-down methods start from global data (e.g., national statistics for energy consumption or equipment sales), then going down to more disaggregated data when necessary (e.g., energy efficiency indicators already corrected for some structural or weather effects).
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With this report, the EMEEES project consortium presents the essence of its findings. The many detailed reports, tools, and guidelines that the project prepared are listed in Appendix 1. They are available for download at www.evaluate-energy-savings.eu.
1.2 Results of the project The direct results of EMEEES are (1) a system of bottom-up and top-down methods and their integrated application for the evaluation of around 20 types of energy efficiency technologies and/or energy efficiency improvement measures, harmonised between Member States; (2) a set of harmonised input data and default values for these evaluation methods; (3) a template for Member States for the national Energy Efficiency Action Plans (NEEAPs); and (4) a method and tool for the European Commission to assess the plans. With regard to the evaluation methods developed by EMEEES, the results include: •
Two summary reports on methods: bottom-up (Vreuls et al., 2009) and top-down (Lapillonne et al., 2009)
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A bottom-up methodological report (Broc et al, 2009)
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20 bottom-up case applications papers (cf. table 3 in section 2.4 for the list)
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Compilation of EMEEES formulae for unitary gross annual energy savings, baselines, and default values as well as data to collect for bottom-up case applications
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A compilation report on 14 top-down case studies (cf. table 4 in section 2.6 for the list)
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A report on consistency and the integration of the savings from bottom-up and topdown methods (Boonekamp and Thomas 2009)
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The EMEEES checklist for reporting the results of energy efficiency improvement (EEI) measures (cf. Appendix 2 and 3).
A full list of EMEEES reports and papers can be found in Appendix 1.
1.3 Structure and contents of the report After this introduction, three main chapters follow. Chapter 2 presents the most important findings on how to measure and calculate energy savings for the ESD: requirements by the Directive, general principles, bottom-up calculation methods and case applications, top-down calculation methods and case applications, and how bottom-up and top-down compare. The chapter further expands on methods already applied in EU Member States and on appropriate choices of methods by type of EEI
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measure. It also deals with what EMEEES could not resolve, and offers some information on how to evaluate economic benefits and costs of EEI measures, although this was beyond the scope of the EMEEES project. Chapter 3 addresses the overall monitoring and reporting process: (1) what are the steps in it, which end uses and sectors are covered by the EMEEES bottom-up and top-down cases, (2) which of the cases can be applied in which EU Member State on the basis of the EEI measures included in their national Energy Efficiency Action Plans, and (3) what were the results of pilot tests EMEEES carried out on the applicability of its methods and cases in a number of Member States. Based on the Action Plans, the Commission must judge if Member States can achieve their targets. Chapter 4 presents a tool that EMEEES developed for this task, and results of its application for three Member States. It also proposes what information the Commission should ask from the Member States to judge the plausibility and comparability of the energy savings reported. Finally, a set of conclusions in chapter 5 rounds off the report.
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2 How to calculate energy savings for the ESD? 2.1 What are ESD energy savings, and why do calculation methods matter? As the first step, we have to take a look at what is the quantity to be calculated. What does the ESD say about it, and is it really clear what it means?
2.1.1 Requirements of the ESD for monitoring and evaluation of energy savings The Directive requires the Member States to adopt cumulative annual energy savings targets to be achieved by 2016. Some have adopted the indicative 9 % target, some have even adopted higher targets. The targets are calculated in relation to the average overall annual energy consumption in a Member State in the base period 2001 to 2005, excluding final energy consumption in the industrial undertakings subject to the EU emissions trading scheme and for military purposes. The targets are expressed as an amount of annual energy consumption saved through energy efficiency improvement measures. The Member States have to prove to the European Commission that they have saved enough energy to reach their targets. This is why the methods and tools, by which the Member States calculate, evaluate, and report their energy savings towards achieving the targets adopted for the Directive are very important. The results must be comparable to build confidence that all Member States have taken comparable effort to stimulate the markets for energy services and energy end-use efficiency in general. At the same time, the effort for monitoring, evaluation, calculation, and reporting must be limited to a reasonable level. However, it should be kept in mind that there is a trade-off between effort and accuracy. The higher the accuracy, the fairer the comparison between the results presented by Member States. Therefore, there is also a trade-off between effort and fairness. The ESD is the first European Directive requiring Member States to report for energy savings. Member States already have their own experiences and skills in this field, but it should not be expected that all Member States will be able to use state-of-the-art evaluation methods right away. And the Commission will also have to set up its own evaluation system to comment the National Energy Efficiency Action Plans (NEEAPs) reported by the Member States. Therefore, the first ESD interim implementation phase (i.e., 2008-2010, to be reported in the second NEEAPs in 2011) should be used as a formative process for all stakeholders to issues raised when evaluating energy savings. One of the main challenges of the ESD methodology requirements for the work of the EMEEES project is to enable the definition of harmonised methods. It has to take into account that some countries have a longer history in monitoring and evaluating energy efficiency activities than others. "Harmonised methods" does not mean that the
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Member States already using their own evaluation systems will have to change them. The EMEEES project developed bottom-up and top-down calculation methods that are to be seen as general principles for the way to report the results and as guidelines to perform evaluations, for Member States which may look for support. Member States can use their own monitoring systems, based on their specific needs and experience. But at the end, the principles of calculation and reporting they use for their NEEAP should be harmonised for all Member States. In most of the cases, it will be possible to use existing monitoring methods and schemes, but then the results should be processed to fit ESD reporting needs. In some cases, also the monitoring methods and schemes may have to be adapted to collect the data needed for calculating energy savings according to the ESD.
