National Energy Efficiency Action Plan Step by Step Krasimir Naydenov Stoyanov Ministry of Economy and Energy, Republic of Bulgaria

2nd Energy Efficiency Task Force Meeting, 26 June 2008 Brussels

Setting the Base: a few simple questions 1. 2. 3. 4. 5. 6. 7. 8.

Why to play now ? → How to play ? → Where to play ? → Who have to pay ? → What is the ideal result ? → How to accelerate ? → What is the expected support ?→ How much have to be saved ? →

Our future Measures and activities Target groups on the market Financial flows, stimulation Optimizing Encouragements and obligations The role of the state National and individual targets

Always to have in mind: 1. More market and less compulsion: 2. State and local budget money: 3. Present activities:

higher results with less efforts ! The source ! 2 Is it worth ?

Our Task : Proposing measures for removing/mitigation of the obstacles for improving of EE in form of a plan. Main steps: short description of NEEAP : 1. Preliminary circumstances :

common accessible statistical data

2. Analysis (short and long-term prognosis) 3. Preliminary idea for EE Strategy : main conclusions and priorities 4. Possible financial sources :

rough estimation

5. Main barriers for EE improving :

identifying

6. Short-term EE measures :

identification and prioritization 3

Before starting 1. Do we have an access to statistical data ? 2. Do we have base knowledge (skills) for data processing? How:

* to collect data * to review the national information data base * to calculate results * to make prognosis: Economic development and energy consumption basic scenario, using historical and prognosticated data and European experience * to analyze and to interpret results, having in mind specific national conditions 4

Let’s start From General to Specific : NEEAP – short description of the content 1.

Analysis:

Long-term prognosis, based on historical data ; Near future prognosis based on short term conditions.

2.

Determination of short term targets, according to long term target. Evaluation of the expected results by energy/fuel and by sectors.

3.

Identifying the key sectors: key players and target groups

4.

Estimation of the existing, expected and possible (attractable) financing, according to economical development and energy market situation

5.

Identifying existing and expected barriers

6.

Determining the measures. 5

From General to Specific An Example: Bulgarian Energy Efficiency Action plan 2008-2010

Base for Upgrading: analyzing the present activities and support 1. Data base and calculation method (as already described): fully harmonized with EUROSTAT, ODYSSEE-MURE 2. State support: organizational (AEE) 3. Legislation: act, ordinances, programs, strategy 4. Financing (details in separated slide) 6

An Example: Bulgarian Energy Efficiency Action plan 2008-2010 Why Bulgaria has to save energy: prognosis

ktoe

Прогноза за КЕП и използването наhave ВЕИto save energy. Sustainable energy development. Why we в перода година Today situation and prognosis. Influence of the EE measures and2005-2050 RES introducing.

18 000 16 000 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 2005 FEC КЕП

2010

2015

2020

2025

2030

Necessary RES Increasing на ВЕИ Необходимо нарастване

2035

2040

2045

2050

year год.

Expected RES нарастване Utilization на ВЕИ Прогнозирано

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An Example: Bulgarian Energy Efficiency Action plan 2008-2010 Where Bulgaria is in the moment ? Energy Efficiency of Bulgarian Economy – current situation (2006). •

Primary Energy Intensity

BG ЕС

~ 0.345 koe/€2000p ~ 0.18 koe/€2000p > 90 % above EC level

•

Final Energy Intensity

BG ЕС

~ 0.162 koe/€2000p ~ 0.12 koe/€2000p > 35 % above EC level

•

Ratio

~ 0.47 (according to National Statistical Institute and ODYSSEE project, 2006)

IF Energy Intensity of the Bulgarian economy is equal to the average EC level, Bulgarian GDP can be produced with ~50% of current used energy.

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An Example: Bulgarian Energy Efficiency Action plan 2008-2010 How Bulgaria is moving? Development and tendencies in energy consumption and energy intensity БВП, ПЕП, К ЕП,

RES, GDP, PEC, PEI, FEI ПЕИ,FEC, К ЕИ, ВЕИ. (2000=1.0)

RES: 10 %/y

1.6 1.5

GDP: 3.8 %/y

1.4 1.3

↑

1.2 1.1 1.0

FEC: 2.3 %/y PEC: 0.5 %/y

0.9 0.8

FEI: - 2.6 %/y

0.7

PEI: - 3.8 %/y.

2000

2001

2002

2003

2004

2005

2006

Energy consumption increases and probably will continue to increase!

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An Example: Bulgarian Energy Efficiency Action plan 2008-2010 NEEAP: main features (Directive 2006/32/ЕО on energy end-use efficiency and energy services 2008-2016 ESD) 1. According to ESD -

TARGET: energy saving ≥ 9% of FEC in scope of Directive during next 9 years (average annual savings: 1%)

Bulgaria accept an annual target of 3% during the period 2008-2010, or 72 ktoe annually. 2. According to ESD -

SCOPE of ESD: Installations in scope of Directive of emission trading, air and water transport has to be excluded.

