A presentation about white certificates and other incentives for energy efficiency and renewables in Italy, and cogeneration

1. www.fire-italia.org White certificates and other incentives - CHP
Dario Di Santo, FIRE
Bicocca University - EERM course
5 July 2013, Milano
The

2. rules

3. and

4. the

5. market

6.
do

7. change...
If

8. you

9. don’t

10. want

11. to

12.
grope

13. in

14. the

15. dark...
You

16. need

17.
FIRE!

18. www.fire-italia.org
The Italian Federation for the Rational use of Energy is a no-profit association
that promotes energy efficiency, supporting energy manager, ESCos and other
companies dealing with energy.
Besides the activities directed to its nearly 500 members, FIRE operates under
an implementing agreement with the Ministry of Economic Development to
manage the Italian energy manager network since 1992.
In order to promote energy efficiency FIRE cooperates and deals with public
authorities, energy technology and service companies, consultants, medium and
large consumers, universities and associations to promote best practices and
improve the legislation.
FIRE
www.fire-italia.org
EGE certification
Energy Management Experts
UNI CEI 11339
www.secem.eu Gestione Energia magazine

19. www.fire-italia.org
FIRE activities and projects
3
www.hreii.eu/demowww.enforce-een.eu
www.ener-supply.eu
www.soltec-project.eu
www.esd-ca.eu
Among closed projects:
- www.e-quem.enea.it
- www.eu-greenlight.org
- www.enerbuilding.eu
- Eurocontract
- ST-Esco
Besides to dedicated meetings, FIRE organises the Enermanagement conference,
workshops, and training courses. It implements dissemination campaigns, surveys,
market analysis and studies.
Among the subjects with which FIRE has cooperated there are ENEA, GSE, RSE, large
companies, universities, associations, agencies and trade fairs organizers.

20. www.fire-italia.org
Introduction
4

21. 40
Figura 30: Consumo del settore servizi per fonte energetica, periodo 1990-2009
Figura 31: Consumo elettrico per addetto (1990=100)
Fonte: elaborazione ENEA su dati MISE
0
5.000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
GPL
80
100
120
140
160
180
200
220
240
260
280
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Commercio Alberghi e ristoranti Credito e asssicurazioni Pubbica Amministrazione
Altri servizi cons elett/add terziario cons energ/add terziario
Rapporto Annuale sull’Efficienza Energetica 2010
efficienza è stato rispettivamente pari al 38,8% e al 17,9%; meccanica e minerali non metalliferi
hanno, invece, evidenziato le maggiori perdite di efficienza: 45,7% la prima e 22,5% il secondo (figura
10).
Significativi miglioramenti si osservano a partire dal 2005 anche per il tessile, mentre altre branche,
quali cemento e metalli non ferrosi, hanno registrato un peggioramento dell’efficienza energetica,
particolarmente pronunciato nel 2008 e 2009.
60
70
80
90
100
110
120
130
140
150
160
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
industria manifatturiera Siderurgia Metalli non ferrosi Meccanica
Agroalimentare Tessile Minerali non metalliferi cemento
Chimica Carta
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WhC and EED
Incentives
Conto termico
RES incentives
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Some data about buildings and energy efficiency
Sources: RAEE 2011 ENEA, ENEA.
5
Impieghi finali di energia per settore 2011
134,9 Mtep
-2,6 % rispetto 2010
24,2%
31,5%
34,4%
2,2%
5,1% 2,5%
Industria
Trasporti
Usi civili
Agricoltura
Usi non energetici
Bunkeraggi
Rispetto al 2007 i due piani di
intervento comporterebbero una
riduzione di consumo complessivo
di circa 6 e 17 Mtep,
rispettivamente per lo scenario BAU
e BAT, pari nell’ordine al 4,5% e
12,8% del consumo iniziale. Se si
prende a riferimento la cosiddetta
previsione “Primes 2007
Baseline”[1], che assegna all’Italia
un consumo tendenziale di 162,6
Mtep al 2020, il calo di consumo è
del 22,4% nello scenario BAU e del
29,1% per lo scenario BAT.
18,20%
11,90%
14,20%
16,90% 17,00%
11,10%
6,80%
3,90%
Distribuzione del Parco edilizio residenziale in Italia (rif. 2010)
Fonte ENEA- CRESME
Stock edifici per anno di costruzione
Prima
del 1919
dal 1920
al 1945
dal 1946
al 1961
dal 1962
al 1971
dal 1972
al 1981
dal 1982
al 1991
dal 1992
al 2001
dal 2002
al 2008
25
%
20
%
15
%
10
%
5
%
0
%
20,1%
9,1%
11,1%
12,2% 10,8%
Edifici costruiti prima della
Legge 373/76
Edifici costruiti dopo della
Legge 373/76
Edifici a priorità di intervento
0
5
10
15
20
25
30
ante 1920 1920/1945 1946/1971 1972/1991 1992/oggi
Incidenza percentuale per fasce di costruzione
NORD
CENTRO
SUD+ISOLE
Some data about Italy:
Residential buildings: 12
Millions
Offices: 65.000
Schools: 52.000
Hotels: 6.000
Around 65% was built
before 1980...
Different attention to energy efficiency in different
industrial sector.
Continuos growth of energy consumption in the
tertiary sector with scarce energy efficiency

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Energy efficiency is the best solution to reduce energy and
environmental risks and achieve a sustainable development.
Why energy efficiency?
Energy efficiency:
reduces or keep under control energy dependency and energy
security;
reduces environmental pollution;
avoids the construction of new power plants and transport
network;
helps creating new working places and facilitates the
European energy industry (in particular the Italian one);
allows to save money;
contributes to a sound environmental and social report;
promotes a sustainable development.

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RES incentives
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Energy efficiency in three steps
Energy efficiency
No waste of energy
Improved
technologies
Renewable and
localized energy
sources
Low cost
Behavioural change
Limited effect per client
Can be costly
No core business
Effect per client varies
Usually costly
NPV of produced energy?
Limited specific power

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A multiplicity of solutions with different sizes and type

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Energy efficiency within a formula
cash flow = ex ante energy bill - ex post energy bill
Lack of MV
and KPI
Linked to
building uses and
weather
Linked to building
uses and weather
Linked to project
and design
Linked to
management
The direct connection between the cash flows related to energy saving and end-use makes it difficult to
assess and manage the risks. Some points:
metering and good design and management (technical part and skills);
distribution of risks on numerous projects (financial part);
smart regulations and guarantee fund (policy).

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Financing: a question of size
Small:
credit through bank agencies, no project financing;
need for a diffused commercial and technical structure;
request for turnkey and full service solutions.
Medium:
agency or corporate banking;
more ordinary commercial and technical structure;
request mainly for turnkey and full service solutions.
Large:
corporate o project financing;
need for a structure capable to manage large projects;
customized solutions.
Good opportunities for innovative business models, such as
cooperatives, crowdfunding, investment funds, European Investment
Bank programs, clustering of small operators and management of
diffused partners.

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Different solutions and approaches for different users
Energy efficiency
project
Energy intensive
industry
Non energy intensive
industry
Tertiary
Public administration
Residential

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Cost effective solutions
Source: UE energy efficiency plan 2011.
12
Figure 2. Overall cost-curve for energy efficiency options of end-use sectors in the EU27 in 2020. Energy
savings are expressed in final energy units. Energy savings (X-axis) are relative to the baseline (source:
E C F study based on Fraunhofer et al., 2009).

29. www.fire-italia.org
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Source: European Commission.
13
Energy efficiency directive
MEETING ALL THREE “20-20-20 BY 2020” GOALS BECOMES A
MATTER OF URGENCY
Reduce greenhouse
gas levels by 20%
Increase share of
renewables to 20%
100%
Reduce energy
consumption by 20%
-10%
Current
trend to
2020
-20%
20%
Current
trend to
2020
Current
trend to
2020
1678 Mtoe
-20%
objective
Status
today
1842 Mtoe
business
as
usual
2020
Projections from 2007
Projections from 2009
20% Energy saving objective
1474 Mtoe
* Gross inland consumption minus non-energy uses
Primaryenergyconsumption*,Mtoe
1400
1450
1500
1550
1600
1650
1700
1750
1800
1850
1900
2005 2010 2015
SO FAR THE EU IS NOT ON TRACK TO MEET ITS 20% ENERGY
SAVING TARGET BY 2020
GAP
The Commission in 2011 proposed
a new directive on energy efficiency
to cope with the negative trend
manifested at European level.

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PUBLIC SECTOR TO LEAD BY EXAMPLE
• Annual renovation target of 3%
for public buildings above 250
m²
• Purchase of products, services
buildings with high energy
efficiency performance
• Local energy efficiency plans
and introduction of energy
management systems
Status
• Share of public
buildings in building
stock
EED proposals
• More systematic use of Energy
Performance Contracting
• Public sector
consumption makes
important share of
EU’s GDP
19%
12%
• Low average energy
performance of
existing buildings
stock, incl. public
buildings
• Cost optimal
renovation can bring
up to 60% energy
savings
PUBLIC SECTOR TO LEAD BY EXAMPLE
• Annual renovation
for public building
m²
• Purchase of produc
buildings with hi
efficiency perform
• Local energy efficie
and introduction of
management syste
Status
• Share of public
buildings in building
stock
EED propo
• More systematic us
• Public sector
consumption makes
important share of
EU’s GDP
19%
12%
• Low average energy
performance of
existing buildings
stock, incl. public
buildings
• Cost optimal
renovation can bring
Energy efficiency directive
Source: European Commission.