2.1.2 What are energy savings in 2016? There can be different interpretations of the term ‘cumulative annual energy savings’ in the target year 2016. EMEEES has adopted the ‘vintage year’ interpretation: in each year from 2008 to 2016, energy efficiency improvement measures are implemented in a Member State and yield annual energy savings (e.g., expressed in kWh/year). These annual energy savings are valid as long as their saving lifetime lasts. The annual energy savings from each ‘vintage year’ that are still lasting in 2016 are then cumulated to yield the ESD energy savings of the Member State. This approach is the only one consistent with adopting a target of x% of annual energy savings in a target year; it is also the only one consistent with top-down calculations of the annual energy savings that accumulate over the years. Figure 1 presents this process. Figure 1: Accumulation of annual energy savings
As can be seen, some energy savings terminate before 2016 and can then not be counted towards the ESD energy savings. This may particularly be the case for
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behavioural actions or for some technologies with shorter lifetimes, such as computers. Concerns have been raised that Member States may be punished for measures early in the 2008 to 2016 ESD period, and may wait until the last minute to implement measures. However, there is always the possibility to check at regularly intervals, whether energy-efficient behaviour is retained or markets have been permanently changed, so that the lifetime of the respective energy savings can be extended. Furthermore, this is one reason, why the intermediate target for 2010 was introduced in the ESD.
2.1.3 Open issues and their potential impacts on the energy savings achieved by the ESD What exactly is the meaning of the 9 % or more of cumulative annual energy savings? The Energy Services Directive does not mention that they shall be additional to ‚autonomous improvement’. In October 2006, however, the European Commission published the Action Plan for Energy Efficiency: Realising the Potential (COM(2006)545 final). It stated that there is a cost-effective potential for energy savings of more than 20 % compared to baseline projections by 2020. Based on this Action Plan, the European Council on 8/9 March 2007 stressed “the need to increase energy efficiency in the EU so as to achieve the objective of saving 20 % of the EU’s energy consumption compared to projections by 2020, as estimated by the Commission in its Green Paper on Energy Efficiency, and to make good use of their National Energy Efficiency Action Plans for this purpose.” This is, therefore, a target for additional energy savings. The reference to the National Energy Efficiency Action Plans suggests that the European Council expects a significant contribution from the ESD towards these additional energy savings. Furthermore, the Directive contains a paragraph on ‚early action’ since 1995, which can be interpreted in two ways. It could either mean to reassure that new energy savings in the 2008 to 2016 period due to ‚early measures’ can be counted towards the target; an example would be energy savings from an energy-efficient building refurbishment in 2010, which is economically atractive due to an energy tax enacted in 1999. Or this paragraph can be read as to allow inclusion of ‚early energy savings’, e.g., from a building refurbishment in 2005 stimulated by the 1999 tax reform. What could be the consequence of these two unclarities? Appendix 4 presents a thorough discussion, here we just wish to present the essence: The EU Action Plan for Energy Efficiency has estimated the ‚autonomous energy savings’9 to be 0.85 % per year, or 7.4 % in total in the period 2008 to 2016. And in the period 1995 to 2016, it would be 17.1 %10. In other words: if energy savings counting towards the targets are not required to be additional to ‚autonomous improvement’ AND ‚early energy savings’ 9
10
“brought about by natural replacement, energy price changes, etc.” as stated in the EU Action Plan (EC, 2006) The result for 2016 must not be calculated by adding up 0.85% of the initial value 21 times for 21 years, but by multiplying 99.15 % (100% - 0.85%) 21 times and then comparing the result to 100 %.
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Measuring and reporting energy savings for the ESD – how it can be done
are allowed, a Member State may not need to prove any new energy savings in addition to ‚autonomous improvement’. But would this be a wise decision, given that the cost-effective potential for new energy savings additional to ‚autonomous improvement’ within 2008 to 2016 is higher than 9 %? The European Commission and the regulatory Committee created for the implementation of the Directive have not yet published a decision on how to deal exactly with these two issues, and it is not in the competence of the EMEEES project to decide this. The methods and case applications developed by EMEEES, therefore, enable Member States to both calculate all energy savings (including those through ‘autonomous improvement’) and additional energy savings (excluding those through ‘autonomous improvement’). Furthermore, the methods and case applications enable Member States to assess whether early energy savings achieved before 2008 still exist in 2016. This does not prejudice the choice of calculating all or additional energy savings, nor whether early energy savings should count towards the ESD target or not. •
Additional energy savings are understood as those that are additional to autonomous energy savings (i.e., to savings that would occur without energy efficiency programmes, energy services, and other energy efficiency policies such as building codes or energy efficiency mechanisms). These additional energy savings include additional energy savings due to existing policies, programmes, and services that are ongoing or have a lasting effect.
•
By contrast, all energy savings are those resulting from all technical, organisational, or behavioural actions taken at the end-use level to improve energy efficiency, whatever their driving factor (or cause) (energy services, policies, or market forces and autonomous technical progress).
2.2 Principles and harmonisation
useful
terminology
for
ESD
calculation
and
What are the consequences of the requirements and uncertainties about the interpretation of the ESD for the calculation methods? What is the subject of an evaluation method? And can energy savings be measured at all? These are questions to be analysed in this section.
