special edition - wordpress.com · 2017. 7. 24. · sofia, february 2017 . isbn 978-619-90807-1-9 ....

ENERGY EFFICIENCY BARRIERS IN BUILDINGS AND TRANSPORT

8 national cases

Special Edition Volume 1

Forward-looking socio-economic research

on Energy Efficiency in EU countries

• POLICIES • TECHNOLOGICAL TRENDS • BARRIERS •

Funded by the Horizon 2020 Framework Programme of the European Union

Sofia, February 2017 ISBN 978-619-90807-1-9

The current Special Edition is a compilation of eight national studies on the barriers to the energy efficiency implementation in the building and transport sectors, and the outcomes of the survey, conducted by the HERON project partners during the first half of the project development. The editting, layout, language review and technical support of this publication is performed by the Black Sea Energy Research Centre, which is the responsible partner for the communication and dissemination activities and the release of Deliverable 6.3, represented therein. Authors: National and Kapodistrian University of Athens (UoA-KEPA, Greece) Università Commerciale “Luigi Bocconi” (UB, Italy) Black Sea Energy Research Centre (BSERC, Bulgaria) Oxford Brookes University (OBU, United Kingdom) University of Antwerp (UA, Belgium) Wuppertal Institut fur Klima, Umwelt, Energie GMBH (WI, Germany) University of Belgrade - Faculty of Mining and Geology (UB-FMG, Serbia) Estonian Institute for Sustainable Development, Stockholm Environment Institute Tallinn Center (SEIT, Estonia)

Editor: Dr. Lulin Radulov, BSERC

HERON project coordinator: Prof. Dimitrios Mavrakis, UoA-KEPA

Photos: Enver Shirinbayli

The project HERON - “Forward-looking socio-economic research on Energy Efficiency in EU countries” has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No. 649690. The content of this publication reflects only its authors’ views. Neither EASME, nor the European Commission are responsible for any use that may be made of the information contained herein. All rights reserved. BSERC, 2017

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Editor’s message Climate change emerges as the most serious challenge for humanity. Despite the early warnings of the scientific community, the world leaders have failed so far to develop and implement the necessary policies capable to confront it. Unless a dramatic turn will occur, we are moving full steam towards the catastrophic increase of the mean atmospheric temperature area of 4 °C, with reference to the pre-industrial period, well beyond the targets of 1,5 °C or even of the 2,0 °C, declared by UNFCCC. In an era where science and technology provide the means to confront the climatic challenge, it is the global economy that should be restructured and the attitude change of common people to

overcome behavioral obstacles that hinder the implementation of the necessary policies and measures. HERON (GA No.649690), a Horizon 2020 financed project, under the title “A forward looking socio-economic research on energy efficiency in EU countries” aims to provide a paradigm shift and facilitate policy makers of multi-level governance and market stakeholders in EU and abroad, to develop and implement effective energy efficiency policies in buildings and transport, incorporating the end-users behavior. Non-economic and non-market elements, such as social, educational and cultural, are incorporated with economic and technological elements into energy scenarios development and modeling reflecting the end-user behavior towards energy efficiency in building and transport sectors. Qualitative findings from eight countries are transformed to quantitative ones and through an innovative Decision Support Tool (DST) they are inserted to the input of a model used in forward looking analysis for both the sectors of buildings and transportation. This edition, the first of the two HERON project will deliver, presents the mapping of barriers linked with the end-users behavior towards the implementation of energy efficient policies and the use of the respective technologies in two sectors, buildings and transport for eight countries (7 EU Member States and one candidate Member State). The barriers are classified in three main groups (“Social-Cultural-Educational”, “Economic” and “Institutional”), while the reader can find which of these barriers are cross-cutting for both sectors per country. In conclusion, I would like to express my gratitude to HERON’s partners for their contribution to this edition, for their supervision and writing of their national reports. The Editor

Prof. Dimitrios Mavrakis Project Coordinator

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Contents Introduction ................................................................................................................................ 5

The HERON project ............................................................................................................... 5

Methodology of reporting material .......................................................................................... 5

NATIONAL REPORTS ............................................................................................................... 7

Belgium ...................................................................................................................................... 8

Energy efficiency policies ....................................................................................................... 8

Technological trends .............................................................................................................17

Barriers .................................................................................................................................26

Cross Cutting ........................................................................................................................31

Bulgaria ....................................................................................................................................33

Energy efficiency policies ......................................................................................................33


Barriers .................................................................................................................................42

Cross Cutting ........................................................................................................................47

Estonia ......................................................................................................................................50



Barriers .................................................................................................................................59

Cross Cutting ........................................................................................................................66

Germany ...................................................................................................................................69



Barriers .................................................................................................................................79

Cross Cutting ........................................................................................................................87

Greece ......................................................................................................................................90



Barriers .................................................................................................................................99

Cross Cutting ...................................................................................................................... 102

Italy ......................................................................................................................................... 105

Energy efficiency policies .................................................................................................... 105

Technological trends ........................................................................................................... 109

Barriers ............................................................................................................................... 113

Cross Cutting ...................................................................................................................... 116

Serbia ..................................................................................................................................... 118



Barriers ............................................................................................................................... 124

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Cross Cutting ...................................................................................................................... 126

United Kingdom ...................................................................................................................... 127



Barriers ............................................................................................................................... 176

Cross Cutting ...................................................................................................................... 179

SURVEY QUESTIONNAIRE .................................................................................................. 182

About the survey ................................................................................................................. 183

Overview of the questionnaire ............................................................................................. 184

Questionnaire dissemination ............................................................................................... 185

Cross-country analysis ........................................................................................................ 186

Key findings ........................................................................................................................ 195

Conclusions ........................................................................................................................ 196

REFERENCES ....................................................................................................................... 197

References ......................................................................................................................... 198

Abbreviations used in the document ................................................................................... 201

List of tables ....................................................................................................................... 205

List of figures ...................................................................................................................... 207

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Introduction The HERON project

HERON, the “Forward-looking socio-economic research on Energy Efficiency in EU countries” project, aims at facilitating policy makers of multi-level governance in European Union, to develop and monitor energy efficiency policies in building and transport sectors, through forward-looking socio-economic research in seven EU and one candidate countries. The objectives are four; the impact of socio-economic and institutional factors on implementing energy efficiency policies and measures, the development of energy-efficient pathways to the horizon 2030 and beyond taking into account the socio-economic drivers and the updated energy efficiency measures, the contribution to improving energy modeling by incorporating social, educational and cultural factors so as to reflect the end-user behavior and finally, the establishment of communication channels between researchers, decision makers of different governance levels and social and market stakeholders.

These objectives will be achieved through: the mapping of energy efficiency policy instruments, available technologies and social, economic, cultural and educational barriers in transport and buildings, the assessment of the evidenced barriers and the main driving factors, in order to define their weight / importance for the implementation of energy efficiency policies, the determination of linkages between the factors and the energy efficiency, the forward-looking scenario analysis, focusing on macro- and micro-economic impacts of energy efficiency policy options and with policy recommendations through multi-criteria evaluation and feedback mechanisms with policy makers and market stakeholders from EU. As part of the objectives achievement steps, HERON will develop an innovative decision support tool to incorporate non-economic and non-market elements, such as social, educational and cultural, into scenario analysis.

Methodology of reporting materialHERON Special Edition, Volume 1 “Energy Efficiency barriers in Buildings and Transport: 8 national cases” includes a compilation of the national reports of the participating countries, taken from work packages 1 and 2 deliverables - reports. The WP1 “Mapping of energy efficiency policy instruments and available technologies in buildings and transport” produced four deliverables – reports. The objectives covered by these reports are to provide updated information about the state-of-the-art for the eight participating countries regarding the latest implemented policy instruments for energy efficiency, and how the existing policies interact to create comprehensive packages as a common background for the other work packages in the project, to provide policy makers and market stakeholders an insight of the energy saving efforts of the eight countries; to support

evidence base for the research outcomes of this proposal and to show how energy efficiency can be fostered indirectly. The titles of these reports are: D.1.1 Landscape of energy efficiency policy packages in a multi-level government system D.1.2 Status-quo analysis of energy efficiency policies in 8 EU countries D.1.3 Interlinkage and synergies between selected other policy areas and energy efficiency D.1.4 Technological Trends in energy efficiency The WP2 “Mapping and assessment of social, economic, cultural and educational barriers in buildings and transport” seeks to identify the main barriers (social, economic, cultural, educational and institutional) which hamper the implementation of energy efficiency

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policies at the regional and local level, relying on literature review as well as on primary research with experts. Starting from the different typologies of barriers (social, economic, cultural and behavioural) for each country and for the sectors considered by the project (buildings and transport), it evaluates their importance in undermining the implementation and the effectiveness of different policy measures, by carrying out a desk research and by investigating the opinions of a range of experts and stakeholders through a structured survey. In parallel it also evaluates the relevance of different driving factors for energy efficiency in the eight project countries. The objectives of this work package are to identify the main barriers for the implementation of energy efficiency policies in buildings and transport sectors at regional and local levels, to evaluate the weight/importance of barriers that affect the decision of households and individuals in the aforementioned sectors in the project countries; to evaluate the weight/importance of driving factors of energy efficiency policies and finally, to identify barriers that need to be considered in the scenario analysis and in the multi-criteria evaluation of the scenario analysis results. The produced national reports can be found in the deliverables of the WP2, under the following titles: D.2.1 Working paper on social, economic, cultural and educational barriers in buildings and transport within each partner country D.2.2 Working paper on cross-cutting barriers across buildings and transport sector D.2.3 Eight national lists of actors and organizations to be surveyed

D.2.4 Questionnaire template on barriers and driving factors and 7 translated versions of the questionnaire D.2.5 Synthesis reports on the outcomes of questionnaire survey.

The Questionnaire

The questionnaire was structured along the different typologies of barriers identified in the national reports mentioned already and along the main features that characterize each barrier, with a combination of different kinds of questions. The aims of the survey were: 1. to collect experts’ and stakeholders’

opinions on the relevance of each barrier for each country, rating the relevance of the different barriers in influencing the degree of implementation of the energy efficiency policy instrument, technology or practice, as well as the interaction between the barriers;

2. to suggest possible ways to overcome them;

3. if necessary, to map additional barriers which had not been considered;

4. Moreover, the survey will also be aimed to rate the importance of different driving factors of energy efficiency policies, identified according to the desk research of Task 2.3 and of WP1.

A more analytical description of the questionnaire approach and results is presented at the relevant chapter of this edition. The referenceas are available at the full documents of reports, at the project website: www.heron-project.eu

http://www.heron-project.eu/

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NATIONAL REPORTS

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Belgium Energy efficiency policies

The competences of the Federal Government in the areas of energy and climate policies are limited. Its most important competence relates to “products” (Ecodesign, energy labelling). As far as buildings are concerned, the federal responsibility is limited to its own buildings, although it does provide a forum for coordination between the Regions regarding their implementation of the EPB Directive. Concerning transport, its most relevant remaining competence is the national railway operator NMBS/SNCB. The federal level helps the Regions accomplish a modal shift by promoting home-work rail travel. All three Regions in Belgium focus on buildings, both residential and non-residential. They expect significant final energy savings by imposing mandatory energy building performance standards (MEPS), including the gradual introduction of near Zero Energy Buildings. This is not a surprise, given the low energetic quality of the housing stock in Belgium. However, the Flemish Region and the Brussels-Capital Region do not give a quantitative 2020 energy savings target for this particular measure. The Walloon Region expects a fairly modest 673 GWh final energy savings in 2020. The renovation of the existing building stock is encouraged by numerous subsidies (often called “premiums” or “bonuses”) in all three Regions and / or soft loans in the Walloon and Brussels-Capital Region. The Flemish Region is unique in that, as it relies on the Public Service Obligation (PSO) of the Distribution System Operators (DSOs) or “electricity grid managers”. This policy instrument is the only one the Flemish Region gives a clear target for, namely 14 630 GWh final energy savings in 2020. All three regions pay particular attention to “vulnerable households”, which often get additional aid in the form of subsidies, soft loans and / or energy audits. Also striking in the Walloon Region and the Brussels-Capital Region is the combination of energy and climate policies with social policies, whereby the authorities vigorously try to stimulate “green jobs” in the construction sector. Informative and awareness raising initiatives are to be found at all levels (Federal, Regional), although in the Brussels-Capital Region and certainly in the Walloon Region those measures seem to be very fragmented. Energy efficiency policies and measures for transport are weak, if not very weak. Basically, transport policies are limited to either agreements with the regional public transport operators on improving vehicle fleet efficiencies and interconnectivity; or informative measures combined with financial/fiscal instruments to promote purchasing cars that emit less CO2. In the Flemish Region and the Walloon Region ambitious mobility plans are still in the making.

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Table 1: Main policy instruments in building sector in Belgium

Type of policy instrument Name

Final Energy savings

2020 Target group

Rules & Influencing

mechanisms Implementation network

Regulatory Bel Ecodesign Directive See D1.1 Products Sanctions

The Federal Public Service (FPS) Health, Food Chain Safety and Environment - Policy Division of Products and Chemicals

Regulatory Fla EPB - MEPS Not defined Buildings - Residential & Non-residential

Penalties for non-compliance

The Flemish Energy Agency (VEA) and the Ministry of Environment, Nature and Energy (LNE) are responsible for the implementation of the Energy Performance of Buildings Directive (EPBD)

Regulatory Wal EPB - MEPS 673 GWh Buildings - Residential & Non-residential


The development authority is the Operational Directorate General for Spatial Planning, Housing, Heritage and Energy of the Walloon Public Service. The implementation authority is the Department of Energy and Sustainable Building

Regulatory Bru EPB - MEPS Not defined Buildings - Residential & Non-residential

Penalties for non-compliance Brussels Environment (IBGE/BIM)

Regulatory Fla EPB - EPC Not defined Buildings - Residential & Non-residential


The Flemish Energy Agency (VEA) and the Ministry for Environment, Nature and Energy are responsible for the implementation

Regulatory Wal EPB - EPC Not defined Buildings - Residential & Non-residential


The Department for Energy and Sustainable Building of the Walloon Region (SPW - DGO4) and the Ministry of Environment are responsible for the development and implementation. In the case of the construction of a new building, the EPB certificate is issued by the Regional authorities. In other cases, it is issued by an EPB certifying officer

Regulatory Bru EPB - EPC Not defined Buildings - Residential & Non-


The Government of the Brussels-Capital Region is responsible for the development. Brussels Environment

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2020 Target group

Rules & Influencing


residential (IBGE/BIM) is responsible for the implementation. When a new building is constructed, the EPB certificate is issued by the Brussels Environmental Authority (IBGE), in other cases by the EPB certifying officer

Regulatory Fla Mandatory Energy Audit n.r. Buildings - Non-

residential Not yet implemented

Regulatory Wal Mandatory Energy Audit n.r. Buildings - Non-

residential Not yet implemented

Regulatory Bru Mandatory Energy Audit Not defined Buildings - Non-

residential Sanction (no permit granted) Brussels Environment (IBGE/BIM)

Regulatory Fla Heating audit Not defined Buildings - Heating systems Sanctions Ministry of Environment, Nature and Energy (LNE)

Dissemination - Informative Bel Energy

labelling Not defined Products Awareness raising

The Federal Public Service (FPS) Economy, S.M.E.s, Self-employed and Energy - Directorate General for Quality and Safety - Regulation and Control Policy Division. The Federal Public Service for the Economy, SME, Middle Class and Energy - Directorate-General for Energy

Dissemination - Informative Bel

Energy guzzlers website

Not defined Products Awareness raising

Federal Public Service Health, Food chain Safety and Environment; Directorate-general for Environment (DG5) - Climate Change Section. Department of Product Policy and Chemical Substances

Dissemination - Informative Fla

Energy savings website

Not defined Multi-sectoral Awareness raising The Flemish Energy Agency (VEA)

Dissemination - Informative Fla Energy

consultants Not defined Multi-sectoral Aid in implementation + subidies

Flemish Energy Agency (VEA). NAV (architecten). Bouwunie (aannemers). Vlaamse Confederatie Bouw (aannemers). Samenlevingsopbouw (kansarmen).

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2020 Target group

Rules & Influencing


Gezinsbond. Komosie. Boerenbond Consult

Dissemination - Informative Wal Disseminatio

n measures Not defined Multi-sectoral Aid in Implementation

Public Service of Wallonia - Department of Energy and Sustainable Building (DG04) - Department for Energy and Sustainable Building

Dissemination - Informative Bru Energy

House Not defined Buildings - Residential (households)

Aid in implementation Brussels Environment (IBGE/BIM)

Dissemination - Informative Bru P.L.A.G.E. Not defined

Buildings - Residential & Non-residential

Aid in implementation

Burssels Environment (BIM/IBGE). Minister of Energy. Secretary of state for housing. Brussels Regional Housing Authority (SLRB)

Dissemination - Informative Bru

Sustainable Building facilitator network

Not defined Buildings - Residential & Non-residential

Aid in implementation Brussels Environmen( (IBGE/BIM)

Economic Bel Tax deductions Not defined Households (tax

payers) Incentive - fiscal Federal Public Service (FPS) of Finance

Economic Bel FRGE Not defined Buildings - Residential (low income households)

Incentive - soft loan Belgian Government. “Fund for the Reduction of the Global Cost of Energy”

Economic Fla

Public Service Obligations DSOs

14630 GWh Households & Companies. Focus low-income

Incentive - financial The Flemish Energy Agency (VEA). The competent authority are the electricity distribution system (grid) operators (DSOs) in the Flemish region

Economic Fla Property Tax Reduction Not defined

Buildings - Residential (households)

Incentive - subsidies Flemish Tax Agency

Economic Fla Home improvement Not defined Buildings -

Residential Incentive - subsidies

Housing Agency-Flanders (“Wonen-Vlaanderen”), more in particular the Housing department

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2020 Target group

Rules & Influencing


Grant (households)

Economic Wal Ecopack 267 GWh Buildings - Residential (households)

Incentive - subsidies + soft loan

The Social Credit Society (“la Société wallonne du crédit social”, SWCS) and the Housing Fund for large families in Wallonia (“le Fonds du logement des familles nombreuses de Wallonie”, FLW)

Economic Wal Energy premiums 3349 GWh

Buildings - Residential (households)

Incentive - subsidies

Public Service of Wallonia - Department of Energy and Sustainable Building (DG04)

Economic Wal PIVERT 173 GWh Buildings - Residential (low income households)

Incentive - financial The Walloon Housing Corporaton or “Société Wallonne du Logement” (SWL)

Economic Wal UREBA 74 GWh Buildings - Non-residential


Public Service of Wallonia - Department of Energy and Sustainable Building (DG04)

Economic Bru Energy premiums Not defined

Buildings - Residential & Non-residential

Incentive - subsidies Brussels Environment (IBGE/BIM)

Economic Bru The Brussels Green Loan (BGL)

Not defined Buildings - Residential (households)

Incentive - soft loan

Brussels Environment (IBGE/BIM) who is the manager of the Regional Energy Fund and the Regional Budget; and the banking institution CRÉDAL (an alternative credit cooperation)

Capacity building Networking

Fwb Build Up Skills BUSB Not defined Building sector

(professionals) Voluntary

The Belgian construction industry training fund (fvb-ffc Constructiv). The Scientific and Technical Centre for the Building industry (BBRI). The Flemish Energy Agency (VEA). the Public Service of Wallonia - Department of Energy and Sustainable Building (DG04)


Wal Employment-Environment Alliance

Not defined Multi-sectoral (building sector + all buildings)

Incentive - financial The Walloon Government, in 2012 represented by the Walloon Prime Minister, the Minister of Sustainable Development; the Minister of Employment and Training;

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2020 Target group

Rules & Influencing


and the Minister of Economy (after the elections of 2014, the names of the ministries have change). The (then) Ministry of Sustainable Development was entrusted with the EEA coordination


Bru Employment-Environment Alliance

Not defined Multi-sectoral (building sector + all buildings)

Incentive - financial

The Employment-Environment Alliance is an initiative of the government of the Brussels-Capital Region. The ministers, the social partners and the relevant public, non-profit and private-sector actors in the field are united

Promotion of Energy Services

Bel FEDESCO Not defined Buildings of the Federal Government

Incentive - financial

Belgian Buildings Agency. Fedesco is (was) a Belgian public / private funded energy service company. . By the end of 2015, Fedesco will be abolished, and the Belgian Buildings Agency will take over the tasks and staff of Fedesco

Promotion R&D Bel Sustainable

procurement Not defined Federal Government Promotion of BAT

The Public Procurement Agency of the Federal Public Service Personnel. The Public Procurement Agency of the Chancellery of the Prime Minister. Support is given by the Federal Institute for Sustainable Development (FRDO/DFDD)

Promotion R&D Bru

Model Buildings BatEx

Not defined Buildings - Residential & Non-Residential

Promotion of BAT + Subsidies

(Bruxelles environnement (IBGE/BIM): Administration de l'environnement et de l'énergie de la Région de Bruxelles-Capitale). Ministry of Energy and Environment. The activities are also supported by the Public Service Housing Associations [Sociétés Immobilières de Service Public, SISP], the Brussels Regional Development Agency (SDRB) and the municipalities through Sustainable Neighbourhood contracts

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Table 2: Main policy instruments in transport sector in Belgium

Type of instrument Instrument Ojbective Target group

Rules & Influencing mechanism

Implementation network

Planning Fla Mobility Plan expected 2016

Reduce / avoid travel

Not yet implemented

Not yet implemented Not yet implemented

Planning Wal Integrated appoach - in progress

Reduce / avoid travel Passenger - public Not yet

implemented Not yet implemented

Planning Bru Plan Iris 2

Reduce / avoid travel - reduce car traffic by 20% by 2018 compared to 2001

Passenger - car Aid in implementation Brussels Mobility. Policy Directorate

Regulatory Fbw Ecodriving Travel efficiency

Passenger – public road vehicles | Freight - trucks

Sanction The Federal Public Service Mobility and Transport

Regulatory Wal

Management contract with regional transport company SRWT

Vehicle efficiency + modal shift. Final energy savings by 2020 around 6 GWh

Passenger - public Sanction The Walloon Regional Transport Company (SRWT). The five (5) Walloon Public Transport Companies, abbreviated TEC

Regulatory Bru Company Transport Plan

Modal shift Passenger - car - commuters Sanction Brussels Environment (IBGE/BIM). Brussels Mobility,

Policy Directorate

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Regulatory Bem

Tax deduction for environmentally friendly cars

Vehicle efficiency Passenger car Incentve - fiscal Federal government. Federal Public Serivce (FPS)

Finance

Economic Bel Free transport for commuters

Travel efficiency Commuters Incentive - financial

The Federal government. The Federal Public Service (FPS) Mobility and Transport. The Belgian (national) railway company, in particular the NMBS/SNCB

Economic Bel

Tax deduction for home-work travel by bicycle

Travel efficiency Commuters Incentive - financial Federal Government Federal Public Service Finance

Economic Bel + Fla Blue-bike Travel

efficiency Passenger - public - commuters


Flemish and federal government, the National Lottery, Ethias and its shareholders NMBS (Belgian Rail), de Lijn (public transport in Flanders), SRWT/TEC (public transport in Wallonia) and FIETSenWERK

Economic Fla Green car registration tax

Vehicle efficiency Passenger - car Incentive - fiscal

The Flemish Tax Authority, Department collection and regulations. The DIV is the Department for Registration of Vehicles of the Federal Public Service Mobility and Transport

Economic Wal Eco-malus Vehicle efficiency Passenger - car Incentive - fiscal

The Department of Taxation of Vehicles of the Operational Directorate General (DGO7) of Taxation. The DIV is the Department for Registration of Vehicles of the Federal Public Service Mobility and Transport

Economic Bru Bruxell'air bonus

Travel efficiency

Passenger - car - car owners Incentive - financial

MIVB/STIB, Distance selling. DIV, the Department for Registration of Vehicles of the Federal Public Service Mobility and Transport. Cambio, car-sharing system. ProVelo, non-profit organisation

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Economic Fla Commuter Fund

Travel efficiency

Passenger - car - commuters


The Provincial Mobility Points, collaboration between the provinces and the Flemish Region. The Social and Economic Council of Flanders (SERV). The Policy Division of the Department of Mobility and Road Transport and Public Works

Disseminiation - Informative Bel

CO2 car guide & energy guzzlers website

Vehicle efficiency Passenger - car Awareness raising

Federal Public Service Health, Food chain Safety and Environment Directorate-general for Environment (DG5) - Climate Change Section + Department of Product Policy and Chemical Substances

Disseminiation - Informative

Fla Wal Bru

Eco-score Vehicle efficiency Passenger - car Awareness raising

The Environment, Nature and Energy (LNE) Department; the Walloon Air and Climate Agency (AWAC) and Brussels Environment (IBGE/BIM). Flemish Institute for Technological Research (VITO). Free University of Brusseels (BUV). The Department for Registration of Vehicles (DIV)

R&D

Bel Fla Wal Bru

ReTiBo Travel efficiency

Passenger – public road and rail transport


Federal Government, all three Regional Governments and all public transport operators (De Lijn, TEC, MIVB/STIB, NMBS/SNCB). The consortium THV Prodata Systems - Prodata Mobility Systems - Fabricom GDF Suez

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Technological trends Energy efficiency potential

McKinsey (McKinsey, 2009) estimates a theoretical energy savings potential of 71 million boe from the buildings sector by 2030. This represents 48% of the primary energy consumption expected by 2030 in the BAU scenario. 65 million boe would come from investment related measures, of which 51 million boe apply to residential buildings. The remaining 5 million ton boe of savings would come from behavioural changes.

Figure 1: Energy efficiency potential in the buildings sector in Belgium according to McKinsey

McKinsey (McKinsey, 2009) estimates a theoretical energy savings potential of 15 million boe from road transportation by 2030. Savings from investment-related measures amount to 12 million boe; savings from non-investment-related measures amount to 3 million boe. Energy improvement measures include conventional vehicle measures (technical improvements applied to conventional internal combustion engines), additional vehicle measures (mostly hybrid and electric vehicles), road infrastructure measures; and behavioural measures.

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Figure 2: Energy efficiency potential in the transport sector in Belgium according to McKinsey

Technologies and policy instruments

There are numerous policies in Belgium which, by means of regulation or subsidies, encourage the use of energy efficiency technologies in the “sustainable construction” or “green building” sector. Some of these policies and measures include:

• The amendment to the Regulation on Energy Performance of Buildings (EPB), by the Flemish Region, the Walloon Region and the Brussels-Capital Region;

• The (reduced) support for energy saving investments by the Federal Government. 40 % tax rebates on amounts invested in energy-saving work such as boiler replacements, solar panel installation, double glazing and other insulation work. As from the 2013 tax year, the tax rebate for low-energy, passive and zero-energy dwellings has been removed, along with all tax rebates for energy-saving costs, with the exception of loft insulation, where the rebate has been reduced;

• The “Energierenovatieprogramma 2020” in the Flemish Region; • The Marshall Plan 2.Green in the Walloon region; • The Employment-Environment Alliance (EEA) in the Brussels-Capital Region.

From 1 January 2014, it is no longer possible to build a house in Flanders without having a system to generate renewable energy. One of the possibilities to achieve this is to install a heat pump. It can be expected that the heat pump market in Belgium will benefit from the new regulation (European Heat Pump Association ehpa, 02.01.2014).

Market perspectives due to technological trends

The Belgian construction market is one of the country’s largest sectors. It is also a very diverse sector that includes many actors and specializations. There is a strong need for “green building” in Belgium, as the energy efficiency of its buildings is one of the lowest in Europe. The building sector has thus become an area where new

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technology plays an important role in terms of energy efficiency (CTCS, 2014). According to a survey conducted in 2010, some 70 % of the sector’s entrepreneurs stated that they were active in sustainable construction. According to a survey conducted by the Flemish Construction Union of 205 residential construction companies, insulation of roofs, walls and floors, air tightness, insulation joinery as well as energy-efficient facilities for heating, cooling and ventilation are always regarded as more important.

Source: IDEA Consult, 2010, p. 4

Figure 3: Number and share of “green building” aspects that are part of the activities of a company in the Belgian construction sector (multiple answers possible)

The Belgian building sector accordingly has a significant potential for “green employment”. In 2012, the 277 200 jobs in the construction industry represented 6,1% of all employment. Around 11% of those are likely to be “green”, primarily people employed within public transport infrastructure and energy efficiency. The Planning Bureau anticipates that 9 500 new jobs will be created in the sector by 2017. This should include an increasing proportion of green jobs (Plasman, 2013, p. 2). The renovation of existing buildings creates opportunities (Plasman, 2013 p. 5):

• In 2009, the “Central Economic Council” and the “National Labour Council” estimated that the replacement of 10 000 old boilers, the technical renovation of half of Belgium’s

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housing stock and the replacement of all single glazing with double glazing could create work for 34 700 people for one year;

• In 2011, the Belgian Construction Federation estimated that the energy renewal of existing buildings (excluding wall and floor work) should provide jobs for a total of 13 500 people over the next 10 years. More rigorous criteria will result not only in an increase in green jobs but also in a greening of existing employment, given that these regulations have an impact on the working methods and kinds of activities required by these jobs (technological modifications, choice of materials, replacing the maintenance of heating systems with that of a far more substantial ventilation system in passive houses, etc.).

The construction of new buildings likewise offers opportunities (CTCS, 2014):

• Passive construction has become a reality in the construction of new buildings. Across all sectors, today there are about two thousand passive buildings in Belgium, of which around 700 are certified. Just five years ago, passive construction was a rather marginal phenomenon, whereas now it is a recognized construction standard. A new set of rules governing the Energy Performance of Buildings for 2015 in the Brussels-Capital Region state that all new construction or major renovation projects must comply with the passive standard from 2015.

The building market in Belgium is highly competitive among the domestic producers and other suppliers. However, there are opportunities for exporters to Belgium in specific market niches in the Belgian construction materials market. The Belgian trade federation FEMA is interested in opening the Belgian market to competitive foreign building materials, including green building products. The Belgian construction market values high-quality materials and products that are often only imported from abroad. Belgium’s principle importing countries for building construction include Germany, Luxembourg, Spain and France (USA International Business Publications; 2012). Despite the Belgian tradition of building in brick, new materials have been introduced. More in particular, there is a growing interest in wood construction. Over the last ten years, the field of timber construction has boomed. Building from wood is not only healthy and environmentally friendly, but also ideal for meeting the high demands of energy-efficient buildings. A survey conducted by Houtinfobois covering the years 2011 - 2012 shows that more than 200 Belgian companies are putting up wooden buildings. The market share for timber construction was 8,1% in 2012, a growth rate of 36,7% over the previous year, despite the recession and the decline in the number of building permits granted. A large percentage (70%) of the wood used in construction in Belgium is imported. The species most commonly used for timber construction are: Douglas Europe or Oregon pine, from North America, spruce and pine. Competition is tough, especially for laminated flooring (there are a large number of Belgian suppliers) and wood (there are a large number of Scandinavian, Austrian, German and Russian suppliers). In total, 90% of the wood used in Belgium is of European origin. The main issues in timber construction currently relate to acoustics (especially bass), stability, fire safety, air tightness and construction joints. These elements can be a hindrance to the development of collective and multi-stage housing, which is a growth market in Belgium, so that design and implementation must be adapted to meet the relevant building standards (CTCS, 2014). Products and materials that demonstrate a high level of innovation and quality do well in the Belgian building sector. To attract interest in the Belgian market, the unique ecological character of a particular material, both in terms of its rarity and its innovativeness, is an important selection criterion. A new technology monitoring site run by the Confederation Construction provides current information about the latest ideas and innovative products in the Belgian construction sector (www.technologywatch.be) (USA International Business Publications; 2012). Exporters to and potential investors should pay particular attention to the standards in force in Belgium. All construction products are subject to the rules of free movement of goods within the European Union. Construction products must meet the standards associated with labels, safety (CE), methods of construction and energy (CTCS, 2014). Belgium excels in exporting and plays an important role as a transit and distribution centre for other member states of the European Union. In recent years, exports have accounted for 9% of

http://www.technologywatch.be/

21

average sales in the construction sector. In addition, 50% of these exports are carried out by the five largest Belgian construction groups (Canadian Trade Commissioner Services, 2014).

Buildings

RESIDENTIAL BUILDINGS

In Belgium, in 2011, there were 3 448 779 single family buildings and 160 787 multi-family buildings, for a total of 3 609 566 buildings. The residential building stock in Belgium is relatively old and not so compact.

Number of buildings

constructed

Single family dwellings Multi-family swellings Others

Total %

TH SDH DH TH SDH

Before 1900 282 766 163 563 135 160 11 335 127 251 720 075 16 From 1900 to 1918 183 445 68 869 42 050 7 986 48 099 350 449 8 From 1919 to 1945 296 869 141 396 88 255 15 310 90 228 632 058 14 From 1946 to 1961 170 668 174 034 145 433 24 795 110 326 625 256 14 From 1962 to 1970 71454 101 265 161 958 25 876 96 652 457 205 10 From 1971 to 1981 77 456 116 383 272 954 23 899 115 110 605 802 14 Post 1981 81 551 156 598 516 652 51 586 196 934 1 003 321 23 Total 1 164 209 922 108 1 362 462 160 787 784 600 4 394 166 100

TH = Terraced House; SD = Semi-detached House; DH = Detached House Source: BUILD UP Skills Belgium, 2013

Figure 4: Compactness and age of the residential building stock in Belgium (2011)

The average total surface area of a Belgian dwelling is 207 m²; the heated surface area is 101 m². The energy efficiency of residential buildings in Belgium is currently among the lowest in Europe. The total energy consumption of a home is accounted for mainly by consumption for heating, the ventilation or air conditioning system, hot water consumption and electricity (BUILD UP SKILLS, 2012, p. 16). Total housing-related energy consumption has remained more or less stable since the nineties, despite a rise in the number of families (+15% since 1990).

Type of dwelling <1946 1946-1970 1971-1990 1991-2005 >2005

PE NER-H PE NER-H PE PE NER-H PE NER-H PE Detached house 334 603 343 603 238 499 165 311 103 157 Semi-detached housing 295 477 300 486 221 463 145 278 92 144

Terraced house 231 385 234 384 167 368 119 232 77 125 Self-contained apartment 140 252 134 243 99 264 93 197 60 112

Non self-contained apartment 341 560 333 549 204 488 163 319 99 159

Source: BUILD UP Skills Belgium, 2013, p. 8 Figure 5: Net energy requirement for heating (NER-H) and primary energy consumption (PE) of

dwelling type (in kWh/y.m²)

Space heating accounts for 71,0% of the total heat demand, compared to 18,9% for domestic hot water and 0,10% for space cooling (CLIMACT, 2012). There are no cross-data linking types of dwellings with types of heating systems.

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The majority (84%) of the Belgian households in 2010 used individual (71%) or collective (13%) central heating. Central heating is preferred to local heating because of its ease of use. Some 61% of the natural gas fired boilers are either high efficiency or condensing boilers, compared to 34% for the fuel oil fired boilers. The share of heat pumps is marginal. Local electric heating accounts for 36% of the total local heating. In Flanders old central heating boilers have to be replaced by condensing boilers. Suppose a Belgian household would like to replace a more than 20 year old natural gas fired boiler with a seasonal efficiency of 65% and an annual natural gas consumption of 3 000 m³ with a natural gas fired condensing boiler. The investment costs (installations costs and VAT included) would be 3 816 EUR. With an efficiency of 95%, and a natural gas price of 5,54 eurocent/kWh, the household would save 525 EUR energy costs per year. The investments costs for an equivalent fuel oil fired condensing boiler would be 4 770 EUR (installation costs and VAT included), and with a fuel oil price of 5,68 eurocent/kWh the annual energy costs savings would be around 538 EUR. (Source: “energy calculator” at www.energiesparen.be)

Table 3: Import and export of heating systems in Belgium, 2012

EXPORT quantity

EXPORT value

IMPORT quantity

IMPORT value

Boilers for central heating … 42 441 410 … 218 437 020 Heat pumps other than airco … 7 922 730 … 35 037 890 Other electric space heaters 329 263 13 336 750 350 077 9 446 540

Source: EUROSTAT Belgium is a net importer of boilers for central heating and of heat pumps. Some 61% of the Belgian households use a combined heating – domestic hot water system. The efficiency of the DHW system thus depends on the efficiency of the space heating generator. Belgium is a net importer of stand-alone non-electric water heaters, and a net exporter of electric instantaneous water heaters. Brown and white appliance account for 80% of the total electricity consumption of appliances and lighting. White appliances consist of refrigerators/freezers, washing machines, clothes dryers and dishwashers.

Table 4: Electricity consumption for lighting and appliances in Belgian households in 2010

% kWh/household Brown appliances 41 1 744 White appliances 39 1 668 Lighting 13 556 Electric cooking 7 309 100 4 277

Source: CLIMACT, 2012 Some 59% of the households have a freezer, of which 65% with an AA+ or A++ energy efficiency label. Belgian households use refrigerators and freezers for cold storage, because of their ease of use. The prices of freezers on the Belgian market range from 97 EUR to 1 890 EUR, with an average price of 549 EUR. Prices of course depend on, amongst other things, the size, which varies from 30 litres to 495 litres. The average energy consumption is 212 kWh per year; or 1,43 kWh per litre per year, but with a large standard deviation. Belgium is a net importer of refrigerators / freezers.

http://www.energiesparen.be/

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Table 5: Import and export of refrigerators and freezers in Belgium, 2012

EXPORT quantity

EXPORT value

IMPORT quantity

IMPORT value

Combined refrigerators-freezers, with separate external doors 92 767 20 722 380 248 367 59 523 130

Household-type refrigerators (including compression-type, electrical absorption-type) (excluding built-in)

263 538 35 199 890 470 134 65 268 020

Compression-type built-in refrigerators 57 559 6 077 190 180 007 38 504 410 Source: EUROSTAT

Some 48% of the households have a dishwasher, of which 72% with an AA+ or A++ energy efficiency label. Belgian households use dishwashers because of their ease of use. Belgium is a net importer of both domestic and non-domestic dish-washers.

NON-RESIDENTIAL BUILDINGS

Data for the non-residential building sector in Belgium are virtually non-existent. There are some 91 930 non-residential buildings in the country.

Source: Retrieved from www.buildingsdata.eu

Figure 6: Breakdown of the non-residential building stock in Belgium by building type

The breakdown of heat demand in the Belgian non-residential building sector is highly tentative. Table 6: Breakdown of heat demand in the services sector

Energy service % Space heating 88 Domestic hot water 10 Space cooling 2 100

Source: CLIMACT, 2012 Domestic hot water has a share of 10% of the total fuel consumption. Space cooling has a share of 3,5% of the total electricity consumption. Likewise, the breakdown of electricity consumption in the tertiary sector is very uncertain.

Wholesale and retail trade 27 200 000

Offices 25 100 000

Educational buildings

20 100 000

Hospitals 7 030 000

Hotels & Restaurants 12 100 000

Sport facilities 4 010 000

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Table 7: Breakdown of electricity consumption for lighting and appliances in the services sector

Energy service % GWh per M€ added value Office lighting 27 0,0344 Street lighting 4 0,0045 Appliances 66 0,0845

97 0,1234 Source: CLIMACT,2012

Transport

In 40 years time (1970-2010) the length of railways has decreased by 15%; whereas the length of all roads increased by 64%. The length of motorways even increased by a factor of 3,6 in that same period.

Table 8: Length and density of transport infrastructure in Belgium

Length (km) Density (km per 1 000 m2)

1970 1980 1990 2000 2010 s.d. Railways 4 232 3 971 3 479 3 471 3 578 117 Inland navigation 1 553 1 510 1 513 1 534 1 532 50 All roads 94 218 124 589 140 241 147 121 154 575

of which motorways 488 1 251 1 666 1 702 1 763 58 Source: FEBIAC

Concerning passenger transport, commuting, socializing and shopping explain 70% of the reasons why Belgians make trips.

Table 9: Trip purposes in Belgium

Trip purpose % Commuting and work related 24 Education 9 Major shopping 20 Special events 5 Socializing 26 Dining out 3 Recreation 9 Joyriding 4 100

Source: CLIMACT, 2012 The respective inland passenger modal shares are 82% by private car, 9% by buses and coaches, 7% by railways and 2% by tram and metro (Towards an Energy Union Belgium, 2015, p. 7). The modal shares are based on passenger-km and refer to 2012. Belgians make use of cars, because of its ease of use. Public transport by bus and tram is regionalized in Belgium. The Belgian railway company NMBS/SNCB is an autonomous state company and as such it is within the federal competence. Passenger trains are for 93% electricity driven. The inland freight modal shares are 72% by road, 17% by rail, 6% by inland waterways and 5% by pipelines. The modal shares are based on tonne-km, and refer to 2012. Compared to the European average, Belgium reports a higher use of inland waterways in freight transport, given the existence of navigable rivers and canals in the country (Towards an Energy Union Belgium, 2015, p. 7).

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Table 10: Evolution of modal shares of freight transport in Belgium, in million tonne-km

2000 2001 2002 2003 2004 2005 2010 2011 Road – light freight 1 874 2 005 2 097 2 195 2 332 2 526

48 242 47 340 Road – heavy freight 47 280 49 576 48 737 47 646 50 042 50 157 Railways 7 674 7 081 7 297 7 293 7 691 8 130 6 268 - Inland navigation 7 313 7 732 8 148 8 302 8 459 8 720 9 071 9 251

Source: Planbureau and FEBIAC In 25 years time the total number of vehicles has increased by a factor of 1,5. The share of cars has decreased from 83% to 78%; whereas the share of light duty trucks (LDT) has increased from 5% to 9%. From 1985 to 2010 the share of diesel cars increased at the expense of petrol cars, in large part due to fiscal incentives from the Federal Government. Since 2010, the share of diesel cars has remained constant at around 62%. The share of hybrid, CNG and electric cars in Belgium remains marginal. The fuel efficiency of petrol and diesel cars has gradually improved.