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CREATING BENEFITS FOR CONSUMERS THROUGH THE PROVISION
OF TAILORED ENERGY SERVICES AND INFORMATION
Status
• Considerable saving
potential unused in
the residential and
services sectors
EED proposals
• Ensure accuracy frequency of
billing based on actual
consumption
• Obligation for individual energy
meters, reflecting actual energy
consumption information on
actual time of use
• Appropriate information with the
bill providing comprehensive
account of current energy costs
• Lack of awareness
access to appropriate
information on EE
benefits
• Technological
developments (e.g.
smart meters/ grids)
not sufficiently
reflecting households
interests
• National energy efficiency
obligation scheme for utilities
• Slow uptake of market
for energy efficiency
services
CREATING BENEFITS FOR CONSUMERS THROUGH THE PROVISION
OF TAILORED ENERGY SERVICES AND INFORMATION
Status
• Considerable saving
potential unused in
the residential and
services sectors
EED proposals
• Ensure accuracy frequency of
billing based on actual
consumption
• Obligation for individual energy
meters, reflecting actual energy
consumption information on
actual time of use
• Appropriate information with the
bill providing comprehensive
account of current energy costs
• Lack of awareness
access to appropriate
information on EE
benefits
• Technological
developments (e.g.
smart meters/ grids)
not sufficiently
reflecting households
interests
• National energy efficiency
obligation scheme for utilities
• Slow uptake of market
for energy efficiency
services
Energy efficiency directive
Source: European Commission.

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Achieved
savings
Remaining
potential
IMPROVING ENERGY EFFICIENCY IN TRANSFORMATION AND
DISTRIBUTION OF ENERGY
Status
• New generation
installations not
systematically
reflecting level of Best
Available Technologies
• National annual inventories of
generation installations to monitor
efficiency levels
• Network tariffs design to encourage
offering services for consumers
allowing them to save energy
control consumption
• 10-year national heat cooling plans:
transparency, predictability
alignment of policies for
investments
• Fragmented
regulations
incentives to address
waste across supply
chain
• CHP uses 30% less fuel
for the same amount of
heat power but level of
use in EU low: 11% vs.
21%.
• Waste heat recovery (CHP)
obligation for new and existing
power industrial plants
EED proposals
Achieved
savings
Remaining
potential
IMPROVING ENERGY EFFICIENCY IN TRANSFORMATION AND
DISTRIBUTION OF ENERGY
Status
• New generation
installations not
systematically
reflecting level of Best
Available Technologies
• National annual inventories of
generation installations to monitor
efficiency levels
• Network tariffs design to encourage
offering services for consumers
allowing them to save energy
control consumption
• 10-year national heat cooling plans:
transparency, predictability
alignment of policies for
investments
• Fragmented
regulations
incentives to address
waste across supply
chain
• CHP uses 30% less fuel
for the same amount of
heat power but level of
use in EU low: 11% vs.
21%.
• Waste heat recovery (CHP)
obligation for new and existing
power industrial plants
EED proposals
Energy efficiency directive
Source: European Commission.

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Efficienza e 2020 inEnergy efficiency directive
• Mandatory audits for large
companies incentives for the
implementation of recommended
measures and the introduction of
Energy Management Systems
INCREASE AWARENESS FOR BENEFITS STEMMING FROM ENERGY
EFFICIENCY IMPROVEMENTS IN INDUSTRY
Status EED proposals
• Member States to create
incentives for SMEs to undergo
energy audits
28%
• Important share in
overall final energy
consumption
• Considerable
progress made but
potential remaining
Achieved
savings
Remaining
potential
• Energy efficient
technologies and
EE best practices
readily available
• Dissemination of best practices on
benefits of energy management
systems for SME businesses
• Mandatory audits for large
companies incentives for the
implementation of recommended
measures and the introduction of
Energy Management Systems
INCREASE AWARENESS FOR BENEFITS STEMMING FROM ENERGY
EFFICIENCY IMPROVEMENTS IN INDUSTRY
Status EED proposals
• Member States to create
incentives for SMEs to undergo
energy audits
28%
• Important share in
overall final energy
consumption
• Considerable
progress made but
potential remaining
Achieved
savings
Remaining
potential
• Energy efficient
technologies and
EE best practices
readily available
• Dissemination of best practices on
benefits of energy management
systems for SME businesses
Source: European Commission.

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18
Energy efficiency 2012/27/EU directive
Art. 7
1. Each Member State shall setup an energy efficiency obligation scheme. That scheme
shall ensure that energy distributors and/or retail energy sales companies that are
designated as obligated parties under paragraph 4 operating in each Member State’s
territory achieve a cumulative end-use energy savings target by 31 December 2020,
without prejudice to paragraph.
2. That target shall be at least equivalent to achieving new savings each year from 1
January 2014 to 31 December 2020 of 1,5 % of the annual energy sales to final
customers of all energy distributors or all retail energy sales companies by volume,
averaged over the most recent three-year period prior to 1 January 2013. The sales of
energy, by volume, used in transport may be partially or fully excluded from this
calculation.
9. As an alternative to setting up an energy efficiency obligation scheme under
paragraph 1, Member States may opt to take other policy measures to achieve energy
savings among final customers, provided those policy measures meet the criteria set out
in paragraphs 10 and 11. The annual amount of new energy savings achieved through
this approach shall be equivalent to the amount of new energy savings required by
paragraphs 1, 2 and 3. Provided that equivalence is maintained, Member States may
combine obligation schemes with alternative policy measures, including national
energy efficiency programmes.

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19
Energy distributed in Italy
1.1 Ai fini della presente deliberazione si applicano le definizioni di cui ai decreti
ministeriali 20 luglio 2004 come modificati ed integrati dal decreto ministeriale
21 dicembre 2007, le definizioni di cui alla deliberazione 28 dicembre 2007, n.
344/07 e, inoltre, la seguente:
distributori obbligati nell’anno 2012 sono i distributori di energia elettrica o
di gas naturale che avevano almeno 50.000 clienti finali connessi alla propria
rete di distribuzione alla data del 31 dicembre 2010.
Articolo 2
Comunicazione delle quantità di energia elettrica e di gas naturale complessivamente
distribuite sul territorio nazionale nell’anno 2010 dai distributori obbligati nell’anno
2012
2.1 La quantità di energia elettrica complessivamente distribuita sul territorio
nazionale nell’anno 2010 dai distributori di energia elettrica di cui all’articolo 1,
comma 1, è pari a 238.339 GWh.
2.2 La quantità di gas naturale complessivamente distribuita sul territorio nazionale
nell’anno 2010 dai distributori di gas naturale di cui all’articolo 1, comma 1, è
pari a 1.229.579.791 GJ.
Articolo 3
Obiettivi specifici di risparmio di energia primaria a carico dei distributori obbligati
nell’anno 2012
3.1 Gli obiettivi specifici di risparmio di energia primaria a carico dei distributori di
energia elettrica di cui all’articolo 1, comma 1, arrotondati all’unità con criterio
commerciale, sono determinati nella Tabella A allegata al presente
provvedimento.
3.2 Gli obiettivi specifici di risparmio di energia primaria a carico dei distributori di
gas naturale di cui all’articolo 1, comma 1, arrotondati all’unità con criterio
commerciale, sono determinati nella Tabella B, allegata al presente
provvedimento.
Source: EEN 13/2011 AEEG decision.
It means around 45 Mtoe + 30 Mtoe = 75 Mtoe of energy distributed. Considering other
sources it rises to 80-90 Mtoe.
A saving of 1,5% equals to 1,1-1,3 Mtoe/year that cumulated on 7 years means 7,7-9,5
Mtoe of savings. Of course the targets in the energy efficiency obligation scheme can be
lower if
Savings due to actions started from 2008 can be accounted for provided their effects are
measurable and still present in 2020.

36. !!!!!
!5.000!!
!10.000!!
!15.000!!
!20.000!!
!25.000!!
2005! 2006! 2007! 2008! 2009! 2010! 2011! 2012! 2013! 2014! 2015! 2016! 2017! 2018! 2019! 2020!
Na#onal'energy'efficiency'targets'and'WhC'targets'
Na0onal!targets! WhC!targets!
Fonte:!elaborazioni!FIRE!
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WhC and 20-20-20 Programme
WhC play an important role within the Italian 2020 target
strategy.
Italian 2010 RES Plan target in 2020
2006/32/EC directive EE target in 2016
Mtoe
Yearly increment in the range 0,4-1,6 Mtoe

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WhC: different approaches from different countries
! UK (CERT and CESP) Italy France Denmark Flanders region (Belgium)
Obligation period
2002-2005 (EEC-1)
2005-2008 (EEC-2)
2008-2012 (CERT)
2009-2012 (CESP)
2005-2012
2006-2009 (first period)
2011-2013 (second period)
2006-2009 (first period)
2010-2012 (second period)
2003 –
Target size (ongoing phase)
293 MtCO2 lifetime savings in
2012 (CERT)
19.25 MtCO2 lifetime savings
in 2012 (CESP)
Cumulative savings of at least
22.4 Mtoe in 2012
345 TWh lifetime discounted
(over the period January 2011-
Dec. 2013)
2.95 PJ annual (first year
savings) until 2009
As of 2010: 6.1 PJ/y (first year
savings weighted with
prioritisation factors reflecting
action lifespan)
Approx. 580 GWh (2009 target)
3.5% of the amount of electricity
supplied the year before to
household and non-residential
clients (2.5% in case of less than
2,500 clients).
Energy end-use sectors covered Residential All All excl. ETS All except transport
Residential and non energy
intensive industry and service
Restrictions in achieving the
target
40% priority group and 15%
super priority group. 25%
insulation measures (CERT)
Low income areas; max 4% by
loft insulations; max 4% by
cavity wall insulations; max 1%
by energy advice
Until 2008 50% on own energy
source
25 TWh cumac max achievable
by information, formation and
innovation programmes
None specific
The actions must always consist
of financial contribution and an
awareness-raising element
Measurement and verification
options
Standard values
Standard values (19 measures)
Engineering approach (5
measures)
Metered baseline method
Standard values (about 240
measures)
Case-by-case approval for other
measures
Standard values for approx. 200
measures
Specific engineering calculation
Case-by-case approval by VEA
Dominant measurement and
verification choice
Deemed savings only Deemed savings Deemed savings Specific engineering calculations NA
Accreditation of savings Ex-ante Ex-ante (majority) Ex-ante
Ex-ante (adjusted first year
savings only)
Ex-ante approval
Size of certificate NA 1 toe 1 kWh cumac NA NA
Validity of certificate NA (compliance in 2012)
The entire phase of the scheme
(2005-2012)
3 compliance periods
(compliance in 2009 and 2013)
NA (only adjusted first year
savings count)
NA
Certification threshold size NA
20 toe/year, 40 toe/year and 60
toe/year for savings evaluated
respectively by deemed,
engineering and metered baseline
methods
1 GWh cumac
(projects can be pooled to reach
the threshold)
NA NA
Trading* mechanisms Trading among suppliers
Spot market
OTC (dominant)
OTC only No trading No trading
Banking, borrowing
Banking of excess savings
between phases
(EEC-1 to EEC-2, EEC-2 to
CERT)
Banking till 2012
Borrowing for 1 year if under
compliance below 40%
Banking three compliance
periods
Banking till 2012
As of 2010 borrowing if under
compliance below 35% (45% in
2010)
Banking of excess savings
Figure 1. Summary of WhC schemes in Europe. Source: European Commission Directorate General JRC

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22
AEEG asks for WhC
Energy savings
End-user
GME
AEEG
WhC
obliteration
DSO
Authorises WhC
emission
Tranfers WhC
1st step obtaining WhC
2nd step: target compliance
Obliged parties: DSOs with more than
50.000 clients.
DSO
Italian white certificates scheme (obliged parties)
WhC flows
cash flows
relations between
parties
project implementation
agreement
ENEA
WhC project
evaluation
Source: FIRE.

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23
AEEG
asks for WhC
Energy savings
End-user
GME
AEEG
WhC
obliteration
Distributor
Authorises WhC
emission
Tranfers WhC
1st step obtaining WhC
2nd step: target complaiance
Voluntary parties: companies connected
with obliged DSOs, small distributors, SSE
and ESCOs, large consumers with
appointed energy manager
Voluntary player
Voluntary company
GME
market
WhC trading
Direct contracting (OTC)
Italian white certificates scheme (voluntary parties)
WhC flows
cash flows
relations between
parties
project implementation
agreement
ENEA
WhC project
evaluation
Source: FIRE.

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WhC for dummies
DSOs with more than 50.000 clientsObliged parties (SO)
DSOs with less than 50.000 clients
Companies linked to or controlled from SO
Energy service providers SSE
Companies with appointed energy manager
Voluntary parties (SV)
1 WhC (also called TEE) = 1 additional toeWhC energy equivalent
5 years
8 years for building envelope related actions
10 years for high efficiency cogeneration
Duration of WhC issuing
Depends on the market (95-115 €/toe recently)WhC economic equivalent
Modalità standardizzata - deemed savings
Modalità analitica - engineering estimates
Modalità a consuntivo - monitoring plans
Saving evaluation
Energy efficiency improvements and savingsAllowed actions

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Type I - electricity savings
Type II - gas savings
Type III - other fuels savings (no transport)
Type IV - other fuels savings transport D.S.
Type V - other fuels savings transport E.E. M.P.
Types of certificates
Both till 2012, to be extendedDuration and validity of WhC
WhC for dummies
Primary energy efficiency improvementsTargets
It depends on a standard fuel mix price trend. Till
now the range has been: 86.98-100 €/toe.
DSO tariff reimbursment
It is the the ratio between the useful life of the
measure and the standard WhC project life (5 or
8 years). It ranges between 1,00 and 4,58.
It depends on the technology group as collected
in the ministerial decrees tables.
Coefficient tau
WhC are released quarterly for deemed savings.
After the measure are collected for the other
projects (the timetable can be freely chosen,
provided it is at least annually.
WhC release timetable

42. www.fire-italia.org
WhC and EED
Incentives
Conto termico
RES incentives
CHP
WhC for dummies
Fonte figura: ENEL.
Gas Electricity
Source: AEEG. Source: AEEG.
53% of the total
target is ENEL’s.

43. www.fire-italia.org
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Incentives
Conto termico
RES incentives
CHP
18
Additional savings concept
Consumption baseline:
market average or mandatory standard
Energyconsumption
ex-ante consumption
ex-post consumption
Counted saving
for WhC
Saving not
counted for WhC
Time

44. 0
50
100
150
200
250
300
350
400
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
How$the$tau$coefficient$works$
Hipothesis:$annual$saving$100$toe,$tau=3,36$
WhCwithtau
WhCnotau
Fonte:FIRE
www.fire-italia.org
WhC and EED
Incentives
Conto termico
RES incentives
CHP
Tau coefficient
WhC lifespan
Technology lifespan

45. www.fire-italia.org
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Incentives
Conto termico
RES incentives
CHP
Minimum thresholds required to present a project
Possibility to join different actions in one project
Number of involved
clients
Homogenous methodsHomogenous methodsHomogenous methods
Non homogenous
methods
Single client
Deemed
savings
Engineering
estimates
Monitoring
plans
Monitoring plans
Many clients
Deemed
savings
Engineering
estimates
Monitoring
plans
Not allowed
Minimum thresholds and allowed synergies
Project evaluation method
Global savings
(with tau)
Deemed savings 20 toe
Engineering estimates 40 toe
Monitoring plans 60 toe

46. www.fire-italia.org
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Incentives
Conto termico
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CHP
Saving evaluation methods
• Deemed savings: the saving is evaluated with respect to the
number of installed reference units (e.g. square meter, kW, number of
installed units). No measures are required. Only standardized
solutions can be included in a deemed saving file.
• Engineering estimates: the saving is evaluated with respect to some
measured quantities through a dedicated algorithm defined in the
considered file. Required meters are also indicated in the considered
file.
• Monitoring plan: the method is similar to the previous one, but the
algorithm, the baseline, the additional saving coefficient, and the
needed meters should be preliminarily proposed by the applicant
and approved from ENEA.
Saving evaluation method
Deemed savings
Engineering estimates
Monitoring plan

47. www.fire-italia.org
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Incentives
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31
Time chart
Action Implementation
RVC
presentation RVC
approved
by GSE
WhC
Release WhC
transaction WhC
obliteration
PPPM
presentation
PPPM
approved
by GSE
Within
180 days
Within
60 days
No time
limitations
Within
May 31st of
the year
after the
targeted one
Within
60 days
(silence
procedure)

48. www.fire-italia.org
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Incentives
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CHP
32
Deemed savings files

49. www.fire-italia.org
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Incentives
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CHP
33
D.S. files for industry, tau coefficients and M.P. results
!
min max min max max min
Tau
File
number
Technology Unit
Unit per toe
Saving (10-3
toe/unit/year)
Units needed to
reach 20 toe
Industrial deemed savings files
9 VSD electric engines for industrial pumping systems
1 turn industry 1 kW 12 42 24 83 314 91 2,65
2 turns industry 1 kW 6 20 49 166 153 45 2,65
3 turns industry 1 kW 3 11 95 319 80 24 2,65
seasonal industry 1 kW 11 38 27 90 284 84 2,65
11 high efficiency electric engines
1 turn industry 1 kW 37 294 3 27 2.220 283 2,65
2 turns industry 1 kW 19 149 7 53 1.126 142 2,65
3 turns industry 1 kW 10 77 13 102 581 74 2,65
seasonal industry 1 kW 35 270 4 29 2.040 262 2,65
Figure 1. Industrial deemed savings files summary.
Monitoring plan: more interesting (potential savings and tau value), but more
difficult to obtain (more complex and longer procedure) than deemed savings
and engineering estimates.