2.2.1 Guiding principles for EMEEES in the development of methods As a consequence of all the considerations made in chapter 2.1, the EMEEES team adopted the following guiding principles for our work: •
Be as thorough as possible in analysing the relevance of correction factors, and the possibilities to evaluate them,
•
but be as pragmatic as possible in the methods proposed as a result of the analysis;
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keeping in mind that the evaluation system has to be applicable (technically), not costly (economically) and fair between Member States (ethically) •
with as many EU-level average values as possible
•
enable avoiding double-counting
•
enable estimating the multiplier effect, if possible
•
enable the evaluation of all, additional, and early energy savings in a consistent way (cf. section 2.7.3 on how to achieve such consistency)
•
develop both bottom-up and top-down methods
The Member States will have to report energy savings based on harmonised methods (ESD Annex IV(1.1)). This harmonisation obviously covers the following issues: •
using the same accounting unit
•
using common and consistent basic assumptions (e.g. baseline/reference trend; correction factors); these must differentiate between the calculation of all and additional energy savings, but be consistent between bottom-up and top-down calculations, cf. section 2.7.3
•
providing a minimum set of information for each type of calculation
•
to the highest extent as possible, using a consistent level of evaluation efforts.
Member States have different experiences and starting points; but they should use harmonised requirements for reporting their results. EMEEES developed six bottom-up methods, 20 bottom-up case applications, and 14 top-down cases based on three types of indicators. These are not exhaustive, but a starting point. General principles for calculation and reporting to ensure comparable results are therefore provided, too, so that the results can be compared, no matter whether EMEEES methods or own methods of the Member States are used.
2.2.2 Can energy savings be measured at all? Unlike energy, energy savings can usually not directly be measured. However, they can be indirectly measured or estimated in relation to a reference situation. Such a reference situation will, therefore, always be needed to calculate energy savings. ESD Annex IV states: “Energy savings shall be determined by measuring and/or estimating consumption, before and after the implementation of the measure,...” For bottom-up methods, the reference situation ‘before’ the measure is called the baseline.
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Measuring and reporting energy savings for the ESD – how it can be done
For top-down methods, energy savings are calculated from the difference between the actual value of an indicator and the value of the indicator for the same year that would have materialised in a reference trend. We have chosen to differentiate the name of the reference situation in bottom-up and top-down methods, since they are not the same thing. The following sections on bottom-up and top-down methods will expand on how to define and calculate baselines and reference trends.
2.2.3 Addressing harmonisation issues A harmonised model of bottom-up and top-down calculation methods should be developed and used for the ESD reporting (cf. ESD article 15). Harmonisation should give a reasonable freedom for the Member States (following the principle of subsidiarity), while the results reported can be compared. Therefore, the methods and the 20 bottom-up and 14 top-down case applications developed by the EMEEES project are a starting point, but these methods and applications are not intended to exclude the use of own methods and further methods for other sectors, end uses, and kinds of energy services and energy efficiency improvement measures by the Member States. However, harmonisation should be ensured by key elements proposed by EMEEES: a general structure both for the documentation of bottom-up and top-down energy savings and for the calculation itself, with the selection of baseline and baseline parameters, reference trends, as well as correction factors, and a dynamic approach to ensure improvement over time. In bottom-up measurement, a three-level approach has been proposed by EMEEES to facilitate such improvement over time (cf. chapter 2.3.2). These EMEEES proposals were based on past experiences and existing literature (e.g. CPUC 2006, SRCI et al. 2001, TecMarket Works et al. 2004, Vreuls et al. 2005), taking account of the ESD specificities. Bottom-up and top-down methods can both be used for calculating ESD energy savings. In order to avoid “adding up apples and oranges”, the key elements for top-down and bottom-up should also be mutually consistent. EMEEES findings on how to achieve such consistency will be presented in chapter 2.7. The development of a harmonised model is a learning process, and the methods should be improved in the future as more experiences from Member States become available and lessons are learned. In the ESD process, the EMEEES results are not to be directly compulsorily used by the Member States. They are inputs to the work of the Commission and the ESD Committee. According to the harmonisation level needed for the ESD implementation, the decisions from the Commission and the ESD Committee may correspond to different levels of requirements (“could, should or shall”). It is therefore necessary to clarify what level of requirements the different EMEEES proposals correspond to. We hereafter distinguish supporting resources, reporting check-list and general principles, as described in the table below.
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Table 1: Three main categories of methodological outcomes. Supporting Resources
Reporting Checklist
General Principles
Concrete evaluation methods Member States COULD use when they are looking for technical support.
List of questions Member States SHOULD answer in their future NEEAP to provide a consistent set of information about how they assessed their energy savings results.
Harmonised rules Member States SHALL apply when evaluating their energy savings results.
(example of provided information: examples of algorithms, formulae, or data commonly used to calculate a baseline for heating systems) To be available for all Member States (no need for decision) From specific issues…
(e.g.: update frequency for baselines)
(e.g.: reporting what data were used to calculate the baseline values) To be discussed by the ESD Committee (but no need for decision unless its use should be compulsory)
To be decided by the European Commission and the ESD Committee
…To general issues
The supporting resources are made available by the Commission to Member States. These materials are mainly developed by Intelligent Energy Europe projects, such as EMEEES, for concrete evaluation methods and pilot tests. Data on average annual energy consumption (for equipment stocks or markets) can also be found in preparatory studies for implementing the EuP (Energy-using Products) Directive (2005/32/EC). As these resources are not mandatory, they do not require a decision (validation) from the ESD Committee. The reporting checklist is to address issues that do not necessarily need to be harmonised at an EU level, but that are relevant when evaluating energy savings. This checklist is a quality assurance (on data, sources, etc.) that would enable the Commission to compare data provided by the Member States on their achieved energy savings. An example of such a checklist can be found in (Vine and Sathaye, 1999). The checklist specific to ESD proposed by the EMEEES project will have to be validated by the European Commission and is included in Appendix 2 and 3. The checklist does not require Member States to apply a given method nor to include all possible issues in their evaluations. But they are asked to report whether they address the listed issues, and how. By pinpointing the main evaluation issues, the aim is to induce better evaluation designs. And by structuring the evaluation reporting, the checklist will also facilitate the collection and analysis of experience to share between Member States. General principles correspond to the major priority issues, for which harmonisation is required in order to achieve a harmonised evaluation system for all Member States. Their application will be mandatory, so they require a consensual decision from the ESD Committee and the Commission.