Table 11: Evolution of the fuel efficiency of petrol and diesel cars in Belgium (in litre/100 km)

Year Petrol Diesel 1995 8 7 1996 8 7 1997 8 6 1998 8 6 1999 8 6 2000 8 6 2001 8 6 2002 7 6 2003 7 6 2004 7 6 2005 7 6 2006 7 6 2007 7 6 2008 7 5 2009 6 5 2010 6 5 2011 6 5

Source: Planbureau The automotive sector has always been one of the most important industrial sectors in Belgium. The country still hosts two car assembly plants, namely Audi in the Brussels-Capital Region and Volvo Cars Gent in the Flemish Region. The European headquarters, logistics centre, and technical R&D centre of Toyota Motor Europe are located in Belgium. In addition, there are assembly plants for buses (Van Hool and VDL Jonckheere) and trucks (Volvo Europa Trucks) (IEA, 2014, p. 97).

Table 12: Evolution of vehicles assembled in Belgium and exported

Year Assembly Export 1980 929 005 883 774 1985 1 034 864 955 564 1990 1 252 196 1 192 851

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Year Assembly Export 1995 1 272 534 1 218 799 2000 1 033 294 993 698 2005 926 528 868 801 2010 555 302 526 054 2011 596 461 575 233 2012 538 848 520 724 2013 503 504 480 848 2014 516 831 490 053

Source: FEBIAC The drop in production (assembly) after 2005 was caused by the closure of a large factory in the Flemish Region, Opel Antwerp. Ford Genk recently closed. The introduction or implementation of electric mobility in the region may help strengthen its economy (IEA, 2014, p. 97).

Table 13: Belgium fleet numbers of electric and fuel cell vehicles in 2013

Fleet Totals per 01 January 2014 Vehicle type EV HEV PHEV FCV Total Fleet

Bycicles (no driver’s license) a Motorbikes 170 0 0 0 421 061 Quadricycles 559 0 0 0 23 679 Passenger vehicles 1 205 25 493 590 1 5 505 332 Light commercial vehicles 430 0 0 0 641 225 Busesa 3 56 0 0 16 261 Trucksb 7 4 0 0 150 229 Industrial vehicles 1 482 0 0 0 249 207 Total 3 856 25 553 590 1 7 006 994

a = no official registration of bicycles; b = hybrid buses and trucks are sometimes categorized under non-hybrid vehicles; EV = Electric Vehicle; HEV = Hybrid Electric Vehicle; PHEV = Plug-in Hybrid Electric Vehicle; FCV = Fuel Cell Vehicle

Source: IEA, 2014, p. 105

Barriers The housing stock in Belgium on average is old; and both demolition and renovation (retrofit) rates are low (below EU averages). Although both the consumers (households) and the supply side professionals in Belgium still lack considerable knowledge as far as energy efficiency measures and policy instruments are concerned; (qualitative) research seems to indicate that more or better knowledge has little or no effect on energy-related behaviour. On the other hand, social networks matter a lot. Even the best advice of the most competent professional will not be accepted, if it is not corroborated by the opinions and experiences of relatives, friends, colleagues (even if these networks are not as competent as they claim to be). The “attitude-action gap” is very real in Belgium. Households or individuals aware of energy-related and environmental issues (e.g. energy efficiency, renewables, climate change), or who claim to be, in general do not behave in more (or less) energy efficient ways than others. Energy efficiency has low priority, simply because households (even the environmentally aware ones) are much more attracted to other attributes of the products (be it dwellings or vehicles), such as thermal, visual and acoustic comfort, aesthetics, safety and health. Last but not least, the financial barrier is real, especially for lower-income households. Although Belgium (or rather its regions) provide a large number of instruments to compensate the high initial investment costs, consumers are confused by the plethora of subsidies, premiums, tax rebates, etc.; or are simply not aware that they exist.

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The most typical policy obstacle for Belgium is the extreme complexity of its state structure. Energy-related policies continuously overlap. Competences are very fragmented, not only between the federal state and the regions, but also between various authorities within the different regions. Attempts to improve coordination are rarely successful. The “sixth state reform”, in progress, is not likely to improve matters. The administrative burden to obtain subsidies is too high and subsidies may not reach the right households. Energy-related taxes are low and do not provide much of an incentive. But households themselves clearly indicate that higher energy prices (internalisation of externalities) would steer them to more energy efficient behaviour. This should also be viewed from the perspective of Belgian stakeholders who see the multitude of subsidies more as “a tool of communication” rather than as an instrument to accomplish behavioural changes. Finally, the effectiveness of Belgian federal and regional energy-related policies is severely hindered by the lack of adequate monitoring and evaluation. The Belgian institutional framework is made up of three regions (Flemish Region, Walloon Region, and Brussels-Capital Region) and three communities (Flemish Community, French speaking Community, and German-speaking Community), which do not have exactly the same competences. Different competences related to energy policy have been allocated to the federal state and federated entities. Energy efficiency is with the regions. There are specific advisory bodies to co-ordinate policies across governments, for example ENOVER/CONCERE (“Energieoverleg/Concertation État-régions pour l’énergie”), for discussions between federal government and regional governments over energy-related matters (including energy efficiency). Belgian policies aiming at improving energy efficiency are to a large extent driven by guidelines decided at the EU level. Belgium’s contribution to the EU effort to improve energy efficiency are designed at the subnational level. There is no federal energy agency for energy efficiency. The federal government does intervene in setting standards and financing. There are thus de facto four Energy Efficiency Plans, a national one and three regional. Belgium is currently in the process of a new state reform aiming at transferring competences from the federal to the regional level (the so-called “sixth state reform”).

Buildings

The barriers given above are being assessed starting from those with the greatest impact on impeding the implementation of energy efficiency in the country.

Table 14: Assessment of barriers in the building sector

Impact of barrier Barriers

Big

Low priority – other attributes Attitude-Action gap Social interactions – credibility & trust Access to capital Structure of the building sector Low energy and transport related taxes Fragmentation of authority - interregional Fragmentation of authority - intraregional Discontinuity Adminstrative load Weak monitoring and evaluation

Medium Behavioural spill-overs Lack of dissemination of information

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Impact of barrier Barriers Badly presented information Information is too complex Inconsistent information Lack of knowledge about government support (imperfect information) Inability to estmate the magnitude of energy use (and related costs) (imperfect information) Lack of understanding how much energy (money) can be saved (imperfect information) Split incentives Principal-agent relationships Heterogeneity across end-users Hidden costs Adverse selection Lack of knowledge and education of building professionals Legal barriers concerning split incentives Legal barriers concerning financial and technical conditions to subsidies

Small

Bounded rationality Identity Risk – long payback periods and length of occupancy Old housing stock Urban legislation prohibiting façade insulation

The following table lists the main driving factors for implementing energy efficiency in the building sector.

Table 15: Barriers and policy instruments in the building sector

Types of barriers Country-specific barriers Scale Barriers addressed in current

policy instruments

Soci

al, c

ultu

ral ,

edu

catio

nal

Low priority – other attributes National

Bounded rationality National Attitude-Action gap National Behavioural spill-overs National Identity National Social interactions – credibility & trust National

Lack of dissemination of information National

Badly presented information National Information is too complex National Inconsistent information National

Econ

omic

Lack of knowledge about government support (imperfect information)

National Regional

Energy guzzlers website www.energiesparen.be website Energy desks Wallonia Energy House

Inability to estmate the magnitude of energy use (and related costs)

National

29


policy instruments (imperfect information) Lack of understanding how much energy (money) can be saved (imperfect information)

Regional Energy Performance Certificates Mandatory audit requirement Heating audit

Split incentives National Principal-agent relationships National Heterogeneity across end-users National

Hidden costs National

Access to capital National Regional Local

Federal personal income tax relief Promotion of RUE by electricity distribution companies Financial incentives encouraging RUE Energy Renovation Programme 2020 Building renovation subsidy Property tax reduction Ecopack UREBA Subsidies to improve Energy Efficiency of Public buildings Energy premiums Zero interest Brussels Green Loan FEDESCO

Risk – long payback periods and length of occupancy National

Inst

itutio

nal

Old housing stock Regional Energy Performance Requirements Energy Renovation Programme 2020

Adverse selection National

Lack of knowledge and education of building sector professionals

National Regional

Flemish support programme for energy consultants Build Up Skills Belgium Energ’ethic Communities Employment-Environment Alliance Examplary buildings Sustainable Building Facilitator Network Milieu- en Energietechnologie-innovatieplatform (MIP) Programme Mobilisateur ENERGYWALL

Structure of the building sector Regional

Low energy and transport related taxes

National Regional

Fragmentation of authority - interregional

National Regional

Fragmentation of authority - intraregional Regional

Discontinuity National Regional

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policy instruments

Adminstrative load National Regional

Legal barriers concerning split incentives

National Regional

Legal barriers concerning split incentives

National Regional

Legal barriers concerning financial and technical conditions to subsidies

National Regional

Urban legislation prohibiting façade insulation

National Regional

Weak monitoring and evaluation

National Regional

Transport

Table 16: Assessment of barriers in the transport sector

Impact of Barriers Barriers

Big

Low priority - Other attributes Attitude-Action gap Group influence Access to capital Lack of infrastructure

Medium Lack of knowledge (imperfect information) Heterogeneity of end-users

The following table lists the main driving factors for implementing energy efficiency in the transport sector. The pure institutional barriers are not repeated, as they are the same as for the buildings sector.

Table 17: Barriers and policy instruments in the transport sector


policy instruments

Social, cultural, educational

Low priority - Other attributes National Attitude-Action gap National Group influence National

Econ

omic

Lack of knowledge (imperfect information)

National Regional

Green Mobility Plan Action plan to promote use of public transport CO2 guide of the clean vehicle www.ecoscore.be website Provincial Mobility Desks Eco-driving ReTiBo Test project on passenger vehicles Proeftuin elektrisch voertuig

Heterogeneity of end-users National

Access to capital National Regional

Fiscal benefits for commuting by bike Fiscal benefits for commuting by car-

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policy instruments pooling Deductibility under corporate tax of expenses related to the use of company cars Tax exemptions for surplus value upon ship sale 80/20% system for public transport season tickets Green car registration tax Flanders Commuter Fund Ecobonus-Ecomalus Bruxell’air premium

Institutional Lack of infrastructure National

Cross Cutting Empirical research in Belgium on energy efficiency barriers is very limited and focused on residential buildings. No information about the existence of any empirical research addressing cross-butting barriers is at hand. In fact, energy literature in general tends to treat the buildings and transport sectors as two entirely different subjects. A similar remark applies to energy efficiency (and climate change) policies. Both fields are approached almost entirely separate from each other. The only exception is the “energy guzzlers” website, where consumers may find the most energy efficient (household) appliances and vehicles available on the Belgian market. The potential cross-cutting barriers identified by the experts for Belgium are:

• Social, cultural and educational

- Social interactions - credibility and trust (behavioural aspect of information dissemination)

- Low priority (of energy efficiency) - other attributes (are more salient) - The attitude - action gap (related to environmental values)

• Economic

- Imperfect information, more in particular lack of information - Heterogeneity across end-users - Limited access to or lack of access to capital

• Institutional

- Low energy and transport related taxes (i.e. energy prices do not internalize negative externalities)

- Fragmentation of authority Concerning “cross-cutting” energy policies, again it should be very clear: there are none in Belgium. All policies either address buildings or the transport sector, but never both at the same time. This is probably and at least partly the result of the “extreme fragmentation of authority”, both inter-regional and intraregional, and which was identified as one of the most important institutional barriers in Belgium (see HERON deliverable D1.1 country report for Belgium, D1.2 country report for Belgium and D2.1 country report for Belgium). There is but one policy instrument that addresses both the building sector and the transport sector, namely the federal informative “energy guzzlers” website. This is mainly because it was set up by the Federal Public Service Health, Food chain Safety and Environment, who are

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responsible for “product policies” rather than energy policies. The fragmentation of authority becomes even more apparent, when considering that the regions also have an informative website on environmentally friendly vehicles; totally disconnected from the energy guzzlers website.

Table 18: Assessment of cross-cutting barriers

Impact of barriers Description of barrier

High

Low priority of energy efficiency Attitude-Action gap Social interactions Lack of access to capital Energy prices that do not internalize externalities Fragmentation of authority

Medium Imperfect information Heterogeneity of end-users

Low No low impact barriers assessed

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Bulgaria Energy efficiency policies

Buildings

The experience and analysis of the already implemented policy instruments show that the most significant is the effect of the regulatory measures such as requirements for minimal insulation of new buildings, mandatory audits and certification, individual energy saving targets for public buildings, mandatory inspection of water heating boilers and air-conditioning systems. The individual billing and payment of energy costs for heating in multifamily residential buildings connected to district heating formally is an informative policy instrument with high impact, but the influencing mechanism of this measure is similar to that of the regulatory instruments. If devices for heat share distribution are not installed by the consumers, the energy for heating is calculated on the basis of the installed capacity of the radiators multiplied by the maximum specific consumption of the building, and is 2-3 times higher. Practically all consumers were obliged to install distribution devices and regulation valves. From the financial instruments, the Residential Energy Efficiency Credit Line (REECL 2015) was successful, but the great expectations are linked with the “National Programme for Energy Efficiency of Residential Buildings” (MRDPW 2015b) which will be the main mechanism for supporting the energy efficiency in households in the near future and provides 100% grants for multifamily buildings’ renovation. The national definition of NZEB has been introduced with the new Energy Efficiency Act (EEA 2015). All new buildings in the country constructed after 2020 shall meet the NZEB requirements.

Transport

The primary objective of the regulatory policy instruments in transport sector - mandatory speed limits and periodical or roadside technical inspections of the vehicles - is the safety of travel, but the energy savings from these measures are also substantial. The development of railroad and urban metro infrastructure are financed by the Structural and the Cohesion Funds of the EU trough the Operational Programme “Transport” 2007-2013 (OPT 2015). Research and development activities in the field of new technologies and innovations are supported by the National Action Plan for Promotion of the Production and Accelerated Penetration of Ecological Vehicles, including Electric Mobility 2012-2014 (Council of Ministers 2012). The Plan proposes introduction of financial instruments (tax exemptions, subsidies for purchase) for the take-off of the efficient vehicles. General conclusion is that the following typical problems are not addressed adequately in the national and local energy efficiency policy:

• Increased electricity consumption in public buildings per employed person; • Increased share of and fuel consumption by private cars which are the biggest consumer

in the transport sector; • Insufficient financing for renovation of residential buildings and increased use of firewood

in inefficient old stoves.

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Table 19: Main policy instruments in building sector in Bulgaria

Instruments Short list of

implemented policies and measures

Objective Target group and targeted objects

Rules and influencing mechanism (motivation or punish non-compliance)


Regulatory policy instruments

Requirements for minimal insulation

Reduce energy cost and improve thermal comfort in residential and public buildings

All new residential and public buildings

The requirements for improved thermal insulation of buildings are set in Ordinance №7 of 2004 on energy efficiency, heat and energy savings in buildings

The Ministry of Regional Development and Public Works is responsible for the implementation of the requirements for all new buildings

Dissemination and awareness instruments/Informative policy instruments

Individual billing of heat energy in multifamily buildings

Promote the regulation of heating and reduce energy consumption and costs

Residential multifamily buildings connected to district heating with vertical pipe system

If devices for share distribution are not installed by the consumers, the bill for heat energy is calculated on the basis of the installed capacity of the radiators multiplied by the maximum specific consumption of the building

Energy services companies install thermostatic valves and distributors on radiators and perform calculation of the bills paid by the clients of the district heating company

Economic policy instruments

National energy efficiency program for multifamily residential buildings

Reduce costs and improve thermal comfort in multifamily residential buildings

Multifamily residential buildings with more than 32 dwellings in all municipalities

The grants are received by owners’ associations and amount to the full cost of renovation. Exemptions are the single family houses and buildings with less than 32 dwellings

The Ministry of Regional Development and Public Works coordinates the program and supports the Local Administrations in the programme’s implementation. The Mayors of municipalities are responsible for the overall technical and financial administration of the renovation of the buildings located on their territories

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Capacity building and networking

Training of state and municipal employees in development of energy efficiency plans

Improve the capacity of the employees in the central and local administrations

Employees in the central government and local administrations

The plans and programmes shall be elaborated in compliance with the regional plans for development

In 2013 SEDA organized 6 educational seminars for the experts from state and municipal administrations

Policy instruments for the promotion of energy services

Individual energy saving targets for owners of public buildings

Improve energy efficiency of public buildings, reduce energy costs and promote energy services

Owners of public buildings with total useful floor area over 1000 m2

The obliged building owners are 243 municipal, 28 regional and 15 central administrations

The control over the implementation of the individual energy savings targets is executed by the Sustainable Energy Development Agency

Policy instruments for Research and Development and BAT promotion

Pilot program for public buildings with nearly zero energy consumption

Determine the national definition for buildings with nearly zero energy consumption

All public and residential buildings

Definition of NZEB a) energy consumption corresponds to class A; b) not less than 55 percent of the energy is from renewable sources produced on-site at the building level or near.

The Ministry of Regional Development and Public Works defines national parameters for buildings with nearly zero energy consumption and proposes national target for NZEB

Table 20: Main policy instruments in transport sector in Bulgaria



Objective1 (improve system, travel or vehicle

efficiency)

Target group and targeted

objects

Rules and influencing mechanism (motivation

or punish non-compliance)


Planning instruments

Development of the railroad infrastructure

Improve travel efficiency

Rail, waterborne and subway transport

Financing by EU funds Ministry of Transport, Information Technology and Communications and the network of the Operational Programme

1 Energy efficiency in the transport sector can be divided into system efficiency (reduce or avoid travel or the need to travel), travel efficiency (shift to more energy efficient modes) and vehicle efficiency (improve the efficiency through vehicle technology).

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efficiency)

Target group and targeted

objects

Rules and influencing mechanism (motivation

or punish non-compliance)


infrastructure “Transport”


Mandatory speed limits

Improve vehicle efficiency Road transport The traffic police imposes

fines on the offenders The implementation of the measures is a responsibility of the Ministry of Interior

Financial policy instruments

Programme for energy efficiency in the transport sector 2012-2020

Improve travel and vehicle efficiency

Rail transport, railway stations and infrastructure

Financing by EU funds

The responsibility for the development and implementation of the Programme belongs to the Ministry of Transport, Information Technology and Communications

Dissemination and awareness instruments

Training of drivers in economical driving

Improve vehicle efficiency

Drivers of cars, trucks and buses Training courses for drivers

The training courses are controlled by the Ministry of Transport, Information Technology and Communications

Policy instruments for Research and Development

National action plan to promote efficient vehicles

Improve vehicle efficiency Road vehicles Tax exemption, grants for

purchase of electric cars

Ministry of Transport, Information Technology and Communication, Ministry of Energy, Ministry of Economy

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Technological trends The Economic Potential - High Policy Intensity (HPI) scenario for building and transport sectors in Bulgaria during the period 2012-2020 represents an additional economic saving potential, which is estimated at 550 ktoe/a over the baseline scenario (Eichhammer, W. et al 2009).

Table 21: Economic saving potential of Bulgaria under HPI and Technical Potential scenarios 2012-2020, ktoe/year

Sector Economic HPI Technical Potential Transport 92 117 Households 295 451 Services 163 226

Source: http://www.eepotential.eu/esd.php Remark: This potential is the difference between the baseline scenario and HPI or technical scenarios for the period 2012-2020 (Eichhammer,W. et al 2009).

Buildings

The perspectives for the market penetration of energy efficient insulation and windows are based on the following assumptions: financial support with 75-100% grants for households and mandatory renovation of public buildings (MRDPW 2015a). The national definition of a “Nearly zero energy consumption building” was adopted with the last amendment of the Energy Efficiency Act (EEA 2015). According to it, the “Nearly zero energy consumption building” (NZEB) is a building that meets both of the following conditions:

a) energy consumption of the building, defined as primary energy, corresponds to class A of the scale of energy classes for the type of buildings;

b) not less than 55 percent of the energy consumed (supplied) for heating, cooling, ventilation, domestic hot water and lighting is energy from renewable sources produced on-site at the building level or near the building.

After 2018 all new public buildings, and after 2020 all new residential buildings must be NZEB. The consumption of biomass (firewood, wood pellets, chips etc.) is high and its share in the final energy consumption of households is 33% (2013), which is an increase of more than 3 times in less than 10 years. More than 70% of this biomass is firewood, burned in low efficiency old stoves (NSI 2015a). The market trends are directed towards accelerated penetration of efficient boilers for firewood, wood pellets and other solid fuels (coal). The share of households equipped with air conditioners increased from 5% in 2003 to 32,6% in 2014, and the main purpose of purchase is space heating and the reason is the suppressed electricity price in the country (NSI 2015c). It is expected that the fast penetration of air conditioners will continue. Currently 100% of the air conditioners are imported. Almost 100% of the dwellings in multifamily buildings connected to the district heating network have individual metering in the form of thermostatic valves and heat allocators (temperature integrators). These meters are currently being replaced by remote metering devices.

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The penetration of smart meters and remote metering devices has been limited until now and therefore import data are not available. Practically all already installed heat allocators and thermostatic valves are imported from Denmark, Germany etc. The boilers for straw are imported, but a substantial share of the efficient boilers for firewood and wood pellets are locally produced under license. The exact share of imported biomass boilers is not known. Straw boilers are imported mainly from Denmark and the wood and pellets boilers - from Germany and Czech Republic. Efficient lighting is quickly penetrating into both the residential and public sectors. Currently 100% of the lamps and devices in the country are imported from China and the EU. The existing technologies for improvement of energy efficiency in buildings, supported by policy instruments, include energy efficient windows, insulation of walls, roofs and floors. These technologies are cost effective in long-term but the initial investment is high – about 60 EUR/ m2 floor area, according to the assessment for the program “Support for energy efficiency in multifamily buildings” under the Operational Programme “Regional Development 2007-2013” (MRDPW 2011). This cost calculation includes the implementation of all four technologies. The payback period of the improvement of insulation of existing buildings depends on the initial state of the insulation, but usually exceeds 10 years. Often the cost includes structural reinforcement of the buildings and other measures that are not linked to energy efficiency, which significantly increases the amount of the necessary investment and, since this does not lead to energy savings - the payback period is further prolonged. Without policy support these technologies in the residential and public sectors will be limited. The principal policy instruments supporting the renovation of residential and public buildings, including the improvement of their insulation, are:

• “National energy efficiency program for multifamily residential buildings” (MRDPW 2015a)

The program is a financial policy instrument and provides subsidy of 100% for the energy audit and the implementation of energy efficiency measures. The total budget of the program is 500 million euro. This includes financing of all improvements in windows, insulation of walls, roofs and floors but also structural reinforcement of buildings and other repairs if necessary.

• “Support for energy efficiency in multifamily buildings” (MRDPW 2011) The project was launched in 2011 under the Operational Programme “Regional Development” and will be closed in 2016. It finances 100% of the energy audit and 75% (100% since 2015) of the implementation of the energy efficiency measures for renovation of multifamily residential buildings in 36 Bulgarian towns. The total budget is 25 million EUR.

• Residential Energy Efficiency Credit Line (REECL 2015) REECL facility provides loans and incentive grants through local participating banks to any household or Association of Owners in multifamily buildings to improve energy efficiency. The incentives include grants of 20%, 30% or 35% respectively toward the cost of the energy saving project once it has been completed. Applicants need to use eligible products and materials to qualify for the incentive grants.

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• Updated requirements for referent U values, W/m2K of the walls, floors, roofs and windows and building elements (MRDPW 2015b)

The requirements for the minimum insulation of buildings are regulated in Ordinance №7 of 2004 on energy efficiency, heat and energy savings in buildings (last supplemented in State Gazette, issue 31/28.04.2015). There is a methodology for calculation of minimum performance of the insulation depending on the type and characteristics of the elements of the construction – external walls, glazing, ceilings, floors etc.

• Mandatory annual renovation of 3% of the total area of the central government buildings (SEDA 2014a)

The measure implements the requirements of Article 4 of Directive 2012/27/EC according to which each Member State shall ensure that, as from 1 January 2014, 3% of the total floor area of heated and/or cooled buildings owned and occupied by its central government is renovated each year to meet at least the minimum energy performance requirements that it has set in application of Article 4 of Directive 2010/31/EU (Directive 2012/27/EC). The current price ranges and characteristics of the products and technologies presented below are result of BSERC’s market research.

• Gas boilers and gasification of households The penetration of this technology is limited as a consequence of the high price of natural gas as an energy resource compared to other resources and the Bulgarian level of prices. The price of natural gas for households in July 2015 was 366 - 456 EUR/1 000 nm3 or 42 - 50 EUR/MWh including VAT (EWRC 2015)2. The price of a condensing gas boiler with capacity of 24 - 40 kW is 1 200 - 1 800 EUR. In 2013 natural gas constituted only 2% (NSI 2015a) of the final energy consumption of the households in Bulgaria. The principal policy instrument supporting this technology is the Residential Energy Efficiency Credit Line, which provides grants of up to 20 - 35% which is not enough to make it attractive to consumers (REECL 2015).

• Biomass fuelled room heaters, stoves and boiler systems The price of firewood is about 20 EUR/MWh and of wood pellets 27 - 30 EUR/MWh. The price of high efficiency heating boilers of 25-44 kW fuelled with firewood is 1 500 - 2 200 EUR and of 22-52 kW capacity fuelled with wood pellets 2 200 - 3 000 EUR. The efficient biomass boilers are supported by grants through the Residential Energy Efficiency Credit Line (REECL 2015).

• Solar thermal systems The price of conventional solar collectors is 80-110 EUR/m2 and of heat pipe collectors - about 150 EUR/m2. The penetration of the technology is supported by the Residential Energy Efficiency Credit Line with grants.

• Air conditioners for space heating and cooling The price of the electricity for households is about 0,09 EUR/kWh (day tariff including VAT). The price of an efficient air conditioner with Seasonal Condition of Performance (SCOP) of 4,06 and heating capacity of 4,8 kW is 430 EUR. The penetration of efficient air conditioners is supported by the Residential Energy Efficiency Credit Line in the household sector and the Rules for Green Public Procurement in the service sector.

2 All prices of fuels and energy are taken from EWRC (EWRC 2015)

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The Executive Director of the Sustainable Energy Development Agency (SEDA), jointly with the Executive Director of the Public Procurement Agency (PPA) issues rules for determining the obligatory criteria for the energy consumption of equipment and transport means, subject to supply through public procurement.

• Space heating regulation and individual billing of heat energy from district heating in multifamily residential buildings

Individual distributors and thermostatic valves for heat energy regulation are installed practically on all heating radiators in the residential buildings connected to district heating. If devices for share distribution are not installed by the consumers, heating energy is calculated on the basis of the installed capacity of the radiators multiplied by the maximum specific consumption of the building. Individual billing and payment of heating energy costs in multifamily residential buildings connected to district heating is stipulated in the following documents:

- Energy Act (EA 2006); - Ordinance on regulating the prices of heat supply (MEE 2008); - Ordinance № 16-334 since 06.04.2007 on district heating (MEE 2015).

• Buildings with nearly zero energy consumption In Bulgaria, there is a pilot program for nearly zero energy consumption of public buildings. The measure is part of the activities for determination of the National Target for buildings with nearly zero energy consumption. In the first stage a definition of the national parameters for buildings with nearly zero energy consumption was elaborated. A simple definition of “Nearly zero energy consumption building” was adopted with the new Energy Efficiency Act (ЕЕА 2015): “Nearly zero energy consumption building” is a building that meets both of the following conditions:

a) energy consumption of the building, defined as primary energy, corresponds to class A of the scale of energy classes for the type of buildings;

b) not less than 55 percent of the energy consumed (supplied) for heating, cooling, ventilation, domestic hot water and lighting is energy from renewable sources produced on-site at the building level or near the building.”

The second step will include the setting of a national target for NZEB.

• Efficient lightning The typical energy saving bulb in households is 19 W, 900 lm and costs 3-4 EUR (including VAT), and street lighting LED Street Light, 18 W, 2 100 lm and price of 30 - 40 EUR. The price of the electricity is about 0,09 EUR/kWh. The penetration of efficient lighting is supported by the “Program for street lightning modernization in the service sector”, which is set as a measure in the NEEAP and launched in 2012 under the Rural Development Programme of the Ministry of Agriculture and Food (SEDA 2014a). The program foresaw renovation of street lightning in municipalities with new energy efficient lamps from the highest class (at the moment of the measure implementation) and equipped with lighting control systems.

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Transport

In 2013 the consumption of biofuels and natural gas was respectively 4,3% and 3,2% of the final energy consumption of the road transport (NSI 2015a). The penetration of natural gas in motor vehicles is stimulated by its low price compared to other motor fuels. Natural gas is used in retrofitted existing cars. The natural gas and methane stations and the installations for retrofitting cars are imported mainly from Germany and Italy. The wide utilization of biofuels is promoted through introduction of obligatory share in the transport fuels stipulated in the Energy from Renewable Sources Act (ERSA 2014). The development of public transport, including metro transport in the capital city - Sofia relies on financing from European funds. The modern and efficient public transport vehicles are imported mainly from Germany and the Czech Republic. Also, German technology is used for the building of the underground transport infrastructure used. The perspectives for the market penetration of energy efficient vehicles will be based on the approach that will be taken for their promotion and the trends in motor fuel prices.

• Efficient vehicles - cars, busses, etc. The efficient vehicles are supported by the “National action plan to promote production and accelerated entry of environmental vehicles including electrical mobility in Bulgaria 2012-2014” (Council of Ministries 2012). The efficient and environment friendly cars in the scope of the plan are:

- electric vehicles - vehicles that use electric motor with full power and do not have an internal combustion engine;

- hybrid cars - vehicles that use two or more power systems of different types - an electric motor and an internal combustion engine (petrol or diesel);

- vehicles - passenger cars emitting CO2 emissions to 120 g/km; vans - up to 175 g/km; buses - requirements EURO V.

The Plan proposes the following approaches for the increase of the use of efficient vehicles:

- Exemption from annual tax; - Lower fees for initial registration; - Exemption from (or relief on) tolls for the use of road infrastructure; - Grant for the purchase of new green vehicles.

As of the end of 2014, the number of electric cars was 497 and of the hybrid cars – 1 031 (ME & MOEW 2015).

• Biofuels and compressed natural gas in transport The consumption of biofuels in transport sector in 2013 was 104 ktoe (NSI 2015b) and of natural gas 79 ktoe (NSI 2015a). This was 4% and 3,2% respectively of the final energy consumption of the road transport. The price of compressed natural gas (CNG) is about 0,8 EUR/kg and the consumption of a personal car is 5,5 EUR/100 km. The price of the CNG installation on a car is 500-600 EUR. Biodiesel and bioethanol are promoted by mandatory shares in the fuels for transport introduced in the Energy from Renewable Sources Act (ERS 2015). Compressed natural gas is supported with excise and tax relief as a clean fuel (EDTW 2011).

• Modal shift to more energy efficient interurban and urban transport

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The Operational Programme “Transport” 2007-2013 (OPT 2015) is one of the seven operational programmes in the Republic of Bulgaria, financed by the Structural and the Cohesion Funds of the EU. The goal of OPT is the development of railway, road and waterway infrastructure, expansion of metro transport and development of intermodal transport. Under the Operational Program "Regional Development 2007-2013” (OPRD 2013) projects for the modernization of public transport were conducted in seven major cities in Bulgaria: Sofia, Burgas, Plovdiv, Varna, Stara Zagora, Ruse and Pleven. Their main objective was to ensure accessibility and cohesion through efficient and sustainable urban transport systems, including the use of intelligent transport systems.

Barriers Building and transport sectors in Bulgaria possess vast potential for energy saving measures implementation. Poor energy efficiency performance in those sectors is mainly due to keeping up of low energy prices for a long time period. The easily accessible energy resources have driven to high intensity in all energy related processes. In the last years a progress in decreasing the energy demand has been made and the EU energy directives have been fully transposed into the Bulgarian legislation along with the development of many strategies, action plans and information campaigns at national and local levels.

The energy policy

The responsible body for energy policy elaboration in Bulgaria is the Ministry of Energy (ME). The Sustainable Energy Development Agency (SEDA) is the executive authority within the Ministry of Energy, which monitors and evaluates the implemented by the obligated parties measures and supports the development and actualization of the strategies and action plans. In 2011 Bulgaria adopted an Energy Strategy until 2020, which identifies the resources for the promotion of energy efficiency in the country. It corresponds to the current EU energy policy framework and reflects the global trends in energy efficiency technologies. The strategy aims at the overcoming of the following major challenges (MEET 2011):

• Very high intensiveness of GDP. The energy needed for production of one unit GDP is higher than the EU average by 89% (considering the parity of purchasing power).

• Dependency on fuel imports. Bulgaria imports more than 2/3 of its gross energy demand, mainly from the Russian Federation.

• Need of securing the country’s sustainable development and reducing greenhouse gases emissions.

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Source: SEDA 2014

Figure 7: Primary and final energy efficiency in Bulgaria, 2000-2012, kgoe/BGN, 2005

The main priorities set by the Energy Strategy can be grouped into five main directions (MEET 2011):

• To provide conditions for securing the energy supply; • To achieve the targets set for energy produced from renewable sources; • To increase the energy efficiency; • To establish a competitive energy market and to elaborate appropriate policy

framework to meet the present and future energy needs; • To protect the consumers’ rights and interests.

The National Energy Efficiency Action Plan (SEDA, 2014) sets the national goals and obligations for increasing the energy efficiency for the period 2014-2020. It includes horizontal measures and measures for energy efficiency in all sectors (buildings, public bodies, end-use energy efficiency (including in transport and industry), promotion of efficient heating and cooling, and energy transformation, transmission, distribution and consumption).

Actors involved in energy efficiency targets attainment

The parties, obligated for reaching the targets are the energy and fuel distributors and/or retail sales companies, which meet the following criteria (ME 2015a):

(1) Sales of energy to final users in the previous calendar year greater than the equivalent of 75 GWh (6,45 ktoe) p.a. and includes: - Traders selling electricity to final energy users in amounts exceeding 75

GWh/y; - Transmission companies selling heat energy to final users in amounts

exceeding 75 GWh/y; - Natural gas traders selling more than 8 million normal cubic meters p.a. to

final energy users; - Liquid fuel traders selling in amounts exceeding 6,5 thousand tonnes p.a.,

excluding transport fuels, to final energy users; - Solid fuel traders selling in amounts exceeding 13 thousand tonnes p.a. to

final energy users; (2) Employers with more than 10 people employed in the previous year;

0,552 0,537 0,506 0,489

0,445 0,442 0,429 0,391

0,364 0,337 0,342

0,361 0,343

0,242 0,236 0,227 0,231 0,214 0,209 0,204 0,189 0,174 0,164 0,168 0,171 0,17

0

0,1

0,2

0,3

0,4

0,5

0,6

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

FEC

PEC

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(3) Companies with turnover and/or balance sheet position at the end of the previous year of more than BGN 3,9 million in respect of energy trading.

The obligations scheme does not include the distributors and retailers of fuels for the transport sector. The energy efficiency policy defined in accordance with the requirements of Directive 2006/32/EC is based on the fulfilment of the individual energy-saving targets as a leading factor for the successful implementation of energy efficiency measures. (SEDA 2014) Article 10 of the Energy Efficiency Act states that the national energy saving goal is allocated in the form of individual energy saving targets to three groups of obligated parties (ME 2015a):

• Energy traders; • Owners of state and/or municipal buildings in use with total floor area of more

than 1 000 m2 (since 12 March 2013 the threshold became 500 m2 and after 9 July 2015 the certification threshold is reduced to 250 m2);

• Owners of industrial systems consuming more than 3 000 MWh/year. The obliged parties should attain the overall target of 5 984 GWh (516 toe) reduction, which accounts for 82% of the overall national energy saving target. The remaining 18% are expected to be achieved by final energy users, who are not targeted by obligation (ME 2015a). Individual energy savings targets for owners of buildings with a total floor area of more than 1 000 m2 are within the aggregate amount of 521,03 GWh. (ME 2015a)

Breakdown of energy use by sectors, thousands of toe

The table below provides a historical overview of the final energy consumption in the country by sectors.

Table 22: Final energy consumption in Bulgaria by sectors, thousands of toe

Sectors 2006 2007 2008 2009 2010 2011 2012 2013

Industry 3 689 3 831 3 451 2 443 2 549 2 693 2 576 2 579 Transport 2 801 2 678 2 832 2 772 2 738 2 722 2 871 2 604 Households 2 183 2 073 2 125 2 149 2 262 2 391 2 377 2 257 Agriculture 295 265 186 183 184 204 198 193 Tertiary 911 899 958 939 987 1 040 1 021 964

Source: NSI 2015a The next table presents the shares of the different means of transportation in the energy consumption by the sector.

Table 23: Actual and forecasted share of means of transportation in Bulgaria

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 Transport

sector Gpkm (Giga passenger kilometre )

Passenger transport activity

47,7 56 65,5 68,3 71 73,8 76,8 79,4 82 83,7 85,5

Public road transport 14,6 13,7 10,6 10,9 11,2 11,5 11,9 12,2 12,5 12,6 12,7

Private cars 27,5 35,8 47,9 49,1 50 50,9 51,8 52,9 53,7 54 54,1

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2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 and motorcycles Rail 3,9 2,8 3 3,4 3,8 4,1 4,4 4,5 4,7 4,8 4,9 Aviation 1,7 3,6 3,9 4,8 6 7,2 8,7 9,8 11,1 12,3 13,7 Inland navigation 0 0 0 0 0 0 0 0 0 0 0

Freight transport activity

Gtkm (Gigatonne kilometre)

Trucks 6,4 14,4 19,4 20,6 21,8 23,1 24,5 26 27,5 28,4 29,3 Rail 5,5 5,2 3,1 3,5 4 4,6 5,2 5,5 5,8 6 6,2 Inland navigation 0,3 0,8 1,2 1,4 1,5 1,6 1,8 1,9 2 2,1 2,1

Source: Capros et al 2013 Usually the energy demand in transport reflects sales of fuels at the point of refuelling, which do not represent automatically the regional consumption. Road freight transport activity is defined at national level, due to the lack of sufficiently long time series of territorially defined data. These differences should be borne in mind when comparing energy and transport figures. This applies in particular to transport activity ratios, such as energy efficiency in freight transport, which is measured in tonnes of oil equivalent per million tonne-km. (Capros et al 2013). Table 24: Energy intensity of the economy in Bulgaria, toe for 1000 EUR GDP (2005 = 100)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

0,854 0,853 0,827 0,751 0,701 0,647 0,655 0,690 0,658 0,603

Source: NSI 2015a

Buildings

The key findings relating to the barriers in the Bulgarian building sector could be summarized, as follows:

• The lowest in the EU electricity prices have led to denial of energy efficiency improvements in the sector. Consumers often do not find attractive such investments due to the long payback period.

• The world financial crisis has conceived uncertainty in consumers for investments at all. The lack of finance affects these projects most because of the long payback period.

• There is a serious lack of information about the incentives for such projects. Both engineering consultants and consumers need additional knowledge on these opportunities.

• There is a serious need of demonstration projects. People tend to trust on “their eyes” and friends’, colleagues’, relatives’ opinion.

• The need of wider approval for energy efficiency improvements in multi-family housings leads to lack of initiation of projects for increasing the energy performance of buildings.

• The Bulgarian municipalities “suffer” from lack of sufficient data for energy planning. No energy data sets have been stored for better planning purposes. Only municipalities, which have adhered to the Covenant of Mayors initiatve,

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have collected historical data. Few more have started on their own seeing the positive sides.



Big

Lack of finance High costs Distortion of energy prices Strong dependency on the neighbours in multi-family housing No sufficient energy data for planning Long administrative procedures Insufficient marketing of EE programmes No incentives for EE projects Financial risk

Medium

Low level energy prices Energy tariff system structure not reflecting correctly the cost of energy and carriers Shortcomings in the legislation with regard to common property Low level of demonstration projects for nZEBs Lack of trust in ESCOs Frequent ungrounded change of regulatory framework Insufficient national statistics Poor regional and municipal energy statistics Lack of social approval Lack of power for initiation of EE actions Neglecting the EE needs Lack of information Lack of capacity

Small

Historical preservation Mistrust in the institutions and governmental system Split of incentives in house renting sector Not efficient selection of means and source for heating Hidden costs

Transport

Energy efficiency has had a minor role in the Bulgarian national and local transport policies and strategies over the last 20 years, as energy production and housing sector were in the main focus for energy efficiency improvements and emissions’ reduction. Growing economy, urban sprawl and relocation of jobs has driven increased demand in road transport and private car use, resulting in the overall decrease in transport energy efficiency since 2000. This demonstrates that policies in the transport sector have not addressed energy efficiency sufficiently and there is a lack of systematic policy packaging and of research regarding barriers and their tackling. Transport sector’s high energy and emissions saving potential was first recognized in Sustainable Transport Report in 2011, which was further elaborated in the preparation of National Energy Strategy 2030+ in 2012-2014. The National Transport Strategy 2014-2020 sets clear energy efficiency targets for transport sector.

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Main barriers are related to lack of fiscal measures to improve fuel efficiency of vehicle fleet, of long-term funding schemes for developing public transport and cycling, of integrated urban and transport planning and low density of population. Many of the listed barriers in buildings and transport sectors have been already addressed through existing policies. It however, will take time and appropriate supporting financing to overcome and reach higher energy efficiency targets set in national strategies and action plans.