50. www.fire-italia.org
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CHP
Market trends and monitoring plans
Savings breakdown for type of evaluating procedure

51. www.fire-italia.org
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The analysis about monitoring plans
Background
Considering new projects, monitoring plans are overcoming standard and
engineering estimates projects with respect to the amount of generated savings.
No deep investigation was carried out and a few data were available on them.
The aim of the analysis
ENEA commissioned a study to FIRE to:
 investigate monitoring plans and extract information on the results of
seven years of presented projects;
 identify trend lines for the energy efficiency technologies used and
assess the market penetration;
 verify if the real savings (RVC) matched the forecasts (PPPM);
 identify the role of the proponents, the difficulties they encountered and
the most common errors in the presentation of proposals.

52. 14#
33#
47#
0#
5#
10#
15#
20#
25#
30#
35#
40#
45#
50#
2005)2010# 2011# 2012#(incomplete)#
Monthly#average#PPPM#proposals#
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WhC and EED
Incentives
Conto termico
RES incentives
CHP
PPPM presentation trend
Both the effect of the tau coefficient and of the learning curve about PPPM
presenting linked to FIRE-ENEA training courses can be seen.
Source: FIRE on AEEG data.

53. 51%$
43%$
6%$
0,1%$
0,5%$
Accepted$PPPM$
Passed$at$the$first$a7empt$
a9er$1$revision$
a9er$2$revisions$
a9er$3$revisions$
a9er$4$revisions$
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Incentives
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PPPM are not that easy to present
Detailed analysis focused on the 600 PPPM that have been approved.
About half of the approved proposals has required at least a request for
integration. Especially in the first years some proposals required 3 or 4 revisions
(recently ENEA decided to allow no more than one request of integration.
Less than 10% of the proposals were rejected.
Source: FIRE commissioned by ENEA.

54. 1%#
5%#
7%#
87%#
Presented#PPPM#
Electric#DSO#(DE)#
Gas#DSO#(DG)#
Energy#manager#(EM)#
Energy#service#provider#
(ESP)#
2%#
30%#
68%#
Requested#WhC##
Electric(DSO((DE)(
Gas(DSO((DG)(
Energy(manager((EM)(
Energy(service(provider((ESP)(
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WhC and EED
Incentives
Conto termico
RES incentives
CHP
PPPM and monitoring plans’ WhC divided by proponent
Source: FIRE commissioned by ENEA.
Source: FIRE commissioned by ENEA.

55. 30%$
41%$
29%$
WhC$energy$saving$breakdown$
WhC$electricity$$
WhC$natural$gas$
WhC$other$fuels$
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WhC and EED
Incentives
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RES incentives
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WhC breakdown
A strong role of thermal energy consumption emerges in the industrial sector, in
opposition to the saving electricity leadership for standard projects.
Source: FIRE commissioned by ENEA.

56. STEEL%
METALLURGICAL%
38%%
PETROCHEMICAL%
PHARMACEUTICAL%
CHEMISTRY%
16%%
BUILDING%
MATERIALS%
12%%
AGRO:FOOD%
7%%
ENERGY%/%SERVICES%/%
WASTE%TREATMENT%
7%%
RESIDENTIAL%
COMMERCIAL%
6%%
GLASS%
4%%
PAPER%AND%
PRINTING%
3%%
ICT%
2%%
AUTOMOTIVE%
MECHANICS%
2%%
WOOD%
2%%
TEXTILE%AND%TANNING%
1%%
STEEL%METALLURGICAL%
9%%
PETROCHEMICAL%
PHARMACEUTICAL%
CHEMISTRY%
17%%
BUILDING%MATERIALS%
14%%
AGRO9FOOD%
13%%
ENERGY%/%SERVICES%/%
WASTE%TREATMENT%
7%%
RESIDENTIAL%
COMMERCIAL%
17%%
GLASS%
4%%
PAPER%AND%PRINTING%
4%%
ICT%
3%%
AUTOMOTIVE%
MECHANICS%
6%%
WOOD%
2%%
TEXTILE%AND%TANNING%
4%%
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WhC and EED
Incentives
Conto termico
RES incentives
CHP
WhC breakdown: PPPM (above) and WhC (below)
Source: FIRE commissioned by ENEA.

57. EEheat
48%
EEelectricity
17%
Heatrecovery
9%
Cogenera8on
16%
Biomass
6%
Solventtreatment
0%
Civilsector
4%
WhCtechnologybreakdown
EEheat
19%
EEelectricity
28%
Heatrecovery
15%
Cogenera8on
17%
Biomass
6%
Solvent
treatment
1%
Civilsector
14%
PPPMtechnologybreakdown
n°#PPPM requested#WhC
EE#heat 128 645.293
EE#electricity 186 226.946
Heat#recovery 98 112.973
Cogeneration 111 210.377
Biomass 41 81.487
Solvent#treatment 9 5.236
Civil#sector 90 48.820
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Technology breakdown
Source: FIRE commissioned by ENEA.

58. 9%#
53%#
10%#
28%#
Heat#recovery#breakdown#
HEAT#RECOVERY#FOR#
THE#PROCESS#
HEAT#RECOVERY#FOR#
OTHER#USES#
FLUE#RECOVERY#FOR#
THE#PROCESS#
FLUE#RECOVERY#FOR#
OTHER#USES#
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WhC and EED
Incentives
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Heat recovery
With heat recovery for the process we mean heat reused within the
same process that generated it.
More often the heat recovered at low temperature is used in other
processes within the enterprise.
The same applies for the two flue recovery categories.
Source: FIRE commissioned by ENEA.

59. www.fire-italia.org
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Gas cogeneration
The new cogeneration plants are distributed homogeneously among all
activities with use of low-temperature heat.
A peak of interventions in the food and chemical / pharmaceutical
sectors can be nevertheless noticed.
82%$
17%$
1%$
Cogenera.on$proposals$
Gas$CHP$
Gas$trigenera.on$
Gas$quadrigenera.on$
Source: FIRE commissioned by ENEA.

60. 44%#
22%#
10%#
14%#
10%#
Biomass#proposals#
BIOMASS#BOILER#
BIOMASS#COGENERATION#
BIOMASS#FOR#PROCESS#
BIOGAS#
BIOOIL#
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Biomass
The use of biomass shows a concentration in the agri-food sector
where the availability of residues leads to a natural application.
Other interesting aspects are the direct use of wood biomass as fuel
in the lime factories and biogas in the food industry.
Source: FIRE commissioned by ENEA.

61. www.fire-italia.org
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Civil sector
59%$
36%$
5%$
Civil$sector$proposals$
BOILERS$AND$HEAT$
ACCOUNTING$
LIGHTING$
DISTRICT$HEATING$

62. www.fire-italia.org
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Incentives
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CHP
PPPM forecast VS requested WhC over years
Case 1: e.g. building
materials,
manufacturing industry
Case 2: e.g. furnace
glass, membranes,
RDF
Case 3: e.g.
lighting, heating,
cooling
Preventivo
Consuntivo
Preventivo
Consuntivo
Consuntivo
Preventivo

63. www.fire-italia.org
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The complete report will give us a lot of interesting information (that would be
difficult to summarize in a presentation).
It is better to think about a procedure to collecting and categorising data from
complex projects since the start up of the WhC scheme.
Monitoring plans don’t tell us just how many pieces of a technology has been
installed, they give us information about industrial processes and trends in
technology substitution (a fact that can stimulate many support activities), and they
help ESP to grown up and become ESCO or anyway skilled operators.
To make savings in the order of Mtoe monitoring plans are a necessity (unless we
pour a lot of money in terms of WhC/”cost of investment” on deemed savings, like
we have done for CFL), so it is important to monitor their trends.
A lot of information and training activities is needed in order to get some interesting
achievement.
Conclusions
Energy efficiency is complex and to be successful it needs a lot of
commitment (in primis by policy makers), the recognition of co-benefits,
MV (not only for WhC to work, but for EPC and banks), information and
training. This is true for EEO as well as for any kind of support policy.

64. www.fire-italia.org
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48
Typical cement production cycle
!
Figure 1. Cement manufacturing process (dry process) [22]
Source: Reference Document on Best Available Techniques in the Cement, Lime and Magnesium Oxide
Manufacturing Industries, EC, 2010.

65. www.fire-italia.org
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Italy is among the largest cement producers in Europe.
With a total production of 36.3 million tons of cement it was in 2009 the
main producer, despite the significant decline in recent years (-15.6% in
2008).
The production facilities are located throughout the country and currently
total 88 manufacturing units, of which 58 are full-cycle and 30 are
grinding factories.
There are 80 active rotary kilns, all based on the dry or semi-dry
technology that enables the achievement of greater energy efficiency.
The cement industry in Italy
The cement industry is clearly one of the most interesting for the WhC
scheme in terms of potential certificates and it serves well as an example of
WhC implementation in the industrial sector.
The data and the assumptions on this presentation are taken from the
guideline for the cement industry created by ENEA and FIRE that will be
published on the website www.efficienzaenergetica.enea.it.