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Measuring and reporting energy savings for the ESD – how it can be done
These principles are proposed, e.g., by the ESD Working Groups11. The EMEEES work provided analyses about possible options that might be considered in these decisions. We hope that the EMEEES proposal to distinguish these three levels of requirements (“could, should or shall”) will be useful, as it focuses the debates in the Committee on the highest level (i.e. general principles) and therefore limits the discussions to the main issues. At the same time, national representatives are reassured to see that for lower requirement levels they retain freedom on how to manage ESD implementation in their country.
2.2.4 What is the subject of an evaluation method? From the definitions provided by the ESD, it is not directly clear what an "energy efficiency improvement (EEI) measure" is, as this is presented in Article 3, Definition (h) as “all actions that normally lead to verifiable and measurable or estimable energy efficiency improvement”. This can be very broad, as Annex III of the ESD, Indicative list of examples of eligible energy efficiency improvement measures, starts with “This Annex provides examples of areas in which energy efficiency improvement programmes and other energy efficiency improvement measures may be developed and implemented in the context of Article 4”. Many of these examples of areas are technical, organisational, or behavioural action taken at an end-user’s site (or building, equipment, etc.) that improve the energy efficiency of that end-user’s facilities or equipment, but some of the examples given are also types of energy services, EEI programmes, or other policy instruments (as Article 4 and Annex I 1(d) state, the national indicative energy savings target shall: “be reached by way of energy services and other energy efficiency improvement measures”). We therefore make an analytical clarification on terms for more precisely presenting the subject of evaluation in the EMEEES project: •
An end-use energy efficiency improvement action (end-use (EEI) action) is a technical, organisational or behavioural action taken at an end-user’s site (or building, equipment, etc.) that improves the energy efficiency of that end-user’s facilities or equipment, and thereby saves energy. It can be a result of a facilitating measure.
•
An energy efficiency improvement facilitating measure ((EEI) facilitating measure) is an action by an actor that is not the final consumer him-/herself, which supports the final consumer in implementing an end-use action, or implements it for the final consumer. Examples are energy efficiency programmes, energy services or EEI mechanisms.
Figure 2 shows how some evaluation methods can focus on one type of end use or end-use action subject to several facilitating measures (e.g., efficient boilers and 11
24
To facilitate the decisions of the ESD Committee, two working groups were created to examine the most important issues respectively related to bottom-up and top-down evaluation approaches.
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pumps for tertiary heating systems), or on a number of end-use actions covered by one facilitating measure (e.g., energy performance contracting). Figure 2: End-use actions and facilitating measures
2.3 Bottom-up calculation methods The ESD specifies (Annex IV): „A bottom-up calculation method means that energy savings obtained through the implementation of a specific energy efficiency improvement measure are measured in kilowatt-hours (kWh), in Joules (J) or in kilogram oil equivalent (kgoe) and added to energy savings results from other specific energy efficiency improvement measures.“ EMEEES started its work on bottom-up methods with a report on general methodology (Broc et al. 2009, Definition of the process to develop harmonised bottom-up evaluation methods)12. It presents the four steps in bottom-up evaluation (cf. section 2.3.1) and the five general bottom-up methods (cf. section 2.3.3) in detail. EMEEES partners followed this methodology in the development of the 20 bottom-up case applications (cf. section 2.4). Appendix 1 lists the individual reports on the case applications. An overview report (Vreuls et al. 2009) 13 with several Appendices summarises the findings. The key elements proposed by EMEEES for bottom-up calculations (four steps, three levels, five types of methods, and three baseline situations, cf. Chapter 2.7.3) form a framework that is a good basis for a transparent reporting / documentation of the energy savings. Such transparency is the first required condition for a harmonised 12 13
http://www.evaluate-energy-savings.eu/emeees/en/publications/reports/D4_EMEEES_Final.pdf http://www.evaluate-energysavings.eu/emeees/en/publications/reports/EMEEES_Bottom_up_draft_overview081006.pdf
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Measuring and reporting energy savings for the ESD – how it can be done
evaluation system. This was confirmed in the EMEEES pilot tests (cf. Chapter 3.4), in which the use of this framework enabled describing the tested measures in a comprehensive and transparent way.
2.3.1 Four steps in the calculation process The harmonised rules for bottom-up evaluation methods are organised around four steps in the calculation process (see figure 3). These steps and their sub-steps are presented in detail in a separate report (Broc et al. 2009, The development process for harmonised bottom-up evaluation methods of energy savings)14 and are used in each case application. Figure 3: A four steps calculation process.
Step 1: unitary gross annual energy savings (in kWh/year per participant or unit, average or individual) Example: how much energy is saved annually by using an A+ fridge instead of an A fridge? + summing up across participants or units + double counting, multiplier effect, + other gross-to-net correction factors (e.g., freerider effect*)
+ timing and lifetime (within ESD period)
Step 2: total gross annual energy savings (taking into account the number of participants or units, in kWh/year) Example: how many A+ fridges were sold (within the EEI programme)? Step 3: total ESD annual energy savings in the first year of the EEI measures (taking into account double counting, multiplier effect, and other gross-to-net correction factors, in kWh/year) Example: how many A+ fridges are promoted by more than one EEI programme and might be double-counted?