Big

Lack of finance Lack of support for rail transportation Low economic activity of the regions Inefficient urban transport infrastructure Inefficient transport structure Lack of electric mobility infrastructure Lack of economic stimuli for purchasing electric/hybrid vehicles

Medium

Matter of social status Avoiding railway transportation Lack of information on green transportation Lack of information on the electric mobility Lack of Sustainable Urban Mobility Plans Not well developed first class road network

Small Inefficient transport intercity infrastructure Lack of regular transport services in smaller settlements

Cross Cutting After the conducted research it became clear that both sectors – buildings and transport, have only a few cross-cutting and more sector-specific barriers. The identification of the common barriers will allow the setting of common objectives for their overcoming. The identified cross-cutting barriers have high and medium impact on the energy efficiency. No crossing points have been observed between the barriers with low impact. The cross-cutting barriers are: Medium impact:

• Buildings:

- Lack of information

• Transport: - Lack of information regarding green transportation

High impact:

• Buildings:

- Lack of finance - High costs - No incentives for EE projects

• Transport:

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- Lack of finance - Lack of economic stimuli for purchasing electric/hybrid vehicles

The lack of finance and of economic incentives affects both sectors and has the highest influence on the energy efficiency in the country. These are closely connected with the poor financial possibilities of the greater part of the population, which cannot afford investing in EE improvement of their properties and in efficient and sustainable vehicles. Although these barriers are addressed by a number of national action plans and various financial instruments, still they are not enough to change the situation. The energy efficiency legislation should decisively target the barriers through cross-sectoral framework implementation. On the other hand people usually do not sufficiently trust the funds, because of the corruption practices and the need “to know someone” if you want your job to be done properly. This is equally in force for the both sectors. The policies and their instruments need a proper execution and appropriate control measures should be put into practice. Another crossing point refers to the lack of information regarding climate change and the influence of human behaviour on the environment. The lack of information is assessed at having medium impact on the EE in the country. The stated cross-cutting barriers’ importance shows the need of common policy framework implementation, which will support and effectively inspire the initiation of energy efficient activities by all stakeholders.



High

Lack of finance (transport sector) Lack of economic stimuli for purchasing electric/hybrid vehicles Lack of finance (building sector) No incentives for EE projects (building sector)

Medium Lack of information (buildings) Lack of information on green transportation

Low n/a

Table 28: Cross-cutting barriers and relevant policy instruments

Types of barriers

Cross-cutting barriers

Building sector: current policy instruments

Transport sector: current policy instruments

Social, cultural and educational

Lack of information

National policy framework on EE, Local/Regional policy framework on EE, SEAP (Covenant of Mayors)

National policy on EE in transport sector

Economic

Lack of finance

National Energy Efficiency Action Plan, EU funds, National/Local budget, other financial mechanisms, grants, subsidies


High costs


-

No incentives

National Energy Efficiency Action Plan, EU funds,

National Action Plan on Climate Change

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Types of barriers

Cross-cutting barriers

Building sector: current policy instruments

Transport sector: current policy instruments

for EE projects

National/Local budget, other financial mechanisms, grants, subsidies

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Estonia Energy efficiency policies

The main six policy instruments in the Estonian building sector are: energy labeling of buildings; energy audit, advice and assistance; the credit and export guarantee fund (KredEx Fund); establishment of energy savings competence centre under KredEx; pilot projects implemented to test zero-energy buildings; and state support schemes implemented by the Environmental Investment Centre (EIC). Perhaps the most influential policy instrument in Estonian building sector today is the energy labeling of buildings which is an obligatory action for all the new buildings built as of January 1st 2009 onward. Another important instrument is the establishment of the Foundation KredEx in 2001 and its funds and services offered for the renovation of apartment blocks explicitly. The multi-level policy process in building sector is the Tallinn city project „Fassaadid korda“, offering self-financing support (in addition to KredEx funding) to the apartment associations in order to help them renovate their apartment buildings. It is only since 2010 that energy efficiency policies have been introduced in Estonian transport sector more explicitly. One of the key roles in the policy instruments belongs to the EU structural funds that have enabled funding of national, regional and local public transport and cycling infrastructure development (new passenger trains on commuter and long-distance lines, partly new trams and tramline in Tallinn, new rolling stock for regional bus lines, investment scheme for developing multi-modal access to railway stations and cycling infrastructure in major cities) and R&D activities in the Smart City Cluster (developing mobile services for public transport management). In July 2015 increasing fuel excise duty by 10% annually over the next three years was decided by the Parliament, having an estimated 5-7% energy saving impact on the transport energy consumption. New cars registered in Estonia tend to rate as the least fuel efficient cars compared to other EU member countries – therefore Estonian Ministry of Environment is introducing an energy labelling system for passenger cars from 2016 onwards in order to raise awareness of consumers. As energy efficiency is not a primary goal for all of these policies and the energy saving impacts are either not thoroughly assessed or monitored for these policies, there is only very little data available for energy efficiency impacts of these transport policies.

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Table 29: Main policy instruments in building sector in Estonia

Status quo Objective Target group and targeted objects

Rules and influencing mechanism (motivation or punish

non-compliance) Implementation network

Regulation Energy labelling of buildings

To be a tool for the flat owners to know what electricity and heat bills will be To promote the use and ownership of energy efficient homes

From 2009 onward, the energy label must be given to all new buildings or their parts (except for those which have been recognized in accordance with the “Law on National Heritage”), including apartments which are to be sold or rented after January 1st, 2009

The influencing mechanism of having an energy label on a building is quite rigid since it is an obligatory action from 2009 onward, thus non-compliance is not allowed. In addition, all EU Directives and ambitions to reduce energy emissions set further motivation for the government of Estonia and other local governments, to implement and have control over energy labelling

Energy label is issued by entrepreneurs having corresponding legal relationship with a specialist who can prove his\her competence with a professional certificate. The awarding of qualifications for energy auditors and energy label publishers is done by the Union of Estonian Heating and Ventilation Engineers after successful completion of the vocational training provided by the Open University of Tallinn University of Technology

Transparency and information

Energy audit, advice and assistance

To provide technical and energy condition of the building, promote energy awareness Assessment necessary for issuing of energy label

Energy audit could be ordered by all owners who are interested in improving the energy efficiency of their buildings or who want to know the technical condition of their property

Issuing of an obligatory energy label might be a good motivation behind ordering an energy audit first. In addition, knowing what financial savings could be achieved, might as well motivate the implementation of EE measures

Energy audit can be performed by any entrepreneur who has certain qualifications for it. The issuing of energy audit is led by a specialist who complies with the rules set in paragraphs 1 and 2 of §47 of the Building Act

Incentives and financing

The Credit and Export Guarantee Fund (KredEx Fund)

To provide grants for installing renewable energy generation installations in private households (solar panels, wind generators, heat pumps, etc.), for energy

Anyone wishing to renovate his\her home can apply for KredEx fund, however, apartment associations have been one of the main stakeholders

The reconstruction grant is explicitly designed for associations and communities, as well as for private households wishing to reconstruct their apartment buildings. In order to decrease the share of required self-financing, the grant may be combined with a KredEx loan. Aging

Applications to the bank or directly to KredEx (in case sufficient self-financing is there or loan is not needed) may be submitted after the mplementation of energy audit

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refurbishment, as well as guarantees for loans for reconstruction of multi-storey apartment houses to improve their energy efficiency

housing conditions and increasing energy prices most probably are the main influential factors for people to renovate their homes, and thus apply for the grant


Energy Savings Competence Centre of KredEx

To promote smart energy saving measures in apartment buildings To administer information concerning the energy saving topics for all apartment buildings To find common grounds between different parties related to the further use of energy consumption development in buildings in Estonia

Apartment associations Apartment cooperatives Communities of apartment owners Housing maintenance managers

Raising awareness of residents on energy efficiency measures by KredEx Energy Savings Competence Centre is done through different courses, seminars and campaigns, as well as through mass media channels (radio, TV)

Energy Saving Competence Centre itself (created under Foundation KredEx) with its 2 staff members.

Promotion of energy services

Pilot projects for zero-energy buildings

To understand and study the potential of fulfilling the goal of the European Union Directive 2010/31/EU.

All EU MS countries who have formally established the requirements set in Directive 2010/31/EU Architects, builders, scientists , electrical engineers, and other stakeholders engaged in the decision making processes

Obligations set by the EU and different guidance reports

All EU MS countries who have formally established the requirements set in Directive 2010/31/EU Architects, builders, scientists , electrical engineers, and other stakeholders involved in the decision making processes

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RD&D and BAT promotion

State supported schemes implemented by the Environmental Investment Centre EIC

To ensure maximum efficiency for the benefit of the Estonian people, a healthy living environment, and resource-efficient development of the country To increase environmental awareness

The target group for EIC grants involves a wide range of applicants from all over Estonia who wish to apply for projects related to the environment

EIC accepts applications twice a year, with the deadline for the applications announced one month before the submission

EIC grants and loans are financed from four separate sources: the environmental fees of the Republic of Estonia, the European Union structural funds, part of the European Investment Bank's (EIB) loan to the Estonian State and the sale of CO2 quotas (also known as Green Investment Scheme)

As energy efficiency is not a primary goal for most of the existing policies and the energy saving impacts are either not thoroughly assessed or monitored for these policies, there is only very little data available for energy efficiency impacts of the selected transport policy instruments.

Table 30: Main policy instruments in transport sector in Estonia

Short list of



efficiency)

Target group and targeted objects




Development of regional and local public transport connections

To improve system efficiency

Local municipalities, all transport users, railway stations

The projects have to be selected based on sustainable urban development strategies, 15% co-funding requirement, public procurement rules

Ministry of Interior, Ministry of Economy and Communications, Enterprise Estonia, Estonian Environmental Investment Fund, Technical Regulatory Authority, local municipalities

3 Energy efficiency in the transport sector can be divided into system efficiency (reduce or avoid travel or the need to travel), travel efficiency (shift to more energy efficient modes) and vehicle efficiency (improve the efficiency through vehicle technology)

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Short list of



efficiency)





Maximum parking standards in Tallinn centre

To improve system efficiency

Developers, property owners, car users and owners

Building permit depends on compliance with the regulation

Tallinn city government


Fuel excise duty, annual increase by 10% 2016-2018

To improve system, travel and vehicle efficiency

Consumers of motor fuels: diesel and petrol, especially road transport

Gradual increase of fuel excise rate 2016-2018

Ministry of Finance, Tax and Customs Board


Energy labelling of new cars

To improve vehicle efficiency

Consumers buying new cars, car retail companies Not specified Estonian Road

Administration


Smart City cluster To improve system and travel efficiency

Companies, local governments, educational establishments, NGOs

Membership fee Ministry of Economic Affairs, Enterprise Estonia, 17 member organisations

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Technological trends Buildings

The Estonian buildings sector (without industrial buildings) consumes approximately 50% (16-17 TWh annually) of the total final energy (ENMAK 2030). From the overall buildings stock, the majority (31%, 27 385 units, 34 281 629 m2) are multistorey apartment buildings and 1-2 floor detached houses (24%, 190 460 units, 26 447 774 m2), followed by the industrial buildings (15%, 17 832 units, 4 133 084 m2). The rest of the buildings stock includes buildings used by services sector and other types of dwellings. 96% of the Estonian housing belong to private persons. According to the National Buildings Register, there are altogether 3 006 708 buildings with controlled inner climate and overall floor surface of 110 241 726 m2. 77% of the housing stock was built before 1992 and 58% during the Soviet period (1946-1990) with relatively low energy standards. The annual energy use of an average dwelling house in Estonia is 250 kWh/m2. According to the development plan of the Estonian housing sector 2030+ and its analysis of the current situation, the potential annual technical energy saving in Estonia is 9,3 TWh of heat and ca 0,2 TWh of electricity. The heat saving potential represents about one third of the total final energy consumption in Estonia, being 33-34 TWh annually. Energy saving potential of new buildings, if built according to nearly zero energy performance requirements, would be annually 0,5 TWh heat and 0,4 TWh electricity. Global cost calculations (EQUA, 2011) for construction concepts from “business as usual” to passive house building envelope level, combined with all possible technical systems, showed that cost optimal in the reference detached house was between 120-140 kWh/(m2/a) of primary energy and in reference office buildings about 140 kWh/(m2/a) of primary energy. Expanding these results to the whole building stock shows that the economic energy efficiency potential of the buildings sector in Estonia would be ca 5 TWh per annum, mostly from reducing heat consumption. The cost of the energy saving in case of complex renovation of the typical multistorey dwellings would be 1 290-1 340 €/MWh/a. In case of complex renovation (both insulation and renovation of technological systems) of detached house, the cost of the energy saving could be between 723-1 240 €/MWh/a (ENMAK 2030, 2014). In the buildings sector the only energy efficiency technologies supported by the relevant national policy instruments are complex energy renovation of the multistorey dwellings for increasing the buildings’ energy performance, replacement of heating systems in the detached private houses, installation of micro-energy production equipment in private buildings and reconstruction of street lightning – replacement of the incandescent bulbs with LED lamps. The main national policy instrument has been the subsidy (between 17-35 % of the renovation costs, depending on the expected savings, average 24%) for complex renovation of multistorey dwellings, as well loan guarantees and support to housing cooperatives for pre-renovation audits and on-site inspections of renovation works by the state foundation KredEx. Complex renovation of typical multistorey dwelling consists of additional insulation of the perimeter of the house, reconstruction and insulation of the roof, replacement of the windows, replacement of heat piping and radiators with thermostats-regulators, installation of ventilation with heat exchange. The average cost of complex renovation of the multistorey dwellings has been 91 EUR/m2 (highest cost 382 EUR/m2) and the support from KredEx has amounted to 23 EUR/m2 average (KredEx, 2014). The progress of the use of subsidies has been moderate as there have been barriers for implementation: the main barrier being the difficulties to reach agreement between the members of the housing cooperatives for taking renovation loan and the low income of owners. During the period 2010 (first year of implementation) - 2014, support was provided to 663 housing cooperatives with a total amount of 38 MEUR. Most active was the use of the subsidy in 2 of the biggest cities, where the income of the inhabitants had been higher than in other regions. Some correlation of renovation activity can be drawn with heat prices in the cities and regions. The number of applicants reached its peak in 2012 with 310 renovation projects and decreased to 57 renovated houses in 2014. As regards cost-effectiveness, the energy savings in Estonian houses in 2013 after the implementation of KredEx investment fund

56

were estimated to be approximately as high as 2,5 MEUR. An overview of the energy savings achieved both in kWh-s and euros in 2013 can be seen in the next table.

Table 31: Energy savings in Estonian houses in 2013 after the implementation of KredEx renovation fund

Number of houses 2013 savings in kWh Savings in euros Tallinn 153 18 835 839 1 488 031 Tartu 31 4 367 870 279 544 Harjumaa 43 3 566 858 267 514 Tartumaa 19 1 667 597 125 070 Pärnumaa 20 1 288 205 96 615 Ida-Virumaa 6 998 427 74 882 Lääne-Virumaa 7 895 827 67 187 Raplamaa 10 638 517 47 889 Valgamaa 4 626 060 46 955 Viljandimaa 6 402 608 30 196 Jõgevamaa 5 246 233 18 467 Saaremaa 2 226 290 16 972 Läänemaa 3 197 523 14 814 Järvamaa 2 116 447 8 734 Põlvamaa 1 65 253 8 734 Võrumaa 1 45 793 3 434 Hiiumaa 1 22 453 1 684 Total 314 34 207 800 2 592 882

Source: Lauri, M., KredEx, 2014, lk. 21-22 The policy instrument supporting detached private houses is the subsidy for renovation of heating systems – switching from oil heated boilers to heat pumps and biomass based boilers. The subsidy is limited to 40% of the equipment purchase and installation cost, but not exceeding 4 000 EUR per household. Progress cannot be reported yet as this measure started rather recently, at the end of 2014, and has been more widely in practice since the beginning of 2015. The intended amount for the period 2015-2017 is 5 MEUR, which are expected to cover the substitution of the oil fueled boilers in more than 2 000 detached houses. Both above measures are planned to continue until 2030. In 2012 KredEx provided support for the purchase and installation of equipment for local renewable micro-energy supply and replacement of heating systems with heat pumps and biomass boilers in detached private houses. The subsidy was 4,5 MEUR and the whole amount was earmarked during a couple of weeks from the start of disbursement. The applications received exceeded significantly the available support. This shows the keen interest of household sector to improve energy efficiency in a way of using renewable energy sources or alternative possibilities of generating energy. Altogether 212 projects were supported, 146 of which included replacement of heat supply equipment (50% for earth heat pumps, 40% for air heat pumps and 10% for wood use, mainly pellets). The average investment cost per project was 7 500 - 10 500 EUR for heat pumps and 6 000 EUR for wood based boilers. During the period 2012 – 2015 the Estonian Environmental Investment Centre (EIC) provided support for renovation of street lightning in seven medium-size cities. The support scheme was based on bilateral agreement between Estonia and Austria on sales of the Assigned Amount Units (AAU). According to the agreement earnings were allocated to the National Green Investments Scheme (GIS) for the replacement of the old street lamps with modern and energy efficient LED lamps. EIC financial support covered 90% (16,2 MEUR) of the project cost and the remaining 10% (1,8 MEUR) were provided by the local governments’ own bidgets. Totally 12

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253 lightning spots were installed, the control systems were renovated and as a result 5 GWh of electricity and 0,3-0,4 MEUR were saved annually. A “New technology shift” measure was started on 29.06.2015, managed by the KredEx, which represents a support mechanism for renovation of old (3x220 V) electrical wiring and control systems to new (3x230/400 V) system in multi-storey buildings belonging to housing cooperatives and in private households. The support provides up to 30% of the replacement costs, but not more than 200 EUR per a flat in multi-storey building and not more than 800 EUR for a private house. The scheme is limited only to Tallinn City inhabitants. The amount of the subsidy during the initial period (2015) will be 300 000 EUR, and the measure is expected to continue in 2016. Due to its fresh implementation, no assessment of its cost-effectiveness is possible to be made at the moment.

Transport

Transport sector accounts for a quarter of the Estonian final energy demand (8,3 TWh/33 000 TJ of which 94 per cent is cars and trucks), which has been rising over 33% during the last 15 years primarily due to the economic growth, rapid increase in private car use and road freight, urban sprawl and decreasing share of public transport and walking in daily mobility (Jüssi et al., 2014). Road transport has increased at the same pace as economic growth which puts Estonia as one of the most transport and energy intensive economies in the EU. 60% of the energy in road transport is consumed by passenger cars, which has been the fastest growing transport mode. Ca’ 44% of the fuel consumed on Estonian roads can be associated with local roads and streets, which shows that the local level plays a big role in energy efficiency policies (Jüssi et al., 2014). Contrary to EU average and most other sectors’ trends in Estonia, the overall energy efficiency (based on aggregated ODEX indicator) in transport decreased in 1996-2010 by more than 15% (Energy …, 2012).

Source: Jüssi et al., 2014

Figure 8: Energy consumption in Estonian road transport by mode 2000-2011

Two background studies commissioned in the framework of the National Energy Development 2030+ (ENMAK 2030+, Jüssi et al., 2014 and Jüssi et Rannala, 2014) assessed the energy saving potential of 24 policy instruments ranging from fiscal measures, public transport development to eco-driving and car-sharing, and analyzed the policies and final energy demand in the transport sector in two alternative scenarios. The reports concluded that in case all the instruments were implemented, about 40% (-19 000 TJ/a) reduction of energy consumption

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Heavy Duty Vehicle 5417 6312 6982 6244 6304 6460 6841 6878 6846 5626 6889 7400Car 11242 14198 13815 13984 14314 15480 17258 18797 18287 17683 17238 17500Motorcycle 25 26 28 31 54 18 32 47 51 45 46 43Light Duty Vehicle 1779 2512 2971 2811 3264 3233 3187 3272 3208 2425 2504 2652Bus 2094 2006 2182 2122 2097 2100 2101 2210 2127 1670 1796 1810

0

5000

10000

15000

20000

25000

30000

35000

TJ/a

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could be achieved compared to the reference scenario. Approximately 20% of the overall energy saving potential until 2030 can be reached with more fuel efficient conventional and hybrid passenger cars, while the role of electric vehicles remains still relatively marginal (175 TJ). Developing public transport (1 300 TJ/a), integrated spatial planning (2 900 TJ/a), eco-driving (1 400 TJ/a), parking management (1 100 TJ/a), congestion charging (1 300 TJ/a), electrification of railways (450 TJ/a), energy efficient lorries (1 000 TJ), developing cycling infrastructure (360 TJ/a) would all contribute substantially to the energy saving. In the area of transport it was the ELMO programme, runing from 2011 until the end of 2014 that supported the take-up of electric mobility, providing direct support for purchasing of electric vehicles (EVs) and developing a quick-charging network all over Estonia. The programme, which was managed by KredEx, has supported 657 car purchases (339 by private persons and 318 by companies) and 350 home chargers. The grant allocated during the program period amounted to EUR 10,5 million; the average grant per car was EUR 16 500 (KredEx press release, 2014), which represented ca 35-50% of the subsidy compared to the full price of an average EV. In addition the government purchased 507 Mitshubishi i-MiEVs for social workers. According to the KredEx ELMO programme (Parve, 2015) the reported total annual mileage of the EVs supported were 7,2 million kilometres (2014), and social workers i-MieV 3,8 million (2013) with a total annual mileage of EVs of 11 million vehicle-km. As of May 2015, there were 1 221 registered EVs in Estonia. Coming to the launch of EV era, one can see that in 2010 there were all in all 8 registered EVs only in Estonia. Figure 9 shows the yearly registration of EVs in the period 2011-2015 (Estonian Road Administration, 2015).

Source: Estonian Road Administration, 2015

Figure 9: Number of EVs registered in Estonia during the period 2011 – May 2015

The annual energy saving per car (15 000 km) is estimated in comparison with the average car and similar sized car (see Error! Reference source not found.). In addition to the electricity costs, EVs need to replace their batteries after 5-7 years of use, which adds about 5 000 € to the 10-15 year lifetime costs and 2 000-5 000 € additional costs during purchase compared to similar sized average car. The annual energy saving for the consumer is 5 800-8 400 kWh/y, monetary saving 1 100-1 500 €/y (see Table 32). The total annual energy saving with current EV fleet is 4 000-6 000 MWh/y, remaining marginal compared to the overall energy consumption in the transport sector (8,3 TWh/y). Table 32: Comparison between average energy and fuel costs for Nissan Leaf and average petrol

car in Estonia and annual mileage of 15 000 km

Energy

consumption (kWh/km)

Energy consumption

(kWh/y)

Fuel consumption

(l/y)

Energy & fuel cost

Energy & fuel costs (€/y)

Annual saving

(€)

Annual energy saving (kWh/y)

Retail price

(€)

Price at 50%

support (€)

€/kWh Nissan Leaf 0,173-0,212 2 595 0,0475 123 1 100 –

1 500 5 800 –

8 400 34 000 17 000

0

100

200

300

400

500

600

2011 2012 2013 2014 2015

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Energy

consumption (kWh/km)

Energy consumption

(kWh/y)

Fuel consumption

(l/y)

Energy & fuel cost

Energy & fuel costs (€/y)

Annual saving

(€)

Annual energy saving (kWh/y)

Retail price

(€)

Price at 50%

support (€)

€/l Average petrol car 0,77 11 550 1 269 1,3 1 650 1 499 8 370

10 – 20 000

-

Similar sized car 0,6 9 000 989 1 286 1 135 5 820 -

Sources: Authors’ calculations, Average energy consumption based on: Nissan Europe (2015), Parve (2015), Jüssi et al. (2014)

Barriers The Ministry of Economic Affairs and Communications (MEAC) is responsible for the overall energy and economic policies. It prepares economic development plans in sectors that have direct impact on climate change: industry, trade, energy, housing, buildings, transport and traffic management. Furthermore, the ministry coordinates the implementation of the National Development Plan for the Energy Sector, Development Plan for Estonian Electricity Sector, Action Plan for Renewable Energy, Development Plan for Housing Sector, Transport Development Programme and the Energy Conservation (Energy Efficiency) Programme for Estonia. The ministry holds the overall accountability for energy efficiency policy as part of the energy policy mandate. It is in charge of the EU legislation implementation, including the EU Renewable Energy Directive (RED), Energy Efficiency Directive (EED), Energy Performance of Buildings Directive (EPBD), etc. The Energy and the Building and Housing Departments within the ministry are responsible for the majority of the matters related to energy efficiency, district heating (DH) and renewable energy policies. MEAC collaborates with two executive agencies acting as implementing agencies of energy efficiency policy measures. Both of them have specialised units, dealing with energy measures, working on issues closely linked to the promotion of energy efficiency (National Energy…, 2014). One of these agencies is the Credit and Export Guarantee Fund (KredEx Fund), which works with measures targeted to residential sector and electro-mobility (http://www.kredex.ee/en/). KredEx develops and offers financial services aimed at energy efficiency. It provides grants for renewable energy generation installations in private households (solar panels, wind generators, heat pumps, etc.) and for energy efficiency refurbishment, as well as guarantees for loans for reconstruction of multistorey apartment houses to improve their energy efficiency. The other agency is the Environmental Investment Centre (EIC) which targets public infrastructure, particularly heat and electricity generation, energy distribution systems and street lighting. EIC funds larger-scale energy efficiency projects such as DH systems and both onshore and offshore wind parks, reconstruction or construction of combined heat and power (CHP) plants (http://www.kik.ee/en). The Ministry of Environment (MoE) is responsible for the development of green public procurement rules and guidelines for the purchase of energy efficient goods (http://www.envir.ee/et). It is increasingly involved in energy policy and in particular - energy efficiency policy management. Given the historical dependence on oil shale electricity driving climate emissions, there is a need for close co-ordination of energy and environment policy developments. The policies related to local air and water quality are driven by the European Union requirements and are based on emission taxes for local water and air discharges, including mining activities. These are useful complementary drivers for a more sustainable development and energy efficiency (Estonia 2013…, 2013). In addition, the ministry supervises state commercial enterprises such as the State Forest Management Centre and the Plc. Geological Survey of Estonia. Land-use issues related to agricultural biomass are dealt by the Ministry of Agriculture. Energy efficiency is also being promoted via energy tariff coordination by the Competition Authority which supervises the DH markets and electricity, and ensures the fair competition on

http://www.kredex.ee/en/

http://www.kik.ee/en

http://www.envir.ee/et

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the renewable energy market. The development of energy efficiency and energy saving related research is largely supported by the Programme on Green Economy and Energy set up by the Estonian Development Fund (Estonia 2013, 2013). The topics related to the energy efficiency are also dealt by the Riigi Kinnisvara AS (RKAS), State Real Estate Ltd, which is engaged in the development and administration of the state-owned buildings - public buildings such as schools and government agencies, and whose stocks are 100% owned by the Republic of Estonia. The company has the objective to guarantee the saving and effective provision of the real estate service to the executors of state authority (http://www.rkas.ee/about-rkas). The transmission system operator (TSO) AS Elering manages the subsidy system for electricity generators. AS Elering keeps track of the production of renewables-based electricity generation and takes care of billing the consumers and delivering of subsidies to the electricity producers. At the local level, the local governments develop their own energy efficiency and renewable energy strategies, while ensuring that they are in accordance with the national policy framework and principles. The local governments that have developed energy efficiency action plans are the cities of Tallinn, Tartu, Võru, Valga, Jõgeva and Rakvere. (Estonia 2013…, 2013)

Breakdown of energy use by sectors HOUSING SECTOR ENERGY CONSUMPTION

In 2011 the total final consumption in Estonia was 2,8 million tonnes of oil-equivalent (Mtoe). Oil comprised 34,3%, electricity - 20%, biofuels and waste – 17,5%, heat – 16,7%, natural gas – 7,1% and coal – 4,4%. The share of residential sector was the biggest – 32,8%, of transport – 26,3%, industry – 22,8%, commercial and other services – 18,1% (Estonia 2013 …, 2013, p. 39). Space heating demand has the major share in the households’ energy consumption. During the period 1995-2010 the population of Estonia continued to decline. When analysing households’ energy consumption, the population decrease is a very important factor which should be taken into account. The estimated population of Estonia as of 1 January 2011 was 1,34 million. Since 1995, the reduction had been 6,7%, i.e. 0,46% a year. According to the official statistics, in 2010 the number of dwellings was 653,6 thousand. The estimated number of households was 583,9 thousand. Roughly 70% of the dwellings are in apartment buildings. The relatively large share of apartment buildings in the housing stock resulted from the structure of construction activities in 1950-1990 (Energy …, 2012). Several significant changes have taken place in the energy consumption and dwelling stock. First, the average area of the dwellings has gradually increased: from 58,6 m2 in 1995 to 61,3 m2 in 2010. The size of the new dwellings has grown: the average living area of new dwellings in 2010 was 103,5 m2. Of course, there are signifficant differences in the area of the various types of dwellings. For example, in 2010 the average living area of a new single family house was 167,8 m2 and of the new apartment – 62,1 m2. Second, from 1999 to 2006 the households’ total energy consumption marked a slightly declining trend, while since 2007 the consumption has slightly grown. The estimated share of space heating in households’ total energy consumption is approximately 60-70%. The annual consumption of purchased district heat has declined both in relative (from 53,9% to 34,6%) and absolute (from 0,52 to 0,36 Mtoe) terms. Households’ use of oil fuels has fallen from 59 to 8 Mtoe. Oil fuels have been replaced with other energy sources: solid fuels, natural gas and electricity. The supply of local firewood increased fast. At the same time energy efficiency issues started to occur in the agenda of residential sector renovation plans. Third, still the most essential change has been the steady growth of electricity consumption: the use of electricity by households increased to 89,6% – from 1,067 GWh in 1995 to 2,023 GWh in 2010 which makes 4,4% per year as average. Also, the share of electricity in households’ total energy consumption had increased from 9,5% in 1995 to 16,8% in 2010 (Energy …, 2012).

http://www.rkas.ee/about-rkas

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The common widespread reflection is that Estonia’s average annual consumption per square metre of dwelling is relatively high, reaching 180 or even up to 200 kWh/m2 compared to the European average of 130 kWh/m2. However, the efficiency of energy use for space heating has improved significantly starting from the 1990-ies, and particularly quick development it has reached during the last 5-7 years. Above all, it is important to consider that Estonia is located closer to the North compared to most of the European countries. For making fair comparison of households’ specific energy consumption between the EU Member States, the difference in climate conditions in countries should be taken in account. Therefore, the specific consumption per area unit (m2) should be considered as the most representative one. It is reflected by indicators of consumption per unit (per dwelling and/or per m2) and considering the so-called heating degree days (HDD). The annual amount of energy used for space heating depends on the outdoor temperature during the heating season. Therefore, to find the actual changes in the efficiency of energy use for space heating there is a need to eliminate the annual climate changes. The heating degree days, which express the severity of the cold in a specific time period, give the opportunity to take into consideration both the outdoor temperature and the room temperature. In frames of the Odyssee - Mure 2010 project a methodology was elaborated for scaling the households’ energy consumption to the EU average climate. The annual specific space heating energy calculated per heating degree day enable to compare the average energy use efficiency in dwelling sector in Estonia and in average EU (Energy …, 2012). These average figures are informative and allow making fair comparison (see Table 33).

Table 33: Key indicators of households’annual specific energy consumption, 2010

Indicator Unit Estonia EU av.

Energy consumption (all purposes) toe/dwelling 1,56 1,42 kgoe/m2 25,5 16,5

Energy consumption (all purposes) scaled to EU average climate

toe/dwelling 1,20* 1,42 kgoe/m2 19,7* 16,5

Energy consumption for space heating scaled to EU average climate

toe/dwelling 0,64 0,94 kgoe/m2 10,5 11

Energy consumption for space heating per heating degree day

toe/dwelling 0,163 0,252 kgoe/m2 2,66 2,94

Electricity consumption kWh/dwelling 3 226 4 062 *data for 2009

Source: Energy Efficiency Policies and Measures in Estonia, 2012 From the comparison of average figures in Estonia and EU, it could be concluded that the energy consumption per dwelling (and per m2) in Estonia is at quite a good level, considering the climate conditions. Significant progress has been made since 2010 in improving the energy efficiency in the course of energy refurbishment of apartment houses, also in bright new buildings’ stock. There is a need for updated energy efficiency statistics of buildings.

TRANSPORT SECTOR ENERGY CONSUMPTION A quarter of the Estonian final energy demand comes from the transport sector and the energy demand has grown during the last 15 years by over 33% (see Figure 10 and Figure 11). In Estonia, contrary to the EU average and most other sectors’ trends, the overall energy efficiency (based on aggregated ODEX indicator) in transport decreased in 1996-2010 by more than 15% (Energy …, 2012).

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Source: Keskkonnauuringute Keskus, 2015

Figure 10: Transport sector energy consumption by fuel type

Source: Jüssi et al, 2014

Figure 11: Energy consumption by transport mode, 1995-2010 (TJ)

Energy demand has been rising primarily due to the economic growth, rapid increase in private car use (more than 50% of increase in annual mileage) and road freight, urban sprawl, also due to a decreasing share of public transport and walking in daily mobility (see Figure 12). Road transport has increased at the same pace as economic growth which puts Estonia as one of the most transport and energy intensive economies in the EU. For example Estonia uses twice as much transport fuel per unit of GDP than the average EU country (Jüssi et al 2011).

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Air 44 44 44 44 44 44 44 43 44 44 44 0 0 44 43 43Sea 170 298 256 256 213 298 298 469 383 341 341 469 724 852 341 341Rail 1634 1671 1505 1889 2021 1889 1765 2234 1982 1712 1840 1925 1623 1154 1534 2148Road 17771 19347 20235 21024 20878 20839 25387 26244 25459 26253 27497 29611 31421 30737 27673 28629

0

5000

10000

15000

20000

25000

30000

35000

40000

63

Source: Estonian Statistics Board, 2013 ref Jüssi et al 2014

Figure 12: Home to work trips by transport mode in Estonia 2000-2011

Even though the fuel economy of new cars has improved over the last seven years, passenger cars registered in Estonia rank lowest in the fuel efficiency in the EU, with average cars being 10% less efficient than the EU average (Figure 13).

Source: Eurostat

Figure 13: Average CO2 emissions of new passenger cars in selected countries – 2007, 2014 (g/km)

Buildings

The second NEEAP presents 99 measures for increasing of energy efficiency. It also includes a long-term forecast of the final energy consumption in Estonia by the year 2020 compiled by the MEAC. According to this forecast, Estonia’s final energy consumption would be 137 PJ (3 272 ktoe) in the case of the basic (reference) scenario and 131 PJ (3 127 ktoe) in the case of the additional energy efficiency scenario in 2020. Additionally, it has to be noted that the National

64

Reform Programme “Estonia 2020” (approved by the Government in 2011) established two major priorities of the Government for moving towards environmentally sustainable economy and energy sector:

• Implementation of long-term structural changes in the energy sector in harmony with Estonia’s energy security and energy efficiency objectives;

• Reduction of the general resource-intensity, including energy intensity, of the economy, through improvement of the energy efficiency.

In the Programme the Government has set an ambitious goal for making final energy consumption more efficient, i.e. in 2020 to keep it at the same level as it was in 2010, which means a reduction by approx. 11% compared to the forecast for 2020. The measures introduced by the National Housing Development Plan for the years 2008-2013 are carried out jointly by MEAC and KredEx in co-operation with the local authorities. In 2003 Estonia already started to support the refurbishment of apartment buildings built before 1990. The Tallinn University of Technology organizes training courses for energy auditors. Energy efficiency certificates for buildings have been issued since January 2009. Estonia has a surplus of Kyoto Protocol assigned amount units amounting to 85 million. Starting from the end of 2010 the country has successfully sold a great amount of AAUs. The revenues from the sales (365 M€ up to now) are used in line with the relevant Green Investment Scheme. According to the statistics from GIS almost 500 public sector buildings have been refurbished, including improvement of thermal insulation. The actual number of state and municipality owned buildings being currently renovated in frames of the GIS is 493 with a total floor area of more than 1,1 Mm2 (Energy …, 2012). The total renovation budget reached approximately 172 MEUR. Regarding the residential sector, detailed application procedures have been elaborated for investments in apartment buildings as well. To get a grant, energy savings from 20% to 50% have to be reached. The energy savings potential together with the plan for proposed renovation works have to be compiled by a certified energy auditor. Currently, the first wave of renovation works is completed. The average renovation cost is 60 EUR/m2 and the estimated energy saving is 40%. Similar grant was available for renovation (thermal insulation) of small residential buildings: family houses, detached and semi-detached houses. According to the energy audits, the average renovation cost for this type of buildings was 160 EUR/m2 and the estimated energy saving was expected to be 68 kWh/m2 per year. The main barriers in the buildings sector are social, educational and economic. These are described in Table 34 below.

Table 34: Assessment of barriers in the building sector of Estonia


Big

Energy usage habits in relation to relatively autonomous national energy market Energy intensity in relation to Estonian cold climate Gas supply security Lack of high level specialists Regionally fragmented energy saving potential Dependence on private investment Aging housing stock Development of building sector and the price of renovations Access to financing Finding agreement between different parties, also between members of living association

Medium Increasing consumer wellness Lack of client courage to do certain investments Dwellings left empty because of unemployment

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Impact of Barriers Barriers Clients do not feel like equal partners, lacking knowledge Weak national guidance Relatively cheap energy (only in Narva town which uses the waste heat from power plants) and fuel prices Prerequisites for energy service undertakings within the commercial and public building sector Energy services weakly connected with the potential savings High costs to renewable energy generators

Small

Lack of experience in procurement Operational overlap and clarity Co-operation between local municipalities Estonia’s dependence on district heating – principal agent failure Question of actual tenants when accessing relevant data and actual consumers Size of the country Lack of sufficient data for comprehensive research

Transport

Energy efficiency has had a minor role in the national and local transport policies and strategies over the last 20 years as energy production and housing sector were the main focus for the energy efficiency improvements and emissions reduction. Growing economy, urban sprawl and relocation of jobs have driven increased demand for road transport and private car use, resulting in an overall decrease of the energy efficiency since 2000. This demonstrates that the policies in the transport sector have not addressed energy efficiency sufficiently and there is a lack of systematic policy packaging, lack of research regarding barriers and tackling them. The transport sector’s high energy and emissions saving potential was first recognized in the “Sustainable Transport Report” in 2011, which was further elaborated in the preparation of the “National Energy Strategy 2030+” in 2012-2014. The “National Transport Strategy 2014-2020” sets clear energy efficiency targets for transport sector. The main barriers are related to lack of fiscal measures to improve fuel efficiency of vehicle fleet, lack of long-term funding schemes for developing public transport and cycling, lack of integrated urban and transport planning and low density of population. Many of the listed barriers in buildings and transport sectors have been already addressed through the existing policies. It however, will take time and appropriate supporting financing to overcome and reach the higher energy efficiency targets set in the national strategies and action plans.

Table 35: Assessment of barriers in the transport sector of Estonia


Big

Lack of integrated transport/mobility and planning professionals Fiscal instruments in transport sector not sufficient for encouraging energy efficiency Perverse incentives by employers/Employee benefits regarding cars National investment schemes encourage growth in road sector Low population density Transport/mobility sector management split between several departments, lack of integrated governance Contradicting policy goals and implementation Administrative fragmentation and lack of integrated governance

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Lack of investment in public transport and cycling infrastructure

Lack of integrated transport and land-use planning

Medium

Summer houses/ Second homes in low population density areas “Own house far from neighbours” Social pressure for SUV-s and powerful passenger cars Poor image of public transport Image of cycling as sports and leisure activity Lack of finances for road and street maintenance

Small Aggressive/speedy driving style

Cross Cutting In Estonia there are plenty of cross-cutting barriers affecting simultaneously the buildings and transport sector. Some of them have already been addressed by the current policy instruments. These are mainly to do with awareness raising and willingness of public to invest in energy efficiency. One of the most obvious common barriers is the lack of specialists, who could plan, implement, promote and monitor integrated sectoral policies. This could be noticed both at national and at local level. Nevertheless, the number of high-level experts in universities, research institutes and private enterprises is increasing from year to year, the energy efficiency new requirements still need more people to carry on and implement the most updated information in buildings sector. Following the continuously growing interest in energy efficient buildings, the construction of new modern, low-energy consuming houses boosted in Estonia more than five years ago (Energy …, 2015). There are good examples of low-energy and passive houses design and construction of apartment buildings, private houses and also office buildings using renewable energy equipment like PV-panels, solar collectors and heat pumps to reduce significantly the energy consumption (SENSE passiivmajad …, 2015). Also, the information dissemination and public awareness are on their way up. Quite a lot has been done; still it is the beginning of a long-lasting process towards the energy efficiency wider deployment all over the country. As for transport sector the educational background of the related professionals and civil servants does not fully support energy efficient transport system. High level professionals are still scarce, but the trend in the sector is still positive as the educational background of transport planners and civil servants is getting more relevant and diverse. Also, there are more opportunities for studies abroad of university students. Still, city planners together with architects and transport and mobility research labs are collaborating to find new approaches in organising the living environment in bigger towns and in the capital city of Tallinn. In September 2015 the international architecture festival “Tallinn Architecture Biennale Self-Driven City”, devoted to self-managing city with the emphasis on smooth organisation of transport, was launched (Self-Driven …, 2015). From the institutional barriers common for both the buildings and transport sectors, is the fragmentation of the policy implementation between the various governmental institutions and different stakeholders. Each stakeholder is responsible for a certain part of the policy implementation, thus sometimes policy actions drive in different directions or even contradict each other. E.g., in buildings sector the management and integration of operational activities related to energy efficiency and the relationship with the Ministry of Economic Affairs and Communications (MEAC) are unclear. The relationship between MEAC and the Ministry of Environment and operational programmes should be restructured in order to remove operational overlaps and improve consistency. Estonia should consider creating an energy efficiency unit, which would be able to commission, research, evaluate and implement energy efficiency priorities maximising delivery efficiency, reporting to the Energy Department of MEAC. The latter should lead the coordination of energy efficiency policies between the institutions, to merit

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required focus and operational clarity. The Estonian Renewable Energy Association has drafted a proposal to streamline and centralise the procedures: to have an authority (a one-stop shop) that would facilitate all the processes for renewable energy project developers (International Energy Agency, 2013). At national and regional levels, the management of transport and mobility issues is split between different ministries, state-level departments and at local level – municipal departments. For example, transport planning issues in Tallinn are split between 4 different departments – Urban Planning Department (spatial planning and building permits), Transport Department (public transport management, traffic and parking management), Public Works Department (cycling policy, building of infrastructure), Environmental Department (environmental assessment, emission and noise reduction, promoting sustainable transport). At national level, the institutional capacity lies mainly in the Road Administration (responsible for national road network, traffic safety, minor role in regional public transport planning) (Jüssi et al., 2014; Rannala et al., 2013). The cross-cutting barriers already addressed by the current policy instruments include:

(1) Low awareness; (2) Willingness to pay for more energy efficient alternatives; (3) Lack of highly qualified specialists; (4) Lack of relevant national schemes; (5) Operational overlap and lack of clarity.