66. www.fire-italia.org
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Despite remarkable advances in technology, in terms of energy
efficiency, there are still margins for improvement.
The BAT considered in the cement industry BRef indicate a value of
3,000 MJ/t of clinker for thermal energy and 90 kWh/t of cement for
electricity.
The savings that would result from the transformation of the entire
cement factories park is about 300 MJ/t of clinker. Given the annual
national production of 36.3 million tons of cement, a clinker/cement ratio
of 0.75, and assuming an approximate percentage of plants renovation
of 50%, the global saving will be around 100 ktoe/year.
For the consumption of electrical energy, considered over the entire
production line, the possible reduction from the baseline is about 25
kWh/t of cement. Considering again a penetration rate of 50% the global
saving will be around 85 ktoe/year.
Potential savings

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51
Typical algorithms for the cement industry
In order to prepare a monitoring plan the following points
must be addressed:
- process description;
- description of the EE solution;
- identification of the baseline, and thus of additional
savings;
- definition of the algorithm to calculate the energy savings;
- description of the MV system.
Usually the third and fourth points are the most difficult to
address, for different reasons.

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52
Typical baseline values
For new plants (or a complete renovation of an existing plant) the reference is
the market average, i.e. the typical solution proposed in that period of time for
the same intervention. As mentioned above, currently it is the dry process
with multiple stage preheater and precalciner.
For the renovation of an existing plants, provided an hardware intervention is
implemented and not only an improvement of the plant management or of the
regulation of the energy devices, the baseline reference is the higher between
the specific consumption of the ex-ante plant and the specific consumption of
the current practice in the same industrial sector.

69. www.fire-italia.org
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53
Savings collected in the cement industry within the WhC scheme
The good number of applications demonstrates that even if monitoring plans
are complex, they can successfully be used, especially when the available
savings are good enough to justify the effort.
In Italy, there is a minimum threshold to present a single EE measure of 60
toe, that at present WhC prices corresponds to 6,000 €/year for five years.
The table shows typical savings between 15 and 3,500 toe.

70. www.fire-italia.org
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The algorithm is not an issue technically, but it is important that it is
chosen taking into account the necessity to normalise the savings with
the industrial production – the clinker in this case – and to ensure that
the effect of the EE intervention is correctly isolated from other energy
consumption.
Most problems that arise in this connection are due to an insufficient
number of meters or to their incorrect positioning. But there are may also
be errors in the definition of the savings formula.
Since in the cement industry fuel and clinker consumption present high
values – on the order of hundreds of thousands of tons per year – an
accurate measurement may be difficult. To address this issue, one
possibility is to refer to the measurement uncertainties listed in Annex VII
of the Decision 2007/589/EC related to the emission trading scheme
(directive 2003/87/EC).
The use of alternative fuels is still limited, so its effects on the final result
is still not very significant, but considering the Italian interest in refuse
derived fuel (RDF) from industrial and municipal waste, the implications
of its use should be analysed, both with respect to WhC and ETS, and
should lead to a different baseline for RDF fired plants.
Conclusions

71. www.fire-italia.org
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With large EE interventions, like the ones considered in the cement
industry, monitoring plans are working well. Industrial companies have
come to understand the opportunity that WhC represent and are trying to
join in.
More importantly, EE is finally going to be promoted by the mechanism.
Monitoring plans have in fact already overtaken deemed savings and
engineering estimates in Italy in the last year in terms of issued
certificates.
Due to the complexity of the plans the proponents are improving their
knowledge of the industrial sectors in which they operate, with positive
effects on their potential to promote and replicate similar actions. Some
of the proponents have indeed become full ESCOs this way, fulfilling one
of the original aims of the WhC scheme in Italy.
A final important aspect: the real trigger to success of the scheme and of
the involvement of industry is information and training. It is fundamental
to devote sufficient economic and personnel resources to these
activities. The advantages for the system in general are enormous
compared with the cost of implementing these actions.
Conclusions

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56
Weighted average WhC price
40,00$
50,00$
60,00$
70,00$
80,00$
90,00$
100,00$
110,00$
2005$ 2006$ 2007$ 2008$ 2009$ 2010$ 2011$ 2012$ 2013$
Weighted(average(WhC(price(on(the(GME(market(
€/toe$
Target$year(2013:$provisional$data)$
Source:$FIRE$based$on$AEEG$and$GME$data$

73. 0
10
20
30
40
50
60
70
80
90
100
110
120
07/03/2006
16/05/2006
25/07/2006
24/10/2006
16/01/2007
27/03/2007
05/06/2007
28/08/2007
06/11/2007
29/01/2008
08/04/2008
17/06/2008
09/09/2008
18/11/2008
17/02/2009
28/04/2009
01/07/2009
22/09/2009
01/12/2009
02/03/2010
11/05/2010
20/07/2010
19/10/2010
11/01/2011
22/03/2011
31/05/2011
30/08/2011
15/11/2011
07/02/2012
17/04/2012
31/05/2012
07/08/2012
06/11/2012
05/02/2013
16/04/2013
25/06/2013
WhC'sprice(Euro)
Marketsessiondata
WhCpricetrend
May31stsession DSO'sreimbursement TypeIII TypeII TypeI
Source:FIREevaluaIonbasedonAEEGandGMEdata
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57
Price trends
Source: FIRE.
WhC oversupply
WhC shortage

74. www.fire-italia.org
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58
Issued certificates VS targets
In the first phase there has been an excess of WhC on the market. Then it came a change
that has taken the market on the opposite situation. The main drivers of these changes have
been: CFL and other deemed saving files no more available, the completion of the 5 years
cycle for the first projects, the rapid growth of monitoring plans since 2012.
The results in 2011 and 2012 are affected by the introduction of the tau coefficient (i.e. in the
same years targets and issued WhC are not directly comparable).
!40%%
!20%%
0%%
20%%
40%%
60%%
80%%
100%%
!4.000%%
!2.000%%
%!%%%%
%2.000%%
%4.000%%
%6.000%%
%8.000%%
%10.000%%
2005% 2006% 2007% 2008% 2009% 2010% 2011% 2012% 2013% 2014% 2015% 2016%
%
ktoe
ItalianWhCtargetsandresults
(dataupdatedtoMay312013)
Primary%energy%saving%targets%(ktoe)% Issued%WhC%from%June%1st%to%May%31st%(ktoe)%
Eccess%%or%missing%WhC%(ktoe)% (issuedWhC!targetWhC)/targetWhC%(%)%
Source:%FIRE%based%on%AEEG%and%GME%data%

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Legislation and incentives
59

76. www.fire-italia.org
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Barriers
Source: IEA 2010.
60
adopt new technologies are the time and inconvenience associated with searching
for a better product, collecting and assessing information, and completing the
transaction. Consumer perceptions of the potential risks associated with the shift
to more efficient technologies may also impede their adoption. Policies can make
energy-efficient technologies more attractive to would-be adopters (Figure 16.5).
Figure 16.5 Impact of policies on different costs relating to technology choices
Impacted by policies,
programmes, awareness, and by
shifting preferences – all roughly
approximated by the “hurdle rate”
or the “implicit discount rate”
Impacted by policies, RD
programmes, experience, growing
expectations, and new innovations
Capital
Capital
Fuel
Fuel
Standard
technology
Efficient
technology
Information
costs
Search costs
Preferences,
perceived risk
Transaction
costs
Costorcostequivalent
Source: Laitner (2009).

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Existing barriers slow down the diffusion of energy efficient solutions
and must be addressed to reach the 20-20-20 targets.
Some of these barriers can be addressed through dissemination and
training activities, others require support schemes, others – like the
second one – should be dealt with, but will remain.
Barriers
The main barriers to energy efficiency are:
lack of knowledge and attention;
attention focalized towards the core business;
operators know-how and qualification;
attitudes and behaviors;
lack of a sufficient production and distribution chain;
complexity of the EE solutions;
inadequate legislation and authorization procedures;
lack of good support schemes;
lack of interest and know-how from financial institutions and
banks.

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Policy and behaviors
Source: IEA 2010.
62
16
reflect a more complex understanding of the many factors that shape or drive
individual behaviours (Stern, 2002). Such policies will reflect not only the influence
of financial costs and rewards and the availability of technology choices, but also
the importance of personal capabilities, habits, values, norms and social and
institutional contexts (Figure 16.2).
Figure 16.2 Policy instruments and behavioural drivers
Policy instruments Behavioural drivers
Command
and control
Economic
instruments
Service and
infrastructure
Personal capabilities and constraints:
literacy, social status, behaviour-
specific knowledge and skills
Habit and routine
Values, attitudes, beliefs,
personal norms
Institutional, economic
and technological context:
Social context: social norms,
persuasion, advertising, personal
commitments, informal institutions
Laws, regulations
Private contracts
Financial costs and rewards
Available technology
Convenience
Communication
and diffusion
instruments
Collaborative
agreements
Source: Stern (2002).