Step 4: total ESD energy savings achieved in the year 2016 (in kWh/year, taking account of the timing of the end-use (EEI) action, and its lifetime) Example: how many A+ fridges due to the programme are still in use in 2016?
* the free-rider effect will only be relevant, if the aim of the evaluation is to calculate energy savings additional to those that energy consumers, investors, or other market actor would have achieved by themselves anyway, cf. section 2.7.3. This effect is not mentioned in the ESD.
Bottom-up methods start from calculating annual energy savings for one final consumer or one piece of equipment. These so-called unitary gross annual energy savings can normally not be directly measured but need to be calculated from the difference between the energy-efficient situation after an energy efficiency improvement measure and a hypothetical baseline. For example, the savings for a specific dwelling are the calculated or measured gas use after a thermal insulation 14
http://www.evaluate-energy-savings.eu/emeees/en/publications/reports/D4_EMEEES_Final.pdf
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measure compared to the calculated or measured gas use before, normalising measured values for fluctuation in heating degree days. In some cases, the choice of the baseline is decisive for whether all or additional savings will be calculated (cf. section 2.7.3). Then these so-called unitary energy savings per consumer or equipment are added together for all consumers or equipment affected by an energy efficiency improvement measure. However, the resulting total gross annual energy savings need to be corrected by some factors. The ESD requires avoidance of double counting but accounting for multiplier effects15. It does not mention correction for free-rider effects, i.e., savings by consumers who would have taken the action without energy efficiency programmes, energy services, and other energy efficiency policies. Correcting for freerider effects or not is, therefore, another element in the calculation of all or additional energy savings (cf. table in section 2.7.3 for details on bottom-up calculations, baselines, and correction factors). Two general formulas can be derived from this four-step process for the total ESD annual energy savings in the first year (cf. also SRCI et al. 2001, p. 65): 1. If average unitary gross annual energy savings for a unit of end-use action can be defined, the formula will be: total ESD annual energy savings = average unitary gross annual energy savings per equipment (or participant) * number of equipment (or participants) * (1 - free-rider fraction° + multiplier fraction) * (1- double-counting factor/fraction) ° only if additional energy savings are calculated
Equation 1a
2. If individual unitary gross annual energy savings for one (usually larger) final consumer benefitting from an energy efficiency improvement measure (called a participant) have to be used, the formula will be: total ESD annual energy savings = sum of individual unitary gross annual energy savings per participant * (1 - double-counting factor/fraction (average or individual) ) * (1 - free-rider fraction° + multiplier fraction) ° only if additional energy savings are calculated 15
Equation 1b
The multiplier (or spill-over) effect enhances the initial effect of EEI measures. According to Annex IV-5 of the ESD the multiplier effect means that “the market will implement a measure automatically without any further involvement from the authorities or agencies referred to in Article 4-4 or any private-sector energy services provider”. The free-rider effect regards market actors who make use of facilities or support, provided for by EEI programmes, policies, or energy services, but would have taken energy-saving actions anyway. It is not mentioned in the ESD and only relevant when calculating additional energy savings.
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Measuring and reporting energy savings for the ESD – how it can be done
In both cases of the formula: •
free-rider fraction: share of free-riders between 0 and 1
•
multiplier fraction: equivalent to spill-over effect, 0
•
double counting factor/fraction: coefficient or fraction between 0 and 1
2.3.2 Three levels of harmonisation To be as practicable as possible and stimulate continued improvement, the harmonised reporting on bottom-up evaluation is structured on three levels (see figure 4). Figure 4: Three levels of harmonisation
Data scale
Level 1
European default values
Main data sources existing/available European regulation, studies and statistics
up-to-date national National Level 2 statistics, surveys, representative values samples, registries
Data processing and documenting Reliability coefficient according to the data basis for the default value requirements = minimum set of data and justifications to be reported
requirements to report on the specific monitoring Programme- or specific data and justifications in Level 3 systems, registries, Participant-specific detail (standard report at least surveys, measurements available) These three levels correspond to the three main cases (1, 2, or 3) that may occur when a Member State wants to evaluate the energy savings related to a given EEI measure: 1
the Member State has only a few data about this measure (e.g. number of participants) and needs other data sources to complete the evaluation: for that case, the proposal is to provide MS with European default values (= level 1 evaluation) ;
2
the Member State can evaluate the energy savings by using mainly data available at national level (e.g. national statistics or surveys): for that case, the proposal is to provide MS with general guidelines (for ensuring harmonisation at the EU level) (= level 2 evaluation) ;
3
the Member State can evaluate the energy savings by using mainly data specific to the evaluated measure (e.g. registry of participants’ data): for that case, the
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proposal is to provide MS with detailed guidelines (for ensuring harmonisation at the EU level), (= level 3 evaluation). The basic idea behind these three levels is that the more evaluation efforts a Member State makes, the more accurate the results, and so the more rewarded/recognised the results should be by the Commission. This approach is indeed to induce a progressive improvement of the values used by the Member States, rewarding their evaluation efforts. It is also assumed to be a cost-effective way to address the uncertainties related to energy savings evaluations. This approach makes it possible to learn from experience and improve the methods over time.