Yet it must be underlined that most of them are not addressed directly, but rather in an indirect manner. All of the mentioned barriers have to a certain extent been integrated to the yet to be proved National Energy Management Development Plan 2030+. This is a freshly formulated document (relevant national scheme) which combines all the energy efficiency related documents so far into one comprehensive strategy. The five highlighted above barriers are addressed in one way or another to the mentioned development plan. These are also the topics what the national government is currently most well aware of, trying to work on their elimination. Lack of capacity is also tackled via national planning guidance – a national guidelines document is being worked out by the ministry of Interior to increase the capacity of local governments to tackle issues related to energy efficiency, sustainable mobility and planning. Low awareness and lack of specialist have been addressed through setting up new study programmes in different universities across the country, directly dealing with the topics related to energy efficiency in buildings and transport sectors. Also trainings and seminars have been organised for public in order to raise awareness. The willingness of public to invest in more energy efficient technologies and other methods which would increase the overall national energy efficiency (for instance home refurbishment) is currently helped via support schemes of Foundation KredEx (which is an authority giving out financial support for electric vehicles, apartment cooperatives and home owners in general). This is increasing the willingness of public to pay for energy efficiency measures since through the financial support given, the prices have been made cheaper. On the other hand, the national financing schemes are still rather weak as well as the interest of public to invest despite of the support already given. This is so, because for the successful funding application to be made, one needs to comply with certain conditions (such as proof of certain income). Thus the barriers - dependence on private investments, as well as – willingness of public to pay (low incomes particularly), counteracts to a certain extent with the KredEx support given. Also raising fuel excise duty on motor and heating fuels (planned increase by ca 30% 2016-2018) is a common fiscal instrument for tackling these barriers. The barriers listed up above are rather common for most of the fast developing countries in former centrally planned economies. It is a matter of time and effort to smoothly overcome these.

Table 36: Assessment of cross-cutting barriers in Estonia


High Increasing client/ consumer wellness

Size of the country and low population density Dependence on private investment

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Impact of barriers Description of barrier Settlements structure

Lack of co-operation between local municipalities

Medium

Willingness to pay for more energy efficient alternatives Energy usage habits Energy intensity in relation to Estonian cold climate Hard to find common ground in agreements between different administrative levels, and stakeholders (e.g. MEAC and the Ministry of Environment) Lack of highly qualified specialists Lack of relevant national schemes Lack of appropriate knowledge among public and low awareness

Operational overlap and lack of clarity

Low Not identified

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Germany

Energy efficiency policies The buildings sector consumes a substantial amount (40%) of the final energy in Germany. One of the reasons is that the majority of the buildings were erected before the first minimum energy performance standard was established. Apart from that, less efficient building equipment or appliances contribute to the excessive energy consumption. Through a package of policy instruments the Government seeks to drive down energy consumption of the building stock. In order to increase the energy efficiency in the transport sector, three different levels of energy efficiency connected to three basic strategies have to be taken into account, based on the Avoid-Shift-Improve (ASI) approach (e.g. Schipper and Marie-Liliu 1999, Dalkmann and Brannigan 2007, ADB 2009):

• Avoid travel or reduce travel-length in order to improve the system’s efficiency which concerns how transport is generated and how modes are chosen.

• Shift travel to more energy-efficient modes in order to improve travel efficiency which covers the energy consumption of different transport modes.

• Improve the energy efficiency of vehicles and fuels by reducing the vehicle’s fuel consumption per kilometre.

Different instruments (planning, regulation, economic incentives, information and technology oriented measures) can be used for implementation of these strategies.

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Table 37: Overview of measures implementation in the Germany’s buildings sector

Policy instruments Short list of



Rules and influencing mechanism



Energy Saving Ordinance (EnEV)

Prevent market entrance of energy inefficient buildings

Mainly investors in new buildings; owners of old boilers

Among other things, financial support for new buildings if EnEV standards are exceeded substantially and funding for new energy-efficient heating systems in existing buildings

Construction companies and public authorities

Regulator Inspection of Boilers and (non-residential) air-conditioning

Phase out inefficient building-related appliances

Operators of boilers and (non-residential) air-conditioning

Financial support for exchange of inefficient heating system through the Market Incentive Programme

Chimney sweepers for boilers and adequately trained experts for A/C systems

Heating cost regulation Provide detailed overview of monthly heating costs

Building occupants and owners

Increased costs for energy are an incentive to lower the excessive use of energy

Energy providers

Energy Performance Certificate

Initiate dynamic market transformation towards a higher degree of energy efficiency in buildings

Building owners are required to hand over EPC to future owners or tenants

Penalties are established for not handing over an EPC to potential buyers or tenants

Federal Ministry of Economic Affairs and Energy


Energy checks

Promote the uptake of energy efficient appliances and behaviour

Households; especially low-income households are addressed by the energy check programme carried out by Caritas

Energy checks are available at very low to no costs; with the Caritas-managed programme, small-scale energy saving

The consumer organisation Verbraucherzentrale Caritas

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equipment is given free of charge

On-site energy consultation

Identify energy saving options

Households, particularly building owners

Financial support incentivises one-site energy consultation

BAFA

Energy consultation for SMEs (KfW)

Identify energy saving options SMEs Subsidies are offered KfW Bank and BMWi

KfW Construction Monitoring

Support building owners with refurbishing energy-inefficient buildings

Building owners of energy-inefficient buildings

Construction monitoring is partly financed BMWi, KfW Bank

Dena Efficiency House Quality Mark

Increase visibility of energy-efficient buildings and inform owners about energy demand

Home owners

KfW energy efficient renovation and construction programmes complement the Quality Mark

Dena


KfW Energy-efficient construction

Support residential building investors with realising an energy-efficient home

Home owners

Financial support (soft-loans including grants) available; EnEV is used as a benchmarking tool to assess the amount of the support

KfW

KfW Energy-efficient Renovation

Support residential building owners with realising the refurbishment towards an energy-efficient home

Home owners

Financial support (soft-loans including grants, grants) available; EnEV is used as a benchmarking tool to assess the amount of the support

KfW

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Energy tax Facilitate the more rational use of energy Cross-cutting N/A

The main customs office of the Federal Ministry of Finances

Market incentive programme

Reduce upfront costs for certain energy-efficient technologies and promote market breakthrough

Cross-cutting

Financial support available for taking up respective technology options

BAFA

BAFA cross-cutting technologies

Reduce upfront costs for certain energy-efficient technologies and promote market breakthrough

SMEs and energy contractors assigned by SMEs

Financial support for installation of energy efficient technologies or for the systematic optimisation

BAFA


Energy efficiency networks initiative

Promote voluntary energy saving targets and knowledge on how to achieve targets

SMEs Financial incentives available for first-movers

Fraunhofer Institute for Systems ISI

Promotion of energy management systems

Facilitate the uptake of an EMS

Mainly the manufacturing sector

Funding for EMS available BAFA

Educational vouchers for re-training towards energy advisors

Expand the supply of energy advisory services

Direct: people interested in becoming an energy advisors; indirect: home owners and occupants

The educational voucher subsidises retraining

Federal Employment Agency

Requirement guidelines for energy consultants and list of certified energy consultants

Safeguard proper training for experts supporting the realisation of energy-efficient homes

Direct: energy efficiency experts; indirect: home owners

KfW and BAFA programmes require appropriate training of advisors

KfW, BAFA

International Improve policy-making Direct: German Federal N/A Members States

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Partnership for Energy Efficiency Cooperation

Government; indirect: cross-cutting


Centre of Excellence (incl. default guarantees)

Improve knowledge and procedures for the uptake of energy services Default guarantees support smaller companies to energy the energy services market

Energy services providers and public authorities

The Centre of Excellence and the default guarantees offered to smaller companies complement each other

dena


Low energy buildings project and efficiency house Plus

Increase visibility of efficiency houses, and, primarily, promote BAT

Actors of the residential building sector

KfW offers financing support dena

Research initiative “Zukunft Bau” and Research for energy-optimised construction

Promote R&D Research institutes and construction industry

Project financing available

Federal Institute for Research on Building, Urban Affairs and Spatial Development, Fraunhofer Institute, Institute for Social Research, Research Centre Jülich

Public procurement guidelines Promote BAT Public procurement

bodies

Particularly, building labels help public procurement authorities to identify energy-efficient technologies

BMWi

6th energy research programme Promote R&D

Research institutions and construction companies

Financing is available BMWi, Project Centre Jülic

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Table 38: Summary table for the German transport sector

Short list of


Objective* (improve system, travel or

vehicle efficiency) Target group and targeted objects




Federal Transport Infrastructure Plan

System and travel efficiency All transport users

1. Financial resources for maintenance; 2. Remaining financial resources are distributed among the three transport carriers; 3. Project proposals are classified into urgency categories by benefit-cost-ratio

Federal Ministry of Transport and Digital Infrastructure, Federal States, railway infrastructure provider, associations, initiatives

National Cycling Plan System and travel efficiency

Federal government, federal states, municipalities

Motivation Federal government, federal states, local authorities

Mobility and fuel strategy Vehicle efficiency


Law on electric mobility Vehicle efficiency Municipalities Motivation German parliament

Voluntary agreement with German National Railways

Vehicle efficiency German National Railways and its subsidaiaries

Motivation German National Railways


CO2-related motor vehicle tax Vehicle efficiency Car owner Motivation or punish

non-compliance

German parliament, federal finance administration

Ecological tax reform System efficiency, travel efficiency, vehicle efficiency

Car drivers Motivation or punish non-compliance

Federal Ministry of Finance and local customs offices

Heavy goods vehicle toll charges

System efficiency, travel efficiency, vehicle

Logistic and service companies

Motivation or punish non-compliance; “User

Federal Ministry of Transport and Digital

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Short list of






efficiency pays” principle Infrastructure, Toll collect

Fiscal allowances for work-related travel expenses

Travel efficiency Employees and self-employed persons Motivation

Local tax authorities and the supervision authority of the respective state

Regionalisation act Travel efficiency Public transport Providing funds for local passenger rail transport.

Federal government, federal states

Levy on air traffic Travel efficiency Passenger of air traffic German government


Passenger car labelling Vehicle efficiency Car drivers Motivation Car salesmen

Mobility management action programme

System and travel efficiency

Enterprises, public administrations, hospitals, universities, local authorities etc.

Motivation German Energy Agency (dena), Federal Ministry for Environment

“me and my car” campaign Vehicle efficiency Car drivers Motivation

German Energy Agency (dena), Federal Ministry for Environment, German Federation for Motor Trades and Repairs, German Traffic Safety Association, automobil club (ADAC)

Federal procurement initiative for electric mobility

Vehicle efficiency Federal government and its subordinate authorities

Motivation Federal government and federal states


Government electro mobility programme Vehicle efficiency motivation

Federal Ministry of Economic Affairs and Energy, Federal Ministry of Transport, Building

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Short list of






and Urban Development

Funding programme for electro mobility in model regions

Vehicle efficiency Model regions, electric mobility industry, scientific institutions

motivation

Federal Ministry of Transport and Digital Infrastructure, National Organisation Hydrogen and Fuel Cell Technology

National innovation programme for hydrogen and fuel cell technology

Vehicle efficiency Industry motivation

Federal Ministry of Transport and Digital Infrastructure, Federal Ministry for Economic Affairs, participating industry

* Energy efficiency in the transport sector can be divided into system efficiency (reduce or avoid travel or the need to travel), travel efficiency (shift to more energy efficient modes) and vehicle efficiency (improve the efficiency through vehicle technology).

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Technological trends Buildings

The German building stock consumes around 40% of the final energy. At the same time, studies found that the sector has huge energy saving potential in different sub-sectors. However, in order to realize them, policy support is the key factor. Germany’s energy efficiency policy package in the building sector includes regulatory instruments, instruments that promote dissemination and awareness raising, economic tools, capacity building support as well as support for the uptake of energy services and research and development promotion. Most of the measures used in Germany do not focus on a single technology. They either address a set of technologies or are even cross-cutting. According to IFEU et al. (2009) building refurbishment and exchange of boilers in the residential sector will result in significant savings (154 PJ) by 2020. In comparison to that, the construction of new energy-efficient buildings will only yield marginal savings by 2020. For the commerce and services sector, efficient lighting has the highest saving potential with almost 50% (or 33 PJ) in the sector, while the saving potential for building refurbishment and the exchange of boilers can be neglected. A newer study carried out by IFEU (2011) also identifies the enormous energy saving potential in building refurbishment for 2020 and 2030. However, this time energy consumption can be lowered in both, the residential sector and the commerce and services sector. Fraunhofer ISI (2012b) found that energy-efficient appliances and lighting can result in energy savings in the residential sector, but compared to other options their contribution is rather small. In particular, building-related measures like water heating systems are opportunities for large-scale reduction of the energy consumption. Increasing fuel prices make such investments profitable within shorter periods. However, the study concludes, “they need to be activated by political measures that address in particular also behavioural barriers such as high up-front investments” (Fraunhofer ISI 2012, p. 15).

Table 39: Overview of the energy efficiency potential in buildings in Germany according to the different studies

Study Scope Efficiency improvement Details

IFEU, et al. 2009

Germany; till 2020

Reductions in 2020 amounting to 534PJ

Private households: 254 PJ, commerce and services: 68 PJ, industry: 212 PJ Study based on energy efficiency potentials of 33 instruments

IFEU 2011 Germany; till 2030

For 2020, energy saving estimates range between 630 PJ to 1262 PJ and for 2030, between 954 PJ to 2078 PJ

Private households: 58 – 388 PJ by 2020 and 127 – 622 PJ by 2030 Commerce and services: 94 - 247 PJ by 2020 and 141 – 409 PJ by 2030 Industry: 181 – 278 PJ by 2020 and 258 – 417 PJ by 2030 Study based on energy efficiency potentials of 43 instruments

Fraunhofer ISI 2012b Germany

Overall savings can amount to 57% compared to baseline

Household sector: compared to baseline 71% or 207 Mtoe of final energy demand reduction possible

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projections; estimates for cost-efficient savings are slightly lower at 52%

by 2050 Tertiary sector: compared to baseline 61% or 90 Mtoe of final energy demand reduction possible by 2050 Industry sector: compared to baseline 52% or 192 Mtoe of final energy demand reduction possible by 2050

Transport

The current share of the transport sector in the final energy consumption in Germany is 28%. Several studies identified significant potential for energy efficiency improvements. According to these studies, efficiency increases of up to 50% are possible till mid of the century. Besides modal shift for passenger and goods transport, improvements in vehicle technology are a key factor for the overall efficiency increase. Design, material composition, and engine technology as well as more efficient vehicle components and equipment can reduce the specific energy consumption. In addition to the efficient gasoline and diesel vehicles, hybrid electric and electric vehicles play a key role for efficiency improvements. For this reason the German government developed an electric mobility strategy and implemented several policies to promote efficient vehicles in general and electric vehicles in particular. There are also energy efficiency technologies available for non-road transport, but these play a smaller role in realizing strong efficiency improvements. The efficiency potential does not lie solely in technical improvements, but also in mode shift as highlighted by Fraunhofer ISI (2012a). Despite the efficiency improvements in terms of energy consumption per distance travelled, the total energy demand from the transport sector is also determined by the development of transport demand. Ifeu (2012) assume efficiency improvements for all modes, but according to their assumption increasing transport demand outweighs efficiency improvements and leads to a net increase of transport energy demand.

Table 40: Overview of the energy efficiency potential in transport in Germany according to the different studies


Fraunhofer ISI 2012a

Germany, Developments till 2030 (also data for EU 27)

47% reduction of transport energy demand compared to the baseline

Origin of the energy savings: 43% from passenger transport (technical and mode shift) 40% from goods transport (technical and behaviour change) 11% from air traffic

Shell 2014

Germany, Till 2040 Covers only passenger cars

Reduction in energy consumption from passenger cars: Trend-scenario 45% , Alternative scenario 52%

Stronger market penetration of alternative fuels in the “Alternative scenario” Average efficiency improvements of new vehicles in 2040 compared to 2013: Trend-scenario 44%; Alternative-scenario 52%

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Ifeu 2012 Germany, till 2030

The primary energy consumption of the transport sector is projected to increase due to and rising transport volume

Efficiency improvements are outweighed by an increase in transport demand. Specific fuel consumption for buses and heavy-duty vehicles is projected to decrease by 8% Efficiency improvements in rail transport of 10% for diesel traction and of 20% for electric traction Specific energy consumption in air transport decreases by 20%

DLR et al.2012 (Leitstudie 2011)

Germany, till 2050

Final energy consumption is reduced by 40 to 47% (compared to 2005) depending on the scenario

Energy efficiency improvement is assumed to reach 55% in 2050 (compared to 2005) for gasoline cars and 50% for diesel cars

Barriers Buildings

The final energy consumption in Germany accounts for approx. 8 800 PJ and is typically divided into industry (2 634 PJ; 30%), transport (2 568 PJ; 29%), households (2 333 PJ; 27%) and the commercial sector (1 346 PJ; 15%) (BMWI 2014b; data for 2011). Buildings have a share of around 40% in total final energy consumption (BMWI 2014a) and account for one quarter of the CO2 emissions in Germany (UBA 2013). Building-related energy consumption by the private household sector amounted to 1 940 PJ in 2011; taking into account buildings in industry and the commercial sector, this leads to 3 151 PJ4. Space heating alone has a share of over 28% in the total final energy consumption (BMWI, 2014a). Combined with the high potential for energy savings (Horst et al. 2011), buildings are a main target sector in Germany to mitigate climate change and to improve energy security. Concerning shares of single sectors in building-related energy consumption (Figure 14), the household sector (space heating and hot water requirements) makes over 60% of building-related final energy consumption, followed by the commercial buildings with approx. 29% and industrial buildings with 10%. Applicable to all sectors, space heating has the highest share, followed by hot water requirements and lighting.

4 Including only permanently installed lighting in the commercial sector and excluding appliances, information and communication technologies etc.

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Source: BMWI 2014

Figure 14: Building-related energy consumption by end-use in % (2011)

In the last decade Germany has already been successful in lowering specific space heat requirements for the residential buildings stock as temperature adjusted consumption fell from 198 kWh/m2 (2000-2002 average) to 146 kWh/m2 (2010-2012 average) (BMWi, 2014a)5. However, the whole potential for energy savings was not utilised because of the growth in living space, triggered by the increase of income and demographic structures that occurred during the same time period. The annual growth rate in living space has been 1% since 1996 (Weiß & Dunkelberg 2010). Currently, the floor area of residential buildings adds up to 3 720 million m2 (2011) and is expected to grow by 7% until 2030 (Schlesinger et al. 2014). The absolute number of non-residential buildings is estimated to be 1,7 million (12% of which are publicly owned). Residential buildings amount to 18,2 million (BDI, no year). Weiß & Dunkelberg (2010) stress the importance of single to two-family houses as a sub-group of residential buildings, as specific heat energy requirements are higher than in multi-family houses. Floor area of single to two-family houses and multi-family houses was 2 167 and 1 481 million m2 respectively in 2011 (Schlesinger et al. 2014). The share of single to two-family houses accounts for 60% of the floor area. Krémer et al. (2005) further points out that the quality of the new buildings significantly differs from that of the existing ones. While more than 35% of the new buildings are built with a low-energy-house standard (less than 70 kWh/m2a)6, the existing building stock shows huge potentials for energy efficient modernisation (between 160-200 kWh/m2a). Currently, 60% of the German building stock is not energy refurbished (DDIV, 2015).

5 The specific energy consumption of non-residential buildings is much higher than in residential buildings. However, statistical data for non-residential buildings is scarce. 6 Further improvements in the future are expected due to further strengthening of the EnEV (energy saving ordinance).

12,1% 49,4%

6,7% 0,4% 2,3%

19,2%

1,2% 0,7%

0,8%

7,1%

hot water (privatehouseholds)space heating (privatehouseholds)lighting (commercial)

space cooling (commercial)

hot water (commercial)

space heating(commercial)lighting (industry)

space cooling (industry)

hot water (industry)

space heating (industry)

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The importance of thermal heating in energy consumption is also reflected by the German energy policy, particularly thermal refurbishment has been given a high priority in the set of the national building targets. Linked with the government’s decision to reduce primary energy demand of buildings by 80% until 2050 and heat consumption by 20% until 2020, is the requirement to increase the rate of thermal refurbishment from currently approx. 1% to 2% per year (BMWi, 2014a). Table 41 lists the annual modernisation rate of single building components in residential buildings. The most common technical measure taken is the renewing of heating system, while insulation of the basement and façade are least favoured (Jahnke & Verhoog, 2012).

Table 41: Annual modernisation rate (in %) of buildings components (residential)

Technical measure Diefenbach et al. (2010) Jahnke & Verhoog (2012) Heating 2,8 – 3,5 3,2 Facade 0,8 – 1,1 0,9 Roof/ upper floor 1,3 – 1,7 1,4 Basement 0,3 – 0,4 0,5 Windows 1,3 – 1,8 1,6

Source: Jahnke & Verhoog (2012) and Diefenbach et al. (2010), numbers adapted from Jahnke & Verhoog (2012)

Most of the found literature examining the barriers in the buildings sector deals with refurbishment of residential buildings. The key findings regarding the barriers in the German buildings sector are:

• The barriers existing in the buildings sector are highly complex and there exist interrelations between the sub-groups (e.g. age of building owners as a social barrier also influences investment decisions).

• When barriers are discussed, it is important to distinguish between the groups of actors (e.g. landlords might respond differently to motivation factors than homeowners).

• Barriers, which dwelling owners are aware of, need to be distinguished from those owners are not aware of (e.g. misperception of the energetic building condition vs. technical/constructional issues). A distinction also needs to be made for benefits from refurbishments.

• Each barrier is affected by specific target groups (e.g. older dwelling owners, energy saving motivated owners) and differentiation needs to be made when barriers are to be overcome.

• The identified manifold economic barriers show that financial support is still necessary to accelerate the uptake of energy efficiency improvement; however information tools at all levels are also necessary. It is necessary to address particularly ‘soft’ or non-economic barriers like lack of awareness and risk perception, and thus to incentivise end-users to change their behaviour.

Table 42: Assessment of barriers in the buildings sector

Impact of barriers Barrier type Barriers

Big


Misperception of building condition (bounded rationality) Disadvantage of energetic quality to other attributes of a housing unit (value)

Economic Length of payback period High up-front costs, lack of capital and missing profitability

Institutional Split incentives / owner-tenant (investor-user) dilemma

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Impact of barriers Barrier type Barriers

Legal barriers Missing support chains

Medium


Lack of awareness on non-energy benefits (value) Preferences for single measures than comprehensive retrofitting Low social recognition of energy efficiency

Economic Time costs Uncertainty on investment

Institutional

Missing strategic development Missing supply of qualified craft business and energy consultants Missing incentives by single policies Complexity and target conflicts of support programmes Adverse long-term effect of municipalities’ investments

Small


Age of private investors

Missing credibility and trust concerning technologies

Institutional

Technical/constructional issues Difficult real estate markets in some cities/regions (depending on the individual situation) Joint ownership of buildings

Transport

With more than 2 600 PJ, transport accounted for 28% of the total final energy consumption in 2013, with greenhouse gas emissions in the sector amounting to some 17% of the total greenhouse gas emissions (BMWi 2014c, p. 40). The energy consumption of the transport sector includes final energy consumption of rail transport, road transport, air transport, coastal shipping and inland navigation7. Road transport accounts for the largest share of transport energy consumption and is responsible for about 82% (2 167 PJ) of the energy consumed. Private motorized transport can be identified as being responsible for about two-thirds of the energy consumption in road transport – and for more than half of the total transport energy consumption. Road-based public passenger transport accounts only for a minor share in the energy consumption (1,5% of the road based energy consumption). Road-based goods transport is responsible for nearly one third of the road-based energy consumption (BMVI 2014). Aviation8 is responsible for about 14% (375,2 PJ), followed by rail transport (2,2%, 57,5 PJ). Coastal shipping and inland navigation have only a minor share in transport final energy consumption (0,4%, 12,2 PJ) (BMWi 2014a, p. 39). The energy consumption of the German transport sector reached its highest level in 1999 at 2 781 PJ. Hence, a reduction of about 6% was achieved between 1999 and 2013 (Figure 15). However, in the recent years, a slight increase of energy consumption has been observed, so that the 2013 level was by 1% higher compared 7 The final energy consumed by providing transport services is included, while energy consumption from lighting and other infrastructural services are not covered (BMWi, 2014). 8 Based on the aviation fuel consumption in Germany, thus also aviation fuel is included, which is consumed by international aviation.

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to 2005. This is mainly due to the rising energy consumption by road transport, while rail transport, coastal shipping and inland navigation experienced a decrease compared to 2005. This development has to be seen against the background of the rising transport volume in passenger and goods transport. In total, a decrease of energy consumption per passenger kilometre and tonne kilometre is observed – indicating rising energy efficiency in the transport sector. Passenger kilometres travelled increased by 56% compared to 1990 (by 5% compared to 2005) and tonne kilometres by 115% compared to 1990 (11% compared to 2005).

Source: BMWI 2014b

Figure 15: Development of energy consumption in the transport sector in Germany

Still Germany is far away from its objectives for the transport sector, which are (1) Reduction of the final energy consumption by transport by about 10% in

2020 compared to 2005, (2) Reduction of the final energy consumption by transport by about 40% in

2050 compared to 2005, and (3) Distribution of 1 million electric vehicles by 2020 / 6 million electric

vehicles by 2030. Currently, conventional vehicles clearly dominate the German vehicle fleet. Less than 2% of the passenger car fleet is equipped with alternative propulsion system. 67% are conventional gasoline vehicles and 31% run on diesel (KBA 2015). Among the alternative fuels, LPG (liquefied petroleum gas) has a share of 1,1% and natural gas a share of 0,2%. Only 0,2% of the passenger car fleet is partially electrified (Hybrid electric vehicles/ Plug-in hybrid electric vehicles) or fully electrified (BEV). However, there is a positive development in terms of electric vehicle registrations (see Figure 16). In 2014, about 8 500 fully electrified vehicles were newly registered, thus a market share of 0,3% was achieved. Partially electrified vehicles have a market share of 0,9 %, while HEV dominate clearly in this segment. Still Germany has a relatively low market share of EVs compared to the other European countries like Norway, the Netherlands, France or Denmark.

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Source: KBA 2015

Figure 16: Annual registrations electric passenger cars in Germany and total registrations

Figure 17 highlights the efficiency improvements realised in Germany since 1990 for different transportation modes9. Strong energy efficiency increases have been achieved for passenger cars, passenger air transport and lorry-based goods transport. Comparing the differences in energy efficiency between the various modes in passenger transport reveals that rail-based transport and coach services are nearly twice as efficient as passenger cars. Regarding goods transport waterway and rail-based transport need less than half of the energy per tonne kilometre than road-based transport by lorries. Consequently, a significant potential for increased energy efficiency in the transport sector lies in mode shift e.g. from road to rail transport.

9 Improvements are realised in terms of energy consumption per passenger kilometre or tonne kilometre. This indicator depends not only the technical vehicle efficiency (fuel use per vehicle kilometre travelled), but is also influenced by the occupancy rate of the vehicle (e.g. passengers per car), thus can be influence by organisational efficiency improvements.

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Source: dena 2012

Figure 17: Final energy consumption of selected transport modes in MJ/pkm or MJ/tkm in 1990 to 2010

In general, it has to be acknowledged that in order to achieve a more energy-efficient transport system all determinates of energy consumption in transport have to be addressed. The full potential for energy savings can only be realised by taking all elements of the transport system into account - ranging from energy consumption of single vehicles to the overall need for transport. Energy-efficient transportation can be realised at three different levels. Potentials for energy efficiency are available for single vehicles (vehicle efficiency), individual trips (travel efficiency - based on the modal choice) and for the whole transport system (system efficiency – based on the generation of transport demand). The overall energy efficiency of the transport system results from the performance at all three levels (Böhler-Baedeker et al., 2012). Road-based transport is responsible for 82% of the energy consumption in the German transport system. Consequently, the largest potential for energy efficiency improvements can be seen in increasing the efficiency of road vehicles and in shifting passenger and freight transport to more efficient modes. However, several barriers impede the full utilization of the energy efficiency potential:

• Passenger transport is heavily relying on passenger cars. Private cars have a long tradition as status symbol in Germany and are often perceived as the most flexible and convenient form of travelling. The decision-making process at different governmental levels has led to a car-oriented infrastructure in many regions and a paradigm shift towards prioritization of energy-efficient modes in planning and investment decision is still at the beginning. Consequently, the framework conditions (e.g. infrastructure provision, taxation) for passenger mobility are very attractive for individual motorized transport, while non-motorized transport and public transport are perceived as less attractive.

• The technological potential of vehicle efficiency is not fully tackled due to higher purchasing prices for energy-efficient vehicles or alternative drivetrains. Most consumers are not willing to accept surcharges. Furthermore, they usually do not reflect the vehicle’s energy efficiency in their purchasing decision.

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One or more policy instruments already address several of the identified barriers, but a clear prioritization of energy efficient modes and vehicles through targeted investment decisions and taxation is still missing. Furthermore, some policy instruments target important lever for more energy efficiency, but have only a limited effect due to their inherent design (e.g. limited effect of CO2 based vehicle taxation).


Impact of Barriers Type Barriers

Big

Cultural Tradition of car ownership and use Cultural Car-oriented urban planning Economic Lack of financial resources for high-quality public transport

Economic Tax policies that negatively affect road transport energy efficiency

Institutional Lack of long-term vision in regard to improvements of and investments in transport infrastructure

Economic Lacking cost competiveness of electric vehicles Institutional Fragmentation of public transport operators Institutional Parallel extension of road networks Institutional Complex funding structures in urban public transport

Medium

Cultural Cars as status symbol

Economic Prioritization of megaprojects, at the expense of more cost-effective sustainable/energy-efficient transport options

Economic Limited focus on energy efficiency and co-benefits in the public decision making process

Social Suburbanisation trends Economic Limited rail infrastructure capacity Economic Tax policies that favour inefficient modes Institutional Inconsistency in national, regional and local priorities Institutional Segmented planning of transport infrastructure

Cultural Limited willingness to accept high costs for alternative fuelled vehicles (e.g. electric vehicles)

Cultural Limited willingness to accept higher purchasing prices for an energy-efficient vehicles

Cultural Limited relevance of environmental performance and energy-efficiency in vehicle purchasing decisions and lack of awareness

Economic High economic importance of the automobile industry in Germany

Economic Payback period of fuel efficient vehicles Cultural Opposition against (tighter) speed limits (e.g. on highways)

Cross-cutting (Perceived) lack of charging infrastructure for electric vehicles

Educational Limited awareness about actual travel costs of different modes

Small

Cultural High performance expectations for electric vehicles

Educational Limited awareness of actual driving behaviour and range requirements

Social Vulnerability of pedestrians

87

Impact of Barriers Type Barriers

Educational Limited awareness of the energy consumption of goods deliveries among private consumers

Institutional Limited cooperation in city logistics

Cross Cutting At the first step all identified cross-sectoral barriers in Germany have received medium ranking. For some of the barriers there are large sectoral discrepancies related to the ranking, e.g. “misperception of building condition” is of high importance in the buildings sector, however “lack of awareness of fuel consumption and emission of own vehicles” has a low sectoral ranking. In the second step, only cross-sectoral barriers are taken into account and these are ranked relative to each other in the set of cross-sectoral ones. The internal ranking of cross-sectoral barriers leads to the results displayed in Table 44.

Table 44: Assessment of cross-cutting barriers in Germany


High

Limited relevance of energy consumption and environmental performance High up-front costs of energy efficient technologies Policy-induced and/or not yet dissolved disincentives by policy Missing financial resources in the public sector and adverse long-term effects

Medium

Lack of awareness of energy consumption and CO2 emissions Investment lock-in Payback period for energy efficient technologies Lack of awareness of other co-benefits

All cross-sectoral barriers have been ranked as medium or high. Moreover, many barriers that are ranked high are not identified to be cross-sectoral. Consequently, it occurs that barriers ranked as medium might be ranked high in the cross-sectoral ranking due to the limitation of barriers considered in the ranking. None of the identified cross-sectoral barriers are found to be addressed by policy covering both sectors. However, in most cases the listed barriers are addressed by at least one sector-specific policy. Table 45 lists all of the identified barriers as well as policies by which these are addressed.

Table 45: Cross-sectoral barriers and relevant policy instruments

Barrier(s) in the building sector

Policy instruments addressing the

buildings sector barrier(s)

Barrier(s) in the transport sector

Policy instruments addressing the transport sector

barrier(s) Cross-sectoral barrier: Limited relevance of energy consumption and environmental

performance Disadvantage of energety quality to other attributes of a housing unit (cultural)

Energy saving ordinance On-site energy consultation

Limited relevance of environmental performance and energy efficiency in vehicle purchasing

CO2-related motor vehicle tax

88






barrier(s) Energy checks Energy consultation for SMEs KfW construction monitoring

Cross-sectoral barrier: Lack of awareness of energy consumption and CO2 emissions

Misperception of building condition (bounded rationality) (mainly educational)

Inspection of boilers and heating/cooling installations Seal of quality efficiency house On-site energy consultation Energy checks Energy consultation for SMEs Energy performance certificate

Lack of awareness of fuel consumption and emission of own vehicles (educational) Limited awareness of the energy consumption of goods deliveries among private consumers (educational)

Passenger car labelling “me and my car” campaign; “new driving” campaign Heavy goods vehicle toll charges

Cross-sectoral barrier: Lack of awareness of other co-benefits (e.g. comfort gains, wider sustainability benefits, quality of life)

Lack of awareness of non-energy benefits (value) (cultural/ educational)

On-site energy consultation Energy checks Energy consultation for SMEs Promotion of energy management systems

Limited focus on energy efficiency and cobenefits in the public decision-making process (economic)

Cross-sectoral barrier: High up-front costs of energy efficient technologies

High up-front costs, lack of capital and missing profitability (economic)

Relevant KfW programmes Market incentive programme to promote the use of renewable energies in the heating market BAFA cross-cutting technologies Energy tax

Limited willingness to accept higher purchasing prices for energy efficient vehicles (cultural) Limited willingness to accept high costs for alternative fuelled vehicles (e.g. electric vehicles) (cultural)

Federal funding programme for energy efficient commercial vehicles to be launched in 2016 (BMWi, 2014) Tax benefits for natural and liquid gas Tax exemption for electric vehicles

Cross-sectoral barrier: Policy induced and/or not yet dissolved disincentives by policy Legal barriers (institutional) Complexity and target conflicts of support programmes (institutional) Missing incentives by single policies

Tax policies that negatively affect road transport energy efficiency (economic) Tax policies that favour inefficient modes (economic)

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barrier(s) (institutional)

Cross-sectoral barrier: Missing financial resources in the public sector and adverse long-term effects

Adverse long-term effect of municipality investments (institutional)

Funding programmes for municipalities

Lack of financial resources for high-quality public transport (economic)

Municipal transport financing act and regionalisation act: financial aid for investments for improvement of the infrastructure and the transport of passenger in cities and municipalities

Cross-sectoral barrier: Investment lock-in Investment lock-in in private, commercial and public buildings (institutional)

Indirectly addressed by all instruments

Investment lock-in of vehicle owners (institutional)

CO2-related motor vehicle tax

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Greece Energy efficiency policies

The majority of the Hellenic policy instruments for the promotion of energy efficiency (EE) concerns the transposition of EU Directives. There are more regulatory policy instruments compared to those in other categories. The policy instruments for the building sector are more and described in details compared to those of the transport sector. The outcomes of these national policy instruments in terms of energy savings are rarely available. There are no policy instruments for any of the two sectors under the categories: Network and capacity building instruments, policy instruments for R&D and BAT promotion.

Buildings

Particularly, concerning the buildings sector, the majority of the policy instruments are targeting to the final energy consumers. These policy instruments include:

• Regulatory policy instruments (Energy labeling, energy audits, Regulation for Energy Performance of Buildings – Minimum requirements of energy performance for buildings, metering, energy auditors, eco-design requirements, energy management systems);

• Dissemination and awareness instruments/informative policy instruments (energy performance certificate; Green Public Procurements, Voluntary agreements);

• Economic policy instruments (taxation on energy products and electricity, Green Fund-subsidies, financial incentives (subsidies, financial exemptions), financial incentives for replacement of devices/systems);

• Policy instruments for the promotion of energy services (ESCO market promotion).

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Table 46: Summary table for the buildings sector in Greece

Policy instruments

Short list of implemented policies and measures Objective Target group and

targeted objects


(motivation or punish non-compliance)



Energy labelling KENAK Minimum energy performance requirements for buildings Energy audits Energy auditors Energy management systems Eco-design requirements

Promotion of energy efficiency

Final energy consumers and producers / manufacturers of energy efficient technologies

Registry Penalties Sanctions

General Secretariat of Industry at MEECC Ministry of Finance Chambers Regions (second level local authorities)


Energy Performance Certificate


Owners of buildings, apartments

Penalties Sanctions

Ministry of Reconstruction of Production, Environment and Energy

Green Public Procurements, Voluntary agreements


Public sector Local authorities Private entities that can provide EE services and technologies

Not mentioned

Ministry of Finance Ministry of Reconstruction of Production, Environment and Energy


Subsidies from Green Fund Tax

Promotion of energy efficiency Reduction of GHG emissions

Owners of buildings, apartments Not mentioned

MEECC Green Fund

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Policy instruments

Short list of implemented policies and measures Objective Target group and

targeted objects




Capacity building and networking None


ESCOs market promotion

Establishment of an market for energy efficiency actions Promotion of energy efficiency

Providers of energy services and other measures of EE Distributors of energy Distribution network operators Energy companies of retail sales End-users

Registry Penalties Sanctions

Ministry of Reconstruction of Production, Environment and Energy Green Fund


None - - - -

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Transport

The same situation is observed for the transport sector. Its policy instruments include:

• Planning policy instruments (Cycling and pedestrianism in the city, improvement of infrastructure for electric vehicles);

• Regulatory policy instruments (Emission standards (Euro 5 and Euro 6), Establishment of Permanent Committee on Green Transport; Energy labeling for transport);

• Financial policy instruments (taxation on energy products and electricity, Registration and circulation tax exemption for electric and hybrid vehicles, incentives to replace old technology cars and motorcycles (subsidies, tax exemptions));

• Dissemination and awareness instruments (Consumer information fuel economy and CO2 emissions of new passenger cars, eco-driving; Green Public Procurements for the transport sector).

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Table 47: Summary Table for the Transport Sector in Greece

Short list of


Objective10 (improve

system, travel or vehicle

efficiency)





Cycling and pedestrianism in the city Improvement of infrastructure for electric vehicles

Improve transport infrastructure Support traffic management Promotion of energy efficient technologies and practices

Vehicle owners End-users

Penalties

Ministry of Finance Ministry of Economy, Infrastructure, Shipping and Tourism Ministry of Reconstruction of Production, Environment and Energy Region of Attica Municipality of Athens


Emission standards (Euro 5 and 6) Energy labelling Establishment of Permanent Committee on Green Transportation

Achievement of energy savings Reduction of GHG emissions

Manufacturers Owners of passenger and light professional vehicles

Tax exemptions, Penalties Ministry of Economy, Infrastructure, Shipping and Tourism


Taxation on energy products and electricity, Registration and Circulation tax exemption for electric and hybrid vehicles Incentives to replace old technology cars and

Achievement of energy savings Reduction of GHG emissions

Vehicle owners Road, rail, navigation, aviation sub-sectors

Not mentioned Ministry of Economy, Infrastructure, Shipping and Tourism


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Short list of


Objective10 (improve

system, travel or vehicle

efficiency)




motorcycles (subsidies, tax exemptions)


Consumer information fuel economy and CO2 emissions of new passenger cars Eco-driving

Promotion of energy efficiency Familiarization of the public with energy efficient practices

End users/drivers Car suppliers Driving license schools Vehicle drivers of governmental agencies and the broader public sector, professional drivers

No available information

Ministry of Economy, Infrastructure, Shipping and Tourism Ministry of Reconstruction of Production, Environment and Energy

Green Public Procurement Promotion of EE Not mentioned Public sector Local authorities


None - - - -

96

Technological trends The Hellenic building and transport sectors show significant energy saving potential. In 2012, the buildings sector (residential and tertiary) accounted for 45% of the total final energy consumption, while the transport sector - 37%. The activities with the highest energy saving potential in building sector are the end-uses of space heating-cooling, hot water production and lighting, while in the transport sector - the passenger and freight road transport (private cars, trucks). For the exploitation of energy efficiency potential, the national energy efficiency policy instruments promote cost-efficient, mature and innovative technologies. For the Hellenic sector of building construction, these are: improved building materials and construction systems, bioclimatic elements, solar and hybrid cooling and heating systems, software tools for calculating the energy efficiency of buildings and BEMS. Respectively, for the Hellenic transport sector, these are the electric and hybrid cars, and intelligent networks. The energy services market shows great potential of development. Companies that develop new competitive products in the EE sector are those producing building materials, insulation materials, solar thermal systems, smart home applications and have obtained a significant market share in the country and abroad. On the other hand, the transport EE technologies market in Hellas is limited. Especially for navigation sector, where Hellas has one of the world’s biggest shares, issues of energy efficiency are examined in the context of the world competition in trade transportation and IMO regulations.