Bulgarian Action Plan excludes over 100 large final energy consumers and it covers 80 % of Total Bulgarian FEC. 3. According to ESD -

PLAYERS – All energy wholesale and retail dealers, which sell energy to final consumers. They have to be stimulated to invest in EE measures.

Bulgaria planes to distribute national target only on large energy dealers, which sell more than 75 GWh annually. 10

An Example: Bulgarian Energy Efficiency Action plan 2008-2010 Current Financing : Used possibilities Source of financing (current conditions)

Total value of projects, million €

With state budget participation Programs for certification of public buildings, 2006/2007

≈ 2.0

Programs for auditing of enterprises, 2006/2007

≈ 1.7

Bulgaria Energy Efficiency Fund

≈ 7.5

Fund “Kozlodui” (KIDSF)

≈ 5.4

Credit line in industry (EBRD)

≈ 33.3

Credit line in households (EBRD)

≈ 22.5 GRAND TOTAL

≈ 72.4

¾ Implemented measures with financial support of state budget are mainly in public buildings and consume not more than 4% of FEC. ¾ There are a strong need of additional financing in sectors with large energy consumption: transport, households, manufacturing.

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An Example: Bulgarian Energy Efficiency Action plan 2008-2010

Additional Financing: Expected Development FRAME CONDITIONS: 1. Energy consumption will increase, independently of increasing of the fuel prices. 2. The market of energy services will increase, also. 3. Position of energy dealers for penetrating into the market for EE measures is the best one. 4. The future of EE services and ESCO companies looks very promising.

The above mentioned conditions have been used in development of the ESD and Bulgarian NEEAP 2008-2010 as well as in the new Energy Efficiency Act.

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An Example: Bulgarian Energy Efficiency Action plan 2008-2010 Determining of Strategic Directions of EE Measures and Activities Prioritizing of main sectors and energy flows. Дялове на секторите в КЕП, в Sector Shares in FEC обхвата на Директивата за ЕЕ и ЕУ in scope(2005) of ESD, 2005 Agriculture селс.стоп. Services услуги 11%

4%

Дялове на горива и енергии в КЕП в Fuel & Energy Shares in FEC обвхата на Директивата за ЕЕ и ЕУ, in Scope(2005) of ESD, 2005

Industry

индустрия(rest) остатък 13%

Biomass биомаса 10%

Heat топлина 10%

Liquid

течни fuels горива 45%

Households бит 32%

Transport транспорт

Electricity ел.енергия 26%

40%

Coal въглища 5%

Road Transport Households + Manufacturing (SMEs)

→ →

природен Natural Gas газ 4%

liquid fuels Electricity + Heat

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An Example: Bulgarian Energy Efficiency Action plan 2008-2010 Key sector – 1 : Transport Б Energy В П , п оConsumption тр еб лен и (EC) е н аand ен ер ги я Intensity и GDP, Energy (EI) ofоroad ен ер ги й н а и н тен зи в н ст нtransport а секто р " Т р ан сп о р т" (2000=1.0)

↑

1.6 1.5

EC GDP

1.4 1.3 1.2

EI

1.1 1.0 2000

2001

2002

2003

2004

2005

2006

Energy consumption of road transport increases faster than GDP. 14

An Example: Bulgarian Energy Efficiency Action plan 2008-2010 Key sector – 2: Trends in Households and Services Енергийна интензивност на сектор "Услуги". Energy Intensity of Services 2000=1.0

Енергийно потребление в Unit Energy Consumption of Households битовия сектор 2000-2006

2000=1.0

(2000=1.0) (climate corrected)

1.2

Energy Intensity of Services 2000-2005

1.06 1.1

1.04 toe/dwelling 1.02

↑

1.00

1.0

↑

0.98 0.9

0.96 0.94 0.92 2000

2001

2002

2003

2004

2005

2006

0.8 2000

2001

2002

2003

2004

2005

2006

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An Example: Bulgarian Energy Efficiency Action plan 2008-2010 Key sector - 3: Industry Дяло в е н а го р и в а и ен ер ги я

Брутна добавена Енергийно Value Added (VA), стойност, Energy Consumption потребление и Енергийна интензивност на (EC) and Energy Intensity of Industry сектор "Индустрия"

Shares in вEnergy Е П н а Consumption и н д у с т р и я т а of Industry 0.30

VA

1.4 0 .2 4

0.25

0 .2 6 0 .2 6

1.3

0 .2 4

0 .2 3

1.2

0 .2 1 0 .1 9

0.20

1.1

2000 0 .1 4

0.15

2006

0 .0 9

0.10

EC

1.0 0.9

EI

0.8

0 .0 8 0 .0 4

0.05

0.7 2000

2001

2002

2003

2004

2005

2006

0 .0 1

ин а ес рв

дъ

ое пл то

ек

тр

ое

не

не

рг ия

рг ия

а гл и

щ

з въ

га

ел

те

чн и

го ри

ва

0.00

Increasing of EC of industry is due to increasing of the electricity and heat energy consumption.

