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Category: Energy efficiency

 

 

Entrepreneurs who wish to prepare for the implementation of the new energy efficiency directive and become “early movers” or even to establish potential consequences, in particular, costs for adjustment to the prospective provisions, may face some difficulties.

Beneath a few potential dilemmas of crucial importance.

 

 

 

It is difficult at present to formulate suggestions for precise actions when it comes to introduction, at the level of enterprises, of measures envisioned by the new directive or to recommend for specific methods of adaptation.

 

The legal act giving rise to these problems is the European Commission’s Proposal for a Directive of the European Parliament and of the Council on energy efficiency and repealing Directives 2004/8/EC and 2006/32/EC {SEC(2011) 779 final} {SEC(2011) 780 final} (COM(2011) 370 final) published on 22 June 2011.

The entry into force of the said Proposal (Member States will be obliged to bring into force the laws, regulations and administrative provisions necessary to comply with the said Directive within 12 months after the entry into force of the new legal measure) will mean the significant change in the legal environment, especially for energy market.

The new directive intends to repeal the Directives 2006/32/EC and 2004/8/EC.

 

The obstacles to map the consequences (financial including) as regards business activity of the enterprises arise from several options of crucial significance leaved by draft regulatory measure.

 

1. Who should prepare for new burdens: energy distributors or retail energy sales companies?

 

The first dilemma is that the new draft directive generally obliges each Member State to set up an energy efficiency obligation scheme but does not sufficiently precise which category of business entities should be burdened with the new costs. Pursuant to the Proposal the said scheme should ‘ensure that either all energy distributors or all retail energy sales companies operating on the Member State's territory achieve annual energy savings equal to 1.5% of their energy sales, by volume, in the previous year in that Member State excluding energy used in transport. This amount of energy savings shall be achieved by the obligated parties among final customers’.

 

According to the Proposal for the new directive 'energy distributor' means a natural or legal person, including a distribution system operator, responsible for transporting energy with a view to its delivery to final customers or to distribution stations that sell energy to final customers and 'retail energy sales company' means a natural or legal person who sells energy to final customers.

 

It follows that we know so far the new regulatory requirement of annual energy savings equal to 1.5% of energy sales (by volume) is at stake but the sphere of the entities obliged (among the two categories mentioned) is leaved to the discretion of the Member States.

 


 

 

2. What proportion of the energy efficiency improvement measures put in place by the obligated parties must be independently verified?

 

According to the proposal for a directive Member States should put in place control systems under which at least a ‘statistically significant’ proportion of the energy efficiency improvement measures put in place by the obligated parties is independently verified.

It is obvious that the verification means financial costs for obligated parties and the extent of this obligation influences on higher or lower future service expenditures. On the ground of the literal wording of the Commission’s Proposal we can only note that the scope for the verification obligation should be ‘statistically significant’ but what does this phrase mean is so far an open issue.

 


3. Who could be ‘other third party’ (different from energy service providers) achieving energy savings eligible to be counted towards the obligation of the obligated parties?

 


Another norm of the Proposal for the new directive which could influence on adaptation choices of the business entities is the provision that permits obligated parties, covered by the energy efficiency obligation scheme, to count towards their obligation certified energy savings achieved by energy service providers ‘or other third parties’.

 

And despite including in the regulatory text the legal definition for ‘energy service provider’ (it means a natural or legal person who delivers energy services or other energy efficiency improvement measures in a final customer's facility or premises) there are no clear legislative clues as for potential ‘other third parties’. Such a regulatory gap may effect in a situation where business entity incurring costs for energy efficiency measures does not qualify for energy efficiency obligation scheme only because doubts as regards merits of the ‘other third party’ which achieved them. Maybe establishing an accreditation process (which according to the draft Proposal must be clear, transparent and open to all market actors, and that aims at minimising the costs of certification) solves this ambiguity and uncertainty. And this is the point for consideration for Member States implementing the future directive.

 

4. Will alternative measures be decided by Member States?

 

When it comes to the implementation process by the Member States the fundamental uncertainty at the level of adaptation to the prospective directive by market actors is the alternative leaved by the said regulatory measure to Member States which may opt to take other measures to achieve energy savings among final customers.


The Commission’s Proposal only requires in that regard that the annual amount of energy savings achieved through this approach be equivalent to the amount of energy savings described above.

 

This ambiguity will, however, be cleared, by 1 January 2013 at the latest, because Member States opting for this option should notify the Commission by that date.