Webinar 13 th July 2017

Transcription

1 Energy Saving Policies and Energy Efficiency Obligation Scheme Cost of EEO schemes and cost-recovery mechanisms Webinar 13 th July 2017 Vlasis Oikonomou, Project Coordinator

2 Cost recovery mechanisms For obligated energy providers in competitive energy markets, there are two possible cost recovery paths: Option 1: the costs of meeting energy savings targets are treated as a cost of doing business and energy providers adjust their prices to recover these costs; or Option 2: the costs of meeting energy savings targets are either funded by the government through direct budgetary appropriations, or price surcharges are imposed on regulated wires and pipes energy providers.

3 EU MS Cost Recovery options Country Explana:ons Austria Bulgaria Croa:a Denmark Estonia France Cost recovery (or funding) mechanism are obligated par-es allowed to recover their expenses due to the scheme? (and how?) Energy markets are open, therefore the energy suppliers can recover their costs through the energy prices (a possible increase in energy prices is indeed a fear of many stakeholders, including consumer associa-ons) not defined yet, which is likely one of the main reasons of the low achievements so far Yes, through regulated price of energy distribu-on which will take into account addi-onal costs due to the scheme (process supervised by the regulator HERA ; op-on to avoid increased energy prices for industries is under discussion) Individual companies have their actual costs of mee-ng the obliga-on covered by supplement to revenue cap (power, gas) or by inclusion in tariff (district hea-ng). No law allowing oil companies to demand specific contribu-ons from customers to cover the costs. The surcharge on the energy prices has been es-mated by the DEA for as (in c /kwh) 0.23 for electricity, 0.17 for gas, 0.2 for district hea-ng and 0.04 for oil. not defined yet (would likely be through energy tariffs, under supervision of the Compe--on Authority that regulates the energy markets) The energy suppliers opera-ng within open energy markets can recover their costs through their energy prices. Special rules applied for the energy suppliers with regulated energy prices.

4 EU MS Cost Recovery options Ireland Italy Latvia Lithuania Luxembou rg Malta Poland As energy markets are open, the obligated par:es may recover their costs via the energy prices. No specific rule is defined. The compe::on between energy suppliers is expected to prevent from high increases in energy prices. Tariff reimbursement for obligated par-es depends on previous years market values (since 2013, previously on standard fuel price mix trend); range has been about /toe. Cost for savings measures in electricity/gas can be included in regulated operator s tariff, whereas this is not possible for transport measures Adjustment under discussion to allow inclusion in gas tariff, or to recycle costs into the transport sector. The dra[ Energy Efficiency law includes the possibility to account for the expenses related to the obliga-on scheme, when defining the energy tariffs. The fear of increasing energy prices is likely the main cause of opposi-on to the implementa-on of the obliga-on scheme. to be defined by the Ministry The obligated par-es may recover their costs on energy prices. To avoid distorsion between energy types, non- obligated suppliers may have to pay a special tax. The obliga-on is defined as a mission of public service. This allows the scheme to be partly funded by the public budget. costs are assumed to be recoved through the electricity tariffs Costs of the obliga-on scheme are passed through to consumers via tariffs for electricity, heat, and natural gas. Slovenia Spain UK The obligated par-es will likely recover their costs on the energy prices (liberalised market) Costs will likely be recoved on energy prices (liberalised markets). Obligated par-es may Source: recover Broc their 2015 costs through the energy prices (liberalised market) hap://atee.fr/c2e/third- european- workshop- mee-ng- white- cer-ficates- club

5 Outside the EU? Country Canada/Ontario China US MinesoPa US New York US Texas Australia NSW Australia South A Australia Victoria Korea US California US Connec:cut US Massachusets US Vermont India Cost recovery Collected from all ratepayers based on energy use or contribu-on to peak demand City u-lity surcharge, revenue from differen-al electricity prices, and other funding sources Energy efficiency cost- recovery charge determined in rate cases System benefits charges, and funding from carbon market Obligated u-li-es recover program costs through base rates or cost recovery tariffs Obligated par-es costs are treated as a cost of doing business Per- customer amount included in regulated price determina-on Obligated par-es costs are treated as a cost of doing business Through a customer charge for electricity and from energy u-lity revenues for gas and district hea-ng Public goods charge and natural gas DSM charge; addi-onal funding through rate cases System benefits charges, funding from carbon and capacity markets, plus other funding sources System benefits charges, funding from carbon and capacity markets, plus other funding sources Volumetric wires charge to customers and funding from carbon market Cer-ficate trading and carrying over prices to consumers Source: RAP 2012, ENSPOL 2015, ACEEE

6 Cost of EEO schemes Figures out of early evaluation (capital and administrative costs).. France: 0.4 Eurocent / kwh Denmark: 0.45 Eurocent / kwh Italy: 1.7 Eurocent / kwh UK: 0.7 Eurocent / kwh (Lees 2012, Rosenow and Galvin 2013) BELOW energy price so highly cost effective!

7 Some issues? Transparency (some countries need to report their costs) What type of costs (administrative, transaction, investment, marketing?) What is the incentive to report accurately costs (it unveils strategy and is a negotiation point for target setting)

8 Contact Details Project Coordinator Dr. Vlasios Oikonomou Tel: Dissemination Leader Assistant Prof. Alexandros Flamos University of Piraeus Research Center (UPRC) Website: Tel: