1. Beta Paramita 2011DBB402
Chau Thi Cam Hong 2012WACO16
Qiong Wu 2012 DBB001
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2. CONTENT
BACKGROUND
 Problem
 Research Area
 Aim of Study
DISCUSSION
 Energy Saving Obligation to Utilities
 Obligation to large end-users
 Where to place the obligation?
CONCLUSION
 The best scheme for energy saving in
residential and commercial + industrial sector
2

3. Background
BACKGROUND
Climate Cheapest Energy Savings (ES) without
Reduce energy technology
change
demand -- behavioural aspect
mitigation Fastest
To overcome the barriers Energy Efficiency (EE)
-- technological aspect
Labels and standards, building codes, information campaigns, voluntary agreements,
taxation, investment subsides, suppliers’ obligations and financial incentives.
Market based How is the
mechanisms obligation
defined
What is the total Who will be subject
obligation to the obligation
Decision of the Setting of
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an obligation

4. Aim of this paper
RESEARCH AREA
 EUROPE (EU) : ITALY, FRANCE, FLEMISH REGION
 UNITED KINGDOM
 UNITED STATES
 AUSTRALIA
 JAPAN
MAIN OBJECTIVE
To explore several innovative policies and measures implemented
worldwide, identify the obliged parties and the reasoning behind that,
and come up with useful suggestions for policymakers.
4

5. BACKGROUND
 Problem
 Research Area
 Aim of Study
DISCUSSION
 Energy Saving Obligation to Utilities
 Obligation to large end-users
 Where to place the obligation?
CONCLUSION
 The best scheme for energy saving in
residential and commercial + industrial sector
5

6. Energy saving obligations to utilities
Energy Saving Obligation to Utilities
obligations to
utilities
US
Australia
6

7. Energy saving obligations to utilities in EU
A new policy instrument introduced in the EU to
support energy efficiency is introducing
obligations on some categories of energy
market operators to deliver a certain
amount of energy savings.
A tradable savings certificates
white certificates
7

8. White certificates in EU EU
White Certificate in
Concept of Core elements of
White Certificates white certificates
 Establishing energy saving
A kind of documents
obligation on some category of
White certificates certify that a certain
market actors;
reduction of energy consumption has been
attained;  Technical processes to support
Based on suppliers’ obligation the scheme and the market
backed by a reputable body
An obligation to achieve a certain target of
energy savings, if energy producers do not authorising that the claimed
meet the mandated target for energy energy savings are valid;
consumption they are required to pay a  Tradable instrument as well as
penalty; rules and, if deemed necessary,
Tradable infrastructure for trading;
The white certificates are given to the  Cost recovery mechanism in
producers whenever an amount of energy some cases;
is saved whereupon the producer can use  Enforcement mechanisms and
the certificate for their own target sanctions.
compliance or can be sold to (other) parties
who cannot meet their targets
8

9. White Certificate in EU
In Europe several countries have implemented a
white certificate scheme or are seriously
considering doing so.
Italy started a scheme in January 2005; France
and Denmark a year later. Great Britain has
combined its obligation system for energy
savings with the possibility to trade obligations
and savings. The Netherlands and Poland are
seriously considering the introduction of a white
certificate scheme in the near future.
9

10. Energy Efficiency in US
Energy saving obligation in US:
 Target referred to EERSs
(Energy Efficiency Resource
Standards)
 Combined with renewable
energy obligation
referred to RPSs
(Renewable Portfolio
Standards)
 Texas was legislated for distributors to offset a certain percentage of
their load growth through end-use energy efficiency.
 Five states have incorporated tradable certificates in their portfolio
standards ,but only Connecticut is actively.
 Some states energy efficiency has been introduced as a target delivery
option within renewable energy obligation.

11. Resource tiers
An important
structural feature of
combined renewable
and efficiency
portfolios in the US
are the resource tiers,
which specify the
type of resources
that are expected to
contribute to a certain
share of the overall
target
Separate tiers for efficiency and renewable energy allow capturing
energy saving opportunities and are likely to provide more certainty to
market.

