white certificates presentation, ipeec

ExCo 05 // 20-22 September 2011

Author

Presentation CEM

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ExCo 05 // 20-22 September 2011What is a White Certificate?White certificate is a document

certifying that a certain reduction of energy consumption has been attained

As a rule the white certificates are tradable and combined with an obligation to achieve a certain target of energy savings

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Basic principlesThe white certificates are given to an

actor whenever the targeted amount of energy is saved; the actor can use the certificate for its own target compliance or it can be sold to parties who cannot meet their targets.

If energy producers do not meet the mandated target for energy consumption they are required to pay a penalty or to buy a certificate from another actor.

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Scheme of work

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Government

Energy Efficiency targets (in WhC)

Company 1: Company 2: Company 3:

Market place for WhC trade

Target met Target overachieved

Target underachieved

$

Company 4:

Target underachieved

$

ExCo 05 // 20-22 September 2011Countries which implemented WhC

Italy (2005)

France (2006)

UK (1994)

India (2011)

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ItalyThe obligations were placed on:

10 electricity distributors and 20 gas distributors.

The obligations allow the energy distributors to meet their targets by improving the efficiency of their own business, but at least 50% of the White Certificates must be met via reduction of electricity and gas in their final customers’ premises.

Although in principle any fuel can be saved, in practice after one year the proportion in savings of energy was as follows: electricity accounted for 74.7%, gas for 21.9% and other fuels for only 3.4%.

It is expected that more than 30% of the expected carbon dioxide savings by 2012 will come from the White Certificate activities.

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ItalyResults achieved (2005-2007): 2 million toe saved against a target of 1,1 million toe; 78% electricity savings; 18% natural gas savings; 4% other

fuels savings; 90% of savings delivered via projects for which simplified

M&V (measurement and verification) methodologies75% of savings delivered by energy service providers

(including ESCOs);growing number of information campaigns and training

programs.

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ExCo 05 // 20-22 September 2011India: Perform, Achieve and

Trade (PAT) ProgramSpecific Energy Consumption (SEC) reduction targets for

714 energy-intensive Designated Consumers from the following sectors:

Power Fertilizer Chor – Alkali Iron & Steel Cement Textiles Pulp & Paper Aluminium

Total energy consumption by all 714 Designated Consumers under proposed PAT scheme - 181 MTOE

Energy Savings Potential (%) : Cement 16%, Paper and Pulp 26%,

Fertilizers 15%, Aluminium 23%, Iron and Steel 24%, Chlor Alkali 17%

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India

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3. Designated Consumers

Industry-A

Industry-B

6. Accredited Verification

Agency Energy Audit

2. M ark et G overnor

Recommendation for Issue of

ESCerts Issue of ESCerts

1. Policy Governor & Compliance Driver (Bureau of Energy Efficiency)

Set Compliance Directives

5. Transfer

Agent / Depositories

4. Stock

Exchange

3. Designated Consumers

Industry-A

Industry-B

6. Accredited Verification

Agency Energy Audit

2. Market Governor

Recommendation for Issue of

ESCerts Issue of ESCerts

1. Policy Governor & Compliance Driver (Bureau of Energy Efficiency)

Set Compliance Directives

5. Transfer Agent /

Depositories

4. Stock Exchange

Institution Role Policy Governor and Compliance Driver Compliance assurance through incentives and

automatic penaltiesMarket Governor Ensure publicly available dataIndustry Undertake energy efficiency measures; appoint

accredited 3rd party energy auditorsTrading Platform Maintain data of traded prices, traded volumes

and trends.Transfer Agents / Depositories Hold the ESC in electronic form.

Third Party energy Auditors Audit industry energy savings

ExCo 05 // 20-22 September 2011Why implement the WhCMarket mechanism to improve energy

efficiency;Tradable nature of the WhC ensures

achievement of the EE targets at the lowest possible cost;

Transparency of the scheme to market actors;

Proved to be useful and efficient in a number of countries;

Can be modified according to the specific country requirements.

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white certificates presentation, ipeec

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