Buildings

More specifically, the EE technologies available for the building (residential & tertiary) sector are:

Table 48: EE technologies for the buildings sector in Greece

Sub-sector Technologies

Thermal insulation Materials: extruded polystyrene, polystyrene and mineral wool and other fibrous minerals & energy efficient glazing: double, coated, with vacuum, etc.

Space heating-cooling

Gas condensing boilers, heat pumps (mainly air source), biomass systems (mainly energy efficient fireplaces and pellet boilers), energy efficient electric systems (such as air-conditions/inverter technology at least A++), CHP systems, trigeneration systems (power-heating-cooling).

Air Conditioning Inverter A++, A+++ Water heating Electric water heater, solar thermal systems (water heaters) Cooking Electric and gas cooking devices Lighting LEDs, Magnetic induction lamps Refrigeration, Washing machines, Laundry dryers, dishwashers, other electrics

Appliances with EU Energy class A+++ and A++

Other Building Energy Management System (BEMS), Building automation systems

The activities of the residential sector with the highest energy saving potential are:

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(1) Space heating that covers 57% (reaching even 3,3 TWh) of the total possible energy savings in 2016, out of which 60% is attributed mainly to building envelope improvements (1st NEEAP, 2008);

(2) Use of hot water by 22% (1,2 TWh is mainly due to the penetration of solar collectors) (1st NEEAP, 2008), and

(3) Lighting by 9% (0,5 TWh is mostly due to replacement of conventional lamps with more energy efficient ones) (1st NEEAP, 2008).

For the tertiary sector the space heating is expected to contribute by 70% in the total energy savings of this sector, lighting by 15% and space cooling by 13% (1st NEEAP, 2008). These are presented in Table 49 and Table 50. Table 49: Energy savings potential in GWh per end-use in the residential sector during

the period 2008-2016

Activities 2008 2009 2010 2011 2012 2013 2014 2015 2016 Cooking 0 0 13 20 27 33 39 44 49 Dish washing 0 24 52 71 76 75 74 73 73

Water heating 31 253 628 690 828 964 1 116 1 276 1 298

Washing machines 0 47 98 132 144 153 152 151 149

Lighting 18 106 207 302 392 425 453 477 499 Freezing 27 67 109 153 182 177 172 167 163 Air conditioning 20 40 69 97 126 136 146 156 161

Space heating 56 276 503 706 1 200 1 696 2 185 2 737 3 142

Total 152 814 1 679 2 171 2 974 3 659 4 337 5 082 5 533 Source: 1st NEEAP, 2008; Remaco SA, 2010

Table 50: Energy savings potential in GWh per end-use in the tertiary sector during the period 2008-2016

Activities 2008 2009 2010 2011 2012 2013 2014 2015 2016 Cooking 0 0 0 3 3 6 6 6 6 Space cooling 16 52 116 232 339 450 598 793 862

Lighting 85 179 278 391 514 608 694 771 829 Hot water use 43 77 107 187 288 411 540 672 745

Space heating (conventional equipment)

611 800 1 096 1 450 1 919 2 350 2 794 3 209 3 369

CHP 0 122 130 137 149 162 178 179 202 Electricity from CHP - 58 62 66 72 80 89 93 106

Total 755 1 044 1 529 2 192 2 986 3 743 5 543 5 365 5 715 Source: 1st NEEAP, 2008

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Transport

The EE technologies available for the transport sector are: Table 51: EE technologies for the transport sector in Greece

Sub-sector Technologies

Passenger road Electric & hybrid cars, Euro 5-6 cars, CNG buses, e-bikes, tyres with Rolling Resistance Coefficient (RRC) of “A” class

Freight road Heavy and light trucks Euro 5-6, tyres with Rolling Resistance Coefficient (RRC) of “A” class

Passenger & Freight rail Diesel, Electric, Steam Passenger & Freight aviation New generation, fuel efficient A320/321 and A319 aircrafts

Passenger & Freight navigation

Computational fluid dynamics (CFD) analysis and trim/draft optimization, Optimization of hull dimensions, waste heat recovery systems, ballast water treatment systems, energy saving devices such as: Propulsion Improving Devices (Wake Equalizing and Flow Separation Alleviating Devices, Pre-swirl and Post-swirl Devices, High-efficiency Propellers), Main Engine Performance Measurement and Control devices.

For the transport sector (Table 52) the highest energy savings potential is expected from the use of private cars (73% of the total energy savings of this sector) and from the freight transport using trucks (21% of the total energy savings of this sector) (2nd NEEAP, 2011; 1st NEEAP, 2008). Table 52: Energy savings potential in GWh per end-use in the transport sector during

the period 2008 - 2016

Sub-sectors 2008 2009 2010 2011 2012 2013 2014 2015 2016

Public buses 0 18 17 17 32 49 45 43 41

Private cars 0 316 983 1 615 2 235 2 866 3 435 4 014 4 957

Trucks 0 283 596 980 1 171 1 345 1 330 1 313 1 459 Small trucks 0 116 191 255 283 280 278 276 274

Total 0 734 1 781 2 865 3 720 4 540 5 088 5 646 6 731 Source: 1st NEEAP, 2008

In the 3rd NEEAP energy savings are expected from: energy upgrade of buildings, replacement of old home appliances with more efficient ones, use of energy management systems, replacement of old vehicles with others of newer technology, shift of transport modals. Particularly for the building sector the energy saving potential is significant, but the largest part of it is unexploited (Gelegenis J. et al., 2014) (Table 53).

Table 53: Energy savings potential per activity for the building sector in Greece

Type of activity Energy saving in %

Thermal energy Electric energy Insulation of external walls 33-60 Insulation of floor/ceiling 2-14

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Type of activity Energy saving in %

Thermal energy Electric energy Replacement of windows -and door -frames 14 - 20 Maintenance of central heating systems 10 - 12 Installation of new oil heating systems with high performance <17

Installation of central natural gas heating system <21 Installation of compensation and space thermostats 3 - 6 Installation of external shading 10 - 20 Installation of ceiling fans <60 Installation of solar collectors for hot water use 50 - 80 Night ventilation <10 Installation of lighting systems of high performance <60 Installation of Building Management Systems <20 <30 Air insulation 16 - 21 Replacement of air conditioning with other of higher performance - thermal pumps 65 - 75

Use of geothermal pumps <20 Installation of green roofs <10 <30 Usage of cold materials <15

Source: YPEKA, 2014

Barriers The barriers for both sectors are observed on two different levels: national and local/regional. In the local/regional, the barriers were mostly linked with the initiative of Covenant of Mayors and the implementation of SEAPs (buildings, mobility) and concerned the local authorities.

Buildings

Particularly, for the building sector, the Greek society has not yet strongly endorsed energy conservation and sustainability (Theodoridou I. et al., 2012). This barrier is encountered also among the hotel owners who believe that the more energy they consume, the more comfortable their guests are (Hotel Energy Solutions, 2011). Also, the implementation network is considered inadequate, mainly due to the limited training of the technical staff, the inadequate procedures for monitoring and evaluation and the administrative burden. This was observed both in the national level, and in the municipality level for the development and implementation of SEAPs. In order to overcome these barriers, there is an on-going attempt with relevant initiatives, programmes, and dissemination actions.


Impact of barriers Barriers

Big Financial crisis Low level of awareness Lack of expertise - Incomplete training

100


Selecting actions with short payback periods Lack of data/information –diversion of management Inadequate implementation network/governance framework

Medium

Zero to low availability of information Shared ownership (multilateral ownership) Lack of urban and land planning Lack of experience and resources to implement the policy instrument Lack of environmental consciousness, awareness and culture Reluctance to pay up front great amount of money for an investment with future returns Information barrier towards emerging innovative technologies Working habits Unwillingness to do more than minimum requirements Poorly developed market for energy services Costly innovative technologies for end-users Insufficient budget for integrated energy efficiency plans Ignoring the Cost-Benefit ratio Lack of legislation for modern EE technologies and practices Low state support Complex and difficult legislation and procedures Tenure status Inadequate implementation of policy instruments Low information and problematic communication among higher and lower levels of administration and communities Change of legislation for local/regional administrative division Bureaucracy for publicly funded projects Lack of pertinent authorities for building/apartment owners Time delays Administrative burden Low prioritization of EE

Small

Variable ownership structure, age and condition of the existing building stock (social) Lack of local social support Wrong use of information and communication of local scale governments Problematic cooperation among parties South European occupant behavior towards shading Established perception (hotels) Confusion and misuse of terms Higher consumption of oil than gas (habit) Diverse socio-economic background in plenty multi-familly buildings in Greece End-users aloofness due to negative past experience Negative public perception

101


Market failure to understand financial and social benefits Restricted interest of financial institutes towards NZEB Status of economic situation Ηigher income, higher energy consumption Cost distribution of central heating systems that favored the occupants of penthouses Reduced budget for functional expenses due to EE Negative Return of Investment for EE projects Difficult access to finance (hotels) Decommitment of funds Absence of incentive measures for buyers Lack of central coordination Hindering management of funds Special building cases in the Greek building sector Lack of legislation for positive policy interactions Unclear procedures for energy service contracts Interior arrangements in public buildings Reluctance for PPP Financial burden for implementation Management of reporting Limitation in selected EE technologies

Transport

Concerning the transport sector, most of the social-educational-cultural barriers are related with the perception that people have of owing and driving a vehicle. Particularly,

(1) the eco-driving is hindered by the old habits (driving inefficiently), (2) the promotion of public transport is hindered by the citizens’ preference of

private cars due to convenience and their perception that owning and driving a private car shows the status symbol and good lifestyle,

(3) the promotion of e-vehicles’ use is hindered by the negative public perception that this technology is not robust yet, as well as the lack of financial support schemes.

Furthermore, concerning the penetration of electric vehicles in Greek market, there is lack of support schemes (economic barrier) for their purchase (YPEKA, 2012). The incentives are limited to tax exemptions and no traffic restrictions. Finally, the recently implemented measures for the “capital controls” in the Greek banking sector (July 2015) in conjunction with the relevant austerity measures will further increase the barrier among the banking sector in providing loans, until the withdrawal of the measures and of the end-users who are becoming more reluctant to undertake the risk for a loan that is not considered by them as first priority.

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Big

Cruising traffic Wrong perception of people towards their capacities on eco-driving Energy efficient solutions more expensive than conventional ones. Old habits Non-renewal of fleet and infrastructure Lack of certified instructors and examiners for eco-driving Ineffective urban transportation planning Low public awareness towards eco-driving

Medium

Financial crisis Limited knowledge on public transport Citizens’ preference of private cars due to convenience and affordable running costs Perception that owning and driving a private car shows the status symbol and good lifestyle Unattractiveness of sector for investments Lack of support schemes Non-integrated policies Non-integrated energy efficient modal shifts in urban planning

Small

Low environmental sensitivity Low penetration of ICT from elderly people Disappointment for new transport systems Lack of ‘green transport behaviour Conflict of financial interest among different target groups Negative public perception towards electric vehicles Low prioritization of EE Overlap of responsibilities

Cross Cutting From the cross-cutting barriers – common barriers that were observed in both sectors – the most prominent ones are the financial crisis (economic barrier) and the ineffective urban, land and transportation planning (institutional barrier). There are common barriers that affect clearly both sectors (i.e. the economic barrier “financial crisis”), others that concern different types of technologies in the two sectors (i.e. the social-cultural-educational barrier “negative public perception for green roofs and electric vehicles”), and others that, despite the different origin of the barrier, they have the same result (i.e. the social-cultural-educational barriers “Negative past experience & disappointment for a new system” adversely affects the installation of innovative technologies in both sectors). The most prominent cross-cutting barriers are the inefficient performance of the implementation network/governance framework (institutional barrier), the low availability of information (social-cultural-educational barrier), the low state of support (institutional barrier) and the low prioritization of EE (institutional barrier).

103



High

Inefficient performance of the implementation network/governance structure (institutional) (Inadequate implementation network/governance framework - Overlap of responsibilities) Low prioritization of EE (Institutional) Low state support (Institutional) Low availability of information (Social-cultural-educational) (Zero to low availability of information - Limited knowledge on public transport)

Medium

Absence of effective urban planning (Institutional) (Lack of urban and land planning – Ineffective urban transportation planning) Lack of coordinated efforts for integrated policies (Institutional) (Complex and difficult legislation and procedures-Lack of legislation for positive policy interactions-Lack of central coordination- Non-integrated policies) Lack of environmental consciousness (Social-cultural-educational) (Lack of environmental consciousness, awareness, culture - Low environmental sensitivity -Lack of “green transport behaviour”) Creation of negative feelings (aloofness and disappointment) towards the use of new technologies or practices (Social-cultural-educational) (End-users aloofness due to negative past experience – Disappointment for new transport systems) Negative public perception (Social-cultural-educational) (Negative public perception for green roofs - Negative public perception towards electric vehicles) Inadequate information about innovative technologies (Social-cultural-educational) (Information barrier towards emerging innovative technologies – Low penetration of ICT from elderly people) Reluctance to pay more than a defined amount for EE technologies/practices (Economic) (Reluctance to pay up front great amount of money and preference to EE investments with short payback periods – High initial investment for energy efficient solutions compared to conventional ones) Unaffordable cost of the EE technologies from the perspective of the end-users (Economic) (Costly innovative technologies for end-users – Costly energy efficient solutions compared to conventional ones) Financial crisis (Economic)

Low

Low level of awareness (Social-Cultural-Educational) (Low level of awareness – Low public awareness towards eco-driving – Limited knowledge on public transport) Established perception (Social-cultural-educational) (Established perception for hotels that high energy use will ensure the comfort of guests – Perception that owing and driving a private shows the status symbol and good lifestyle) Deficiency in technical expertise or incomplete training (Social-cultural-

104


educational) (Lack of expertise – Incomplete training – Lack of certified instructors and examiners for eco-driving) Established routine/habits in daily reality (Social-cultural-educational) (Working habits-Old habits) Unwillingness to pay from the perspective of the end-users (Economic) (Absence of incentives for buyers – Unattractiveness of sector for private investments due to absence of incentives)

The assessment of the identified common barriers into high-medium-low, in terms of their impact, provides a clear picture of the current situation and will assist in the effort to incorporate barriers encountered by end-users into energy modeling and to identify those policy mixtures that are more effective in tackling these barriers. Finally, as it is shown in the following table, almost all common barriers are not confronted by a specific policy instrument. The incorporation of Directive 2012/27/EC is expected to confront a part of them. The mapping and assessment of the cross-cutting barriers across the building and transport sectors will be used for the development of effective energy efficiency policy mixtures.

Table 57: Assessed as barriers of high impact for Hellenic building and transport sectors

Cross-cutting barrier

Criteria a b c d e

Inefficient performance of the implementation network/governance structure (institutional)

At least 2 different types of policy instruments

5 references for both sectors

Whole sectors

Difficult to overcome due to no proposals

At least 9 years

Low prioritization of EE (Institutional)


2 references for both sectors

Building subsector, whole transport sector

Difficult to overcome due to no proposals

At least 9 years

Low state support (Institutional)


2 references

Whole sector, one sector

Difficult to overcome

Not more than 1 year

Low availability of information (Social-cultural –educational)


3 references

Two subsectors, whole sector

Moderate due to activities/proposals

At least 6 years

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Italy Energy efficiency policies

Italy has a wide and comprehensive set of energy efficiency policies in place, both in the buildings and transport sectors. Here, the most relevant Italian energy efficiency policies are presented. The selection of these policies, both for buildings and transport sectors, are based on the relevance given to the policy in the national NEEAPs and on the expert assessment of Bocconi University-IEFE research team. Ten key policy instruments among those in force for energy efficiency in the buildings sector and five for the transport sector in Italy have been selected for a deeper description and analysis (Table 58 and Table 59). The instruments are divided according to policy type (regulatory policy instruments, dissemination and awareness, economic policy instruments, capacity building, policy instruments for the promotion of energy services, research and development and BAT promotion). Where available, quantitative data on the energy efficiency/energy saving results obtained by the policy instruments are provided.

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Table 58: Summary table for the buildings sector in Italy








Energy Performance of buildings

Improve energy performance of new and existing buildings

Private house owners and public authorities

Compulsory buildings energy efficiency targets

National government; Regional Authorities


Electric Smart Meters Improve awareness of households behaviours

Final energy users and Distribution Service Operators (DSOs)

Voluntary action of Italian DSOs DSOs and AEEG

ENEA Website “Obiettivo Efficienza Energetica”

Widespread energy efficiency culture

Citizens, business operators and public authorities

ENEA initiative ENEA


Tax deductions

Provide financial and economic support for energy efficiency projects

Citizens and companies

65% tax deduction + Tax bonus for energy efficient furniture and appliances

National Government, ENEA, Revenue Agency (Agenzie delle Entrate)

Thermal Account

Subsidies for installation of renewable heating and cooling systems

Public authorities and non-industrial private parties

Economic incentive covering a part of the total costs (spread from 2 o 5 years according to project type)

GSE, ENEA, AEEG

White Certificate

Promote end-use energy savings in residential and industrial sectors

Italian electricity and gas distributors ESCOs Entities requiring an Energy manger Voluntary participants

Tradable energy savings certificates (1 certificate = 1 TOE)

GSE; GME; ENEA; RSE; Minister for Economic Development

Kyoto Fund Provide discounted loans to GHG emissionis reduction

Small and medium enterprises

Revolving fund with a total budget of € 600 billion

Cassa Depositi e Prestiti; Central Government

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projects Public authorities Individuals with legal entities


ENEA training platform and e-learning courses

Improve energy efficiency skills and disseminate energy efficiency information

Energy Efficiency experts National and regional public authorities

Thematic training courses for experts ENEA


Voluntary national certification scheme for ESCOs

Certificate the quality of ESCOs operating in Italy

ESCOs operating in Italy

Certification of ESCOs quality based on UNI CEI 11352:2014

GSE; AEEG


National Electric System Research

Promote energy efficiency R&D activities

National and regional public authorities

Research and consultancy activities

Ministry of Economic Development National Government

Table 59: Summary table for the transport sector in Italy

Short list of


Objective11 (improve system, travel or





Planning instruments National infrastructural plan to set up electric vehicles charging points

Develop a national wide electric charging points network

Regions Italian energy distributors

Dedicated funds and definition of policy and technical standards

Ministry of Infrastructure; Regions; Electric distributors


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Short list of








Obligation to input into consumptions biofuels

Supporting national biofuels production and supply chains

Biofuels producers and traditional fuels seller

Obligation to input a quota of biofuels into market

GSE AEEG


Government subsidies for the purchase of low emissions vehicles

Provide economic support to the renewal of vehicles fleets

Private car owners Economic support to purchase a new car

National Government Car sellers

Funds related to “Five Years bus fleets renewal plan

Complete the renewal of national bus fleets

Regional public authorities

Economic incentives for the purchasing of green buses

National Government Regional public authorities


National Logistic Platform UIRNET

Sharing data and information among Italian logistic operators

Logistic operators operating in Italy

Share of data and information Ministry of Transport


Design and implementation of a Green Wheel bicycle

Developing an electric bike for municipalities able to elaborate traffic data for urban planning activities

Municipalities

Support from a technical partner and funding from the Ministry for the Environment.

SENSEable City Lab Ducati Energy Ministry for the Environment

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Technological trends The energy efficiency is targeted as ‘priority action’ within the last National Energy Strategy (2013), with the purpose to boost the capability of Italy to compete within the international scenery and to assure a sustainable growth. Within this framework, some of the latest and more efficient technologies are recently finding application in the building and transport sectors, where different policy instruments display specific long-term strategies and support proper actions for energy efficiency. Particularly, within the building sector, in Italy there are four main policy instruments to support and promote the energy efficiency improvement actions: the ‘thermal account’, the tax deductions, the so called ‘Energy Efficiency Titles’ (or ‘white certificates’) and the ‘Kyoto Fund’. These policy instruments support proper actions involving thermal insulation of building envelopes, replacement of fixtures and heat generators, installation of building automation systems, replacement of lighting systems and use of renewable energy sources. On the other hand, energy savings within the transport sector may be achieved by introducing more efficient vehicles as well as shifting towards more sustainable mobility modes. The ‘Mobility Management’, both at the local and company level, as well as technological and behavioural changes in the marine transport are particularly important. Anyway, among the existing innovative energy efficiency technologies, only some can be recognized as ‘cost efficient’. The assessment of the investment ‘Pay-Back Time’ related to the main technologies for the residential sector proves that, among the different technologies considered, only new efficient lighting systems, building automation, fixtures with high efficiency, condensing boilers and thermal solar have an ‘acceptable’ Pay-Back Time. Furthermore, there are some technologies that, even if theoretically not economically sustainable, yet are widely diffused due to the presence of proper incentives. Among these, we can mention efficient appliances, opaque building (walls and roofs) surfaces, photovoltaic and thermal solar. With regard to the transport sector, the technologies offering lower running costs imply the use of alternative fuels, such as methane gas, LPG, bio-fuels and full electric traction. Such technologies recorded a progressive increase in sales during the period 2007-2010 due to the support from national incentive schemes. The above mentioned economic analysis led to the development of a national energy efficiency market. With regard to the residential sector, the best market potentials are offered by opaque building surfaces, heat pumps, biomass boilers and efficient appliances. As to the transport sector instead, the expected savings are to be delivered by the main measures/programmes, which comprise actions to renew the road vehicle fleet, promote sustainable mobility and develop the railway infrastructure as well as advanced logistics management systems

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Table 60: Estimates of energy savings and economic energy efficiency potential expected in 2020 by sector

Sector

Primary energy consumption

expected in 2020 (Mtoe/y)

Electricity savings expected in 2020

(GWh/y)

Economic energy efficiency potential12

expected in 2020 (M€/y)

Industry 32,4 28 678 4 129 Transport 41,5 49 175 7 081 Residential 30,2 77 121 11 105 Services 19,6 29 698 4 276

Source: data processed by IEFE on ENEL, 2013

Buildings

The key technologies for achieving energy efficiency in the buildings sector in Italy, as indicated in Energy Efficiency Report (Energy Strategy Group, 2013), are:

• For space heating and air conditioning: heat pump, opaque building surfaces, fixtures with high efficiency, solar cooling, solar thermal;

• For energy production and energy saving: small wind turbines and photovoltaic;

• For water heating: building automation, condensing boilers and biomass boilers;

• For cooking, washing machines, laundry dryers and dishwashers: induction cooking and efficient and pre heated appliances;

• For lighting: efficient lighting systems. According to the Energy Efficiency Report 2013 (Energy Strategy Group, 2013), the potential saving displays the energy saved (TWh) through the implementation of energy efficiency technology solutions. This potential has been assessed for the buildings sector, considering two different scenarios (Table 61):

• ‘Theoretical’ scenario, referring to the implementation of energy efficient solutions to replace or integrate all the less efficient technologies currently used;

• ‘Expected’ scenario that reviews the estimates of the ‘theoretical’ potential on the basis of a reasonable penetration grade for each technology solution (related to the cost effectiveness, the technological maturity grade and the ‘perception’ of the market operators).

Table 61: ‘Theoretical’ and ‘expected’ potential savings in 2020 (TWh) of each technology within the buildings sector

Technologies ‘Theoretical’ potential savings ‘Expected’ potential savings

Residential sector Services Total Residential

sector Services Total

Lighting 8,57 6,13 14,7 4,47 3,68 8,15 Building Automation 11,6 2 13,6 1,2 0,62 1,82

12 Savings expected in 2020 have been calculated considering an average price of electricity in Italy for 2012 of 0,144 €/kWh. (Source: QualeEnergia, 2013. I prezzi dell’elettricità e del gas in Europa e in Italia. Available at http://www.qualenergia.it/articoli/20130528-i-prezzi-dell-elettricit%C3%A0-e-del-gas-europa-e-italia)

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Technologies ‘Theoretical’ potential savings ‘Expected’ potential savings

Residential sector Services Total Residential

sector Services Total

Fixtures with high efficiency 20,2 2,2 22,4 4,94 0,36 5,3

Opaque building surfaces

70,35 3,95 74,4 29,6 1,4 31

Heat pump 101 10 111 36,73 4,37 41,1 Condensing boilers 55,2 6,6 61,8 11,12 2,58 13,7

Solar thermal 17,5 4,4 21,8 5,39 0,65 6,34 Source: Elaboration data from Energy Strategy Group 2013

The residential sector is the buildings sector showing the greater ‘expected’ potential in 2020. The related technologies include heat pumps (36,73 TWh per year) and condensing boilers (11,12 TWh per year). A further analysis of the economic effects of the energy efficiency improvement actions has been made by ENEL in the report “Stato e prospettive dell’efficienza energetica in Italia” (State-of-art and perspectives of the energy efficiency in Italy), 2013. Once again it has been investigated and assessed the business (M€) generated by the implementation of energy efficiency technologies in two different development scenarios: ‘optimal’ and ‘moderate’ (Table 62).

Table 62: Business (M€) generated by the implementation of energy efficiency technologies within the buildings sector in 2020

Technologies Type of energy (energy vector)

‘Optimal’ development scenario

‘Moderate’ development

scenario Potential annual savings (TWh)

2020 business

(M€)

Potential annual savings (TWh)

2020 business

(M€)

Heat pump Thermal 53,30 78,11 33,30 56,61 Condensing boilers Thermal 34,70 31,75 22,10 22,84 Induction cooking Electric 1,00 10,48 0,75 8,23

Building automation Electric 2,74 0,76 2,06 0,63 Thermal 13,36 3,84 10,04 3,22

Solar control Thermal 12,40 56,20 4,00 18,13 Small wind turbines Electric 3,90 15,60 2,70 10,80 Solar cooling Electric 0,76 2,75 0,46 1,66 Building Integrated Photovoltaic BIPV Electric 0,02 0,04 0,01 0,02

Opaque building surfaces Thermal 63,40 115,68 39,60 72,26

Photovoltaic Electric 17,00 33,79 11,30 22,46 Solar thermal Thermal 11,40 32,18 7,60 23,85 Efficient appliances Electric 3,70 37,75 3,00 31,44 Biomass boilers Thermal 38,60 44,79 32,20 37,84 Efficient lighting systems Electric 17,00 2,42 14,20 2,06

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Technologies Type of energy (energy vector)

‘Optimal’ development scenario

‘Moderate’ development

scenario Potential annual savings (TWh)

2020 business

(M€)

Potential annual savings (TWh)

2020 business

(M€)

Total 273,28 466,14 183,32 340,77 Source: ENEL, 2013

As seen from the table, about 45% of the total business generated by the energy efficiency actions comes from the electric energy vector, while the other 55% comes from the thermal energy vector. With regard to the technologies granting relevant business figures, within the general framework we can mention opaque building surfaces (72,26 M€), heat pumps (56,61 M€), biomass boilers (37,84 M€) and efficient appliances (31,44 M€).

Transport

As regards the transports sector, the main fuel-efficient technologies, as identified by numerous sources (such as ENEL, 2013; ENEA, 2015; Marciani et al., 2014) are:

• For road transport: low emission vehicles (natural gas, hybrids, hydrogen and electric), innovative vehicles based on automation, tire pressure monitoring, awareness of "eco-driving" and mobility management actions;

• For rail transport: power magnetic induction and recovering energy from braking;

• For navigation: hull antifouling systems, replacement of propeller and rudder, engine auto tuning, optimizers of hydro-dynamic flow, information system for the optimization of consumption, Air Cavity System and Waste Heat Recovery System;

• For aviation: biofuels, energy efficiency aircraft design, aerodynamic resistance reduction, high efficiency motors and aircraft with long life cycle.

Furthermore, the NEEAP (2014) reports that the expected savings in the transport sector will be delivered by the main measures/programmes, which comprise actions to renew the road vehicle fleet, promote sustainable mobility and develop the railway infrastructure and advanced logistics management systems. In particular, the improved energy performance of the new cars and light commercial vehicles and implementation of the measures to encourage the uptake of low-emission and electric vehicles should, taken together, save about 3,43 Mtoe of energy by 2020. The measures for sustainable mobility will contribute by some 1,97 Mtoe, broken down into the following sectors: local public transport and renewal of the bus fleet (0,9 Mtoe), railway infrastructure (0,45 Mtoe), services of the National Logistics Platform (0,5 Mtoe), and the 2009 incentives for renewing the national car fleet 2009 (0,12 Mtoe). Considering an average price of the toe equal to 545 €13 the business (M€) generated by the implementation of energy efficiency technologies in transport sector is equal to 1 870 M€ for the measures which encourage the uptake of low-emission and electric vehicles and to 1 074 M€ for the measures for sustainable mobility.

13 Value calculated by assuming an average oil price of 105 $/barrel and an exchange rate of 1,4 $/€. (Source: data processed by IEFE)

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Barriers Buildings

Regarding the building sector, the analysis shows that efficiency performance in Italy can be considered relatively high with respect to the other Member States. However, the achievement of further efficiency gains is strongly bounded to a variety of barriers affecting different actors involved and at different degrees. Main limitations in the building sector are:

• lack of a ‘culture of saving’ that limits, and sometimes neutralizes, the effect of policies aimed at boosting efficiency gains;

• old age of the existing building stocks and the great historical importance of such buildings which strongly limit the technical options for energy-efficiency renovations and retrofits;

• dyscrasia between the national/supra-national and local governance, Italy being characterized by a high regional fragmentation which produces insufficient policy coordination, uncertainty among actors involved as well as delays in policy implementation;

• lack of monitoring and controls which generate free-riding behaviours and other market failures;

• the issue of split incentives and principal-agent problem, which in Italy assumes relevant dimension given the high ownership fragmentation in the real-estate market (relevant presence of condominiums);

• economic stagnation, which limits the access to credit and the expenditure budget for energy efficiency investments, both for households and public administrations.

Besides these, behavioural and social issues (misperception of economic returns, different purchasing choice in presence of other people, limited trust in local and national public administration) and a lack of technical knowledge (both in households and in mediating subjects such as ESCo, building administrators etc.) further limit the adoption process of more efficient technologies. The overview of barriers shows that further awareness raising and information provision to consumers, home-owners and building administrators are needed, to spread a culture of saving and to inform about benefits and opportunities of energy efficiency. Furthermore, economic instruments or facilitating mechanisms to improve the access to available financial sources would be required. Also, action would be needed to address inefficiencies of bureaucracy and increase governance and policy coordination among the multiple administrative levels.

Table 63: Assessment of barriers in the building sector in Italy


Big

Old age and low EE performance of the existing stock of buildings Lack of a “culture of saving” Dyscrasia between national, supra-national and local norms (lack of policy coordination) Lack of control for non-compliant building administrators Lack of normative schemes

Medium Fragmentation of home ownership (due to relevant presence of condominiums)

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Lack of technical expertise of building administrators Low-quality bureaucracy level Difficulty to access credit due to economic stagnation Lack of mediating subjects such as installers and technicians Split incentives and principal-agent problem

Small Group as push factor to energy efficiency investments Little incidence of energy costs on companies/families Gender and age differences in adopting EE technologies

Transport

Regarding transport, the analysis shows that an inefficient use of energy is still present both in the people and freights transportation. In relation to public and private transport sector, Italy is still a country where private mobility is prevalent, even if in some urban areas public transport services are well developed and contribute to reduce car use. The main barriers affecting the achievement of further efficiency gains in public and private transport sector are:

• Public transport supply in Italy is still limited in several Italian cities (with some remarkable exceptions), with significant problems in terms of quality and numbers of services. For many Italians, public transport is not reliable and attractive and for this reason they prefer not to use it;

• Soft mobility (bike and pedestrian) is less developed than in other European countries. This is strictly related both to cultural aspects and to the lack of adequate infrastructures in urban areas (bike and pedestrian pathways, etc.);

• Italy is one of the most motorised countres in the world. Car is still a status symbol for a large part of population;

• In the last years, due to economic crisis and the national spending review process, several financial cuts were done to national funds dedicated to the regional and local public transport services. As local public transports are highly dependent from these resources (ordinary activities cover only a limited part of their annual budgets), these relevant cuts generate increasing difficulties in guaranteeing high public transport services levels;

• Innovative forms of private mobility (for example electric mobility, etc.) are not developed, as there is still a lack of adequate infrastructures (electric public recharge area in case of electric vehicles). Moreover it is important to highlight the importance given at national level to the promotion of biofuels and biomethane.

In relation to freight transport sector, the achievement of further efficiency gains is strongly bounded to a variety of barriers affecting mainly the logistic operators involved in national and urban freights delivery. Main limitations in the logistic sector are:

• Very competitive market, where it is difficult to set up forms of collaboration among the main logistic operators in order to reach more efficient solutions (sharing of vehicles and/or common usage of urban logistic platforms);

• Italy is affected by high delays in the main national and regional logistic infrastructures development and improvements (ports, inter-mobility nodes, etc.);

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• Many competences in the urban transport regulation at urban level (access to city centres, etc.) are delegated to the municipal level without an adequate coordination at regional and national level. This aspect led to a high fragmentation of legislative frameworks that impede an efficient organization of logistic services and to create national business model usable in different cities;

• Italian logistic operators appear affected by significant problems in recruiting high-educated logistic manager and working forces. These education deficiencies limited their innovative capacity;

• All the previous barriers, together with a high bureaucracy level, create an economic framework where private investments (national and international) in the logistic sector are not perceived as attractive.

On the one hand, some barriers (promotion of green vehicles, bio fuels, ITS, coordination among different logistics operators) have been addressed by policy instruments in place. On the other hand, other barriers, mainly related to the strengthening of people and freight transport infrastructures for more energy efficient and sustainable mobility received less attention in the Italian policies framework. Therefore investments to fill the gap of sustainable mobility infrastructures and services would be required, as well as information to consumers about the benefits and opportunities of sustainable mobility and to promote a more diffused culture of sustainable travel behaviours. For the freight transport, beyond measures to address the infrastructural gap, also capacity building and coordination mechanisms for operators would be necessary, together with actions to address inefficiencies caused by bureaucracy.

Table 64: Assessment of barriers in the people transport sector in Italy


Big

Low satisfaction for the public transport Critical economic condition of several public transport management authorities Low economic viability of the investment necessary for the realization of high-capacity transport in low-density residential areas Spending review conducted by central government on public transport services Urban sprawl Reduction of national public investments in the public transport sector Old Italian public transport fleets Lack of a national strategy for bike and pedestrian mobility

Medium

Fragmentation of public transport operators Lack of an Italian Transport Authority for a long time Chaotic parking Delays in the definition of the strategic national plan High cost of batteries for electric vehicles High evasion rate of public transport tickets Scarce attention in the public transport concession of qualitative standards of services Scarce diffusion of Bio-methane in Italy Few underground lines in Italian cities

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Lack of recharge stations for electric vehicles Lack of a long term vision regarding the future of transport infrastructures

Small

Bike perceived as dangerous and not compatible with some weather conditions Car ownership Low acknowledgement of environmental/social benefits of public transport use Insufficient safety, lack of adequate space for walking Technical limitations of electric vehicles Scarce diffusion of Bio-methane in Italy

Table 65: Assessment of barriers in the goods/freight transport


Big

Low cooperation between logistic operators Low probability to be sanctioned for irregular parking Several economic operators organize by itself their freights supply (Conto Proprio) High outsourcing level of main logistic operators Old logistics vehicles Italian southern regions weaknesses in freights infrastructures development National logistic infrastructures gap

Medium

High importance for logistics operators to show their logo in the last mile delivery and control the quality of delivery (brand identity)

Lack of infrastructures for intermodal logistics (especially in urban areas)

E-commerce rapid growth Regulatory aspects limits the growing of green logistic solutions (both national and regional level) High bureaucracy in the logistic sector (both national and regional level) High fragmentation of local traffic regulation Few external/international investments in Italian logistic sector Lack of adequate economic resources for local public administrations

Small Technical limitations in electric freights vehicles technology Lack of high level managerial competencies Strong lobbies block political reforms

Cross Cutting Italy is characterized by few examples of cross-cutting EE barriers existing in the buildings and transport sector. Most of the common barriers regard general aspects related to the institutional and social/cultural pattern of the Italian context and can be identified in the lack of a well-established culture of saving, in the low degree of environmental awareness, the fragmentation of the different administrative levels with consequent delays in adopting norms and regulations. Besides these, a relevant economic barrier is due to the persistent economic stagnation, which has contributed

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to reduce both the public as well as the private investment shares in EE, and it makes more difficult to access EE technologies, in particular those characterized by high upfront costs. Despite their general character, these barriers show a relatively high degree of influence, which varies from high to medium level. At policy level, some policy interventions recently implemented have influence on some of the cross-cutting barriers previously described. In this respect, it is worth mentioning:

(1) the creation of the National Energy Efficiency Control Room (Cabina di Regia per l’Efficienza Energetica), within the Ministry of Economic Development in 2015, which aims at coordinating the EE measures and interventions across the different administrative levels;

(2) the economic incentives, which represent effective instruments aimed at increasing the turnover of EE technologies in order to replace or renewal the stock of existing buildings, appliances and carbon-intensive vehicles.



High

Lack of a ‘culture of saving’ Dyscrasia between national, supra-national and local norms (lack of policy coordination) Lack of normative schemes Scarce environmental awareness

Medium Persistent economic stagnation Upfront costs and reduced expenditure budget for adopting new more efficient technologies

Low None identified

Given that some of the cross-cutting barriers are not envisaged by the existing set of policy measures, further effort should be devoted to accelerate the adoption process of EU directives and guidelines at national and local level. Such interventions would make both the transport and building sector more responsive to any type of EE regulation. In addition, communication campaigns aimed at enhancing the level of environmental awareness as well as initiatives aimed at informing consumers about the net economic returns deriving from more efficient goods, would constitute effective policy instruments addressing the cross-cutting barriers deriving from the lack of culture of saving. In addition, a higher policy stringency of the monitoring and sanctionary regimes, together to a simplification of the normative scheme for accessing EE incentives, would help reducing the barrier of excessive administrative bureaucracy.

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Serbia Energy efficiency policies

The Republic of Serbia promulgated the Law on Efficient Use of Energy (Government of the Republic of Serbia, 2013a) and The Second Energy Efficiency Action Plan (Government of the Republic of Serbia, 2013b), and made a significant step towards the transposition of the energy efficiency acquis. However, more needs to be done in the near future for full implementation of the energy efficiency acquis (Energy Community, 2015). Also, the Republic of Serbia has recently adopted several regulations that promote energy efficiency in the buildings sector. These regulations are in accordance with the Law on Planning and Construction (Government of the Republic of Serbia, 2009, 2014a). This Law was the first legal act that introduced energy efficiency principals in Serbia’s buildings sector. The next set of adopted regulations and rulebooks are based on the legal framework provided by the Law on Efficient Use of Energy. Together, these documents make the legal basis for policy instruments related to energy efficiency in buildings. These policy instruments include regulatory, economic and financial instruments, as well as capacity building and networking. Compared to the buildings sector, policy instruments for improvement of energy efficiency in the transport sector are less developed. Planning instruments are developed based on the Law on Road Traffic Safety: Improvements of bicycle and pedestrian infrastructure, Traffic calming, and Traffic management systems. Regulatory policy instruments related to energy efficiency in transport are based on mixture of regulations related to energy sector, but also to trade, market regulation, environment, etc.: Fuel economy standards/vehicle CO2-emission standards, Fuel quality standards. Currently, there are no specific financial policy instruments dedicated to support improvement of energy efficiency in the transport sector in Serbia. Overview of the policy instruments is provided in the next Table 67 and Table 68.

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Table 67: Summary table for the buildings sector in Serbia








Minimum energy performance requirements for new or reconstructed buildings Energy audit (mandatory) Energy management system in buildings

Reduction of energy consumption in buildings for heating and cooling

Target group: Owners, users and investors in public, commercial and residential buildings. Targeted objects: Residential, commercial and public buildings

Punish non-compliance

Ministry of Mining and Energy Ministry of Construction, Transport and Infrastructure Chamber of Engineers


Energy labeling

Reduction of electricity consumption for operation of different appliances in buildings

Target group: Households, suppliers and vendors of products Targeted objects: Households appliances

Punish non-compliance

Ministry of Mining and Energy

Economic policy instruments Subsidy

Financing of activities and measures directed to improve energy efficiency in buildings

Target group: Owners and investors in public, commercial and residential buildings. Targeted objects: Residential, commercial and public buildings

Motivation Ministry of Mining and Energy


Education and training for energy managers Education and training for energy efficiency in buildings

Training and education for implementation proposed regulatory policy instruments

Target group: Persons with acquired education at the master academic studies or bachelor studies as well as education on vocational studies (basic vocational studies, specialized professional studies)


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and secondary education in construction, architecture, mechanical engineering, electrical engineering, technology or other appropriate. Targeted objects: Commercial and public buildings


Model of Energy Service Agreement for Public Buildings

Financing of activities and measures directed to improve energy efficiency in buildings

Target group: public institutions (e.g. a municipality, a public company, a State), ESCO companies Targeted objects: Public buildings



Funding for research in energy efficiency

Scientific research and development of technologies for improvement of energy efficiency in buildings

Target group: Scientific institutions (e.g. Universities, research institutes, etc.), public institutions (e.g. a municipality, a public company, a State), owners of the buildings Targeted objects: Residential, commercial and public buildings

Motivation

Ministry of Education, Science and Technological Development

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Table 68: Summary table for the transport sector in Serbia








Planning instrument Improvements of bicycle and pedestrian infrastructure

System efficiency

Target groups: Passengers in the city transport Target sector: Road transport

Motivation Local self-governments

Planning instrument Traffic calming System efficiency

Target groups: All participants in road transport, public and private companies that maintain the roads and railway, equipment producers Target sector: Road transport

Motivation

Ministry of Construction, Transport and Infrastructure Ministry of Interior Road traffic safety Agency

Planning instrument Traffic management systems

System efficiency

Target groups: All participants in road transport Target sector: Road transport

Motivation

Ministry of Construction, Transport and Infrastructure


Fuel economy standards/vehicle CO2-emission standards

Travel efficiency Target sector: Road transport Punish non-compliance

Road Traffic Safety Agency Ministry of Interior Customs Administration


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Regulatory policy instruments Fuel quality standards Vehicle efficiency Target sector: All

transport sectors Punish non-compliance

Accredited and Appointed and institutions for fuel inspection Market Inspection

Financial policy instruments N/A N/A N/A N/A N/A


N/A N/A N/A N/A N/A


N/A N/A N/A N/A N/A

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Technological trends High potential for energy saving is identified in both sectors. Still, the World Bank`s report (World Bank, 2014) has assessed energy efficiency market as undeveloped and proposed financing options for all buildings sub-sectors. Although a number of government and donor funded programs have been initiated over the past decade to demonstrate the viability of EE investments in public and residential buildings, implementation has remained fragmented and piecemeal (World Bank, 2014).

Buildings

The World Bank has published National Building Energy Efficiency Study for Serbia (Econoler, 2012). Almost half of the buildings are single-family houses in both urban and rural environments. Around 90% of the building stock is concentrated in cities and towns. The predominant buildings sub-sector is the residential, followed by the public sub-sector, and the commercial sub-sector. According to (Econoler, 2012), the possible energy savings in the buildings sector are expected to be 1,592 Mtoe or 15,8% of the final energy consumption. Estimations of the energy saving potentials in the buildings sector and sub-sectors are presented in Table 69. The biggest potential for savings is found to be in the residential sector. Period for achieving the proposed savings was not considered in (Econoler, 2012).

Table 69: Average estimated savings per type of building (Econoler, 2012)

Buildings sector Energy savings

potential (% building

consumption)

Energy savings potential (% of the

final energy consumption)

Total savings potential (Mtoe)

Residential 39 10,6 1 102 Public

Health 47 0,5 0 043 Education 44 0,7 0 086

Public office buildings 47 0,8 0 114

Commercial 48 3,2 0 247 Total 15,8 1 592

If full energy savings are analized and taken into account, it can be concluded that the achieving of Serbia’s full savings potential would cost a total of €8,8 billion and would result in annual cost savings to investors and end users of about €1,1 billion. The savings would pay for the measures in about eight years (Econoler, 2012). There are no available, more detailed data about other energy savings (for example, appliences or lighting) in buildings sector.

Transport

Transport sector is a significant consumer of energy in the Republic of Serbia. According to the energy balances for 2013 (Statistical Office of the Republic of Serbia, 2014), the final energy consumption in the transport sector was 1,970 Mtoe, or 23,43% of the final energy consumption.

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Furthermore, the only document that has provided quantitative assessment of energy savings that could be achieved by implementation of energy efficiency measures in the transport sector is the Second National Energy Efficiency Action Plan (Government of the Republic of Serbia, 2013). According to this document, energy savings in the transport sector during the period 2010-2018 are expected to be 0,2107 Mtoe. The largest number of proposed measures for energy savings in the Second NEEAP is focused on road transport, due to its dominant share of over 70% in the energy consumption of the transport sector, with the expected further increase of consumption. The necessary investments in energy efficiency improvement in the transport sector are projected to €1,05 billion, lowering consumption 17% below BAU by 2030 (UNDP, 2013).

Barriers Buildings

The assessment of barriers in the building sector according to their significance in impeding the implementation of energy efficiency measures is presented in Table 70.

Table 70: Assessment of barriers in the building sector in Serbia


Big

The belief of citizens that the price of electricity remains low in the future Lack of awareness of the population and local politicians about the potential, economic and social benefits from rational use of energy Lack of information, knowledge and experience Distorted District Heating Price and Absence of Metering Low Electricity Prices Public Sector Budgeting does not allow Municipalities to keep their Baseline Budget for a Few Years after Energy Efficiency Projects Institutional Capacity of the Government of Serbia Institutional Capacity of the local self-government

Medium

Inertia Commitment and motivation of public Customs, habits and relevant behavioural aspects Mistrust of new technologies Willingness to adopt new measures High Interest Rates and Numerous Additional Bank Fees and Charges Households Credit Capacity Lack of Dedicated Financing Split Incentive for Rented Building – Landlord is Responsible for Renovations, but Tenants Pay the Bill Energy Efficiency on the Government Agenda Lack of Specific Home Owner Association (HOA) Legislation

Small

Social group interactions and status considerations Bounded rationality Heterogeneity of consumers Familiarisation with technology in general

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Lack of experience in cooperation with national and international funds Lack of providing information from the best practice projects Financial Institutions’ Traditional Lending Procedures Limitation of Public Sector Entities to Provide Collateral Small Size and High Transaction Costs of Energy Efficiency Projects High Interest Rates and Collateral Requirements Make Borrowing Unattractive Association of homeowners’ reluctance to make decisions to renovate Institutional Capacity of the Government of Serbia Energy Efficiency on the Government Agenda Institutional Capacity of the local self-government

Transport

The assessment of barriers in the transport sector according to their significance in impeding the implementation of energy efficiency measures is presented in Table 71.

Table 71: Assessment of barriers in the transport sector in Serbia


Big

Bounded rationality Lack of information, knowledge and experience Low purchasing power of citizens Energy Efficiency on the Government Agenda

Medium

Inertia Customs, habits Lack of providing information from the best practice projects High Interest Rates and Numerous Additional Bank Fees and Charges Lack of Dedicated Financing Institutional Capacity of the Government of Serbia Institutional Capacity of the local self government

Small

Social group interactions and status considerations Heterogeneity of consumers Credibility and trust. Lack of awareness of the population and local politicians about the potential, economic and social benefits from rational use of energy Lack of experience in cooperation with national and international funds

Numerous barriers related to energy efficiency in both sectors are identified. Some of them are addressed by policy instruments, but some not. Decision-makers should be aware of possibilities and effects of energy efficiency improvements, but also should be aware of numerous barriers and their influences on different stakeholders.

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Cross Cutting A substantial economic energy saving potential exists in the buildings and transport sectors, but the energy efficiency services market in the Republic of Serbia is less developed compared to the EU countries (World Bank, 2014). The objective to reduce final energy demand (improvement of energy efficiency) is affected by numerous barriers which are classified in the following groups: institutional, economic, social, cultural and educational. An analysis of the identified barriers indicates that some of them influence both, the buildings and the transport sectors. Both cross-cutting economic barriers "Lack of dedicated financing" and "Low purchasing power of citizens"/"Households credit capacity" have a ‘High’ impact to the implementation of energy efficiency measures. However, the only policy measure dedicated to these barriers, just partly developed for the buildings sector, is the Subsidy (Ministry of Energy, Development and Environment, 2014 i,j). Its aim is to support the financing of activities and measures directed towards improvement of the energy efficiency of buildings, but its implementation in the previous period has been limited only to public sector. In the buildings sector these barriers are related to other economic barriers of high importance (Distorted district heating price and Absence of metering, Low electricity prices), which are not affecting the transport sector. "Institutional capacity of the local self-governments" is recognized as an institutional barrier with ‘High’ impact, while the "Institutional capacity of the Government of Serbia" is recognized as a ‘Medium’ impact institutional barrier in both the buildings and transport sectors. Education and training for energy managers and Education and training for energy efficiency in buildings are capacity building and networking policy instruments directed partly to the first mentioned institutional barrier, but in the buildings sector only. Like for most of the barriers in the transport sector there are no developed policy instruments for these institutional barriers.



High

Lack of Dedicated Financing Low purchasing power of citizens/ Households Credit Capacity Institutional capacity of the local self-governments Lack of information, knowledge and experience

Medium

Inertia Credibility and trust/ Mistrust in new technologies Institutional capacity of the Government of Serbia

Lack of awareness of the population and local politicians about the potential, economic and social benefits from rational use of energy

Low Social group interactions and status considerations Heterogeneity of consumers

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United Kingdom Energy efficiency policies

The United Kingdom has a very comprehensive number of policies which focus on regulation, on information and awareness, on economic policy instruments and measures, on capacity building and networking, on the promotion of energy services, on research and development and the promotion of best available technology (BAT).

Buildings

The regulation policies include minimum energy performance standards (MEPs), energy audits and energy management. The main policy instruments are:

• Building regulations • Energy company obligations • Mandatory energy assessment schemes

Also it has a very comprehensive number of policies, which focus on information and awareness. This includes mandatory and voluntary labelling schemes, energy consultation, information campaigns, energy checks and web-based awareness raising programmes. The main policy instruments are:

• Smart metering • Energy performance certificates • Green Open Homes

In addition, there is very comprehensive number of economic policy instruments and measures including subsidies, loans, tax exemptions and reductions, tradable permits and certificates. The following are described in more detail below:

• The Green Deal programme (complementary to ECO, Green Open Homes, domestic RHI)

• The Salix Finance public sector energy efficiency loan scheme • Electricity Demand Reduction (EDR) scheme

The UK has a very comprehensive number of capacity building and networking policy instruments and measures including education and training, certification of qualified actors, energy networks:

• Big Energy Saving Network (BESN) • Energy Management for Non-specialists training programme • Community Energy Peer Mentoring Fund

The UK has a number of policy instruments for the promotion of energy services:

• LicenseLite • Heat Networks Delivery Unit (HNDU) • Rural Community Energy Fund (RCEF) & Urban Community Energy Fund

(UCEF) Finally, it has a very comprehensive number of policy instruments and measures for research and development and the promotion of best available technology (BAT) including funding for research and development and demonstration projects, competitions and awards:

• Technology Strategy Board (TSB) / Innovate UK • Energy Technology Institute (ETI)

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Table 73: Summary table for the buildings sector in the UK

Policy instruments

Short list of implemented policies and measures





Building regulations

To guide the design process to arrive at or progress beyond a required fabric energy efficiency target

Anyone responsible for dwelling and non-dwelling building work (e.g., designer, builder, installer) must ensure that the construction and design work complies with all applicable requirements of the Building Regulations. The Building Regulations are made up of procedural and technical provisions. Some works are exempt from the whole of the Regulations, whilst others are only exempt from certain aspects. Generally, the Part L requirements apply to buildings, or extensions of such buildings (except Class 7: extensions type), or the carrying out of any work to, or in connection of any such building or extension where the building is a) a roofed construction with walls, and uses energy to condition the indoor climate. Part L requirements do not apply to buildings that fall into the following categories: • Certain buildings which are listed,

in conservation areas or are included in the Schedule of Monuments; where compliance

Prosecution and enforcement notices are applicable if there is a failure to comply with the Building Regulations , in terms of: • Not following the building

control procedures set out for handling building work, or;

• Building work is carried out which does not comply with the requirements contained in the Building Regulations.

In terms of prosecution, the local authority (LA) has a general duty to enforce Building Regulations in its area. If informal enforcement does not achieve compliance, the LA has two formal enforcement powers: • Prosecution: if a person

carrying out building work contravenes the Building Regulations, the LA may prosecute them in the Magistrate’s Court. An unlimited fine may be imposed (sections 35 and

The Secretary of State approves any amendments to the Building Regulations 2010 (SI 2010/2214), following guidance from relevant Government departments such as the Department for Communities and Local Government (DCLG) and advisory non-departmental public bodies such as the Building Regulations Advisory Committee (BRAC), as well as industry members. The DCLG provide ongoing practical actions and support to provide effective building regulations including publishing supporting guidance known as Approved Documents, overseeing and supporting building control organizations, publishing research to provide a scientific basis to underpin regulations and providing the secretariat for the Building Regulations Advisory Committee for England (BRAC), which advises the Secretary of State. In terms of

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with the energy efficiency requirements would unacceptably alter their character or appearance.

• Buildings which are used primarily or solely as places of worship.

• Temporary buildings with a planned time of use of 2 years or less, with low energy demand.

• Industrial sites, workshops and non-residential agricultural buildings with low energy demand.

• Stand-alone buildings other than dwellings with a total useful floor area of less than 50m².

35A of the Building Act 1984). Prosecution is possible for up to two years after the completion of the offending work, and will usually be taken against the person carrying out the work (builder, installer, main contractor).

• Enforcement notice: the LA may serve an enforcement notice instead of, or in addition to prosecution. The notice is served on the building owner and requires the alteration or removal of work which contravenes the regulations (section 36 of the 1984 Act). If the owner does not comply with the notice, the LA can undertake the work itself and recover the costs from the owner. A Section 36 enforcement notice must be served after the expiration of 12 months from the date of completion of the building work. An LA cannot take enforcement action under section 36 if the work is carried out in

ensuring the Building Regulations are enforced, the LAs are responsible for building works (except those which are exempt) in their local area, and for ensuring compliance. All building works subject to Building Regulations are checked by Local Authority Building Control or a private Approved Inspector, or carried out by a ‘Competent Person’, and with Local Authorities enforcing compliance. In Scotland, where such work requires a building warrant, verification of building work is the responsibility of local authorities alone. (DECC, 2014c; BRAC & DCLG, 2015).

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accordance with the full plans application which the LA either approved, or failed to reject.

Where an approved inspector is providing the Building Control Service, the responsibility for checking that the Building Regulations are complied with during the building works lies with that inspector. However, approved inspectors do not have formal enforcement powers. If the building work is considered, by the Building Inspector, to not comply with Building Regulations and there is a refusal to bring it into compliance, the inspector will cancel the initial notice. If no other approved inspector takes on the work, the building control function will be taken on automatically by the LA.

Energy company obligations

Reduce carbon emissions from Britain’s domestic building stock, combat fuel poverty and encourage uptake and awareness of energy

Energy suppliers in relation to their end-users, particularly low income, fuel poor, hard to treat homes. The Green Deal and ECO do not cover Northern Ireland. (DECC, 2012c).

Suppliers with a customer base of less than 250 000 customer accounts will be exempt from the ECO. Penalty for non-compliance: unspecified financial penalty, if

ECO is administered by the Office for Gas and Electricity Markets (Ofgem) (DECC, 2012c), alongside the Warm Home Discount (WHD), through the Energy Efficiency

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efficiency measures financial penalty is not paid, licenses may be revoked.

and Social Programmes team, that is part of Ofgem’s Environmental Programmes team. Until March 2015, Ofgem E-Serve (on behalf of the Gas and Electricity Markets Authority) was the Administrator for ECO.

Mandatory energy assessment schemes (Energy Savings Opportunity Scheme (ESOS))

To target a gap in the existing policy landscape and help them to cut their energy costs, by providing targeted cost-effective recommendations to improve their energy efficiency. It will stimulate demand amongst UK businesses for energy efficiency measures, by making clear in the assessments what savings could be made. The assessments will review the organisations’ entire energy consumption including buildings, industrial processes and transport activities

ESOS applies to large UK undertakings and their corporate groups. It mainly affects businesses but can also apply to not-for-profit bodies and any other non-public sector undertakings that are large enough to meet the qualification criteria. Corporate groups qualify if at least one UK group member meets the ESOS definition of a large undertaking.

The environmental regulator is responsible for compliance and enforcement activities. The regulator may issue civil sanctions including financial penalties (ranging from £5k-50k if an organisation does not meet the scheme’s obligations (Environment Agency, 2015).

Overall, the Environment Agency is responsible for administering the scheme across the UK, and holding the UK register. A registered office or principal place of activity (in the absence of a registered office) determines the regulator, in terms of compliance and enforcement activities (Environment Agency, 2015): • The Environment Agency

(England) • Northern Ireland

Environment Agency (Northern Ireland)

• Scottish Environment Protection Agency (Scotland)

• Natural Resources Wales (Wales)

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• DECC Offshore Oil & Gas Environment and Decommissioning (offshore).

In relation to undertaking an ESOS assessment, a corporate group demonstrates compliance using either: • An ISO 50001 energy

management system certified by an accredited certification body.

• Display Energy Certificates (DECs).

• Green Deal Assessments (GDAs), can be part of an ESOS compliant energy assessment for the types of energy consumption they cover, if they qualify as per regulation 7 of the Green Deal Framework Regulations 2012 )

• ESOS compliant energy audits. All such energy audits must be reviewed by an ESOS lead assessor. A register of approved lead assessors is available online via the UK Government’s ESOS webpage. An

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assessor can be an employee of the business, or a third party. The assessor is not held responsible for compliance by the regulators; therefore it is recommended that a member of the corporate group/organisation who understands the ESOS requirements, and works with the lead assessor to ensure the overall approach taken is compliant with ESOS.

The Environment Agency and the other regulators do not provide standard templates for ESOS related data/activities and/or presentation of findings. Only the data to evidence that 90% of the total energy consumption is compliant via ESOS audits or other alternative routes to compliance, is required to be undertaken and recorded. This is to reduce the administrative burden on organisations that have existing data management procedures and

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tools.

Dissemination and awareness instruments/ Informative policy instruments

Smart Metering Implementation Programme

To increase awareness of energy use in consumers to help them control energy use and reduce energy wastage. Provide accurate billing and improved customer service as well as reduce administration costs, for example by reducing call centre traffic, removing the need for a site visits to read meters

The Government is requiring energy companies to install 53 million gas and electricity meters at 30 million domestic and smaller non-domestic properties (DECC, 2012b).

No legal obligation on individuals to have one. Energy companies will be required to install smart meters and take all reasonable steps to reach everyone. However, energy companies are not expected to take legal action to fit a smart meter if they cannot get the householder’s co-operation

The programme is led by the DECC, with co-operation from interested parties such as the energy industry, Ofgem and consumer groups. DECC is responsible for driving delivery and providing active oversight of progress by all delivery parties. During 2014, industry partners including the Data and Communications Company and its contractors, energy suppliers, network operators and manufacturers have continued to develop the systems that will deliver smart meters to consumers when the main installation phase begins (DECC, 2012b). Ofgem, as electricity and gas industry regulator, will be responsible for ensuring compliance with smart metering rules. DECC’s aim is to leave the management and evolution of smart metering to energy industry participants, which will then be governed

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Policy instruments





through the arrangements in the Smart Energy Code, and subject to regulatory oversight by Ofgem. DECC will remain responsible for the Government’s ‘retail energy policy and for the realisation of the benefits set out in the Programme’s business case’, and if required, ‘will introduce further regulation to protect these benefits, using its powers in the Energy Acts 2008 and 2011’ . DECC has worked with industry to develop a Smart Metering Implementation Programme (SMIP) Transition Governance Model; the role of such groups is to support DECC decision-making through advice and recommendations on a variety of issues including planning, risk and issue management, and change control for design and regulatory documents.

Energy performance certificates

Provide energy efficiency information on, and comparison of energy efficiency of one building with another

Energy Performance Certificates (EPCs) are needed whenever a property is: built, sold, or rented (with the exception of: places of worship, temporary buildings that

The current owner can be fined if an EPC is not in place as required (GOV.UK, 2015a). The enforcement of the regulations is the responsibility

The Domestic and Non-Domestic Energy Performance Certificate Registers are operated by Landmark Information Group on behalf of

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Policy instruments





building of the same type; encourage energy efficiency and fuel costs to be considered as part of investment.

will be used for less than 2 years, stand-alone buildings with total useful floor space of less than 50 square metres, industrial sites, workshops and non-residential agricultural buildings that don’t use a lot of energy, some buildings that are due to be demolished, holiday accommodation that’s rented out for less than 4 months a year or is let under a licence to occupy, listed buildings, residential buildings intended to be used less than 4 months a year) (GOV.UK, 2015a).

of local weights and measures authorities i.e. trading standards. The fine is 12,5% of the rateable value of the building, capped at £5 000 (€6 890) and with a default penalty of £750 where the calculation is not possible. A further fine of £200 (€275) can be issued for failure to provide a copy of the EPC, when requested by an enforcement authority officer within seven days. In terms of DECs, the penalties are; a £500 (€690) fine for failure to display a DEC at all times in a prominent place, and a £1 000 (€1 380) fine for failure to possess a valid advisory report (GVA, unknown).

the Secretary of State for Communities and Local Government (DCLG); DCLG is responsible for making sure buildings in the UK meet the standards required by the EU Energy Performance of Buildings Directive (DCLG, 2015).

Green Open Homes

The aim was to help new open homes events and networks get off the ground all around the country, to increase people’s feeling that making energy saving improvements is ‘normal in my

Homeowners seeking more information on energy efficiency upgrades, e.g. those with further questions regarding the Green Deal (CSE, 2014).

Grants cannot be used directly for private profit and a budget breakdown must be provided as part of the application; Grant awards of greater that £1 000 can only be made to legally incorporated organisations; Grants cannot be used directly for private profit and a budget breakdown

DECC funded, delivered by the Centre for Sustainable Energy and Bristol Green Doors (CSE, 2014).

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Policy instruments





neighbourhood’. must be provided as part of the application. Public liability insurance is also required (CSE, 2013).


The Green Deal programme

To help households and small businesses improve energy efficiency and/or reduce carbon emissions and ensure that they have access to trusted information about energy efficiency. The Green Deal is intended to encourage undertaking of energy assessments.

Households (owner-occupied and private rented tenants and landlords) in existing dwellings as well as the owners, landlords and tenants of small non-dwellings. The Green Deal and ECO do not cover Northern Ireland (DECC, 2014c).

The Green Deal, although legislated through DECC, is based in the private sector and seeks to enhance the uptake of physical energy efficiency measures as well as increase assessments and awareness of energy use and efficiency in domestic and small non-domestic properties. The Green Deal framework regulations provide a Code of Practice as well as assessor and provider certification in order to ensure consumer protection. The overall authorisation body is the Green Deal Oversight and Registration Body (GD ORB). In addition, a Green Deal Ombudsman and Investigation Service, run by the Ombudsman Services, has been established. The Ombudsman Services provide independent, impartial and cost-effective dispute

The Green Deal Oversight and Registration Body (GD ORB), on behalf of the Secretary of State, manages the authorisation scheme for participants in the Green Deal and is responsible for a number of functions aimed at providing effective administration and oversight of the scheme. The GD ORB is responsible for maintaining a register of all authorised Green Deal Providers, Certification Bodies, Assessors and Installers; maintaining the Green Deal Code of Practice and controlling the use of the Quality Mark; ongoing monitoring of Green Deal Participants against the Code of Practice; producing an annual Green Deal report; and gathering evidence of non-compliance and referring participants to the

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Policy instruments





resolution outside the courts, and operate under appropriate UK legal and regulatory authority. The Green Deal also sought to positively influence the conflicting interests of tenants and landlords, and is supported by the first tenants’ energy efficiency improvements regulations coming into force by 1 April 2016, and the legislation surrounding EPCs ensuring that by 2018, it will be illegal to rent a property with an EPC rating of E or below. Because it is the bill payer in rented dwellings that benefits from energy efficiency improvements, the Landlords Energy Saving Allowance, a financial incentive, allows landlords of domestic rented property to claim tax relief of up to £1 500 per property for the costs of buying and installing energy-saving products (DECC, 2014c).

Ombudsman or the Secretary of State where appropriate and imposing sanctions when directed (DCLG, DWP & DECC, 2015).

The Salix Finance public sector energy

To provide interest free loans to improve the energy efficiency of

‘Any public sector body who receive the majority of their income directly from the public sector can

Recipients of funding must apply the basic rules of procurement whenever they

Salix Finance Ltd is grant funded by DECC, wth contributions from the

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Policy instruments





efficiency loan scheme

hospitals, schools and other public sector buildings

apply. Only those projects where the resultant energy savings, over the lifetime of the project, go directly back to the public sector and the public sector gains a direct financial benefit are eligible. An example of an ineligible project would be an outsourced estate management contract in which the outsource supplier paid the energy bills and benefitted from any savings achieved from the project. However, if the energy bill was a pass through under the contract and the public sector benefitted from the energy savings, then the project would be eligible’ (Salix, 2014). All public sector organisations (across their whole estates) in England, Wales and Scotland are eligible to apply for funding. Such organisations include schools, higher and further educational institutions, emergency services, hospitals, leisure centres, local authorities, the NHS. Eligibility is dependent on the installation of technologies on the Salix list of eligible technologies, and the completion of the Salix Programme Compliance Tools (Salix, 2014).

spend public money. These rules look to make sure that public funds are spent openly and fairly, and make the most of every budget, while protecting against legal challenges, financial penalties and damage to a recipient’s reputation (Salix, 2014). In total, over 120 technologies (e.g. boilers, combined heat and power, LED and lighting upgrades, and heat recovery) fit the Salix funding criteria, and as such can be funded through the Salix finance schemes. However, the list of supported technologies is evolving and public sector organisations can discuss the addition of technologies they feel fit the Salix criteria for funding.

Department for Education (DfE), The Higher Education Funding Council for England (HEFCE) and the Welsh and Scottish governments (Salix, 2014). Salix Finance Ltd ensure the participating public sector organisations provide data to ensure cost-effective and energy/carbon savings are achieved.

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Electricity Demand Reduction (EDR) scheme

To evaluate and report on an exemplar case of electricity demand reduction during peak times, most likely through the replacement of less efficient equipment with a more efficient version (DECC, 2015b). The EDR pilot has two objectives: • To examine the

viability of electricity demand reduction in the Capacity Market; and

• To learn lessons for Government and wider stakeholders on the delivery of EDR schemes.

Organisations from all sectors (private, public and voluntary/third-sector) are invited to participate in the EDR Pilot (DECC, 2013a). DECC is excluded. Participants from all geographic locations may apply, as long as they are able to enter into contract with the UK Government. However, project sites must be located within Great Britain and be connected to the Great Britain Electricity Grid (England, Wales and Scotland only; sites in Northern Ireland are excluded as they are connected to the Irish Single Electricity Market).

There are eligibility rules in place (some described above in target groups) (DECC, 2014e): • All measures included in an

application must deliver reductions in electricity demand through the installation of equipment, including replacement of less efficient measures. Behavioural, new build, generation, load shifting and expansion projects are excluded.

• The ‘payback’ of measures included at any single site in a project must have a payback period of two years or more.

• Measures which are already benefitting or will benefit from specified incentives are not eligible.

• Measures must deliver capacity savings across the winter peak period (the 83 business days from 1 November 2015 to 29 February 2016).

Funded, approved, and evaluated by DECC as part of their Energy demand reduction in industry, business and the public sector policy framework (DECC, 2015b). There is a specific EDR project team overseeing and providing administrative and evaluation duties in relation to the pilot scheme.

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• Measures must not have a short replacement cycle (an expected lifespan of less than 16 000 hours), unless included as a component in the installation of an eligible EDR measure.

• Measures included as part of any one application (one project) must result in an average of at least 100kW of savings throughout the winter peak period (4pm-8pm, business days, 1 November 2015 to 29 February 2016).

• Measures must be able to be installed and provide Operational Verification by 15 October 2015.

• Measures must be electricity Grid connected and based in Great Britain (if the site is partially self-supplied, then any onsite generation must be declared).

In addition, there are also eligibility criteria relating to the participant’s history of convictions, insolvency,

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misconduct and/or tax offences (DECC, 2015b).


Big Energy Saving Network (BESN)

Outreach to vulnerable consumers, focussed on helping them to reduce their energy costs through assisted action on tariffs, switching and take-up of energy efficiency offers

Third sector organisations and community groups that focus on helping vulnerable energy consumers i.e. those significantly less able than a typical consumer to protect or represent his or her interests in the energy market; and/or; significantly more likely than a typical consumer to suffer detriment, or that detriment is likely to be more substantial.

Mainly socio-economic influences and potential to ‘up-skill’. No exemptions, penalties or sanctions.

BESN is funded by the Department of Energy and Climate Change (DECC); DECC were successful in appointing a range of delivery organisations that reflected the diverse characteristics of vulnerable consumers that BESN was intended to reach.

Energy Management for Non-specialists training programme

To equip non-specialists with the skills of energy management

Any individual with the capacity to put into practice energy management; those who are not energy specialists but have (or will have) energy reduction as part of their role.


GAIA Active, a private company of sustainability specialists was responsible for the design and implementation of the training programme, and the programme itself was funded through the DECC. GAIA now continue to run the programme without funding from DECC.

Community Energy Peer Mentoring Fund

The funding was designed to help new groups working in the area of energy efficiency and carbon reduction to get off the ground so they can start

Community-level organisations and groups (both existing and new) who undertake energy-related projects and activities.


The Community Energy Peer Mentoring Fund was funded by Cabinet Office’s Centre for Social Action and the Department of Energy and Climate Change (DECC). EDF Energy were also part of the

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saving money and generating energy in their community. It also helped existing groups to professionalise, develop business plans and scale up their work and to show how social action can help people reduce their energy bills.

CEPMF through pro bono supporting to the 12 grant recipients; senior staff from EDF Energy volunteered to act as mentors, depending on the expertise and their geographical locations, and provided ongoing business support as and where needed.


Licence Lite

To enable communities to sell electricity locally, at a ‘local price’ as a way for all members of the community to benefit from a community energy project. Further community energy projects may wish to sell electricity beyond their local community, which ultimately has the potential to increase competition in the retail market and increase access for consumers to the sector

Owners and operators of distributed energy schemes, electricity suppliers, distribution network operators, consumer groups, local authorities, property developers, and manufacturers and any other interested parties, in particular, small scale energy suppliers and community energy organisations (DECC, 2014a).

Licence Lite relieves the applicant of their obligation to be a direct party to a number of industry codes. The regulatory costs incurred by complying with these codes are disproportionately high for smaller suppliers. Licence Lite lets a new supplier partner with an existing supplier (third party fully licensed supplier (TPLS)) to be responsible for some of the more costly and technically challenging parts of a supply licence. License suppliers that handle domestic and/or small-business customers are required to be members of the Ombudsman scheme, and comply with

Ofgem; a non-ministerial department of the UK Government. The UK Government wants to see Licence Lite work for community groups and will actively work with Ofgem to support this (DECC, 2014a).

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complaints handling regulations. Customers have the right to take certain complaints to the Energy Ombudsman, if the supplier fails to resolve the problem. If either the Licence Lite supplier or the TPLS does not meet its commercial obligations as set out in the supplier services agreement, it is expected that parties seek redress via the commercial agreement. If a Licence Lite supplier is found to have breached its licence conditions there are a number of enforcement actions Ofgem may take, including imposition of penalties, consumer redress, and orders (Ofgem, 2015). In terms of setting the amount of any financial penalty and/or payment under a consumer redress order, the amount in each case must not exceed 10% of the regulated person’s turnover. Ofgem have enforcement powers under the following legislation: • the Gas Act 1986 (the Gas

Act)

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• the Electricity Act 1989 (the Electricity Act)

• the Utilities Act 2000 • the Competition Act 1998

(the Competition Act) • the Enterprise Act 2002 (the

Enterprise Act) • the Unfair Terms in

Consumer Contracts Regulations 1999 (UTCCRs)

• the Business Protection from Misleading Marketing Regulations 2008 (the BPMMRs).

Heat Networks Delivery Unit (HNDU)

HNDU aims to transform district heating in the UK, providing financial support, guidance and expertise for local authorities, especially in the crucial early stage of developing a heat network.

Local authorities

Local authorities apply for HNDU support through bidding rounds. Successful applicants are published on the Heat Network Delivery Funding page. All bids are reviewed by a panel of engineering, financial and commercial experts with significant experience in heat networks development. Grant funding of no more than 67% of eligible costs is provided to successful local authorities under section 31 of the Local Government Act. Eligible costs

HNDU is a unit within DECC and is staffed by experts, who have gained experience developing heat networks outside the civil service working on technical or commercial aspects of heat networks for consultancies or local authorities.

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are defined as externally commissioned consultancy costs for heat network development work. If successful, each local authority is assigned an HNDU staff member as ‘Project Lead’ and their work together is supported through an online collaboration site and face to face meetings.

Rural Community Energy Fund (RCEF) & Urban Community Energy Fund (UCEF)

RCEF and UCEF funds are offered to be used as source of early stage finance for community heat projects. Through these funds, community groups can receive grants for technical feasibility studies, and loans for the later, more complex stages of project development. This funding will help groups overcome the riskier stages of renewable development and attract commercial finance, or raise money through a community share offer. The RCEF

Rural and urban communities interested in renewable energy and community-owned renewable schemes (DECC, 2014a). Local authorities become eligible for RCEF and UCEF if working with an applicant community group.

Local authorities become eligible for RCEF and UCEF if working with an applicant community group. Loans issued to groups are repaid, enabling the fund to self-sustain, recycling funds to support more community groups (DECC, 2014a). The Rural Community Energy Fund (RCEF) is available to rural communities in England that: • represent a rural community

of: o fewer than 10 000

residents; or o more than 10 000

residents but within a

DECC/DEFRA-funded; monitoring and evaluation will be carried out on the UCEF and RCEF by DECC Community Energy Unit (DECC, 2015d). Waste and Resources Action Programme (WRAP) and Centre for Sustainable Energy (CSE) provide advice and support relating to the application and undertaking of RCEF and UCEF-funded projects. WRAP are the UCEF scheme administrators and CSE have been contracted the management of the UCEF fund, in partnership with Pure Leapfrog, a business-led charity.

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and UCEF aim to contribute to the UK Government’s target for renewable energy and community-owned renewable schemes (DECC, 2014a).

local authority area which is classified by the Office of National Statistics as 'predominantly rural'.

• form a legal entity in order to receive public funds

• demonstrate the support of the wider community

and are planning a renewable energy project which: • will provide a legacy for the

future benefit of the community

• use a proven renewable technology

In terms of the UCEF, the following are eligible to apply:

Groups that: o are developing a project

in an urban area o incorporated as a legal

form that we can give money to

o answer a series of other eligibility criteria

• In addition, any of the following groups are eligible to apply for the fund: o Registered Company

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(including CICs) o Charitable Incorporated

Organisation o Registered Societies

(formerly known as IPS) o Parish and Town

Councils o Local Authorities,

businesses and Housing Associations can apply in partnership with the local community.


Technology Strategy Board (TSB) / Innovate UK

The focus of Innovate UK is on innovation, working with business to stimulate and support innovation and accelerate economic growth

Business and research

The responsibilities of Innovate UK are to: provide new support for innovative small and medium-sized enterprises (SMEs) with high-growth potential; make sure that government initiatives such as SBRI (Small Business Research Initiative) attract innovative UK businesses and give companies access to important customers in the public sector; identify and invest in the sectors that have the greatest potential for innovation to speed up economic growth; and help innovative companies work

Innovate UK is an executive non-departmental public body, sponsored by the Department for Business, Innovation & Skills

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with their backers so their ideas can be developed commercially.

Code for Sustainable Homes

The Code for Sustainable Homes is a vital tool for improving environmental performance and reducing CO2 emissions from new homes. The extensive framework provided by the Code sets challenging targets in a range of categories; from energy use and CO2 emissions, to water consumption, to site ecology. It aims to reduce carbon emissions and promote higher standards of sustainable design above the current minimum standards set out by the building regulations.

Designers, builders and owners of new dwellings.

The code is voluntary and should not be confused with zero-carbon policy or the 2016 zero-carbon target. The only circumstances where the code can be enforced are where: local councils require developers to comply with the code by including a requirement in their planning policy; affordable housing is funded by the Homes and Community Agency that requires homes to be built to code level 3; the level 3 energy standard is now incorporated in the building regulations. The code applies in England, Wales and Northern Ireland. Within England it replaces the EcoHomes scheme, developed by the Building Research Establishment. Assessments are carried out in two phases: An initial assessment is carried out at the design stage. This is

Launched and managed by DCLG.

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based on detailed documentary evidence and commitments which results in an interim certificate of compliance. Final assessment and certification is carried out at the post construction stage. Based on the design stage review, this includes a confirmation of compliance, including site records and visual inspection, and results in a final certificate of compliance.

Energy Technology Institute (ETI)

The primary objective is to act as a conduit between academia, industry and the government to accelerate the development of low carbon technologies. ETI brings together engineering projects that develop affordable, secure and sustainable technologies to help the UK address its long term emissions reductions targets as well as delivering

Academia, industry and government

All officers and employees of the ETI must avoid conflicts of interest with their ETI responsibilities. Any such conflict, actual or potential, must be declared immediately as it arises to enable the ETI to take appropriate action. ETI establishes processes that identify, assess and manage risks and carries out regular internal audits to ensure full compliance throughout. All business transactions on behalf of the ETI will be reflected accurately and fairly in the accounts, in accordance

The ETI is a public-private partnership between global energy and engineering companies and the UK government.

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nearer term benefits with established procedures, and will be subject to audit and disclosure. ETI respects the strict need for confidentiality when dealing with the intellectual property assets of both member organisations and other organisations with ETI conducts business. ETI respects all applicable laws and regulations of the countries in which ETI operates and shall seek to operate within the framework of applicable competition laws including any EC rules and regulations relating to State Aid.

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Transport

The same situation is observed for the transport sector. The UK has a very comprehensive number of planning policy instruments and measures for research and development and the promotion of best available technology (BAT) including smart spatial planning, improvements to bicycle, pedestrian, public and rail infrastructure, traffic calming and management systems as well as improvements in logistic, which are the following:

• Plug-in Vehicle Infrastructure Strategy • Eco-towns Planning Policy

It has a very comprehensive number of regulatory policy instruments and measures including fuel economy/vehicle CO2 emission standards, speed restrictions, low emission zones, rules for energy-efficient public procurement and voluntary agreements:

• Vehicle Excise Duty (VED): fuel type and CO2 emission vehicle bands • Renewable Transport Fuel Obligation (RTFO) • Energy Savings Opportunity Scheme (ESOS)

Furthermore, the UK has a very comprehensive number of financial policy instruments and measures including incentives, subsidies, tax exemptions, congestion charges and road tolls, which follow:

• Cycle to Work Scheme • Plug-in Car and Van Grants • Low Emission Bus Scheme

In addition, it has a very comprehensive number of dissemination and awareness policy instruments and measures including mobility advice for transport users, information and image campaigns for sustainable transport, vehicle labelling, gear shift indicators, training for eco-driving:

• Fuel Economy labels for cars • The National Standard for cycle training • Eco-driving training / FuelGood driver training

Finally, the UK has a very comprehensive number of research and development policy instruments and measures including funding of alternative fuels, and low emission vehicles, freight and passenger transport:

• Research Councils Energy Programme (RCEP) • Technology Strategy Board (TSB) / Innovate UK

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efficiency) Target group and targeted

objects Rules and influencing

mechanism (motivation or punish non-compliance)



Plug-in Vehicle Infrastructure Strategy (Plug-in Infrastructure Programme, PiP)

Travel efficiency; In addition to making plug-in vehicles more affordable and stimulating technological innovation, having the right infrastructure in place to support plug-in vehicle owners is the other critical component in maintaining the UK’s favourable market position. By providing clarity of approach and removing barriers for those wishing to invest in, provide or benefit from such infrastructure, the Strategy aims to stimulate and accommodate the growth in the plug-in vehicle market that we expect to see up to 2020.

The PiP aims to encourage local authorities to adopt plug-in vehicle recharging infrastructure within their local planning policies, as well as encourage research and development in electric vehicles within the transport industry, and improve the economic viability of plug-in vehicle infrastructure for installation contractors, charge-point manufacturers and operators as well as local authorities and owners of publicly accessible car parks. In addition, a secondary target group is the end user/consumer (both domestic and business).

As a strategy, there are no specific rules. However, it is combined with numerous policies and financial incentives in relation to increasing the uptake of plug-in vehicles (hybrid and/or full electric) such as the Plug-in Car and Van Grant incentives, favourable tax regimes (plug-in vehicles receive VED and Company Car Tax exemptions, as well as Enhanced Capital Allowances). Furthermore, businesses monitored under the Carbon Reduction Commitment (CRC) are able to discount electricity used to charge plug-in vehicles from their total electricity consumption. Planning-related incentives include the establishment of a Permitted Development Right for landowners to install charge-

Office for Low Emission Vehicles (OLEV). Implementation strategy includes: using the Plugged-In Places trials as a central mechanism to inform the development of commercial models for plug-in vehicle infrastructure; removing barriers to the market, such as the requirement for planning permission for public recharging infrastructure, and working to enable charge point operators to charge the market rate for electricity; producing a conducive environment for private investment, by encouraging infrastructure through planning policies, supporting the move to standardisation and, if raising finance proves a barrier, the potential for targeted financial solutions through the Green


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points without the need for planning permission.

Investment Bank; and helping the consumer by enabling all public infrastructure to be interoperable and improving the provision of information about public charge points (OLEV, 2011).

Eco-towns Planning Policy (cancelled in current form from 5th March 2015)

System efficiency; To minimize energy consumption and to make healthy living easier.

Developers, designers, infrastructure and building industries

Planning applications should include travel plans which demonstrate: (a) how the town’s design will enable at least 50 per cent of trips originating in eco-towns to be made by non-car means, with the potential for this to increase over time to at least 60 per cent (b) good design principles, drawing from Manual for Streets, Building for Life, and community travel planning principles (c) how transport choice messages, infrastructure and services will be provided from ‘day one’ of residential occupation, and (d) how the carbon impact of transport in the eco-town will be monitored, as part of embedding a long term low-carbon approach to travel within plans for

The UK Government ministerial department, DCLG, sets out national planning policy guidance, strategy and rules. The DCLG has the following responsibilities: • supporting local

government by giving them the power to act for their community - without interference from central government;

• helping communities and neighbourhoods to solve their own problems so neighbourhoods are strong, attractive and thriving;

• working with local enterprise partnerships and enterprise zones to help the private sector

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community governance. Where eco-town plans intend to incorporate ultra-low carbon vehicle options, including electric car schemes to help achieve a sustainable transport system, planning applications should demonstrate that: (a) there will be sufficient energy headroom to meet the higher demand for electricity, and (b) the scheme will not add so many additional private vehicles to the local road network that these will cause congestion. The policies set out in the Planning Policy Strategy should be taken into account by regional planning bodies in the preparation of revisions to regional spatial strategies, by the Mayor of London in relation to the spatial development strategy for London, and by local planning authorities in the preparation of local development documents (DCLG, 2009b).

grow; • making the planning

system work more efficiently and effectively;

• supporting local fire and rescue authorities so that they’re able to respond to emergencies and reduce the number and impact of fires.

There are corresponding departments in the Welsh Government, Scottish Government and the Northern Ireland Executive, and which are responsible for policy relating to communities and local government within their localities. In terms of planning, England and Wales follow the same planning policies, whilst Scotland and Northern Ireland have their own separate local planning policy frameworks. Within the DCLG, the executive agency, the Planning Inspectorate, deals with “planning appeals, national infrastructure planning applications, examinations of local plans

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and other planning-related and specialist casework in England and Wales.” Eco-towns will need to be monitored through regional and local monitoring frameworks. Regional Planning Bodies and Local Planning Authorities will be required to monitor the implementation of their spatial policies as set out in the RSS and in development plan documents at the local level. Regional Planning Bodies and Local Planning Authorities should set out in their Annual Monitoring Reports indicators for monitoring the sustainability of eco-towns in their region/district. Arrangements should be put in place for the long-term monitoring of the standards set out for eco-towns as part of the requirements for community governance.

Regulatory policy

Vehicle Excise Duty (VED): fuel type and CO2

Travel and vehicle efficiency; The reformed VED system retains and strengthens the

All vehicle owners. To ensure those who can afford the most expensive cars make a fair contribution,

Tax set forth by HM Revenue & Customs. The measure is monitored through the DVLA

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instruments emission vehicle bands

CO2-based First Year Rates (FYRs) to incentivise uptake of the very cleanest cars whilst moving to a flat Standard Rate (SR) in order to make the tax fairer, simpler and sustainable

a supplement of £310 will be applied to the SR of cars with a list price (not including VED) over £40 000, for the first 5 years in which a SR is paid. Section 1 of the Vehicle and Registration Act (VERA) 1994 provides for the charging of VED. Section 2 of VERA provides that VED in respect of a vehicle of any description is chargeable by reference to the applicable rate specified in schedule 1 of VERA. Part 1A of Schedule 1 to VERA sets out the VED rates for cars registered on or after 1 March 2001, as amended by successive Finance Acts (HM R&C, 2015).

vehicle licensing data (HM R&C, 2015).

Renewable Transport Fuel Obligation (RTFO)

Travel and vehicle efficiency; Reducing transport related GHG while supporting production of biofuels.

Obligatory for companies own and supply 450 000 litres or more of any road transport or NRMM fuel for use in the UK. Open to any company.

A company must register under the RTFO if it owns and supplies 450 000 litres or more of any road transport or NRMM fuel for use in the UK during the course of an obligation year (15 April to 14 April). The 450 000 litre figure includes all fossil fuels and biofuels. If a company

The Administrator of the RTFO is the Secretary of State; however, the daily administration including registration and compliance of the RTFO is managed by the RTFO Unit in the Department for Transport (DfT). In addition to the practical administration of the

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supplies less than 450,000 litres a year in the UK, it can still register to claim Renewable Transport Fuel Certificates (RTFCs). Any company that supplies sustainable biofuel for use in road transport or NRMM in the UK can claim RTFCs. Companies can trade RTFCs or sell them to companies that need them to meet their obligations under the RTFO. Suppliers covered by the RTFO must provide data on the volumes and source of biofuel brought to market in the UK (DfT, 2012). In terms of non-compliance; “The Administrator has powers to impose civil penalties in certain cases of noncompliance with the requirements of the RTFO including: failure to register with the Administrator if obligated; failure to meet the obligation through either the redemption of RTFCs or the payment of the buy-out price; or the fraudulent application

RTFO, the RTFO Unit runs regular stakeholder events, publishes a monthly newsletter with updates on important developments and has developed guidance to help suppliers and verifiers meet the requirements in the RTFO legislation. The unit also has an expert advisory group which provides technical advice, input and expertise on issues around carbon and sustainability of biofuel.

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for, or gaining of RTFCs. The Administrator may also apply interest to, and will collect, overdue civil penalties and buy-out payments” (DfT, 2014b).

Energy Savings Opportunity Scheme (ESOS)

System and travel efficiency; To target a gap in the existing policy landscape and help them to cut their energy costs, by providing targeted cost-effective recommendations to improve their energy efficiency. It will stimulate demand amongst UK businesses for energy efficiency measures, by making clear in the assessments what savings could be made. The assessments will review the organisations’ entire energy consumption including buildings, industrial processes and transport activities (DECC, 2014c).

ESOS applies to large UK undertakings (UK company that either employs 250 or more people, or has an annual turnover in excess of 50m euro, and an annual balance sheet total in excess of 43m euro; or an overseas company with a UK registered establishment which has 250 or more employees paying income tax to the UK) and their corporate groups. It mainly affects businesses but can also apply to not-for-profit bodies and any other non-public sector undertakings that are large enough to meet the qualification criteria. Corporate groups qualify if at least one UK group member meets the ESOS definition of a large undertaking (Environment Agency, 2015).

The environmental regulator is responsible for compliance and enforcement activities. The regulator may issue civil sanctions including financial penalties (ranging from £5k-50k if an organisation does not meet the scheme’s obligations (Environment Agency, 2015).

Overall, the Environment Agency is responsible for administering the scheme across the UK, and holding the UK register. A registered office or principal place of activity (in the absence of a registered office) determines the regulator, in terms of compliance and enforcement activities (Environment Agency, 2015): • The Environment Agency

(England) • Northern Ireland

Environment Agency (Northern Ireland)

• Scottish Environment Protection Agency (Scotland)

• Natural Resources Wales (Wales)

• DECC Offshore Oil & Gas Environment and

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Decommissioning (offshore).

In relation to undertaking an ESOS assessment, a corporate group demonstrates compliance using either: • An ISO 50001 energy

management system certified by an accredited certification body (United Kingdom Accreditation Service (UKAS) accredited, a body accredited by another EU member state’s national accreditation body or a body accedited by a body which is a member of the International Accreditation Forum), and covers all their energy use (for the whole corporate group in the UK),

• Display Energy Certificates (DECs), which are defined by the Energy Performance of Buildings Regulations 2008 (Northern Ireland) and the Energy Performance of

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Buildings Regulations 2012 (as amended) (England and Wales). DECs form part of the implementation in England and Wales of the European Directives 2002/91/EC and 2010/31/EU on the energy performance of buildings. DECs are undertaken by qualified assessors,

• Green Deal Assessments (GDAs), can be part of an ESOS compliant energy assessment for the types of energy consumption they cover, if they qualify as per regulation 7 of the Green Deal Framework Regulations 2012 ),

• ESOS compliant energy audits. All such energy audits must be reviewed by an ESOS lead assessor. An register of approved lead assessors is available online via the UK Government’s ESOS webpage . An assessor can be an employee of the business, or a third party.

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The assessor is not held responsible for compliance by the regulators; therefore it is recommended that a member of the corporate group/organisation who understands the ESOS requirements, and works with the lead assessor to ensure the overall approach taken is compliant with ESOS.

The Environment Agency and the other regulators do not provide standard templates for ESOS related data/activities and/or presentation of findings. Only the data to evidence that 90% of the total energy consumption is compliant via ESOS audits or other alternative routes to compliance, is required to be undertaken and recorded. This is to reduce the administrative burden on organisations that have existing data management procedures and tools.

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Cycle to Work Scheme

Travel efficiency; aims to promote healthier journeys to work and to reduce environmental pollution by making cycling more attractive.

Employers of all sizes across the public, private and voluntary sectors can implement a tax exempt loan scheme for their employees.

To qualify for the tax exemption, the cycles and cyclists' safety equipment loaned by the employer under the scheme must be available to employees generally with no groups of employees excluded. There is no limit on the total value of the equipment including the cycle, e.g. it is possible to loan two cycles to one employee. The tax exemption only applies when an employee mainly uses the cycle and cyclists' safety equipment for qualifying journeys. A qualifying journey for an employee means a journey, or part of a journey; between his or her home and workplace, or between one workplace and another, in connection with the performance of their duties of employment. So, for example, cycling to and from the station to get to work would qualify. In this case, 'mainly' means that more than 50% of use of the cycle and safety

Scheme was first put forth by the DfT and is implemented by employers, under the guidance and regulation of HMRC, OFT/FCA and through approved cycle to work scheme providers. In addition, in order to gain the tax exemption, bicycles must be purchased through a retailer that is affiliated to a cycle to work scheme. The HMRC have published guidance and clarifications relating to the scheme; in 2010 the HMRC clarified that the bicycles needed to be sold at fair market value, to prevent the scheme becoming a tax loophole. Until March 2014, the scheme was regulated by the Office of Fair Trading (OFT; now no longer in existence), after which the Financial Conduct Agency (FCA) provided regulation relating to the Cycle to Work scheme as it regulates the consumer credit market, overall, and other regulated financial services

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equipment must involve a qualifying journey. Employees are not expected to keep mileage logs but employers should make clear to them that if they do not use the cycle mainly for qualifying journeys, they may lose the benefit of the tax exemption. In that event the employer would have to report the benefit in kind on form P11D, and account for Class 1A NICs, in the normal way. The employee would be liable for the tax due on the benefit in kind.

activities. Within the FCA Handbook, PERG 2.11.3 outlines the specific exemption for Cycle to Work schemes. In terms of how the scheme is implemented in practice; “Normally, hire payments are sacrificed from your employees' gross monthly salary, these payments are not subject to income tax and National Insurance Contributions (NICs). At the end of the hire period, as the employer, you may choose to give employees the option to purchase the equipment. If your employee chooses to purchase your bike the cycle to work scheme provider will put in place a transfer of ownership process based on a Market Value payment set by HMRC. The scheme operates under a group consumer credit licence, which has an upper limit of £1 000. This allows employees to obtain cycles and related cycling safety equipment up

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to the limit of £1,000 including VAT. The Office of Fair Trading has agreed to adjust the consumer credit licence limit of £1 000 per person in the event someone has a specific need such as a disability. A higher limit can be applied if an employer has a separate company specific consumer credit licence thereby enabling employees to obtain cycles and equipment for an amount above the £1 000 limit covered by the group licence.” (Cycletoworkalliance.org.uk, 2015)

Plug-in Car and Van Grants

Travel and vehicle efficiency; To encourage uptake of electric (plug-in) vehicles. Combined with tax benefits (such as VED and Company Car Tax exemptions) and selected local benefits, these measures aim to make ultra-low emission vehicles a more attractive proposition to consumers in terms of cost – one of the key barriers to the

Auto consumers

A new vehicle is likely to be eligible if it is one of the following: electric vehicles (EVs) – these run completely on batteries and are plugged into the mains to be recharged plug-in hybrid electric vehicles (PHEVs) – these use a petrol or diesel engine combined with a battery that plugs into the mains hydrogen fuel cell

DfT through OLEV supplies the grants. Auto dealerships will manage all paperwork with regard to the grants. It is a requirement of the Plug-In Car Grant that manufacturers of eligible vehicles set out how they will engage with purchasers to ensure safe recharging of their vehicles; and the Institution of Engineering and Technology,

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uptake of new technology (OLEV, 2011).

vehicles and other technologies. Vehicles must emit less than 75 grams of carbon dioxide (CO₂) per kilometre driven. Electric vehicles must be able to travel a minimum of 70 miles between charges. Plug-in hybrid electric vehicles must have a minimum electric range of 10 miles. Vehicles must be able to reach a speed of 60 miles per hour or more (OLEV, 2011). Customers must provide evidence of keepership, lease, or be named as the primary user of an eligible electric vehicle in order to be able to qualify for the home charge grant (OLEV, 2015a).

the standards body responsible for electrical safety, is producing a Code of Practice to advise electricians how to ensure safe plug-in vehicle recharging installations (OLEV, 2011).

Low Emission Bus Scheme

Travel and vehicle efficiency; Increase the uptake of low and ultralow emission buses, speeding up the full transition to an ultralow emission bus fleet in England and Wales, and reducing the need for subsidy support; support the improvement of local air quality; and support OLEV’s

Any English or Welsh local authority or bus operator can apply for funding.

The Department will contribute a maximum of 90% of the cost difference between the low emission bus and the standard diesel equivalent of the same total passenger capacity. Under the new testing procedure, in order to qualify as a LEB, a bus will need to: produce at

This is an OLEV funded scheme which will be administered by the Department for Transport. The Office for Low Emission Vehicles (OLEV) is a cross Government, industry endorsed team combining policy and funding streams to simplify policy development

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commitment of attracting investment to the UK (OLEV, 2015b).

least 15% less greenhouse gas emissions than the average conventional Euro V equivalent diesel bus of the same total passenger capacity; and meet or exceed Euro VI emissions regulations (OLEV, 2015b).

and delivery for ultra low emission vehicles. OLEV currently comprises people and funding from the Departments for Transport (DfT), Business, Innovation and Skills (BIS), and Energy and Climate Change (DECC). Its core purpose is to support the early market for electric and other ultra low emission vehicles (ULEVs).


Fuel Economy labels for cars

Travel and vehicle efficiency; To give consumers more information about the fuel consumption and CO2 emissions characteristics of new cars (VCA, 2013).

Dealers, suppliers and manufacturers of vehicles that are displayed for sale or lease.

The Regulations specify the Secretary of State as an enforcement authority (England, Wales and Scotland). The Vehicle Certification Agency (VCA) are officials of the Secretary of State for Transport and have responsibility for reviewing the content of promotional literature to ensure that the mandatory data is included and accurate. Local weights and measures authorities will enforce all other aspects of the regulations in England, Wales, and Scotland e.g. checking posters, labels, and

Overseen by the Department for Transport, and administered by the VCA, with local weights and measures authorities enforcing all aspects of the regulations, except for the review of promotional literature content, which is the responsibility of the VCA.

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availability of guidebooks. Since weights and measures authorities will be visiting dealers’ premises to conduct their enforcement duties, they also have responsibility for checking that promotional literature available on site contains fuel consumption and CO2 data. However, if there are queries regarding the accuracy of the data in the literature, the matter should be referred to the VCA. As part of their enforcement responsibility, weights and measures authorities have the authority to take action against dealers and suppliers if information is incorrect or not supplied to dealers. In Northern Ireland the Department of Enterprise, Trade and Investment will hold enforcement responsibility for all aspects of the Regulations. Enforcement action should be in the form of helping and encouraging dealers and manufacturers to comply with

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the requirements of the Regulations, and prosecutions only to be brought in cases of persistent non-compliance (VCA, 2013).

National Standard for cycle training

Travel efficiency; To get more people cycling, more often and with less risk.

The National Standard for cycling is designed to encourage and empower people of all ages to make independent cycle journeys in a wide range of road conditions.

National Standard/Bikeability training may only be delivered by National Standard Instructors (NSIs), who have successfully completed a DfT recognised instructor training course. From 1 January 2011, instructor training organisations (ITOs) are the only bodies recognised by government as providers of training for National Standard instructor trainers, instructors and assistant instructors. All NSIs are issued with an NSI number. The National Standard instructor database contains a record of every instructor holding an NSI number.

The DfT promotes the National Standard through the Bikeability award scheme in England. Any cycle training organisation wishing to use the Bikeability branding and issue the Bikeability award materials to trainees must first register a scheme. Bikeability is organised and delivered locally by registered bikeability providers. Scheme registration is part of a quality assurance process to help ensure organisations are delivering good practice cycle training. The NSI database is managed by Steer Davies Gleave on behalf of the Department for Transport.

Eco-Driving / FuelGood training

Travel efficiency; To increase the efficiency of driving; reducing emissions.

Employees who drive for companies.


Delivered by the Energy Saving Trust (EST); training is delivered in 2-hour, one-to-one driving sessions.

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Research Council’s Energy Programme (RCEP)

System, travel and vehicle efficiency; Aims to enable the UK to meet its energy and environmental targets and policy goals through world-class research and training; support a full spectrum of energy research to help the UK meet the objectives and targets set out in the 2007 Energy White Paper; to work in partnership to contribute to the research and postgraduate training needs of energy-related businesses and other key stakeholders; to increase the international visibility and level of international collaboration within the UK energy research portfolio; and to expand UK research capacity in energy-related areas

Academia, business, government

Priorities for the Energy Programme include continuing support for a broad research portfolio in power generation and supply and to grow the portfolio in demand reduction, transport, security of supply, research capacity building and international engagement. It includes investments in large research consortia, “whole-system” research, strategic partnerships with leading companies and support for the UK Energy Research Centre (UKERC), as well as support for fundamental science based energy research through investigator-led projects.

RCEP is the largest public funder of the Energy Technologies Institute (ETI) – a public-private partnership of up to £1 billion to accelerate the deployment of new energy technologies. RCEP is also working with the Living with Environmental Change Programme (LWEC) to ensure a whole systems response to climate change.

Technology Strategy Board / InnovateUK

System, travel and vehicle efficiency; The focus of Innovate UK is on innovation, working with business to stimulate and support innovation and accelerate economic growth

Business and research

The responsibilities of Innovate UK are to: provide new support for innovative small and medium-sized enterprises (SMEs) with high-growth potential; make sure that government initiatives such as SBRI (Small

Innovate UK is an executive non-departmental public body, sponsored by the Department for Business, Innovation & Skills. Innovate UK’s responsibilities are to: • determine which science

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Business Research Initiative) attract innovative UK businesses and give companies access to important customers in the public sector; identify and invest in the sectors that have the greatest potential for innovation to speed up economic growth; and help innovative companies work with their backers so their ideas can be developed commercially

and technology developments will drive future economic growth

• meet UK innovators with great ideas in the fields we’re focused on

• fund the strongest opportunities

• connect innovators with the right partners they need to succeed

• help our innovators launch, build and grow successful businesses

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Technological trends The UK’s indicative national energy efficiency target for 2020 (under Article 3 of the Energy Efficiency Directive Summary) has been set at a final energy consumption of 129,2 Mtoe (1 503 TWh) on a net calorific value basis (DECC, 2014d). In 2013, the total energy consumed in the UK was 142,5 Mtoe (1 657 TWh). The energy used by buildings accounted for approximately 43% of the UK’s total energy use; with the residential sector accounting for 29% of this. The energy used by the transport sector accounted for 36%. Annex E of the UK’s Energy Efficiency Strategy (DECC, 2012) outlined total potential energy savings of up to 268 TWh based on a UK wide Energy Efficiency Marginal Abatement Cost Curve (EE-MACC)16; 66 TWh of which could be attributed to the transport sector, 93 TWh to the domestic sector, 28 TWh to the commercial sector and 38 TWh to products. The Energy Efficiency Strategy (DECC, 2012) also provided cost-effective potential for energy efficiency of up to 196 TWh (equivalent to 41 MtCO2e) savings in final energy consumption; of which 121 TWh could be attributed to the building-related sectors (27 TWh to the commercial sector, 56 TWh to the domestic sector, and 38 TWh to the products sector) and 33 TWh were attributed to the transport sector. In terms of economic potential, in 2012, the UK automotive industry had a £40 bn turnover with £8,5 bn value added, and with over 700 000 jobs, it accounted for 10% of the UK’s total exports. It also invests around £1,5 bn per year in Research and Development (SMMT, 2012). On an individual level, users of energy efficient vehicles will benefit from higher fuel economies; with 100 miles in an ultra low emission vehicle expected to cost under £3 (OLEV, 2014). A key area in terms of improving efficiency in the transport sector is through improvements in the efficiency of fuel. According to the UK’s Energy Efficiency Strategy (DECC, 2012), a European Commission Impact Assessment indicated that, through improvements in the efficiency of fuel, the average motorist could save about €500/year by 2020. Furthermore, research undertaken through the Technology Innovation Needs Assessment indicates that hydrogen technologies for transport could contribute an economic value of £10-26 bn (to 2050) from global export of goods and services, and a further £9-23 bn economic benefit to the UK (to 2050) via a shift in energy sources for the production of transport fuel. As such, the economic energy efficiency potential in the transport sector is significant but total overall figures are unknown. Carbon Trust research (Low Carbon Innovation Coordination Group, 2012) suggests that existing energy efficiency measures within the commercial (building) sector could provide a 35% carbon saving alone, with a minimum net benefit of £4 bn by 2020. However, DECC analysis (DECC, 2012) suggests that around 14% of the total energy use in the business and public sector are not addressed by any of the UK’s existing policies. Furthermore, as identified in the Energy Efficiency (DECC, 2012), National Energy Efficiency Action Plan (DECC, 2014d) and supported by the findings of the collaborative Technology Innovation Needs Assessments (TINAs), the building sector also offers further economic energy efficiency potential. Innovation in the non-domestic buildings sector is estimated to be able to contribute savings of 18 MtCO2e by 2020, with a potential net value of c. £13 bn (by 2050). The additional global market value of innovative products in this sector is estimated to reach around £488 bn (cumulatively from 2010-2050), with £200 bn expected to be accessible to the UK; innovative products in this sector could provide a further £1,7 bn to the UK’s GDP in export opportunities (Low Carbon Innovation Coordination Group, 2012). Innovation in the domestic buildings sector is estimated to be able contribute savings of 11 MtCO2e by 2020, with a potential net value of around £16 bn (by 2050). The additional global market value of innovative products are estimated to reach around £620 bn 16 The EE-MACC estimates the energy savings, measured in terms of final energy consumption that could be achieved in a given year through implementing energy efficiency measures between now (2012) and that year (2020) DECC (2012). The Energy Efficiency Strategy: The Energy Efficiency Opportunity in the UK. Department of Energy and Climate.Available: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/65602/6927-energy-efficiency-strategy--the-energy-efficiency.pdf

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(cumulatively from 2010-2050), with £220 bn expected to be accessible to the UK; innovative products in this sector could provide a further £1,7 bn to the UK’s GDP in export opportunities. As the Energy Efficiency Strategy (DECC, 2012) states, the development of a stronger understanding of the energy efficiency potential, alongside the evaluation of the impact of existing policies is a priority.

Buildings

There are several existing technologies that aim to increase the efficiency of buildings. In terms of the space heating and air conditioning requirements, these include combined heat and power (CHP) systems, heat pumps and high efficiency condensing boilers, biomass boilers, solar thermal, building fabric measures (wall and loft insulation, improved glazing) as well as improved heating controls and management systems (such as building energy management systems (BEMS), domestic smart meters and app-based smart controls). In terms of supportive policy instruments, there are several regulatory policy instruments that seek to increase the energy efficiency of new and existing (domestic and/or non-domestic) buildings in terms of their space and water heating technologies, including the Energy Company Obligation (ECO), the Renewable Heat Incentive (RHI) and its predecessor, the Renewable Heat Premium Payment, the Heat Network Delivery Unit (HNDU), the Community Energy Saving Programme (CESP, 2009-2012) and the Carbon Emissions Reduction Target (CERT, 2008-2012) and its predecessors, the Energy Efficiency Commitment Scheme (EEC, 2002-2008), and the Energy Efficiency Standards of Performance (EESoP, 1994-2002). In terms of appliances and lighting, the uptake of, and improvements to the efficiency and performance of lighting (specifically the uptake of CFLs and LEDs) and appliances relating to cooking, laundry washing and drying, dish washing, refrigeration and televisions has been supported by national policy instruments that embed EU directives into the legal and regulatory framework of UK policy, such as, the Climate Change Agreements, the EU-Emissions Trading Scheme, the Ecodesign for energy related Products Directives 2009/125/EC and the Energy Labelling Directive (2010/30/EU). In terms of renewable energy generation, there are several existing technologies relating to renewable energy generation in the UK, including solar photovoltaic panels, wind turbines (on and off-shore), tidal, hydro, energy from waste, sewage and landfill as well as anaerobic, animal and plant biomass. There a several supporting policy instruments for renewable energy generation including the Renewables Obligation Certificate (ROC), Renewable Energy Strategy, Feed-in Tariffs (FiTs), the Renewable Energy Investment Fund and LicenseLite. There are also several policy instruments that do not encourage specific energy efficiency measures, but rather aim to enable all types of existing and cost-effective energy efficiency technologies in the building sector. Such policy instruments (mainly regulatory and economic) include measures such as the updated Building Regulations (Part L) – for new and existing buildings (non-domestic and domestic), the national roll-out of Smart Meters, the Code for Sustainable Homes and Zero Carbon Homes Standard, the Green Deal, SME Loans, the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) and the Energy Savings Opportunity Scheme (ESOS).

PENETRATION OF EXISTING TECHNOLOGIES DUE TO POLICY INSTRUMENTS

Through policy instruments and measures running from 2008 to 2012, such as EEC 1 and 2, CERT, CESP:

• 139 000 solid (or hard-to-treat cavity) wall dwellings had solid wall insulation installed (total number of dwellings in UK with solid wall is 7,99 million; as of December 2014, 4% have insulation) (DECC, 2014a).

• 2,6 million cavity wall dwellings had cavity wall insulation installed (total number of dwellings in UK with cavity wall is 19,39 million; as of December 2014, 73% have insulation) (DECC, 2014a).

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• 5,45 million dwellings had improved levels of loft insulation installed (total number of dwellings in UK with suitable lofts is 23,91 million; as of December 2014, 70% have insulation) (DECC, 2014a).

Due to ECO and the Green Deal, a total of 1 541 290 measures have been installed in dwellings in the UK between January 2013 and May 2015 (DECC, 2014a). Table 75 outlines the penetration of some of the main technologies within the building sector, due to Green Deal schemes and ECO.

Table 75. Energy efficiency measures delivered through UK Government policy measures

Measure type

Delivery mechanism

ECO Green Deal Cashback

Green Deal Home

Improvement Fund

Green Deal Finance

Boiler 311 269 12 379 2 980 4 846 Cavity wall insulation 563 936 300 137 366 Lighting 0 0 0 158 Loft Insulation 403 694 773 60 1 069 Micro-generation 0 0 0 4 737 Other heating 101 456 12 2 661 1 313 Other insulation 12 061 60 302 1 017 Solid wall Insulation 89 064 2 108 20 876 2 325 Window glazing 3 117 64 124 35 Total number of measures 1 484 597 15 696 27 140 15 866

In relation to renewable energy generation, of the total capacity of solar photovoltaics installed up to the end of May 2015 (7 265 MW capacity over 709 550 systems), 42% (3 075 MW over 694 961 systems) is accredited to Feed-in Tariff (FiTs) installations and 45% (3 300MW over 11 774 systems) is accredited to the Renewables Obligation (DECC, 2014c).

Transport

In terms of the transport sector, the main existing energy efficiency technologies include (DECC, 2012):

• For road transport (freight and passenger): low rolling resistance tyres, improved engine efficiency, improved vehicle dynamics, improved infrastructure for electric vehicles, alternative fuels (e.g. hydrogen, electric, hybrid engines, biofuels), automated vehicles, intelligent systems (e.g. improved routing and scheduling, training and performance monitoring through telematics)

• For rail transport (freight and passenger): transport rail electrification, enhanced braking systems, automated train operation

• For shipping/marine (freight): improved auxiliary power (efficient pumps, high efficiency lighting, solar PV panels), improved hydro- and aerodynamics, improved operational systems (weather routing, autopilot upgrades, speed reduction), improved thrust efficiency (propeller and rudder upgrades), improved energy efficiency (waste heat recovery systems, engine controls) (Sekimizu, 2015);

• For aviation (freight and passenger): engines with increased fuel efficiency, use of alternative fuels, improved dynamics.

The majority of the main existing energy efficiency technologies in the road and rail sectors are supported by policy instruments in the UK; and are mainly based on policies set at EU level. They include a mix of instrument types including regulatory (EU new car CO2 emissions targets: 130 gCO2/km by 2015 and 95 gCO2/km by 2020; and complementary

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measures), economic (Plug-in car and van grants (including Electric Vehicle Homecharge Scheme) and planning ((Ultra-)Low Carbon Emissions Zones at local authority/regional level e.g. London). In addition, there are a number of voluntary approach policy instruments such as the Freight Transport Association Logistics Carbon Reduction Scheme. In terms of existing technologies in the shipping/marine and aviation sectors, these are mainly being driven by international markets and standards; such as measures put in place by the International Maritime Organization (IMO).

PENETRATION OF EXISTING TECHNOLOGIES DUE TO POLICY INSTRUMENTS

The majority of the main existing energy efficiency technologies supported by policy instruments in the UK are showing signs of significant penetration in their relevant domestic markets. However, total figures relating to the direct effect of the policy instruments upon the penetration of the technologies were not available at the time of writing. Despite this, a Society of Motor Manufacturers & Traders (SMMT) report (SMMT, 2014) indicates significant shifts in the UK’s new car market; in 2013, 63% of new car registrations met the EU’s 2015 CO2 target (130 gkm or below), with an increase in the purchase of cars with 95 g/km and below, and fewer cars emitting CO2 over 200 g/km being purchased. Furthermore, sales of VED top-band (Band M – over 255 g/km) cars fell from over 100 000 units in 2000 to less than 10 000 in 2013 (0,4% of the market). SMMT research also indicates that there was a definite step-change in the uptake of low emission cars after 2007. In addition, it is not just petrol and diesel cars, with improved fuel efficiency that are experiencing increased uptake; comparative annual figures also indicate that there is a significant increase in the uptake of vehicles with alternative fuel sources; with ‘pure electric plug-in’ vehicles experiencing an annual percentage change increase of 83%, and ‘other electric plug-in’ vehicles experiencing a 520% increase in uptake, from June 2014 to June 2015. However, currently (mid-2015) alternative fuelled vehicles (AFVs) account for only 2,1% of the market (SMMT, 2015). In terms of the rail sector, significant rail electrification along three key routes began in 2014 by Network Rail17, alongside capacity improvements and the implementation of the European Rail Traffic Management System to improve line capacity, as part of the UK Government’s National Infrastructure Plan (HM Treasury, 2014).

INNOVATIVE TECHNOLOGIES AND SUPPORTIVE POLICY INSTRUMENTS

Innovative technologies in the transport sector are supported through policy instruments aimed at encouraging research and development at all three levels of energy efficiency; system efficiency, travel efficiency and vehicle efficiency, including infrastructural innovations, innovations in ultra-low emission vehicles and alternative fuels. In response to the regulatory EU policy instruments relating to alternative fuels and improved vehicle fuel efficiency, the UK Government set up the Office for Low Emission Vehicles (OLEV) in 2009. The OLEV helps support and develop the market for ultra-low emissions vehicles (ULEV) and provides over £900 million to “position the UK at the global forefront of ULEV development, manufacture and use” (OLEV, 2014). Alongside the Technology Strategy Board/InnovateUK, the OLEV has helped, and continues to help fund innovative technologies in the transport sector. Some of the research and development that the OLEV has helped fund include:

• The Low Carbon Vehicles Innovation Platform (LCVIP) • The Low Carbon Vehicle Public Procurement Programme (LCVPP)

17 Network Rail is the company responsible for owning, operating and managing Britain’s railway network, operating under a licence enforced by the Office for Rail Regulation. On 1st September 2014, Network Rail Limited with all of its subsidiaries was reclassified as a central government body, and is a public-sector arms-length body of the Department for Transport HM Treasury (2014). National Infrastructure Plan 2014. London. Available: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/381884/2902895_NationalInfrastructurePlan2014_acc.pdf

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• The Low Carbon Truck trial • Advanced biofuel demonstration competition

In addition to providing funds directly, the OLEV is also working collaboratively with the UK’s Automotive Council to provide innovation roadmaps, focusing on key areas for innovation; internal combustion engines, power electronics and electric machines, energy storage, lightweight vehicle and power train, and intelligent (HM Government, 2013). In order to identify and promote low emission road freight technologies specifically, a Low Carbon HGV Technology Taskforce was set up in 2011; it includes Freight Transport Association, Road Haulage Association, Chartered Institute of Logistics and Transport, the Society of Motor Manufacturers and Traders, Low Carbon Vehicle Partnership and Transport Knowledge Transfer Network and is supported by the Department for Transport, the Office of Low Emission Vehicles and Defra (DfT, 2014). UKH2Mobility is also a collaborative research and development project that involves industry, public/private partners and UK Government departments, amongst others, and which seeks to evaluate the potential for hydrogen fuel cell technology within the transport sector.

COST-EFFECTIVE TECHNOLOGIES

The EE-MACC analysis undertaken for the UK’s Energy Efficiency Strategy (DECC, 2012) indicates that the cost-effective energy savings within the transport sector from existing technologies is much less than the total energy efficiency potential (33 TWh cost-effective to 66 TWh total energy efficiency potential). Whilst most of the UK’s existing energy efficiency policy covers the cost effective potential (CCC, 2013b), this highlights the need for significant improvements and further investment in the industrialisation of manufacture through process innovation as well as reliable and affordable technologies being available through the reduction in capital costs to ensure continued uptake of existing technologies and future uptake of innovative technologies. The most cost-effective existing technologies relating to transport are electric vehicles and battery leasing (CCC, 2013a). Cost-effective measures are those that cost less than the projected carbon price across their lifetimes (CCC, 2013a).

Barriers In 2013, the building sector accounted for 43% (13% services, 30% residential) of the UK’s total energy consumption in 2013 and the transport sector accounted for 37% of the UK’s total energy consumption. Both sectors are critical in terms of meeting international, European and national carbon reduction and energy efficiency targets. Despite this, many barriers to enhanced energy efficiency in both the building and transport sectors exist, and are often highly complex with multiple inter-relations. The literature review has uncovered a series of UK-specific social, cultural, educational, institutional and economic barriers to improving the energy efficiency in the two sectors.

Buildings

Within the building sector the main barriers include the undervaluing of energy efficiency, lack of motivation and inertia within consumers/end users, infrastructural and planning barriers to medium-sized energy projects as well as practical and construction-related barriers such as a lack of skills and adequate standards. Economic barriers such as upfront/capital costs and the lack of adequate or misaligned financial incentives also appear to be significant in terms of preventing the uptake of energy efficiency technologies and measures within the building sector (both domestic and non-domestic).

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High

Undervaluing energy efficiency Inertia/Habit Perceived lack of impact Lack of time and resources Rebound effect Lack of awareness Refurbishment seen as low priority Socio-economic status of household Unwillingness to replace heating systems Access to trusted Information Lack of information on energy use Understanding of costs versus perceived benefits Misaligned financial incentives Construction standards Poor compliance with building codes Performance gap Building stock characteristics Quality of installation and commissioning Mismatch between policy and occupant reality Disruption /Hassle factor (Retrofits/Renewable heat/Microgeneration) Difficulty of retrofitting to existing buildings (renewable heat) Infrastructure and planning barriers (medium sized energy projects and local access to grid connections) Embryonic markets Capital costs Lack of funds or access to finance Payback expectations/Investment horizons Cost of new heating system Cost of microgeneration technology

Medium

Lack of interest and motivation Mistrust of technologies Mistrust of energy companies or contractors Social norms and accepted behaviours Visibility of energy efficiency Perception that environmental benefits too small Lack of awareness/Information gap on technologies Lack of user experience Skills and training Lack of regulatory provision Lack of data Multi-stakeholder issues Quality of workmanship Policy framework on refurbishments Characteristics of technology/fuel (renewable heat)

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Regulatory barriers (renewable heat) Competing purchase decisions Price signals/Financial Incentive Additional costs/Hidden costs Risks and uncertainty

Low

Confidence in contracting and delivery Inter-occupant relationships Perceived lack of political action Perceived lack of action by business and industry Local oppositions to new energy infrastructure (Community action) Externalising responsibility and blame Aesthetics (Retrofits) Perceived information over-load Consumer confusion on green tariffs Mistrust of green tariffs Marketing and information on green tariffs Impact on residence (Microgeneration) Security of fuel supply (renewable heat) Lack of space (renewable heat) Electricity supply capacity (renewable heat) Cost of energy tariffs

Transport

Within the transport sector the main barriers identified include the immature status of developing technologies, and lack of the necessary infrastructure to support low carbon transport (freight and passenger), the hesitancy and/or inertia of end-users/consumers to trust and take up new technologies, and the prohibitive nature of the capital costs involved and the limited business case for energy efficient transport infrastructure investment.


Impact of barriers Barrier

High

Hesitation to trust new technologies Buyer attitude Inertia Concern about vehicle reliability Lack of knowledge Insufficient information Immature status of developing technologies No standards for infrastructure investments Not developed infrastructure for recharging Range of distance travelled between charges Biofuel distribution and infrastructure Biofuel vehicle limitations Lack of policy on freight efficiency High purchase price and long payback

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Impact of barriers Barrier

Limited business case for infrastructure investment

Medium

Environmental awareness Attitude-action gap Maintenance difficulties Limited understanding of environmental impact Consumer understanding and use of fuel economy information Undeveloped cycling infrastructure Inadequate public transport across England Unclear urban planning and traffic road regulations Confusion about fleet averages for CO2 emissions Limited R&D Incentives High costs preventing development of new technologies Lack of initiatives for fleets Concerns about sustainability of biofuels Lack of research in freight efficiency Battery costs Running costs Limited financial incentives for freight electric vehicles

Low

Car as a status symbol Cycling culture is marginalised Habit and social norm of driving Need for R&D in biofuels Extra load on the electricity grid Limited car-sharing initiatives Non-standardisation of connectors Cost of domestic charging unit Lack of market and policy certainty for hydrogen innovation Lack of financial support for car clubs

Cross Cutting The cross-cutting barriers to the implementation of energy efficiency across the building and transport sectors in the UK include social, cultural and educational barriers as well as economic and institutional barriers. The barriers with the highest impact, based on a qualitative assessment of the available literature include the undervaluing of energy efficiency by consumers, the inertia of consumers in relation to decision making, a mistrust of new technologies in consumers as well as a lack of trusted information and knowledge within consumers, installers/manufacturers of energy efficiency technologies. Furthermore, the practical limitations of certain technologies within the current UK context (due to infrastructure, underdevelopment of some technologies and, specifically in the case of the building sector, the variety and complexity of the UK’s building stock) and the current high capital costs and expected length of payback are also seen as high impact cross-cutting barriers to the uptake of energy efficiency measures. Despite this, there are several UK policy instruments that aim to target these barriers, although none target both building and transport sectors simultaneously. In addition, it appears that more policy instruments target barriers within the building sector, than the same barrier within the transport sector. It must also be noted that a number of the UK’s

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energy efficiency policy instruments that targeted the building sector, and sought to overcome many of the cross-cutting barriers have recently been scrapped, and consultation is out on how to proceed in terms of UK national energy efficiency policy within this sector.



High

Undervaluing energy efficiency (energy efficiency seen as a low priority) Inertia/habit High capital costs and payback Lack of market certainty Practical limitations of technologies Mistrust of new technologies Lack of trusted information and knowledge

Medium

Confusion and understanding/awareness of savings potential Inadequate planning frameworks and infrastructure Complex standards and regulatory provision Lack of data and research

Low Social norms and accepted behaviours Lack of appropriate financial incentives

Identifying specific barriers that affected both the transport and building sectors was difficult, in part due to some of the barriers identified in the literature review were very specific; such as ‘unwillingness to replace heating system’, and ‘biofuel vehicle limitations’. Instead, ‘clusters’ of barriers that were similar in content and effect were identified and classified as cross-cutting barriers. A further reason why some barriers, although similar, were sector-specific is that the two sectors have fundamental differences. An example of this is the influence of the individual, and the highly complex and variability of the UK’s current building stock. In comparison, the transport sector is much more dependent on government- or nationally-led influences on infrastructure and mobility. In other words, there is no ‘one size fits all’ in the building sector due to the variety in building stock, whereas the base transport infrastructure is national, and not reliant on individual decision-making. Despite this, there have been common social, educational and cultural barriers identified, including; undervaluing energy efficiency, inertia of consumers, mistrust of new technologies, lack of trusted information and knowledge, confusion and understanding/awareness of savings potential and social norms and accepted behaviours. Of these six identified cross-cutting barriers, four are found to have a potentially high impact on the building and transport sector; undervaluing energy efficiency, inertia of consumers, mistrust of technologies, and lack of trusted information and knowledge. In terms of policy instruments that address these barriers, none address the building and transport sectors simultaneously. However, there is a range of policy instrument types that seek to address these barriers including regulatory, economic, dissemination and awareness, and research and development. In terms of economic cross-cutting barriers, high capital costs and payback and lack of market certainty both have a high impact in the building and transport sector. The third cross-cutting economic barrier of ‘lack of appropriate financial incentives’ is rated as a low impact; mainly due to the fact that, until recently, there have been several financial incentive programmes in both the building and transport sector (outlined in Table 3). However, due to recent changes in the UK Government, these have either been reduced or pulled completely. Therefore, a reassessment of the impact of this barrier is advised following further anticipated developments in the UK’s energy efficiency policy.