12. US Experience
2006
before 2005  Combined efficiency and
renewable portfolio targets
 Texas is the first state are mostly adopted
introduce a certain percentage
of their load growth through 2010
end-use EF
 The end of 2010 
 scheme was introduce before
26states have energy
2005 and came into force in
efficiency by target as
2007-2008  5 states
EERSs combined with
incorporated tradable
renewable energy as RPSs
certificates in their portfolio
standards, but only Apart from supplier/distributor
Connecticut is actively trading, obligation, include obligation
North Carolina and Illinois are borne by a state agency called
gathering input on certificate Energy Efficiency Utility
trading Ex. Vermont

13. Trading GHG Emissions in US
A mandatory scheme that enables
trading of GHG emissions for
power generation in the US is the
Regional Greenhouse Gas
Initiative (RGGI)  10 states :
Connecticut, Delaware, Maine,
Maryland, Massachusetts, New
Hampshire, New Jersey, New
York, Rhode Island and Vermont
have capped and will reduce CO2
10% by 2018
The main characteristic of this scheme is that auctioning of
allowances is predominant and the main projects that can
be financed by the revenues collected through auctioning
refer to energy efficiency and renewable energy

14. Energy Efficiency in Australia
Australian Bureau
of Agricultural and 2003
Resource
Economics and Greenhouse Abatement Certificates
Sciences, Energy
in Australia 2010,
(GGAS) introduce since 2003 in NSW,
Table F: Australian Australia  To achieve the required
energy reduction in emissions, eligible parties
consumption, by
industry and fuel purchase and surrender tradable
type certificates called New South Wales
Greenhouse Abatement Certificates
(NGACs).
2009
Separate scheme :
1. The energy Saving Scheme (EES)
in NSW
2. The Energy Efficient Target in
Victoria (VEET)
3. The Residential Energy Scheme
in South Australia (REES)

15. BACKGROUND
 Problem
 Research Area
 Aim of Study
DISCUSSION
 Energy Saving Obligation to Utilities
 Obligation to large end-users
 Where to place the obligation?
CONCLUSION
 The best scheme for energy saving in
residential and commercial + industrial sector

16. The Tokyo Emission Trading Scheme
2000 2010 - 2015
Tokyo Metropolitan 1. Category 1-A: 8 % for office
Government (TMG) start buildings, public facilities,
Tokyo CO2 Emission commercial buildings,
Reduction Program, prioritized lodging, educational facilities,
from large-scale business and medical facilities, etc. that do
not fall under Category 1-B;
building, which emit 40% of all
CO2 in this sector 2. Category 1-B : 6 % for
buildings in which air
2002 - 2005 conditioning/heating from
district cooling/heating plants
1st phase resulted average make up more than 20 % of
about 2% emission reduction energy consumption; and
then change the aim at a 25% 3. Category 2 : 6 % for
in the city baseline carbon factories that do not apply to
emission by 2020 Category 1

17. Emission Trading Scheme (ETS)
Trading in different forms, such as:
1. Excess emission reductions trading between
companies
2. SMF credits
3. Credits from outside the city
4. Renewable energy credits
5. Green Electricity Certification
6. City Solar Energy Bank

18. The UK carbon reduction commitment
(recently renamed the CRC energy efficiency scheme)
The CRC is a
mandatory scheme
aimed at improving
energy efficiency
and cutting
emissions in large
public and private
sector organizations.
These organizations
are responsible for
around 10% of the
UK’s emissions.
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19. The CRC energy efficiency scheme
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20. Table of Conversion Factors
Converting fuel types to CO2 Gross CV Basis
Fuel Type Measurement Unit Emissions Factor kgCO2 / per measurement unit
Aviation Spirit tonnes 3128
Aviation Turbine Fuel tonnes 3150
Basic Oxygen Steel (BOS) gas kWh 0.996
Blast furnace gas kWh 0.996
Burning Oil/Kerosene/Paraffin litres 2.532
Cement industry coal tonnes 2373
Coke Oven Gas kWh 0.146
Commercial/Public Sector Coal tonnes 2577
Coking Coal tonnes 2932
Colliery Methane kWh 0.184
Diesel litres 2.639
Electricity kWh 0.541
Fuel Oil tonnes 3216
Gas Oil litres 2.762
Industrial Coal tonnes 2314
Lignite tonnes 1203
Liquid Petroleum Gas (LPG) litres 1.495
Peat tonnes 1357
Naphtha tonnes 3131
Natural Gas* kWh 0.1836
Other Petroleum Gas kWh 0.2057
Petrol litres 2.3035
Petroleum coke tonnes 2981
Scrap tyres tonnes 1669
Solid smokeless fuel tonnes 2810
Sour gas kWh 0.2397
Waste (other than waste oil or tonnes 275.0
waste solvents)
Waste oils tonnes 3026
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Waste solvents tonnes 1613

21. The CRC energy efficiency scheme
 Participants in the CRC will also be able to
purchase (but not sell) emission
allowances from the EU Emission Trading
Scheme at a price that is higher of the EU
ETS price or the minimum CRC floor price.
 The floor price was set at £16/t (= 1973.76
¥) CO2 for 2013, gradually rising to £30/t
(= 3700 ¥) by 2020
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22. BACKGROUND
 Problem
 Research Area
 Aim of Study
DISCUSSION
 Energy Saving Obligation to Utilities
 Obligation to large end-users
 Where to place the obligation?
CONCLUSION
 The best scheme for energy saving in
residential and commercial + industrial sector
22