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63
The legislative tools are:
EU directives, regulations, and decisions;
laws (constitutional, ordinarie, finanziarie);
legislative decrees (D.Lgs.);
decreti legge (D.L., Government’s acts to be confirmed by the
Parliament to maintain effectiveness);
D.P.R., D.P.C.M. e D.M. (second rank decrees, required by the
above mentioned laws);
regional and local acts;
AEEG delibere;
GSE and GME technical regulations concerning the market;
UNI, CEI, and CTI standards.
Italian legislation
Last but not least, the administrative tribunals
(TARs) play an important role especially with
AEEG acts and have a deep reflection on the
regulations.

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Different policies for different technology development
Source: IEA 2010.
64
actors in the early phases of technology development and then gradually expose the
technology to greater competition, while allowing participants to realise reasonable
returns on their investments as a low-carbon economy takes hold.
Governments will need to intervene on an unprecedented level in the next decade
to avoid the lock-in of high-emitting, inefficient technologies. They must take
Figure ES.2 Policies for supporting low-carbon technologies
Marketdeployment
2. Stable, technology-specific incentives
1. Technology development
and demonstration
Prototype and demo stage
( fuel cells, 2 generation
biofuels, electric vehicles, CCS)
e.g.
nd
High cost gap
(solar CSP, solar PV,
hybrid vehicles)
Low cost gap
(onshore wind, biomass
power in some markets)
Mature technology
(energy efficiency,
industrial CHP)
Green certificates, GHG trading
Feed-in tariffs, tax credits, loan guarantees
Building codes, efficiency
standards, information campaigns
1. Development
and infrastructure
planning
RDD financing,
capital cost support
for large-scale
demonstration
3. Technology-neutral
but declining support
4. Accelerate adoption by
addressing market barriers
Time
4. Mass market
3. Achieving
competitiveness
2. Niche markets
Note: The figure includes generalised technology classifications; in most cases, technologies will fall in more than one
category at any given time.

81. www.fire-italia.org
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Incentives
Conto termico
RES incentives
CHP
Support schemes could be dedicated to:
knowledge (raising awareness and know-how, energy audits,
energy management systems);
research and development in new technologies;
the development of the supply chain, from the production to
the installation (both of the technology and of the connected
devices or consumables, such as pellet and ashes for
domestic biomass fired boilers);
the installation of technologies among the end users or the
development of energy services;
the financial system (banks, private equity, etc);
past and present errors (e.g. conto energia PV, nuclear
decommissioning in Italy for power plants turned off soon
after their start up).
The last voice should be treated with respect, because
follows the lack of a medium and long term strategy and
is quite common in Italy.
Support actions

82. www.fire-italia.org
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Conto termico
RES incentives
CHP
The basic idea – often neglected – is that since the
energy system is a complex one, then it should be
addressed with a mix of dedicated and tailored support
measures.
Support tools
The main used are:
capital cost or investment contributions (e.g. Ministry of
Environment’s and regional calls);
feed-in tariffs and premium (e.g. CIP6, conto energia
fotovoltaico);
baseline and cap and trade schemes (e.g. white and green
certificates, emission trading);
guarantee funds (e.g. Fondo Kyoto);
fiscal deductions or reliefs (e.g. detrazioni fiscali 55%, gas
taxation for CHP);
carbon tax.
Support actions

83. www.fire-italia.org
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Conto termico
RES incentives
CHP
Incentives
Energy efficiency Thermal renewables Electrical renewables
Feed in premium PV
(D.M. 5 luglio 2012)
RES incentives
(D.M. 6 luglio 2012)
Green certificates and TFO
(in via di uscita)
Conto energia termico
(D.M. 28 dicembre 2012)
White certificates
65% fiscal deduction
(till al 31 December 2013)
Other options (Elena, Jessica, EEEF, structural funds, local
incentives, etc.)
CHP/
DH
WhC
DH
GC
5

84. www.fire-italia.org
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Incentives
Conto termico
RES incentives
CHP
Incentives
Efficienza energetica Energia termica da FER Energia elettrica da FER
Conto energia fotovoltaico
GSE
Incentivi alle FER elettriche
GSE
Certificati verdi e T.F.O.
GSE - GME
Conto energia termico
GSE-ENEA-AEEG
Certificati bianchi
MSE - GSE - ENEA - AEEG – RSE - GME
Detrazioni fiscali al 55%
ENEA - Agenzia delle Entrate
Altre misure (Fondo Kyoto, Fondo EEEF, incentivi locali etc.)
Cassa Depositi e Prestiti, enti locali, Ministeri etc.
CHP/
TLR
C.B.CAR
GSE
GME
C.V. TLR
GSE
GME
6

85. www.fire-italia.org
WhC and EED
Incentives
Conto termico
RES incentives
CHP
Conto termico
69

86. www.fire-italia.org
WhC and EED
Incentives
Conto termico
RES incentives
CHP
Conto termico
Admitted proponents
Public administrations (max threshold
200 M€/year), also through ESCOs and
TPF
For thermal renewables only: families,
condominiums, agricultural, commercial
and industrial companies (max threshold
700 M€/year), also through ESCOs and
TPF
Target
Existing buildings
Interventions aimed at building envelope and plants
46
direct
registry
Access booking (only P.A.)

87. www.fire-italia.org
WhC and EED
Incentives
Conto termico
RES incentives
CHP
Conto termico
(fonte www.fire-italia.org)
Solu%ons
Incen%ve
dura%on
Admi3ed
proponents
Thermal insulation of building envelope 5
anni (Allegato
I)
P.A.
(accesso
dire5o
o
prenotazione)
Edifici
di
proprietà
delle
PP.AA.
e
da
esse
occupa
Substitution of windows 5
anni
(Allegato
I)
P.A.
(accesso
dire5o
o
prenotazione)
Edifici
di
proprietà
delle
PP.AA.
e
da
esse
occupa
Condensing boilers (substitution) 5
anni
(Allegato
I)
P.A.
(accesso
dire5o
o
prenotazione)
Edifici
di
proprietà
delle
PP.AA.
e
da
esse
occupa
Building shielding and shading 5
anni
(Allegato
I)
P.A.
(accesso
dire5o
o
prenotazione)
Edifici
di
proprietà
delle
PP.AA.
e
da
esse
occupa
Geothermal, electrical and gas powered heat pumps
2
anni
fino
35kW
(Allegato
II)
P.A.(accesso
dire5o
o
prenotazione)
e
priva.
Registri
oltre
500kW
Geothermal, electrical and gas powered heat pumps
5
anni
oltre
35kW
fino
a
1MW.
(Allegato
II)
P.A.(accesso
dire5o
o
prenotazione)
e
priva.
Registri
oltre
500kW
Biomass powered boilers, also for greenhouses
2
anni
fino
35kW
(Allegato
II)
P.A.(accesso
dire5o
o
prenotazione)
e
priva.
Registri
oltre
500kW
Biomass powered boilers, also for greenhouses 5
anni
oltre
35kW
fino
a
1MW.
(Allegato
II)
P.A.(accesso
dire5o
o
prenotazione)
e
priva.
Registri
oltre
500kW
Solar thermal and solar cooling
2
anni
fino
a
50m2 P.A.(accesso
dire5o
o
prenotazione)
e
priva.
Solar thermal and solar cooling
5
anni
oltre
50
fino
a
1000
m2
P.A.(accesso
dire5o
o
prenotazione)
e
priva.
DHW heat pumps in substitution of DHW electric boilers 2
anni
P.A.(accesso
dire5o
o
prenotazione)
e
priva.
50

88. www.fire-italia.org
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RES incentives
CHP
Incentives for
renewable energy sources
72

89. www.fire-italia.org
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RES incentives
CHP
Incentives breakdown
Source: GSE
78
- 7 -
RES - E SUPPORT MECHANISMS
PV PLANTS OTHER RES PLANTS
Feed-in Tariff
Sliding Feed-in
Premium
A fixed tariff
(technology and size
banding incentive)
PLUS
any applicable
premium
Value of Feed-in
MINUS
hourly zonal energy
market price
PLUS
any applicable
premium
P ≤ 1MW P 1MW
Feed-in tariff
Sliding Feed-in
Premium
A fixed tariff
(depending on
technology and size)
PLUS
self consumption
premium or/and any
applicable premium
Value of Feed-in
MINUS
hourly zonal energy
market price
PLUS
self consumption
premium or/and any
applicable premium
P ≤ 1MW P 1MW
Yearly cumulative spending limit:
6,7 € bln
Directly Registries
PV plants ≤ 12 kW
(≤ 20 kW with 20% tariff
reduction)
PV plants 12 kW
How to access to incentives How to access to incentives
Directly Registries Auctions
Very small
plant other
marginal cases
- RES ≤ 5MW
except
- Hydro ≤10 MW
- Geo ≤ 20 MW
- RES 5MW
except
- Hydro 10 MW
- Geo 20 MW
Yearly cumulative spending limit:
5,8 € bln
INSTRUMENTS: RES-E support schemes

90. www.fire-italia.org
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Incentives
Conto termico
RES incentives
CHP
Incentives breakdown
Fonte: GSE
78

91. www.fire-italia.org
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Incentives
Conto termico
RES incentives
CHP
Fonte: GSE
79
Incentives breakdown

92. www.fire-italia.org
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82
Incentives tariffs
Base tariffs from
85 to 291 €/MWh
Premiums are provided
for high efficiency
c o g e n e r a t i o n a n d
innovative biogas and
geothermal plants.

