The document discusses the establishment of national Energy Efficiency Agencies in several European and Mediterranean countries as part of the Euro-Mediterranean Energy Market Integration Project funded by the European Union. It provides an overview of the general mandate of such agencies, including enforcing energy efficiency acts, promoting and monitoring recommendations, and reporting on energy efficiency activities and impacts. The document also includes examples of target consumers, marketing challenges, specific agency tasks, and options for financing the operations of an energy efficiency agency.

1. Euro-Mediterranean
Energy Market Integration Project
Germany
France
Lebanon Setting up national Energy Efficiency Agencies
Belgium 6 December 2010, Amman, Jordan
Albrecht Kaupp, Team Leader
“The contents of this publication are the sole responsibility of
the author and can in no way be taken to reflect the views of the
European Union”.
This project is funded
by the European Union 1

2. What is the general mandate of the agency ?
1. To enforce the mandatory provisions of a national
energy efficiency act and to promote and monitor
recommendations which are voluntary
2. To annually report to the “in charge” authorities the
state-of-play of energy efficiency activities and impact
to the nation
3. To provide advisory service to higher authorities
4. To organize recurring annual events ..
5. To manage an energy efficiency fund…..
6. To conduct energy audits……..
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3. Which consumers are your target ?
Covering 70% of the national electricity consumption is fine
- All business and industry with more than 30% of energy costs
- All residential consumers with more than 12,000 kWh a year
- All buildings with more than 600 kVA connected load
- All consumers where the power utility is loosing big money
- List electricity consumers in % of national consumption
“Cement, chlor alkali, steel, aluminum, fertilizer, water utility,
irrigation, power plants, ceramic, bricks, etc
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4. A real marketing challenge for EE
- The “rich” don’t care because they can afford it !
- The “poor” don’t care because they also can afford it
The only entities that cannot afford it is a Ministry of
Finance and the society.
Egypt US$ 8 Billion subsidy (not lost opportunity
costs), Lebanon US$ 1.5 Billion subsidy, etc ,etc
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5. Which specific tasks ?
1. Observe and rate the energy auditor market ?
2. Promote energy managers ?
3. Lobby for an annual government budget for EE ?
4. Advise the tariff regulator on EE suitable tariffs ?
5. Cooperate with the power utility on DSM
6. Design and prepare all EE publications ?
7. Empanel energy auditors and empower energy managers
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6. Ratings are not legally enforceable but in any
case a highly effective transparency instrument

7. Public awareness cost versus impact issue
“…The honorable chairman of the committee on energy of
the lower house of Parliament requests the Ministry of
Power to explain the electricity savings achieved by the
annual painting contest among 300, 000 school children”
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8. Regulator approved FIT tariff (real case)
Avoided cost calculation US$Cents/kWh
Avoided capital cost due to deferment 4.57
Avoided operating cost 2.28
Avoided primary energy cost 2.54
Proxy plant sum of avoided costs 9.39
Marketing costs of utility - 2.80
Buying price for kWh (saved) excluding 6.59
monitoring and verification costs
This project is funded
by the European Union
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9. Contractual issues with performance contracts
There are admittedly many issues with
performance contracting and associated
monitoring and verification protocols
.http://www.energyservicescoalition.org
“Everything should be made as simple as
possible, but not simpler” (ALBERT EINSTEIN)
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10. How to finance the EE- agency
Lifeline: Annual recurring costs (staff salary, mobility,
infrastructure, acquisition ) paid through interest from an
endowment (corpus) fund. This strategy makes the
organization independent of a public budget.
Icing on the cake: “Project costs” are paid by public, private,
domestic and overseas sponsors. The level either shows how
competent the organization is or how smart her acquisition
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11. Energy Service Company (ESCO)
Requires an officially appointed independent rating agency
GRADE 1 Very High
GRADE 2 High
GRADE 3 Good
GRADE 4 Below Average
GRADE 5 Poor
- Single consultant preparing an energy audit and getting paid for to
submit a report (Full risk of implementation with the client)
- Turn key EE implementation (energy audit, report, engineering
design of EE measure, financing, implementation and joint
monitoring/quantification of the energy cost savings over 1-5 years)
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12. 13

13. Evaluation criteria for ESCOs-Part 1
•Years in the ESCO/energy management business.
• Number and nature of energy audits carried out till date.
• Client Profile
• Number of different industries served.
• Order book strength as measured by ratio of current order
book/previous years turnover.
• Number of energy management projects completed.
• Certification and quality systems.
• Technology tie-ups.
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14. Evaluation criteria for ESCOs-Part 2
•Patents held by the company.
•R&D facilities.
•Constitution, ownership structure and parentage.
•Management evaluation and quality of organizational
structure, internal control and systems.
•Employee strength in terms of numbers, qualification and
experience.
•Number of certified energy auditors.
•Maximum number of projects handled at a time.
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15. Evaluation criteria for ESCO-Part 3
• Annual turnover from the ESCO/energy management business.
• Profit margins of the ESCO business.
• Overall financial strength as reflected by the capital structure
and debt servicing indicators like net cash accruals/total debt
• Receivables management.
• Financial flexibility arising from access to cash-flows/profits
from other business.
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16. THE END
Energy input 4000 kCal per 8 hour day at 12% conversion efficiency.
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