2.3.3 Five general bottom-up methods From the general literature on evaluation of energy savings, e.g., CPUC (2006), SRCI (2001), and ESD Annex IV, five general bottom-up methods have been identified. Table 2 presents these methods, along with some experience on their costs. The first two methods rely on measured data. However, due to uncertainties that are always associated with the determination of baselines, this does not necessarily mean their results are more accurate than those of the methods 3 to 5. These latter methods are based on estimates. The accuracy of the methods generally decreases from the enhanced engineering analysis (method 3) down to the deemed estimate approach (method 5). In many cases, particularly for large facilitating measures or evaluations, the first three methods are used on samples to provide the inputs to deemed or ex-post average savings that are then applied to the total number of participants. This way of combining evaluation levels and methods is the practice encouraged by EMEEES, as this offers a great level of flexibility, making it possible to target the evaluation efforts where they are needed the most and/or where they are the most cost-effective. Table 2. Classification of bottom-up evaluation methods for energy savings Methods for measuring or estimating unitary gross annual energy savings
Methods for collecting number of units or participants
Methods for estimating gross-to-net correction factors
Applicable if unit is:
Characterisation of costs and data collection
1 direct measurement
A) monitoring of participants and savings per participant
I) and II)
participant (usually)
can be costly; suitable for large buildings or sites, or as a basis for deemed estimates
A) monitoring of participants and savings per participant
I) and c) comparison with control group;
participant (usually)
can be very costly to collect and analyse, particularly d); may be the only way for information campaigns
A) monitoring of participants number of actions
I) and II)
participant or specific end-use
can be costly; however, if an energy audit or certification is
a) without normalisation b) with normalisation 2 analysis of energy bills or energy sales data (sample or all participants) a) without normalisation b) with normalisation 3 enhanced engineering estimates for
or d) discrete choice modelling and other in-depth billing analysis
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Methods for measuring or estimating unitary gross annual energy savings
Methods for collecting number of units or participants
individual units
and savings per participant/action
(e.g., calibrated simulation)
Methods for estimating gross-to-net correction factors
Applicable if unit is:
Characterisation of costs and data collection
action/ equipment
done anyway, small extra cost of monitoring results
4 Mixed deemed and ex-post estimate, e.g. based on sales data, inspection of samples, monitoring of equipment purchased by participants
A) monitoring of number of actions and savings per action
I) and II)
specific end-use EEI action/ equipment (usually)
costs depend on level of accuracy and grossto-net correction required; monitoring usually straightforward
5 Deemed estimate, e.g. based on sales data, inspection of samples before implementation of the facilitating measure being evaluated
A) monitoring of number of actions and savings per action
maybe II; always simplified;
specific end-use action/ equipment (usually)
costs can be quite low, monitoring of number of actions and savings per action may be combined with ”anyway” contacts
maybe inclusion of correction factors in deemed savings per unit
Typical methods for estimating gross-to-net correction factors (i.e., multiplier, double-counting and, when calculating additional energy savings, free-rider effects) are: I) surveys of participants (and control group and other market actors) to find out reasons for implementing end-use actions II) monitoring of participants and end-use actions for different promotion measures to avoid doublecounting
It will often be possible to gather the necessary data at quite limited costs, if the monitoring is planned before implementing an EEI measure. E.g., in an energy audit programme, only a database has to be created tracking measures proposed in the audits. Even participant surveys can be combined with the contacts occurring anyway to provide an EEI measure to the participants. Furthermore, it will only be necessary to evaluate the influence of the whole package of (EEI) facilitating measures targeting a specific end use or type of end-use (EEI) action. For the ESD, there is no need to distinguish, e.g., the energy-saving effects of an information campaign on energyefficient lighting in tertiary buildings from the effects of an energy audit programme and/or a financial incentive programme targeting the same subject. If these programmes are offered by different actors, it will be their problem if they wish to distinguish their contributions between each other, but not the Member State’s duty vs. the ESD. It is, therefore, a task for the analysis of each specific case application (cf. Table 3) to find a solution for the monitoring that is a good compromise between evaluation cost and accuracy. In Table 2, only a very broad characterisation of the costs and data collection issues can be given based on experience, which should be treated with caution. In addition to the five general bottom-up methods, there is also the possibility to use bottom-up modelling of the whole stock or market for one end use. This will be a bottom-up method, if there are surveys of a sample of final consumers, who are asked
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about the end-use actions they have taken and by which facilitating measures these were influenced.
2.4 EMEEES bottom-up case applications Each of the 20 bottom-up case applications developed by EMEEES has been described in a separate report. There is also a compilation of the formulas for unitary energy savings and the EU level default values that can be used for level 1 calculations available as an appendix to the overview report (Vreuls et al. 2009) 16. The case applications were selected so as to cover all end-use sectors and some important multi-sector types of facilitating measures. Table 3 presents the subjects of the case applications, the sectors covered, whether a level 1 calculation is possible at all, and whether EMEEES was able to propose a default value for this. The table then shows, which of the five main methods is used for level 2 or 3 calculations.
End-use, end-use action, or facilitating measure
Sector Level 1 possible
Default value for savings by EMEEES
Table 3: Overview of EMEEES Bottom-up case applications Method(s) proposed for Level 2 calculations (and Level 3 where required for larger systems)
Building regulations for new residential buildings
Residential
no
no
Mixed deemed and ex-post
Improvement of the building envelope of residential buildings
Residential
no
no
Mixed deemed and ex-post
Biomass boilers
Residential
no
no
Mixed deemed and ex-post
Residential condensing boilers in space heating
Residential
yes
yes Deemed Savings
Energy efficient cold appliances and washing machines
Residential
yes
yes Deemed Savings
Domestic Hot Water – Solar water heaters
Residential
no
no
Mixed deemed and ex-post
Domestic Hot Water – Heat Pumps
Residential
no
no
Mixed deemed and ex-post
Non residential space heating improvement Tertiary in case of heating distribution by a water loop
yes
yes Deemed Savings (Enhanced Engineering)
Improvement of lighting systems
Tertiary (industry)
yes
yes Deemed Savings
Improvement of central air conditioning
Tertiary
yes
yes Deemed Savings
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http://www.evaluate-energysavings.eu/emeees/en/publications/reports/EMEEES_Bottom_up_draft_overview081006.pdf
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End-use, end-use action, or facilitating measure
Sector Level 1 possible
Default value for savings by EMEEES
Measuring and reporting energy savings for the ESD – how it can be done
Office equipment
Tertiary
yes
yes Deemed Savings
Energy-efficient motors
Industry
yes
no
Variable speed drives
Industry
yes
yes Deemed Savings (Direct Measurement)
Vehicle energy efficiency
Transport
yes
no
Deemed Savings
Modal shifts in passenger transport
Transport
yes
no
Mixed deemed and ex-post
Ecodriving
Transport
yes
yes Deemed Savings
Energy performance contracting
Tertiary and industry end-uses
no
no
Energy audits
Tertiary and industry end-uses
yes
yes Enhanced engineering
Voluntary agreements – billing analysis method
Tertiary and industry end-uses
no
no
Voluntary agreements with individual companies – engineering method
Tertiary and industry end-uses
yes
yes Enhanced engineering
Method(s) proposed for Level 2 calculations (and Level 3 where required for larger systems)
Deemed Savings (Direct Measurement)
Mixed deemed and ex-post
Billing analysis
2.5 Top-down calculation methods „A top-down calculation method means that the amount of energy savings is calculated using the national or larger-scale aggregated sectoral levels of energy savings as the starting point“ In other words, top-down methods rely on energy efficiency indicators calculated from national statistics (also called ‚top-down indicators’, e.g., ODYSSEE indicators). There are several types of indicators: •
Specific energy consumption indicators for a well-defined type of new appliance, equipment, or vehicle, measuring the average energy consumption of the sold equipment or the equipment stock in energy/appliance/year or energy/km
•
Unit energy consumption indicators of a sub-sector or sector, e.g., electricity/employee/year in the tertiary sector, process fuels per ton of cement, heating energy/m2 of dwelling/year
•
Indicators on the diffusion of energy-saving technologies, such as m2 of solar thermal collectors, or energy-efficient transport modes, such as the share of trains and ships in goods transport.
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Furthermore, a special econometric method based on the analysis of price elasticities can be used to evaluate the effects of energy taxation from any indicator. The analysis of top-down methods done by EMEEES is presented in a summary report (Lapillonne et al. 2009)17 with a separate Annex presenting the ODYSSEE indicators in more detail18, and a second summary report on the top-down cases analysed in EMEEES (Lapillonne/Desbrosses 2009)19. With top-down methods, the overall energy savings are calculated from the difference in the current value of a particular statistical indicator used in a certain year, and the hypothetical value that is calculated for that year from a reference trend assumed. The simplest form of a reference trend is to take the value of the indicator in a base year as the reference. For example, if the average amount of gas use per dwelling decreases with respect to a base year, the difference is taken as energy savings. The resulting energy savings have been called ‘total’ savings (however, ‘apparent total’ savings would be a better name), and the assumption is easily made that these are equivalent to all energy savings. However, this intuitive assumption is only meaningful for indicators that have the ‘right’ trend over the years, a trend towards higher energy efficiency. But that is only the case for about 60 % of all the 14 indicators and countries analysed in EMEEES. For some indicators, there are all cases of countries with a decreasing, increasing, or stable trend, cf., e.g., figure 5. This is because there are structural effects that also lead to changes in the indicator value but have nothing to do with energy efficiency. Therefore, these structural effects need to be corrected before calculating energy savings, if possible with a reasonable effort. Such correction could be done by bottom-up modelling of some of the effects to correct them. With all structural effects removed, ‘apparent total’ energy savings should be equal to all energy savings. It may, however, be difficult to judge from the results whether all structural effects have been removed, and it may be costly to do the correction.
17
18
19
http://www.evaluate-energysavings.eu/emeees/en/publications/reports/EMEEES_WP5_Summary_report_May_2009.pdf http://www.evaluate-energysavings.eu/emeees/en/publications/reports/EMEEES__WP5_TD_indicators_overview_final.pdf http://www.evaluate-energysavings.eu/emeees/downloads/WP_5_EMEEES_case_studies_report_Final.pdf
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Measuring and reporting energy savings for the ESD – how it can be done
Figure 5: Unit energy consumption per m for heating (koe) in the residential sector for three EU Member States
Note: we have selected three Member States showing different trends for this indicator. There are, however, many other Member States showing similar trends.
An equivalent way, in principle, could therefore be to calculate the reference trend for all energy savings from bottom-up modelling of the energy consumption underlying the indicator, with zero energy efficiency changes in the model. However, the feasibility of this approach was not tested in EMEEES. For calculating additional energy savings using top-down methods, the approach taken in EMEEES is a regression analysis of past trends of an indicator that would reflect the autonomous changes. This was conclusive in some cases but not in others. In those latter cases, again, bottom-up modelling of the energy consumption underlying the indicator and the structural changes may provide a way forward, but EMEEES was not able to test it (cf. table 5 in Section 2.7.3) for details on top-down calculations and correction factors). Using such regression analysis allows to evaluate energy savings compared to an autonomous trend, even if the trend of the underlying indicator does not allow to calculate ‘apparent total’ energy savings. Simple econometric methods were used to quantify the impact of energy market prices and trends, on purpose, taking into account several criteria: • the need for transparency and of harmonisation among countries, •
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the easiness of implementation and of their understanding, as such methods would ultimately need to be applied by the countries;
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•
finally, the data limitations, in particular for additional explanatory variables (e.g., price/tax on cars, cost of equipment) and the uncertainty of the data handled.