93. www.fire-italia.org
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Incentives
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RES incentives
CHP
Incentives breakdown
Source: GSE
78
- 8 -
SUPPORT MECHANISMS FOR RES-E IN EUROPE
Examples of comparison of incentives in force in May 2013
(20 years annualized total revenues)
Feed in tariff Green Certificates Feed in Premium Wholesale electricity price Min and max value of the incentive
0
50
100
150
200
250
RO CK IT NL UK DE FR SE DK AT
€/MWh
Hydro – 10 MW
0
50
100
150
RO IT NL CK UK DE AT FR DK SE
€/MWh
Wind – 10 MW
0
50
100
150
200
250
300
350
DE FR RO UK IT CK NL AT SE DK
€/MWh
Geothermal – 10 MW
0
50
100
150
200
250
IT RO AT DE CK UK FR NL DK SE
€/MWh
Solid biomass – 10 MW
INSTRUMENTS: RES-E support schemes
For almost all kinds of small plants, in Italy, incentives given to producers are still the highest of the EU.
(this is due to a clear intention, in the latest reform, to encourage specific applications with more impact on
Italian supply chain)
Source: GSE

94. www.fire-italia.org
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Incentives breakdown
Source: GSE
78
- 9 -
0
100
200
300
400
500
600
700
€/MWh
0
100
200
300
400
500
600
700
€/MWh
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2007 2008 2009 2010 2011* 2012 2013
MW
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2007 2008 2009 2010 2011 2012 2013
MW
ITALY
GERMANY
3 kW residential buildings
total revenues
200 kW industrial buildings
total revenues
2000 kW ground
total revenues
* This includes more than 3700 MW of plants already completed in 2010 (“Salva Alcoa” Decree)
INSTRUMENTS: RES-E support schemes
annual installed MW
SUPPORT MECHANISMS FOR PHOTOVOLTAIC IN EUROPE
Examples of comparison of PV annual installed capacity and incentives digression
(20 years annualized total revenues based on the Italian load factor)
Source: GSE

95. www.fire-italia.org
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Incentives
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RES incentives
CHP
Incentives breakdown
Source: GSE
78
- 19 -
2005-2011 trends and 2020 NREAP sectorial targets
MONITORING: where we are and where we should be
Data available on SIMERI (http://www.gse.it/it/Statistiche/Simeri)
Share of RES in gross final consumption in the ELECTRICITY sector
Share of RES in gross final consumption in the HEATING sector
NREAP's trajectoryFinal
NREAP's trajectoryFinal

96. www.fire-italia.org
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Incentives
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RES incentives
CHP
Incentives breakdown
Source: GSE
78
- 23 -
Indicative cumulative yearly cost of RES-E support
(“counter PV” and “counter others RES”)
Estimate of the net potential annual cost, already committed
but not yet fully supported. It includes the economic value of
all green certificates as well the costs of registries and auction.
It does not include the costs of services such as “simplified
purchase resale arrangement” and “net metering”.
June 6,
2013
April 30, 2013
(latest available estimate)
PV 6,47 € bil
Other RES 2,54 € bil
Fossil 0,87 € bil
Total 9,87 € bil
MONITORING: FOCUS ON RES-E SECTOR. COSTS
Net cost of incentives
on electricity bills (A3) in the year 2012
It includes the costs of services such as “simplified purchase
resale arrangement” and “net metering” (0,2 € bil).
It does not include the economic value of the green
certificates that have not been withdrawn from the GSE.
PV 6,70 € bil 6,70 € bil
Other RES 4,22 € bil 5,80 € bil
Total 10,92 € bil
Spending caps
Components of the electricity bill for a household type (March 2013):
53% energy and dispatching; 17% burden for incentives;
15% transmission and distribution; 13% taxes; 2% other system burdens

97. www.fire-italia.org
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RES incentives
CHP
Incentives breakdown
Source: GSE
78
- 26 -
MONITORING: FOCUS ON RES-E SECTOR. ECONOMIC BENEFITS
Employment impacts due to investments in 2011RES Investments in 2011
Impacts on national value added in 2011Impact on gross domestic production in 2011
Source: GSEMethodology: input/output analysis, using spending vectors updated and corrected to take account of the value of imports and exports

98. www.fire-italia.org
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RES incentives
CHP
Cogeneration
82

99. www.fire-italia.org
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Incentives
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RES incentives
CHP
83
Fonte:Newsweek
Centralised power production

100. www.fire-italia.org
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Incentives
Conto termico
RES incentives
CHP
84
Fonte:Newsweek
Distributed power production

101. www.fire-italia.org
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Incentives
Conto termico
RES incentives
CHP
85
Definitions D.Lgs. 20/2007:
- Small CHP 1 MWe
- Micro CHP 50 kWe
Cogeneration and trigeneration schemes
ICE engine Gas turbine

102. www.fire-italia.org
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RES incentives
CHP
86
Fonte: Università di Roma 1
Cogeneration and trigeneration schemes

103. www.fire-italia.org
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RES incentives
CHP
87
Large cogeneration plants ( 300 MW)
Source: GSE
Plants of every size
Small CHP plants
Microturbine plant and 1 kW GT
prototype

104. www.fire-italia.org
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RES incentives
CHP
88
Typical figures
Technology Fuel Size (MWe) Electrical efficiency Overall efficiency
Average capital cost
in $/kWe
Average Maintenance in
$/kWh
Steam Turbine Any 0.5-500 7-20% 60-80% 900-1800 0.0027
Gas Turbine
Gaseous and liquid
fuels
0.25-50+ 25B42% 65B87% 400-850 0.004-0.009
Combined cycle
Gaseous and liquid
fuels
3-300+ 35B55% 73-90% 400-850 0.004-0.009
Diesel and Otto
engines
Gaseous and liquid
fuels
0.003-20 25B45% 65-92% 300-1450 0.007-0.014
Micro turbines
Gaseous and liquid
fuels
15-30% 60-85% 600-850 0.006-0.01
Fuel cells
Gaseous and liquid
fuels
0.003-3+ App 37-50% App. 85-90% ? ?
Stirling engines
Gaseous and liquid
fuels
0.003-1.5 App. 40% 65-85% ? ?
Costs and profitability
A well-designed and operated cogeneration scheme
will always provide better energy efficiency than a
conventional plant, leading to both energy and cost
savings.
Cost savings depend on both the cost of the primary
energy fuel and the price of electricity that the scheme
avoids. However, although the profitability of a
cogeneration project generally results from its cheap
electricity, its success depends on using recovered heat
productively, so a prime criterion is a suitable heat
requirement. As a rough guide, cogeneration is likely
to be suitable where there is a fairly constant demand
for heat for at least 4,500 hours in the year.
The total investment in a CHP project depends upon
the size of the installation and its design and
characteristics. Under favourable conditions, payback
Table 1: Cogeneration Technology Characteristics
Project Risks
Technology: CHP is a mature technology. With proper
engineering, risks such as downtimes, failures, and
reduced efficiency are not greater than for most
combustion technologies.
Environmental: Environmental problems such as air
emissions, noise, raw material and residue handling, can
all be mitigated through proper siting, design, and
operation of the CHP facility. In many cases CHP
retrofits to existing installations may bring
environmental improvements.
Planning: The ratio between electricity and fuel prices
may change (price risk); regulatory frameworks may
change unfavorably (regulatory risk); the heat demand
may change, making the CHP project less suited to meet
the siteUs needs (energy consumption risk); or the
organization that uses the CHP scheme may close,
relocate, or go bankrupt (host risk).
or installing the
urchase of the
nnection to the power
and the heating system,
neering) and for the
e fuel and for the
ystem.
costs, the investment
more capital-intensive
nto a boiler, which only
o electricity. The graph
cogeneration unit
st share of overall
y, smaller cogeneration
rice per kWe, so that
ary from 6700 to
cal initial costs per
0
100.000
200.000
300.000
400.000
500.000
600.000
700.000
800.000
5 15 30 50 65 100 150 250 300 350 400 500 600 700 800 900 1000
kWe of chp-plant
TotalinvestmentinEuro
Engineering
Connection to grid
Exhaust
Connection to heating system
Construction
CHP-Unit
Initial costs of cogeneration investment
Source: ASUE 2005
Source: Cogen Europe.