Energy intensity of industry decreases due to replacing of coal with electricity and heat. 16

An Example: Bulgarian Energy Efficiency Action plan 2008-2010

What we have to do : Main short and long- terms tasks. Before starting with formulation. 1. Always in mind…(slide № 2) ! 2. To think about customers. Small but effective steps for creating the energy services market: A. Improve existing services B. Let other players to enter C. To provide all players with additional money D. Think globally about entire financial mechanism

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An Example: Bulgarian Energy Efficiency Action plan 2008-2010 Proposed Measures and Activities Fuel /Energy

Sector

Measures

Residential and Services

• Encourage the replacement of inefficient electric wiring for heating and hot water boilers by more efficiency one or by RES • Financial assistance to improve energy performance of buildings • Dissemination information on EE: illumination, hot water boilers and cooking; replacement by RES (biomass), heat pumps…

Industry

• Dissemination information on EE motive power, ventilation, air-conditioning, compressed air generation systems… • Encourage producers/traders of processed of biomass. • Assist energy audits, including financial support • Encourage use of RES, utilization of residual heat..

Transport

• Improve road infrastructure. Optimize traffic. Replace a part of the fuel with liquid biofuels. Effective control on the engines. Ensure special rights of movement of the public transport, bicycles and mopeds. Expand metro transport. Increasing tax for high power cars.

Services

• Replace heating system with liquid fuels by biomass, solar and geothermal energy.

Residential

• Replace inefficiency biomass incineration facilities with more energy efficient ones. • Replace solid fuels by processed biomass

Electricity

Liquid fuels

Solid fuels Cross-sectoral and horizontal measures

• Support organization delivering training (skills) and education (knowledge) • Advertising campaigns

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An Example: Bulgarian Energy Efficiency Action plan 2008-2010 Proposed Measures and Activities Types

Year

Name

2008-2010

• Allow energy traders to offer extended energy services: not only delivery but also for equipment and support. Ensure that energy traders will refrain from any activities that might impede the demand for the delivery of EE measures or hinder the development of markets for energy services. Create condition for competition between traders and ESCO s. Allocation of the national target among traders, including penalties in case of default

2009 2009 2010

• Ensure independent measurements of the results of complex energy services • Take into account EE as assessment criterion in competitive tendering • Introduce financial mechanism of “white certificate”

Financial

2009 2008-2010 2008-2010 2008-2010

• Ensure access to sources of easy financing for energy services providers • Support absorption of EU funds by industrial companies • Support energy audits through the state budget • Support the implementation of the Strategy for Building Insulation, through the state budget

Tax

2008-2010 2010

• Keep existing tax release for owner of certified buildings (ownership tax) • Introduce cost-oriented tariff to support energy services

Organizational

2008-2010 2008-2010 2009-2010 2008-2009

• Provide information, advice and audits at the expense of the state budget • Prepare and conclude Long term agreements with industrial enterprises • Study and develop white certificate scheme, organize a market for white certificates. • Analyze existing tariffs and include EE component in there future formation to remove incentives in transmission and distribution that unnecessary increase the volume of transmitted or distributed energy

Normative

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NEEAP (template) Proposal Table of Content 1.

Energy efficiency policy – current situation Normative, financial, organizational conditions

2.

Determining the targets Long and short term prognosis: economic development, energy consumption, energy intensity

3.

Identifying the main energy/fuel flows and key sectors Economy main sector mix. Energy/fuel mix.

4.

Estimation the main players, according to main energy/fuel flows and key sectors Large energy dealers. Large energy consumers.

5.

Identifying the existing barriers. Normative, financing (energy prices, taxation, tariffs), organizational (evaluation of the existing organizations).

6.

Determining the most effective measures: dead-lines and persons in charge Specifying according to priorities (main players, main energy/fuel flows, financial conditions, 20 existing energy market, accepted energy saving targets, etc.)

Returning to Our Task Main Questions / Suggestions 1. What kind of NEEAP we need and what to include in it ? How to use NEEAP? Do we have enough statistical data and experience in calculation to make reliable comparison between different countries? (We can use the option, which include only possibility to trace each country progress.) 2. What about investment? Do we have enough information about national financial resources. Is there any possibility to determine and to estimate them ? 3. The example role of Public sector. Measures or activities, concretization of the state and municipalities role. The members of EETF may send theirs suggestion to EE TF secretariat, according to the proposed content of NEEAP (previous) in a month.

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REPUBLIC OF BULGARIA MINISTRY OF ECONOMY AND ENERGY

Thank you for Your attention !

Krasimir Stoyanov [email protected] + 359 2 9263 213 22