The typical regression equation considered was follows: ln ES = a + b T + c ln P + d ln A + K with : ln : logarithm; ES: energy saving indicator; a: a constant; b: trend; T: time; P : energy price; c : price elasticity20 ; A: macro economic variable (e.g. GDP) to capture the impact of business cycles; d : elasticity to GDP; K: constant coefficient Equation 2
The estimate of the regression coefficient is made over a period ending before the effects of facilitating measures will have to be assessed (e.g., before 1995). Then using the coefficient, the impact of the different effects can be removed over the period on which the ESD savings will be calculated (i.e. 2008-2016) (Figure 6). The price effect can be separated into two components, ex-tax energy price (market component) and energy tax (policy component), using the same price elasticity . Figure 6: An example of the calculation of changes in an indicator vs. the reference trend determined through regression analysis (indicator on modal shares in goods transport)
2.6 EMEEES top-down cases 2.6.1 Additional energy savings Energy savings that are additional to an autonomous trend and to energy savings due to increases in market energy prices could, in principle, be evaluated from long time20
Price elasticity may be differentiated between upward and downward price elasticity.
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Measuring and reporting energy savings for the ESD – how it can be done
series of indicators via a regression analysis (cf. the formula in chapter 2.5). This was our starting hypothesis: a regression over past periods, without facilitating measures in place, would deliver the baseline projection. Extending this reference trend over the period 2008-2016 would allow to calculate ESD energy savings by comparison with the actual development of the indicator. The positive features of such an approach are twofold: (1) it allows calculating additional energy savings from statistical data only and (2) it allows calculating additional energy savings even for indicators that do not allow to calculate ‘apparent total’ energy savings, since the unit or specific energy consumption value is increasing or the diffusion of energy-efficient technologies or transport modes is decreasing (as, e.g., in figure 6). However, the analysis of case studies was quite inconclusive. In most cases, it was possible to identify a reference trend for some countries but not for all. An exception here is the market diffusion of solar water heating, which can be assumed to be practically entirely due to facilitating measures in the past, so the baseline would be zero market penetration. Whether this holds for the future, however, would need to be analysed. The same picture showed up for the correction for market energy prices. Therefore, the next hypothesis was to consider using EU default values for both the correction for market energy prices, and for the autonomous trend for the specific energy consumption indicators. •
For market energy prices, the EMEEES proposal is to use price elasticities between 0.1 and 0.2, and only correct for the effects of market energy price increases.
•
For the autonomous trend of specific energy consumption indicators (e.g., for cars and appliances), the proposal is to use the average trend obtained for the three countries with the slowest decrease (i.e., lowest percent change per year) in the value of the indicator. This is based on the assumption that these would be countries without (strong) national EEI measures in place. Such EU default values for the autonomous trend of specific energy consumption indicators should be harmonised with any corresponding EU default values for the percent change per year of the baseline to be used for bottom-up evaluation methods for the same type of equipment. The value achieved through the top-down analysis would be the starting point for such a harmonisation. Such a default value was developed for the average fuel consumption of cars (cf. Lapillonne et al., 2009). Due to budget and data constraints, it was not possible within the EMEEES project to really develop EU average default or country-specific values for the autonomous development of other specific energy consumption indicators (e.g., for appliances).
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For unit energy consumption or diffusion indicators, countries are usually so different that it will not be possible to define EU default values for reference trends. Country-specific trends must be defined. For some countries and indicators, this may be done using the regression analysis method, as said above. Furthermore, not all indicators are available for all or most EU Member States (cf. table 4).
2.6.2 All energy savings In theory, if all structure effects influencing an indicator are corrected for, all energy savings can be calculated from the difference between the indicator value in the base year and the current value of the indicator in the measurement year (e.g., 2016). All energy savings would then be the same as the ‘apparent total’ energy savings found in practice. However, as the analysis of case studies has shown, the indicator is going into the ‘right’ direction to show ‘apparent total’ energy savings at all only for about 60 % of all the 14 indicators and countries analysed in EMEEES. The reason must be that there are still some structural effects not yet removed due to lack of data. Therefore, in practice, it may only be possible for some specific energy consumption indicators to assume that ‘apparent total’ energy savings are a good approximation for all energy savings. For all other types of indicators, this would lead to no savings at all and/or to inconsistent and arbitrary measures of energy savings between Member States.
2.6.3 Applicable top-down calculation methods In conclusion, Table 4 summarises, which top-down calculation methods based on ODYSSEE indicators were analysed in EMEEES, and which of these appear applicable for a harmonised calculation system for the ESD. These are the five marked ‘yes’ in the column ‘Applicable’ in the table. Three are marked with a “sometimes”, as they may be applicable depending on the country situation. The method for general energy taxation cannot be done for a TD indicator, if a correction for energy market price and a calculation of the energy savings due to taxation is already done in the case application for that indicator. Otherwise, the effect of energy taxes will be counted more than once (thus the ‘yes*’).
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Measuring and reporting energy savings for the ESD – how it can be done
Table 4: Applicable ‘pure’ top-down methods, if data available and corrections possible
As part of WP5, the data availability has been checked for each indicator/top-downmethod and each MS (cf. Appendix 1 in Lapillonne et al. 200921). The column ‘Data MS’ gives an overview, with all = 27, most = >22, many >15, EU-15 = 10 to 15 and few