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When assessing the institutional cross-cutting barriers, all appear to be of medium impact, except ‘practical limitations of technologies’, which is rated as a high impact. This is mainly due to the impact this potentially has in the building sector. However, existing, and potentially future policy instruments that address and help fund research and development in this area, as well as improving skills and training within the construction industry workforce should help negate some of the impacts of this barrier.

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SURVEY QUESTIONNAIRE

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About the survey The barriers to energy efficiency are vast and complex and overcoming them is a key challenge for an effective implementation of energy efficiency policies. The HERON project focuses in particular on energy efficiency policies in the building and transport sectors, which are characterized by relevant energy uses and a great potential for energy efficiency in Europe and in the eight partner countries. In the previous activities of the project, the partners identified and cross-analysed social, economic, cultural, institutional and educational barriers to the implementation of energy efficiency in the building and transport sectors for all eight HERON partner countries, through a literature review and expert views, in order to assess country-specific barriers associated with different policy measures and technologies. Subsequently, the partners launched a questionnaire-based online survey to gather further inputs from experts and stakeholders regarding the relevance of these barriers in their respective country. The aims of the survey were:

• to collect experts’ and stakeholders’ opinions on the relevance of each barrier in each country, rating the relevance of the different barriers in influencing the degree of implementation of the energy efficiency policy instrument, technology or practice, as well as the interaction between the barriers;

• to suggest possible ways to overcome them, • if necessary, to map additional barriers which had not been considered.

The survey also aimed to rate the importance of different driving factors of energy efficiency policies, identified in the previous activities of the project. The questionnaire was structured into two main parts (buildings and transport). Each part included general questions about the relevance of a set of barriers to the implementation of energy efficiency (EE) policies in the specific sector, followed by a set of questions regarding specific types of interventions or technologies (for buildings: building fabric upgrade; heat pumps; LEDs; more efficient appliances; Building Energy Management System (BEMS) and building automation systems; for transport: electric and hybrid vehicles; more sustainable and efficient modes of transport for individuals; more sustainable and efficient modes for freight transport). The questionnaire comprised both closed and open questions. The closed questions were mainly aimed to obtain a rating of the barriers. The open questions were aimed to collect suggestions on additional barriers, their importance and possible ways to overcome them. The survey was open from 2 February 2016 until 7 March 2016. It was disseminated to about 370 organizations spread in the partner countries, representative of key target groups and stakeholders of energy efficiency policies, in particular experts and policy makers. Overall, 174 responses from target groups of the building sector were collected, 139 from the transport sector and 128 from respondents with expertise in both sectors. The majority of respondents were reluctant to declare their level of experience (about 35% in the building sector, about 40% in the transport sector). For those who declared it, about 46% for the buildings and 67% for the transport sector respectively have an experience of more than 5 years. When disaggregating by type of organization, the pattern is consistent across the two sectors. The majority of respondents did not belong to any specific type of organization included in the options, the category of “Other” involving about one third of respondents in each of the two sector (28% in building and 34% in transport) and when respondents belong to both building and transport sectors (34%). In the building sector, the categories involved in order of importance are government institutions (23%), universities and research centers (11%), non-profit organisations (9%), energy utilities (6%) and consumer associations (only 1%), while a 21% of respondents prefer not to indicate their type of organization. In the transport sector, the shares were similar, respectively government

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institutions (26%), universities and research centers (14%), non-profit organisations (10%), energy utilities (6%). The share of respondents preferring not to declare their type of organization was about 10%. Given that the HERON survey was not based on a randomized and representative sample design, it was not possible to infer correlation neither causal implications between respondent groups and the different EE barriers listed in the questionnaire. However, in order to identify the most important barriers in each sector as a whole, those barriers rated only as of “high relevance” were selected and summed to obtain the total number of respondents in all the eight countries for each question’s option in each sector. Then, a share for each answer’s option was calculated. Based on this approach, the two most important barriers in the building sector are constituted by:

(1) Socio-economic status of building users, which represents 11,7% of the total grade options choosen;

(2) Lack of funds or access to finance, lack of financial incentives, high capital costs and financial risk, which represents a 10% of the total grade options chosen.

For the transport sector, the two most important barriers are constituted by: (1) Lack of finance for new vehicles/ultra-low-emission vehicles/public transport,

which corresponds to 8,20% of the total grade options choosen; (2) Limited infrastructure investment, which covers the 8,10% of the total grade

options chosen. The lack of finance therefore is confirmed as a key barrier to an effective implementation of energy efficiency policies in both sectors across all the HERON partner countries.

Overview of the questionnaire The HERON questionnaire was structured in four main parts: Introduction and purpose of the survey, with key information on the expected compilation time, data management and ethical principles to be followed by Heron partners within the survey, future use of the data, funding of the Heron project, contacts for further information, glossary of terms used in the questionnaire; Questions on barriers to energy efficiency in the building sector, structured in:

• General questions; • Barriers limiting interventions for building fabric upgrade; • Barriers limiting the adoption of heat pumps; • Barriers limiting the adoption of LEDs; • Barriers limiting the adoption of more efficient appliances (with energy class A+++

and A++); • Barriers limiting the adoption of Building Energy Management System (BEMS) and

building automation systems. Questions on barriers to energy efficiency in the transport sector, structured in:

• General questions; • Barriers limiting the adoption of electric and hybrid vehicles; • Barriers limiting the choice of using more sustainable and efficient modes of

transport for individuals; • Barriers limiting the choice of using more sustainable and efficient modes for freight

transport; • Questions aimed to depict the profile of the respondent and thank you section.

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Questionnaire dissemination The questionnaire in its eight language versions was uploaded on the web-platform “Qualtrics”, which was chosen for its flexibility and functionalities. The questionnaire was available online from 2 February 2016 until 7 March 2016. Each partner was responsible for inviting recipients from his/her country to respond to the survey by sending an invitation email. The questionnaire was disseminated to the target groups identified by partners during Task 2.4 “Identification of the survey’s target groups”. Overall, 374 organizations were identified by partners as potential recipients of the WP2 survey questionnaire, distributed among partner countries as displayed in the following table:

Table 79: Number of organizations identified per country

Country Number of recipients Belgium 26 Bulgaria 41 Estonia 46 Germany 51 Greece 44 Italy 101 Serbia 38 United Kingdom 25 Other (i.e. EU) 2 Total 374

Two partners identified potential recipients also outside of their country, namely in Slovenia and an EU organization based in Italy. As far as the typologies of target groups are concerned, actors and organizations included in the recipients list were spread among several typologies, as shown in the following graph:

Figure 18: Number of organizations identified per typology

Most represented typologies were experts in the domain of energy efficiency and energy policy, as well as of regional/local planning and/or mobility planning), policy makers and regulators and energy utilities and other energy companies.

Experts in EE, en.policy, planning

99

Policy makers and regulators

87

Energy utilities and other

energy companies

62

Professional associations

55

Consumers associations and NGOs

51

Financial institutions

12

Other 3 Mix

5

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Cross-country analysis Building sector

HIGH RELEVANCE BARRIERS TO EE IN THE BUILDING SECTOR IN EACH PARTNER COUNTRY

The following paragraph highlights the barriers rated by the respondents as highly relevant for each country for the implementation of EE policies in the buildings sector. The results are displayed also in the Table 80 below. The socio-economic factors appear to be highly relevant across several partner countries. In fact all of them and almost all of them (7 out of 8) respectively, identified the social economic status of building users and the lack of funds as a high relevance barrier concerning the implementation of EE policies in the building sector. Also the limited payback expectations and investments horizons, which are also connected to the economic dimension of the investment, were rated as high in several countries (5 out of 8). Cultural and behavioural aspects, such as the lack of interest in energy efficiency and customs and habits, were rated as highly important in half partner countries, together with educational barriers such as the lack of trusted information and experience. Also institutional barriers like the complexity of regulatory procedures emerged as highly important in half partner countries. Other barriers of educational type, like the lack of awareness on energy savings potentials, and of institutional type, like the building stock characteristics and the split incentive, were rated high in a smaller number of countries, only 3 out of 8. Other barriers of economic type, like uncertainty on investments, were rated as highly relevant only in 2 out of 8 countries. The specific educational issue linked to training and skills of professionals seems highly important only in one country. The difficulties in using new EE technologies as well as social group interactions do not emerge as highly relevant barriers in any of the partner countries. Looking at the rating for specific EE intervention types or technologies applicable to the building sector, the situation changes according to the specific intervention/technology. For interventions on building fabric upgrades, all partner countries identified highly relevant barriers, mainly of economic and institutional type. The difficulties of their implementation mainly rely on the lack of funding to realize these interventions or the institutional factors linked for example to the lack of incentives in the country’s policies, specific obstacles in the legislation, the split incentives issue, to cite some examples. For heat pumps, only 3 countries identified barriers of high relevance for their adoption, mainly of economic and educational type. The open answers provided by respondents for this technology highlighted economic factors such as the high costs of this technology, and educational factors linked to the expertise of professionals as important elements. For LEDs, half of partner countries identified barriers of high relevance, mainly of economic and cultural type. This may be due to the high purchase costs of this technology in comparison to other options, and to some technical features of LEDs which are perceived in a negative way by consumers, as highlighted in the open answers (e.g. light colour and intensity,etc). Also for more efficient appliances, 5 out of 8 partner countries identified highly relevant barriers of economic and cultural type. This may be due to the higher purchase costs of these appliances in comparison to less efficient ones, and to price policies of the vendors, as well as from cultural patterns that lead to substitute the appliance in case of breakdown, and not for energy efficiency purposes, as reported in the open answers.

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For BEMS, all partner countries identified high relevance barriers, mainly of educational, socio-cultural and economic types. Educational aspects may be linked to the lack of qualification regarding this technology in the professional sectors, and also from the end-users, which have difficulties in familiziaring with it due to its complexity. The economic aspects may be linked to the high purchase costs and lack of finance for the adoption of this technology.

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Table 80: High relevance barriers to EE in the building sector in the partner countries based on the survey results

Bulgaria Germany Greece UK Estonia Italy Belgium Serbia Barriers to the implementation of EE policies in the buildings sector rated as “highly relevant” Lack of interest and undervaluing energy efficiency (individuals may pay scarce attention to energy saving and its benefits) x x x x

Socio-economic status of building users (some statuses, such as unemployment, affect the individual capacity to invest in EE. In general individuals with negative economic conditions have fewer possibilities to sustain EE investments)

x x x x x x x x

Lack of funds or access to finance, lack of financial incentives, high capital costs and financial risk (individuals with more risk aversion may be less prone to invest in EE)

x x x x x x x

Limited payback expectations and investment horizons (individual may think that the payback period for a given EE investment is too long and uncertain)

x x x x x

Uncertainty on investment (individuals may be more or less sensitive to the uncertainty due to the return on their EE investments) x x

Lack of trusted information and experience (individuals may not trust who provides them with information on energy savings) x x x x

Lack of awareness on saving potentials (individuals may misperceive the benefits deriving from EE) x x x

Training and skills of professionals (professionals and sellers of EE goods may have poor expertise) x

Customs, habits, and relevant behavioural aspects (i.e. it may be difficult to change consumer’s habits such as keeping the windows open when the heating is on or sleeping with TV left on)

x x x x

Lack of relevant legislation (legislation may not be sufficiently developed to support the adoption of EE technologies) x x

Building stock characteristics (there may be some technical difficulties in installing EE technologies, due to the characteristics of different buildings, including building age)

x x x

Split incentive (landlords may not invest in energy efficiency because their tenants pay the energy bills, or conversely tenants have no incentive to reduce their energy use as their landlord pays the bill)

x x

Complex/inadequate regulatory procedures (individuals who want to benefit from EE investments may find bureaucratic procedures too complicated)

x x x x

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Bulgaria Germany Greece UK Estonia Italy Belgium Serbia Barriers limiting interventions for building fabric upgrade rated as “highly relevant” Lack of interest and undervaluing energy efficiency benefits; social group interactions (some individuals may negatively affect consumers that are willing to invest in new EE technologies)

x x

Lack of funds or access to finance, lack of financial incentives, high capital costs and financial risk x x x x x x x

Lack of trusted information and experience (individuals may not trust who provide them with information on energy savings); difficulties in knowing new EE technologies; lack of expertise for professionals and technicians

x

Customs, habits, and relevant behavioural aspects (it may be difficult to change consumer’s habits such as leaving the windows open when the heating is on)

x

Lack of specific legislation; aged building stock and difficulties in installing EE technologies; split incentive (landlords may not invest in energy efficiency because their tenants pay the energy bills)

x x x x

Barriers limitating the adoption of heat pumps rated as “highly relevant” Lack of funds or access to finance, lack of financial incentives, high capital costs and financial risk x x

Lack of trusted information and experience (individuals may not trust who provide them with information on energy savings); difficulties in knowing new EE technologies; lack of expertise for professionals and technicians

x x

Barriers limiting the adoption of LEDs rated as “highly relevant” Lack of funds or access to finance, lack of financial incentives, high capital costs and financial risk x x x

Customs, habits, and relevant behavioural aspects (it may be difficult to change consumer’s habits such as leaving the lights on when not in the room)

x

Barriers limiting the adoption of more efficient appliances rated as “highly relevant” Lack of interest and undervaluing energy efficiency benefits; social group interactions (some individuals may negatively affect consumers that are willing to invest in new EE technologies)

x x

Lack of funds or access to finance, lack of financial incentives, high capital costs and financial risk x x x x

Barriers limiting the adoption of BEMS and building automation systems rated as “highly relevant” Lack of interest and undervaluing energy efficiency benefits; social x x x x

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Bulgaria Germany Greece UK Estonia Italy Belgium Serbia group interactions (some individuals may negatively affect consumers that are willing to invest in new EE technologies) Lack of funds or access to finance, lack of financial incentives, high capital costs and financial risk x x x x x

Lack of trusted information and experience (individuals may not trust who provide them with information on energy savings); difficulties in using new EE technologies; lack of expertise for professionals and technicians

x x x x x x x

Customs, habits, and relevant behavioural aspects (it may be difficult to change consumer’s habits such as sleeping with TV on) x

Lack of specific legislation; aged building stock and difficulties in installing EE technologies; split incentive (landlords may not invest in energy efficiency because their tenants pay the energy bills)

x

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Transport sector

HIGH RELEVANCE BARRIERS TO EE IN THE TRANSPORT SECTOR IN EACH PARTNER COUNTRY

Economic and institutional factors, such as limited infrastructure investment and inefficient transport infrastructure and planning, are identified as highly relevant barriers to EE in the transport sectors in all partner countries, together with the insufficient development of cycling/walking infrastructure which has been reported in almost all countries (7 out of 8). Further economic and institutional factors rated as highly relevant barriers and quite widespread among partner countries (in 6 out of 8 of them) are the lack of finance for new vehicles/ultra-low-emission vehicles and public transport, the low purchasing power of consumers/financial crisis, the lack of integrated governance, a lack of EE for transport on the Government agenda, a lack of support for rail transportation/Limited rail infrastructure, a lack of a national strategy for sustainable urban mobility, and not developed infrastructure for recharging of electric vehicles. Some of these factors are also linked to the low satisfaction with public transport/lack of trust, which were also rated as high in several countries (6 out of 8). Barriers more linked to cultural, educational and social aspects emerge as highly relevant in a smaller number of partner countries. These include environmental concern/low priority, recognized as highly relevant in half of partner countries; habit and social norm of driving and car ownership, in 3 of them; car as status symbol and as a driver of group influence, in 2; and the lack of knowledge and information about energy efficient vehicles only in 1 country. Looking at the specific technology of electric and hybrid vehicles, almost all countries (7 out of 8) identified high-relevance barriers. The most widespread barriers seem of economic type, namely the lack of finance, the limited infrastructure investment and the reduced purchasing power of citizens due to financial crisis, as well as of institutional type, namely the fragmentation of responsibility between different public authorities and contradictions in policy goals; inefficient public transport infrastructure; not developed infrastructure for recharging of electric vehicles. These have been rated as highly relevant respectively by almost all partner countries (7 out of 8) and by 5 of them. Cultural and educational barriers emerge as relevant only in 1 country respectively. Looking at the barriers limiting the choice of using more sustainable and efficient modes of transport for individuals, all partner countries identified high-relevance barriers. All countries agree on institutional factors such as the lack of infrastructures and planning to be a highly relevant barrier, followed by more social and cultural factors such as the low satisfaction with public transport (rated high in 6 out of 8 countries) and habit and social norm of using traditional less efficient transport means (4 out of 8). Economic aspects like low purchasing power of consumers/financial crisis are recognized as highly relevant for energy efficiency of individual transport only in 3 countries. Finally, looking at the barriers limiting the choice of using more sustainable and efficient modes for freight transport, 6 out of 8 countries identified high relevance barriers. Several countries (5 out of 8) recognize the impact of the economic crisis (Reduced economic returns/financial crisis), rating it as a highly relevant barrier, followed by more institutional and infrastructural elements (Lack of support for more sustainable and efficient transport means/Limited infrastructure). Social, educational and cultural elements are rated as highly relevant only in 1 country respectively.

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Table 81: High relevance barriers to EE in the transport sector in the partner countries based on survey results

Bulgaria Germany Greece UK Estonia Italy Belgium Serbia Barriers to the implementation of EE policies in the transport sector rated as “highly relevant” Low satisfaction with public transport/lack of trust (Individuals may be dissatisfied with public transport and perceive it as more time consuming and less flexible than private means of transport)

x x x x x x

Hesitation to trust new technologies (Individuals may not trust new efficient vehicles (e.g. electric vehicles) and consider them less reliable than “known” technologies)

x

Lack of finance for new vehicles/ultra-low-emission vehicles/public transport (Individuals may lack economic resources to buy new efficient vehicles or to use public transport)

x x x x x x

Limited infrastructure investment (Public investments in public transport or in infrastructures for energy efficient vehicles (e.g. electric vehicles) may be limited due to lack of resources)

x x x x x x x x

Low purchasing power of consumers/financial crisis (individuals may be reluctant to invest in energy efficient vehicles because of the lowering effect of the economic crisis on their purchasing power)

x x x x x x

Individuals may lack knowledge and information about energy efficient vehicles such as electric vehicles and ultra-low emission vehicles, e.g. information about running costs, variations in vehicle technology, charging routines etc.)

x

Car as status symbol and as a driver of group influence (individuals may consider owning and driving a private car as a symbol of status and good lifestyle)

x x

Habit and social norm of driving and car ownership (owning and driving a private car may be a deeply-rooted habit and tradition) x x x

Environmental concern/low priority (Environmental impact of vehicles and/or of travelling may have a low priority for individuals when they purchase a new car or when they decide which ways of travelling they should use)

x x x x

Lack of integrated governance (transport governance may be affected by a lack of integration, deriving i.e. from a fragmentation of responsibility between different public authorities and contradictions in policy goals)

x x x x x x

Transport EE on the Government agenda lacking/underrepresented (energy efficiency in the transport sector may have low priority in the governmental agenda)

x x x x x x

193

Bulgaria Germany Greece UK Estonia Italy Belgium Serbia Inefficient transport infrastructure and planning (available transport infrastructure and further infrastructure planning may be inefficient and/or ineffective in displacing car dominance and promoting energy efficient transport)

x x x x x x x x

Insufficient development of cycling/walking infrastructure (cycling/walking infrastructure (e.g. cycling routes, bicycle parking facilities) may be lacking or not sufficiently developed)

x x x x x x x

Lack of support for rail transportation/Limited rail infrastructure (Rail infrastructure may be lacking or not sufficiently developed) x x x x x x

Lack of a national strategy for sustainable urban mobility x x x x x x Not developed infrastructure for recharging of electric vehicles (electric vehicles recharging infrastructure may be lacking or not sufficiently developed)

x x x x x x

Barriers limiting the adoption of electric and hybrid vehicles rated as “highly relevant” Lack of finance (individuals may lack economic resources to buy new efficient vehicles); limited infrastructure investment; reduced purchasing power of citizens due to financial crisis

x x x x x x x

Individuals may lack knowledge and information about energy efficient vehicles such as electric vehicles and ultra-low emission vehicles, e.g. information about running costs, variations in vehicle technology, charging routines)

x

Car as status symbol and as a driver of group influence; private car characterized by deeply-rooted habits and traditions x

Fragmentation of responsibility between different public authorities and contradictions in policy goals; inefficient public transport infrastructure; not developed infrastructure for recharging of electric vehicles

x x x x x

Barriers limiting the choice of using more sustainable and efficient modes of transport for individuals rated as “highly relevant” Low satisfaction with public transport (individuals may be dissatisfied with public transport and other more sustainable transport means and perceive them as more time consuming and less flexible)

x x x x x x

Low purchasing power of consumers/financial crisis (individuals may be reluctant to adopt energy saving transport modes because of the lowering effect of the economic crisis on their purchasing power)

x x x

Habit and social norm of using traditional less efficient transport means (owning and driving a private car may be a deeply-rooted habit and tradition)

x x x x

Lack of infrastructures and planning (available transport infrastructure and further infrastructure planning may be inefficient and/or ineffective x x x x x x x x

194

Bulgaria Germany Greece UK Estonia Italy Belgium Serbia in promoting energy efficient and more sustainable transport) Barriers limiting the choice of using more sustainable and efficient modes for freight transport rated as “highly relevant” Hesitation to trust new technologies (companies may not trust new efficient vehicles (e.g. electric vehicles) and consider them less reliable than “known” technologies)

x

Reduced economic returns/financial crisis (companies may be reluctant to invest in more sustainable and efficient transport modes because of the lowering effect of the economic crisis on their budget)

x x x x x

Companies may lack knowledge and information about energy efficient vehicles such as electric vehicles and ultra-low emission vehicles (e.g. information about running costs, variations in vehicle technology, charging routines)

x

Habit, social norm and lack of environmental awareness (using traditional transport means may be a deeply-rooted habit and tradition) x

Lack of support for more sustainable and efficient transport means/Limited infrastructure (Rail infrastructure may be lacking or not sufficiently developed)

x x x x

195

Key findings Given that the HERON survey is not based on a randomized and representative sample design, we cannot infer correlation neither causal implications between respondent groups and the different EE barriers listed in the questionnaire. However, in order to identify the most important barriers in each sector as a whole, those barriers rated only as of “high relevance” were selected and summed to obtain the total number of respondents in all the eight countries for each question’s option in each sector. Then, a share for each answer’s option was calculated. The following graph reports the shares of “high relevance” choices in each question’s option. Accordingly, the two most important barriers in the building sector are constituted by:

(1) Socio-economic status of building users, which represents 11,7% of the total grade options choosen;

(2) Lack of funds or access to finance, lack of financial incentives, high capital costs and financial risk, which represents a 10% of the total grade options choosen.

Figure 19: Share of high revelance choices in each question’s option in the building sector

For the transport sector, the following Figure 20 reports the shares of “high relevance” choices in each question’s option. Accordingly, the two most important barriers are constituted by:

(1) Lack of finance for new vehicles/ultra-low-emission vehicles/public transport, which corresponds to 8,20% of the total grade options choosen;

(2) Limited infrastructure investment, which covers the 8,10% of the total grade options choosen.

11,7% 10,0%

7,5% 7,4% 7,3%

7,0% 6,7% 6,6%

6,3% 6,0%

5,5% 5,4% 5,4%

4,2% 2,8%

0,0% 3,0% 6,0% 9,0% 12,0%

Socio-economic status of building usersLack of funds or access to finance

Customs, habits, and relevant behavioural aspectsLack of awareness on saving potentials

Lack of interest and undervaluing EELimited payback expectations and investment horizons

Complex/inadequate regulatory proceduresBuilding stock characteristics

Split incentiveLack of trusted information and experience

Lack of relevant legislationTraining and skills of professionals

Uncertainty on investmentDifficulties in using new EE technologies

Social group interactions

196

Figure 20: The shares of “high relevance” choices in each question’s option in the transport

sector

The lack of finance therefore is confirmed as a key barrier to an effective implementation of energy efficiency policies in both sectors across all the HERON partner countries.

Conclusions This chapter of the Special Edition presents the key results from the questionnaire-based online survey performed by HERON partners to obtain from experts and stakeholders a rating of barriers to energy efficiency policies in the building and transport sectors in their respective countries and policy recommendations to overcome them. The economic aspects, related to the lack of funding, access to finance, lack of financial incentives, high capital costs and financial risk, emerge as a key barrier to both sectors in all partner countries. Socio-cultural and behavioural aspects seem of greater importance in the building rather than in the transport sector. For transport, other key barriers refer mainly to institutional, governance and planning dimensions. General suggestions for the building sector, also based on inputs provided by respondents, may call for more ambitious policies and mandatory requirements for energy efficiency in this sector, to be accompanied by specific legislative and financial support as well as educational and awareness policies for all actors involved, from the building owners to tenants to professionals. For the transport sector, general policy recommendations may call for a more integrated approach to planning that should take into account several transport modes and their specificities and deliver an overall sustainable mobility strategy backed by clear priorities. Also an increased attention to the overall costs and benefits of different transport modes – not only private but also social and environmental ones – should be further provided, as a knowledge base to better orientate policies and behaviours of travellers and logistics operators. In general, the results of the survey call upon the need to further explore the behavioural and cultural dimensions of EE policies both in the building and the transport sector, also by targeting specifically consumers through dedicated surveys. The access to information related to incentive programs, new infrastructures and transport modes, and in general, to the existent policy tools aimed at promoting EE seems crucial for achieving more ambitious policy targets.

8,2% 8,1%

7,7% 7,3%

7,0% 6,7% 6,7% 6,7% 6,6%

6,1% 5,6% 5,6% 5,5%

4,6% 4,5%

3,4%

0,0% 3,0% 6,0% 9,0%

Lack of finance for new vehicles/ultra-low-emission vehicles/public transportLimited infrastructure investment

Low purchasing power of consumers/financial crisisInefficient transport infrastructure and planning

Lack of a national strategy for sustainable urban mobilityInsufficient development of cycling/walking infrastructure

Lack of integrated governanceLow satisfaction with public transport/lack of trust

Lack of support for rail transportation / Limited rail infrastructureTransport EE on the Government agenda lacking/underrepresented

Not developed infrastructure for recharging of electric vehiclesEnvironmental concern/low priority

Habit and social norm of driving and car ownershipIndividuals may lack knowledge and information

Car as status symbol and as a driver of group influenceHesitation to trust new technologies

197

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198

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ESTONIA

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GERMANY

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GREECE

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ITALY

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SERBIA

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UNITED KINGDOM

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201

Abbreviations used in the document Abbreviation Description

A/C systems Air-conditioning systems AAU Assigned Amount Units AEEG Authority for Electrical Energy and Gas (Italy) AFVs Alternative fuelled vehicles ASI Avoid-Shift-Improve av. average BAFA Federal Office for Economic Affairs and Export Control BAT Best available technologies BAU Business As Usual BBRI Scientific and Technical Centre for the Building industry BEMS Building Energy Management System BESN Big Energy Saving Network BEV Battery electric vehicle BGN Bulgarian currency (lev) BISS Business, Innovation and Skills boe Barrel of oil equivalent BPMMR Business Protection from Misleading Marketing Regulations BRAC Building Regulations Advisory Committee for England CE European Conformity CERT Carbon Emissions Reduction Target CESP Community Energy Saving Programme CFD Computational fluid dynamics CFL Compact fluorescent lamps CHP Combined heat and power plant CNG Compressed natural gas CO2 Carbon dioxide CRC Carbon Reduction Commitment D Deliverable DCLG Department for Communities and Local Government DECC Department of Energy and Climate Change DECs Display Energy Certificates DfE Department for Education DG Directorate General DGO Operational Directorate General DH District heating; Detached house DHW Domestic hot water DIV Department for Registration of Vehicles DSO Distribution System Operator DST Decision Support Tool EC European Community; European Commission ECO Energy Company Obligation EDR Electricity Demand Reduction EE Energy efficiency EEA Employment-Environment Alliance (Belgium); Energy Efficiency Act (Bulgaria) EED Energy Efficiency Directive EE-MACC Energy Efficiency Marginal Abatement Cost Curve EIB European Investment Bank EIC (Estonian) Environmental Investment Centre

ENEA Italian National Agency for New Technologies, Energy and Sustainable Economic Development

EnEV Energy Saving Ordinance EPB Energy Performance of Buildings EPBD Energy Performance of Buildings Directive

202

Abbreviation Description ERSA Energy from Renewable Sources Act ESCO Energy Service Company ESOS Energy Savings Opportunity Scheme EST Energy Saving Trust ETI Energy Technology Institute ETI Energy Technologies Institute EU European Union EU MS European Union Member States EUR Euro EV Electric vehicle EWRC Energy and Water Regulatory Commission FCA Financial Conduct Agency FCV Fuel cell vehicle FEC Final energy consumption FEMA Belgian Trade Federation FiTs Feed-in Tariffs FPS Federal Public Service FRDO/DFDD Federal Institute for Sustainable Development FYRs First Year Rates GA Grant Agreement GD ORB Green Deal Oversight and Registration Body GDAs Green Deal Assessments GDP Gross Domestic Product GHG Green house gas GIS National Green Investments Scheme GME Italian Electricity Market Gpkm Giga passenger kilometre GSE Gestore dei Servizi Energetici / Energy Service System Operator Gtkm Gigatonne kilometre GWh, GWh/y Gigawatt hour, Gigawatt hour per year HDD Heating degree days HEFCE Higher Education Funding Council for England HEV Hybrid electric vehicle HGV Heavy goods vehicles HNDU Heat Networks Delivery Unit HPI High policy intensity IBGE Brussels Environmental Authority IEA International Energy Agency

IEFE Center for Research on Energy and Environmental Economics and Policy at University Luigi Bocconi

IFEU Institute for Energy and Environmental Research IMO International Maritime Organization ITOs Instructor training organisations KENAK Greek Regulation for the Energy Efficiency of Buildings kgoe kilogram of oil equivalent ktoe kilotonne of oil equivalent LA Local authority LCVIP Low Carbon Vehicles Innovation Platform LCVPP Low Carbon Vehicle Public Procurement Programme LDT Light duty truck LED Light-emitting diode LNE Ministry of Environment, Nature and Energy (of Belgium) LPG Liquified petroleum gas LWEC Living with Environmental Change Programme MEAC Ministry of Economic Affairs and Communications (Estonia)

203

Abbreviation Description MEECC Ministry of Environment, Energy and Climate Change (Greece) MEPS Mandatory Energy Performance Standards MEPs Minimum Energy Perfromance Standards MEUR Million euro Mm2 Million square meters MRDPW Ministry of Regional Development and Public Works (Bulgaria) NEEAP National Energy Efficiency Action Plan NER-H Net energy requirement for heating NGO Non-Governmental Organization NHS National Health Service (UK) NMBS/SNCB National Belgium Railways NRMM Non-Road Mobile Machinery NSI National Statistical Institute NSIs National Standard Instructors NZEB Nearly zero energy building OFT Office of Fair Trading OLEV Office for Low Emission Vehicles OPRD Operational Programme Regional Development OPT Operational Programme Transport p.a. Per annum PE Primary energy consumption PEC Primary energy consumption PHEV Plug-in hybrid electric vehicle PiP Plug-in Infrastructure Programme PJ Peta Joule PPA Public Procurement Agency PSO Public Service Obligation PV Photovoltaic R&D Research and development RCEF Rural Community Energy Fund RCEP Research Councils Energy Programme RCEP Research Council’s Energy Programme RED Renewable Energy Directive REECL Residential Energy Efficiency Credit Line RHI Renewable Heat Incentive ROC Renewables Obligation Certificate RRC Rolling Resistance Coefficient RTFCs Renewable Transport Fuel Certificates RTFO Renewable Transport Fuel Obligation SCOP Seasonal condition of performance SD Semi-detached house SDRB Brussels Regional Development Agency SEAP Sustainable Energy Action Plan SEDA Sustainable Energy Development Agency SISP Public Service Housing Associations SLRB Brussels Regional Housing Authority SME Small and medium enterprises SMIP Smart Metering Implementation Programme SMMT Society of Motor Manufacturers & Traders SPW - DGO4 Department for Energy and Sustainable Building of the Walloon Region SR Standard Rate SRWT Walloon Regional Transport Company SWCS Social Credit Society SWL Walloon Housing Corporaton TEC Walloon Public Transport Companies

204

Abbreviation Description TH Terraced house TINAs Technology Innovation Needs Assessments TJ Terajoule TPLS Third party fully licensed supplier TSB Technology Strategy Board TSO Transmission System Operator UCEF Urban Community Energy Fund UKERC UK Energy Research Centre ULEV Ultra-low emissions vehicles UNFCCC United Nations Framework Convention on Climate Change UTCCR Unfair Terms in Consumer Contracts Regulations V Volt VAT Value added tax VCA Vehicle Certification Agency VEA Flemish Energy Agency VED Vehicle Excise Duty VED Vehicle Excise Duty VERA Vehicle and Registration Act WHD Warm Home Discount WP Work package

205

List of tables Table 1: Main policy instruments in building sector in Belgium ................................................... 9 Table 2: Main policy instruments in transport sector in Belgium ................................................14 Table 3: Import and export of heating systems in Belgium, 2012 ..............................................22 Table 4: Electricity consumption for lighting and appliances in Belgian households in 2010 ......22 Table 5: Import and export of refrigerators and freezers in Belgium, 2012 ................................23 Table 6: Breakdown of heat demand in the services sector ......................................................23 Table 7: Breakdown of electricity consumption for lighting and appliances in the services sector .................................................................................................................................................24 Table 8: Length and density of transport infrastructure in Belgium ............................................24 Table 9: Trip purposes in Belgium .............................................................................................24 Table 10: Evolution of modal shares of freight transport in Belgium, in million tonne-km ...........25 Table 11: Evolution of the fuel efficiency of petrol and diesel cars in Belgium (in litre/100 km) ..25 Table 12: Evolution of vehicles assembled in Belgium and exported.........................................25 Table 13: Belgium fleet numbers of electric and fuel cell vehicles in 2013 ................................26 Table 14: Assessment of barriers in the building sector ............................................................27 Table 15: Barriers and policy instruments in the building sector ................................................28 Table 16: Assessment of barriers in the transport sector...........................................................30 Table 17: Barriers and policy instruments in the transport sector ..............................................30 Table 18: Assessment of cross-cutting barriers .........................................................................32 Table 19: Main policy instruments in building sector in Bulgaria ................................................34 Table 20: Main policy instruments in transport sector in Bulgaria ..............................................35 Table 21: Economic saving potential of Bulgaria under HPI and Technical Potential scenarios 2012-2020, ktoe/year ................................................................................................................37 Table 22: Final energy consumption in Bulgaria by sectors, thousands of toe ...........................44 Table 23: Actual and forecasted share of means of transportation in Bulgaria ..........................44 Table 24: Energy intensity of the economy in Bulgaria, toe for 1000 EUR GDP (2005 = 100) ...45 Table 25: Assessment of barriers in the building sector ............................................................46 Table 26: Assessment of barriers in the transport sector...........................................................47 Table 27: Assessment of cross-cutting barriers .........................................................................48 Table 28: Cross-cutting barriers and relevant policy instruments ..............................................48 Table 29: Main policy instruments in building sector in Estonia .................................................51 Table 30: Main policy instruments in transport sector in Estonia ...............................................53 Table 31: Energy savings in Estonian houses in 2013 after the implementation of KredEx renovation fund .........................................................................................................................56 Table 32: Comparison between average energy and fuel costs for Nissan Leaf and average petrol car in Estonia and annual mileage of 15 000 km .............................................................58 Table 33: Key indicators of households’annual specific energy consumption, 2010 ..................61 Table 34: Assessment of barriers in the building sector of Estonia ............................................64 Table 35: Assessment of barriers in the transport sector of Estonia ..........................................65 Table 36: Assessment of cross-cutting barriers in Estonia ........................................................67 Table 37: Overview of measures implementation in the Germany’s buildings sector .................70 Table 38: Summary table for the German transport sector ........................................................74 Table 39: Overview of the energy efficiency potential in buildings in Germany according to the different studies ........................................................................................................................77 Table 40: Overview of the energy efficiency potential in transport in Germany according to the different studies ........................................................................................................................78 Table 41: Annual modernisation rate (in %) of buildings components (residential) ....................81 Table 42: Assessment of barriers in the buildings sector...........................................................81 Table 43: Assessment of barriers in the transport sector...........................................................86 Table 44: Assessment of cross-cutting barriers in Germany .....................................................87 Table 45: Cross-sectoral barriers and relevant policy instruments ............................................87 Table 46: Summary table for the buildings sector in Greece .....................................................91 Table 47: Summary Table for the Transport Sector in Greece ..................................................94 Table 48: EE technologies for the buildings sector in Greece....................................................96

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Table 49: Energy savings potential in GWh per end-use in the residential sector during the period 2008-2016 ..................................................................................................................... 97 Table 50: Energy savings potential in GWh per end-use in the tertiary sector during the period 2008-2016 ................................................................................................................................ 97 Table 51: EE technologies for the transport sector in Greece ................................................... 98 Table 52: Energy savings potential in GWh per end-use in the transport sector during the period 2008 - 2016 .............................................................................................................................. 98 Table 53: Energy savings potential per activity for the building sector in Greece ...................... 98 Table 54: Assessment of barriers in the building sector ............................................................ 99 Table 55: Assessment of barriers in the transport sector ........................................................ 102 Table 56: Assessment of cross-cutting barriers ...................................................................... 103 Table 57: Assessed as barriers of high impact for Hellenic building and transport sectors ..... 104 Table 58: Summary table for the buildings sector in Italy ........................................................ 106 Table 59: Summary table for the transport sector in Italy ........................................................ 107 Table 60: Estimates of energy savings and economic energy efficiency potential expected in 2020 by sector ........................................................................................................................ 110 Table 61: ‘Theoretical’ and ‘expected’ potential savings in 2020 (TWh) of each technology within the buildings sector ................................................................................................................ 110 Table 62: Business (M€) generated by the implementation of energy efficiency technologies within the buildings sector in 2020 .......................................................................................... 111 Table 63: Assessment of barriers in the building sector in Italy ............................................... 113 Table 64: Assessment of barriers in the people transport sector in Italy ................................. 115 Table 65: Assessment of barriers in the goods/freight transport ............................................. 116 Table 66: Assessment of cross-cutting barriers ...................................................................... 117 Table 67: Summary table for the buildings sector in Serbia .................................................... 119 Table 68: Summary table for the transport sector in Serbia .................................................... 121 Table 69: Average estimated savings per type of building (Econoler, 2012) ........................... 123 Table 70: Assessment of barriers in the building sector in Serbia ........................................... 124 Table 71: Assessment of barriers in the transport sector in Serbia ......................................... 125 Table 72: Assessment of cross-cutting barriers ...................................................................... 126 Table 73: Summary table for the buildings sector in the UK ................................................... 128 Table 74: Summary Table for the Transport Sector in the United Kingdom ............................ 153 Table 75. Energy efficiency measures delivered through UK Government policy measures ... 174 Table 76: Assessment of barriers in the building sector .......................................................... 177 Table 77: Assessment of barriers in the transport sector ........................................................ 178 Table 78: Assessment of cross-cutting barriers ...................................................................... 180 Table 79: Number of organizations identified per country ....................................................... 185 Table 80: High relevance barriers to EE in the building sector in the partner countries based on the survey results ................................................................................................................... 188 Table 81: High relevance barriers to EE in the transport sector in the partner countries based on survey results ......................................................................................................................... 192

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List of figures Figure 1: Energy efficiency potential in the buildings sector in Belgium according to McKinsey 17 Figure 2: Energy efficiency potential in the transport sector in Belgium according to McKinsey 18 Figure 3: Number and share of “green building” aspects that are part of the activities of a company in the Belgian construction sector (multiple answers possible) ...................................19 Figure 4: Compactness and age of the residential building stock in Belgium (2011) .................21 Figure 5: Net energy requirement for heating (NER-H) and primary energy consumption (PE) of dwelling type (in kWh/y.m²) .......................................................................................................21 Figure 6: Breakdown of the non-residential building stock in Belgium by building type ..............23 Figure 7: Primary and final energy efficiency in Bulgaria, 2000-2012, kgoe/BGN, 2005 ............43 Figure 8: Energy consumption in Estonian road transport by mode 2000-2011 .........................57 Figure 9: Number of EVs registered in Estonia during the period 2011 – May 2015 ..................58 Figure 10: Transport sector energy consumption by fuel type ...................................................62 Figure 11: Energy consumption by transport mode, 1995-2010 (TJ) .........................................62 Figure 12: Home to work trips by transport mode in Estonia 2000-2011 ...................................63 Figure 13: Average CO2 emissions of new passenger cars in selected countries – 2007, 2014 (g/km) .......................................................................................................................................63 Figure 14: Building-related energy consumption by end-use in % (2011) ..................................80 Figure 15: Development of energy consumption in the transport sector in Germany .................83 Figure 16: Annual registrations electric passenger cars in Germany and total registrations ......84 Figure 17: Final energy consumption of selected transport modes in MJ/pkm or MJ/tkm in 1990 to 2010 ......................................................................................................................................85 Figure 18: Number of organizations identified per typology ..................................................... 185 Figure 19: Share of high revelance choices in each question’s option in the building sector ... 195 Figure 20: The shares of “high relevance” choices in each question’s option in the transport sector ...................................................................................................................................... 196

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