Reducing energy consumption with energy efficiency certificates

energy efficiency, energy consumption, energy saving, energy transition

Last October, the French Court of Auditors presented its report on energy efficiency certificates (EEC) to Prime Minister Jean-Marc Ayrault, thus reopening the debate on this energy consumption reduction scheme.

Less than ten years after their inception, EECs have been criticized for their poor performance. This overview shows that there is still room for improvement.

Forcing providers to save energy

Created in 2005 as part of the “POPE” energy bill, EECs are delivered to various entities by the ministry of ecology, sustainable development and energy in recognition of their efforts to save energy. They provide incentives for non-renewable energy providers to implement energy consumption reduction measures. These companies must achieve energy efficiency results on a three-year basis: if a certain amount of energy has been spared, they will be granted a commensurate number of EECs; if this is not the case, they must pay a two-euro cent penalty for every kWh missing. More specifically, three-year targets are defined and attributed to providers according to their respective sales volumes. Energy companies can reach these targets and obtain certificates following direct action or by paying other energy-saving entities, such as households. In 2011 the bill was extended to fuel suppliers.

The measurement unit for energy savings achieved is kWh “cumac” (which stands for “cumulative amount and updated value”). According to the court’s report, p.23, “the number of kWh cumac saved through the use of an efficient device corresponds to the cumulative yearly energy savings achieved over the course of its lifetime”. One EEC corresponds to an energy consumption reduction of 1 kWh cumac. Energy providers can reduce energy consumption in various ways, for instance by providing financial incentives to households to purchase energy efficient equipment or by offering cheap/free energy efficiency audits for equipment or housing.

Measuring energy savings, a complex task

Although the use of EECs is more and more widespread, their effects are rather limited and above all uncertain. In its report, the court of auditors stresses how difficult it is to assess the actual impact of EECs on energy consumption, as 57% of providers surveyed in 2013 by ADEME (French agency for the environment and energy management) refused to share their results.

The court of auditors estimates that 4 million housing energy efficiency interventions will have taken place by the end of December 2013, i.e. around 2% of existing housing every year since January 1st, 2011. These works are thought to have enabled savings of 78.8 TWh between 2006 and December 2013, “which is equal to the annual heating consumption of 6 million housing units” (p 91).

The court of auditors looked not only into the number of interventions, but also into their cost, i.e. “the cost-efficiency of EECs, both for energy suppliers and for the government” (p 95). According to the court, from January 2006 to December 2013 the average cost of an EEC was 0.4 euro cent per kWh cumac, “which represents an overall cost (for suppliers) of 1.4 million € over a period of 4.5 years to finance the 345 TWh cumac of the second period” (p 109).

Room for improvement to increase the efficiency of EECs

However inaccurate and theoretical these estimates may be, results are deemed mediocre. Energy professionals have voiced numerous criticisms of the EEC scheme, claiming that it was obscure and too complex, and therefore inefficient. For instance, the UFE (Union Française de l’Electricité, French trade association of the electricity sector) conducted a study in 2012 which showed that barely 35% of the energy consumption reduction goals of the Grenelle plan could be met by 2020: “The current energy policy schemes will not meet the residential and tertiary final energy consumption reduction targets established by the Grenelle 2020 plan (137 TWh will be missing)”.

In response to this situation, the court’s report includes several recommendations in order to increase the efficiency of EECs and address criticisms about their complexity and the conditions under which they are granted. For instance, the court recommends that compulsory ex-post surveys should be conducted among energy suppliers to assess how much energy was actually saved through EECs. Combined with a three-year assessment of certified interventions, this could result in a fundamental shift from a means-oriented to an outcome-oriented approach, “excluding from the scheme those interventions which are out of sync with regulation or not efficient enough, for instance because of changes in the housing stock or market” (p 92).

For further information:

  • The report by the Court of Auditors on energy efficiency certificates published on 16 October 2013.
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