23. Where to place the obligations?
 There are many diverse policy options for
formulating energy saving obligations.
 Their efficiency is likely to be correlated
with local framework conditions and
influential historically grown structures in
the energy sectors of each country
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24. Obligation Scheme on large end – users
Table of comparison of Energy Saving Obligation Scheme on large end – users
Tokyo Emissions Trading Scheme UK CRC Energy Efficiency Scheme
Obligated actors Large end-users (~1,300 facilities & office buildings) Large end-users (~5,000 private and public sector
organizations)
Period 2010-2014 (2nd period: 2015-2019) 2010-2012 (2013 onwards: first capped period)
Target Cap based on 6% reduction to baseline 2000 (2nd Reducing around 1.2 million of CO2 per year by 2020
period 17% compared to emissions in 2000)
Coverage 40% of commercial & industrial sector emissions, Around 25% of business sector emissions, electricity
mostly electricity
Unit CO2 – emissions reductions CO2 – emissions reductions
Allocation Grandfathering Auctioning
Compliance Reducing electricity consumption through installing No individually specified target but incentive to reduce
efficient equipment at own sites, or buying credits on electricity consumption by becoming more efficient
the market (Eligibility of renewable energy credits,
green electricity certification, credits stemming from
city solar energy bank)
Measurement Self reporting according to Guideline from the Self-certification of emissions (spot audits)
reporting and municipal government
verification
Penalty/incentive Increase of target by 1.3 Public league table revealing comparative emissions
mechanism reduction performance 24

25. Overall design and target setting
 Are overall final or primary energy savings to be
achieved and in which sectors?
 Shall energy saving be reached via network-
bound energy only?
 Shall only the untapped potential in the
residential sector be addressed?
 Shall all measures be tailored so that they
reduce the maximum amount of carbon
dioxide?
25

26. ITALY + FLEMISH REGION
 Obligation of energy saving to
distribution companies
 Stable regulated companies
 Have no strong link to end-user 
have no interest to develop energy
service as added value
UK + FRANCE
 supplier obligation are imposed to
retailers
 possibility of conflict with their main
resources
 regulated end-user tariffs
Source: Based on the information from “The Digest of United Kingdom Energy Statistics 2006”.
UNITED STATES
alternative to deliver energy saving
target, like Vermont as state-wide
provider of energy efficiency, it is run by
a competitively selected contractor 26

27. FRANCE, GREAT BRITAIN, ITALY AND
FLEMISH REGION)
 obligation of energy saving to distribution companies
 stable regulated companies
ELIGIBLE ACTOR
 supplier have an interest in delivering them selves
 placing obligation on distribution company may
stimulate third actor involvement
DENMARK
 distribution companies under obligation are
requested to contract our part of efficiency project to
independent companies
SPAIN, GERMANY, SWEDEN
 have no supplier obligation, not directly triggered by
the white certificate
ENERGY SAVING OBLIGATION ARE NOT REALLY
CHANGING THE UTILITIES BUSINESS MODELS TO
27
ENERGY SERVICE COMPANY

28. BARRIERS
PLACING THE OBLIGATION ON LARGE END-USER
 It will directly get full credit for implemented action 
economic and public image benefits
 Private end-user tend to be more cost cautious 
recovery mechanism burden into every actor on the
chain, which is takes its profit margins
 Direct end-use obligations may be expected to bring
lower transaction costs for obliged parties
 Easier to integrate the transport sector into end-user
obligations  to cover emission/energy consumption
for transportation
TRADING MECHANISM WILL BRING WIDER BENEFITS
TO A SYSTEM WITH OBLIGATIONS IMPOSED ON 28
END-USERS.

29. Supplier VS Large End-user:
 Energy market structure less important when the
obligation to is put on large end-user
 Such as Tokyo ETS and CRC , they define a
minimum threshold for eligibility  which is called
personal carbon allowance
 Energy efficiency in residential sector more easier
to delivered by mechanism of supplier and often
dominated by standard, straightforward and well-
understood technologies such as efficient product
 Energy efficiency operator like VERMONT model,
also an alternative mechanism
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30. CONCLUSION
 Putting an obligation on an actor allocates
responsibility and will lead to the delivery of
energy efficiency measures
 Separates obligations may be establish in order to
reach certain targets
 The most important type of potential sector will be
harnessed by saving obligation  residential vs
industrial and commercial sector
 For residential sector the utilities (mainly supplier)
could be place to deliver the saving
 ESCO play an important role in delivering saving
for industrial and commercial sector
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31. どうも ありがとうございます
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