105. www.fire-italia.org
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CHP
89
Traditional
system
electricity
gas
heat
Cogenerator
gas
heat
electricity
electricity sold if not self
consumed
Feasibility studies

106. www.fire-italia.org
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Incentives
Conto termico
RES incentives
CHP
90
OM
Electricity
Fuel
Cash flow
Traditional
system
(b)
(a)
(c)
Cogenerator
(d)
(g)
(e)
(f)
Investment I0
FC=f+(a+b+c)-(d+e+g)
VAN=FA(FC)-I0
Feasibility studies

107. 0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
0:00
2:00
4:00
6:00
8:0010:0012:0014:0016:0018:0020:0022:00
MW#
giovedì#+#16/5/2013#
Pompaggio
Eolico
Termo
PV
Idro
Geo
(daTerna,
elaborazioneFIRE)
www.fire-italia.org
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CHP
91
The evolution of the energy
system, including new resources
worldwide and geopolitical and
structural changes, makes the
prices volatile and difficult to
predict.
The rush towards a new (and
smarter) energy infrastructure
shall overcome the friction
b e t w e e n t r a d i t i o n a l a n d
renewable energy sources,
c e n t r a l i z e d a n d d i ff u s e d
generation, and energy waste
against energy efficiency.
2001:
demand 52-19 GW
supply 71 GW (49 GW available)
fuel quota 40 €/MWh
system charges 0 €/MWh
2011:
demand 56-22 GW
supply 118 GW (76 GW from
thermoelectric)
fuel quota 80 €/MWh
system charges 24 €/MWh
Data sources: Terna, AEEG.
A new energy market
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
0:00
2:00
4:00
6:00
8:0010:0012:0014:0016:0018:0020:0022:00
MW#
martedì#+#4/5/2010#
Pompaggio
Eolico
Termo
PV
Idro
Geo
(dati Terna,
elaborazione FIRE)

108. www.fire-italia.org
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92
Gas
Electricity and gas tariff composition
Electricity
34,17%
18,47%
39,40%
7,97%
Imposte
Servizi di rete
Materia prima
Vendita al dettaglio, commercializzazione all'ingrosso e oneri aggiuntivi

109. www.fire-italia.org
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RES incentives
CHP
93
Fonte ECD - AusTex.
Feasibility studies
The optimal situation: high baseload/peak ratio.
Possibility to install two twin cogenerators.

110. www.fire-italia.org
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RES incentives
CHP
94
HeatElectricity
Hours
kW
kW
A typical situation. Using the load curves to define the optimal size
of the CHP plant.
Hour
s
Feasibility studies

111. www.fire-italia.org
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RES incentives
CHP
95
4.500 hours
8.300 hours
200 kW
Option A: 200 kW engine Option B: 1.000 kW engine
2.800 hours
surplus
1.000 kW
Feasibility studies

112. www.fire-italia.org
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CHP
96
Or
kW
45,00
68,75
92,50
116,25
140,00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Saturday
[kW]
37,500
50,625
63,750
76,875
90,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Monday-Friday
[kW]
Demand
Production
Surplus
Power modulation
Feasibility studies

113. www.fire-italia.org
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RES incentives
CHP
97
Mall
 surface: 20.000 m2
 selling area: 13.000 m2
 volume: 100.000 m3
 heat: 2.171 MWh/anno
 electricity: 7.920 MWh/anno
 cooling: 1.915 MWh/anno
 electrical power: 1.400 kW
 Et/Ee: 0,27
Hospital
 beds: 140
 volume: 42.000 m3
 heat: 2.192 MWh/anno
 electricity: 800 MWh/anno
 cooling: 605 MWh/anno
 electrical power: 190 kW
 Et/Ee: 2,75
Hotel
 posti letto: 350
 volume: 43.000 m3
 heat: 2.400 MWh/anno
 electricity: 460 MWh/anno
 cooling: 718 MWh/anno
 electrical power: 105 kW
 Et/Ee: 5,23
Sport centre with swimming pool
 plants: 2 palestre, 3 piscine (20x10;
25x12,5; 12x3 m2)
 volume: 9.000 m3
 heat: 1.200 MWh/anno
 electricity: 316 MWh/anno
 cooling: 126 MWh/anno
 electrical power: 100 kW
 Et/Ee: 3,80
Office buildings
 volume: 15.000 m3
 heat: 563 MWh/anno
 electricity: 371 MWh/anno
 cooling: 209 MWh/anno
 electrical power: 97 kW
 heat power: 222 kW
 cooling power: 302 kW
 Et/Ee: 1,51
Fonte:Macchi,Campanari,Silva
“Lamicrogenerazioneagasnaturale”,Polipress
Demand typical indexes for tertiary users

114. Rules set out from directive 2004/8/EC
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Conto termico
RES incentives
CHP
98
High efficient (alto rendimento) CHP
'49$#%6$$7 47 *## %7 789 I47* @#$+6* '4%'*9* #4 8 O 4#4 #'4'%7
47788*$'*+7497#4*:$#%6?'#477799$'*%7P'+:'*49# 8 E
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115. www.fire-italia.org
WhC and EED
Incentives
Conto termico
RES incentives
CHP
99
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High efficient (alto rendimento) CHP

116. www.fire-italia.org
WhC and EED
Incentives
Conto termico
RES incentives
CHP
White certificates for CHP
CAR recognition and
WhC request
AEEG
Presents WhC
issues WhC
Step I: WhC request
Step IIb: WhC markets
Proponent
Proponent
GME
market
Buys WhC
OTC market
WhC transfer
Cash flows
rapporti fra le parti
DSO
GSE
Requires WhC “ritiro”
Step IIa: “ritiro” WhC
Proponent
GSE
The number of WhC
is evaluated as:
RISPx0,086xK
w h e r e 1 K 1 , 4
depending on the
size of the plant.

117. www.fire-italia.org
WhC and EED
Incentives
Conto termico
RES incentives
CHP
101
Current tax allowances for natural gas:
Industrial uses: 1,80* c€/m3
Civil uses: ≈20,00 c€/m3
* ≈ 1,30 c€/m3 in case of consumption greater than 1.200.000 m3/year.
District heating is considered an industrial service and is subjected to
the industrial uses tax.
The same rule applies to particular users, like restaurants, “amateur”
sport centres, handicapped hosting centres, etc.
Gas tax relief

118. www.fire-italia.org
WhC and EED
Incentives
Conto termico
RES incentives
CHP
102
With regards to tax relief the situation is the following one (GC: gas
consumption).
First 0,220 m3/kWhe of GC
GC over 0,220 m3/kWhe 1,80* c€/m3
(industrial sector)
GC over 0,220 m3/kWhe ≈20,00 c€/m3
(civil sector)
* ≈ 1,30 c€/m3 in case of consumption greater than 1.200.000 m3/year.
0,0004 c€/m3 (sold to the grid)
0,0001 c€/m3 (self consumption)
Gas tax relief

119. www.fire-italia.org
WhC and EED
Incentives
Conto termico
RES incentives
CHP
103
Gas tax relief
0,00#
0,10#
0,20#
0,30#
0,40#
0,50#
0,60#
0,70#
0,80#
0,90#
1,00#
0,15# 0,20# 0,25# 0,30# 0,35# 0,40# 0,45#
Rendimento)ele+rico)cogeneratore)
Fiscalità)gas)naturale)per)CHP)
Consumo#specifico#m3/kWhe# m3#sconta#%#
Fonte: FIRE

120. www.fire-italia.org
WhC and EED
Incentives
Conto termico
RES incentives
CHP
104
Gas tax relief

121. www.fire-italia.org
WhC and EED
Incentives
Conto termico
RES incentives
CHP
105
To summarise the incentives for high efficiency CHP (cogenerazione
alto rendimento CAR):
WhC 16-18 €/MWhe for 10 years in civil sector; in the industrial
sector it depends on the baseline;
Base tariff for RES with CHP is in the range 30-220 €/MWhe for
biogas and 160-270 €/MWhe for solid biomass for 20 years;
the tax relief on natural gas can reach 50 €/MWhe for the civil
sector and 5 €/MWhe for industry and civil users that pays
industrial taxes;
net metering, a choice till 200 kWe, equal to 10 a 30 €/MWhe,
depending on the fuel (higher for RES);
no transport and distribution components on self consumed
electricity for efficient user systems (SEU) below 20 MWe;
dispatching priority.
References

122. www.fire-italia.org
106
To remain up to date:
EU official gazzette (http://eur-lex.europa.eu);
Italian Gazzetta ufficiale (www.gazzettaufficiale.it) and regional
BURs;
the free AEEG newsletter (www.autorita.energia.it);
the free GSE newsletter (www.gse.it);
the free GME newsletter (www.mercatoelettrico.org);
energy dedicated newspapers (www.staffettaonline.com,
www.quotidianoenergia.it, www.e-gazette.it);
ENEA, regional and local energy agencies, energy
associations (www.enea.it, www.fire-italia.org, etc);
the free website www.normattiva.it, which maintains up to date
laws and legislative decrees texts, or the commercial
equivalent like www.studiolegale.leggiditalia.it, which address
also ministerial, regional, and local decrees and jurisprudential
repertories.
Useful references

123. www.fire-italia.org
107
Some useful links:
FIRE: www.fire-italia.org
AEEG: www.autorita.energia.it
GME: www.mercatoelettrico.org
GSE: www.gse.it
Cogen: www.cogen.org
Wade: www.localpower.org
Cogena: www.ascomac.it/sezionec/pag341_c.aspx
DOE: www1.eere.energy.gov/industry/distributedenergy
COSPP www.cospp.com
References

124. www.fire-italia.org
For

125. more

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127.
about

128. our

129. activities

130.
visit

131. our

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133. site!