Consultation on the Implementation of the Energy Efficiency Directive

12th November 2013
Submission Summary

An Taisce welcomes this consultation period on the implementation of the Energy Efficiency Directive and the opportunity to make a submission with regard to same. Please acknowledge receipt of this submission. There are two attachments accompanying the submission below, an implementation guide by leading progressive stakeholders at a European level, and a proposal by Mr Jim Scheer (set out in his 2012 TCD thesis) to re-allocate the approx. €450m expended each year on energy subsidies in a way that lowers costs to households while delivering close to €3 billion in savings to taxpayers over the longer term. Allied to the work below, we commend both documents to you. With regard to any of the proposals outlined or endorsed, please do not hesitate to contact us to discuss further.

Ireland has major issues in energy efficiency which it needs to address in power generation, home heating and transport. However, the current National Energy Efficiency Plan (NEEEAP 11) is deficient in terms of legal force, scope, timetables and targets.

Regrettably, the entire basis of the consultation document on the EED, and what should be its primary objective - to secure the legal implementation of the Directive - is undermined by the statement in the opening paragraph that: This consultation focuses on the key articles of the Directive, which will have a substantive impact on energy efficiency in Ireland. This document does not definitively identify Ireland’s position in relation to these articles but is intended to stimulate input and comment on what is the best implementation strategy for Ireland (emphasis added) Without accurate data on Ireland’s current position in relation to the Directive, it is difficult to formulate the legal, fiscal, policy measures - timetabled and targeted - needed to meet the requirements of the Directive. However, European Environment Agency comparison tables give figures for energy consumption levels, including Ireland. Annual imports of fossil fuels come to €6.5 billion, and in terms of fossil fuel and peat dependency, Ireland is performing very badly on a European per capita comparison, both in energy consumption and emissions. Comparisons with Austria and Germany are particularly striking. Ireland’s total fuel consumption in 2010 was 12 MTOE1, 66% above 1990 levels. While EPA data published in October 2013 shows a reduction of 5.9% in 2012 (on 2011 emissions), this is attributed to a milder winter, and not efficiency measures.

The fundamental problems of a poorly insulated national building stock and inefficient fossil fuel use, both residential commercial and public sector, allied to high levels open peat and coal fires, taken together with individual oil and gas central heating systems across the residential sector, are not being remotely grasped. Combine this with the failure to provide an exit strategy for ceasing peat and coal use in electricity generation and the work ahead for Minister Rabbitte and his Department is significant.

The consultation document states that: energy efficient gains achieved to the end of 2012 account for over 36% (11,350GWWh) of the 2020 target This target does not meet the level of efficiency gains needed to contribute to Ireland’s EU target – to secure an overall 20% reduction of emissions by 2020, or the higher targets which will be required if an effective climate agreement is to be secured by 2015. In fact, the strategic planning for the much higher emission reductions that will be required post 2020 is not yet remotely in place. While the EED is limited in scope (and has a major deficiency in not including land sea and air transport), it obliges member states to translate elements of the European Energy Efficiency Plan into binding measures to: ensure the achievement of the unions 20% headline target on energy efficiency and to pave the way for further energy efficiency improvements beyond 2020. Ireland’s second national Energy Efficiency Action Plan was published in late 2012, and contains 97 actions to deliver a 20% energy saving by 2020, with a 33% target for the public sector.

1 Million Tonnes of Oil Equivalent

This target is inadequate since it does not adequately address Ireland’s high per capita energy consumption, and the level of emission reductions in the heating and transport sectors that will need to be met to achieve the EU 2020 target. An Taisce asks if Minister Rabbitte supports the position held by the Minister for Agriculture, namely, that precious little in the way of reductions in emissions is to be delivered from agriculture by 2020? Low levels of emissions reduction in agriculture would need to be offset by higher CO2 savings from energy efficiency and transport. By promoting Food Harvest 2020, Minister Coveney does not appear to acknowledge that agricultural emissions should be at all reduced. The policy, until it is amended, is on track to deliver at least an 8.5% rise in emissions and Food Harvest 2020 has already resulted in a 3% increase of agricultural emissions in 2012 over 2011 levels. Without addressing these policy failures – and quickly - the prospects for investment and jobs that might result in an effective drive for energy efficiency in Ireland will remain pathetically low. The weak EED targets further disregard the reality that any effective future climate agreement must be based on binding per capita consumption and emission targets.

 Article 3 - Setting indicative national energy efficiency targets for 2020; Research suggests that the public sector 33% target is not disaggregated among divisions or levels of the public sector. Real implementation requires buy-in from all divisions and levels of the public sector. To date energy emissions and savings targets are not soundly based as the baselines remain largely unknown.

 Article 4 The Article requires a long-term investment strategy to mobilise investment in the renovation of the national stock of public and private buildings but in Ireland budget cutbacks are undermining energy and emission policy implementation. The overriding priority for management in many parts of government is on saving short-term costs. There is a critical need for technical and investment expertise to plan and achieve savings - but it is badly lacking in the public sector.

 Article 5 - 3% renovation of public buildings; The ‘default approach’ is to be preferred because a publicly available inventory is created against which progress can be measured. The’ alternative approach’ using “standard values” is less likely to deliver actual savings.

 Article 6 - Purchasing of high energy efficiency products, services and buildings by public bodies; We have not had sufficient time to develop our response on this item; we will continue working on this and revert as soon as we can.

 Article 7 - Energy efficiency obligation schemes; We do not agree with the approach set out (viz. 7.1). Option A should be chosen as it is clear and definite and does not allow complicated counting from different schemes. If option A imposes “too great a challenge”, then it is Ireland’s ambition that should be questioned. We believe that energy and emission-saving goals are vital in creating low carbon jobs and prosperity in the face of the challenges of global warming and energy dependence. Currently, a critical failing in building energy management for public and private sectors is that energy suppliers are only providing energy and cost data separately causing serious delays in energy accounting. This means that effective energy management is not possible. This data problem could be easily addressed by Government insisting that all billing data from all energy suppliers is done on a per building basis and contains all cost, energy and emissions data on a single line of digital data according to a prescribed layout. Any energy supplier unwilling to provide bills in this format should be unable to provide energy to any building. This change should be made immediately.

 Article 8 - Energy audits and energy management systems; The article requires MS to produce high quality energy audits for buildings (see 8.1). In Ireland public buildings over a threshold size require annually updated Display Energy Certificates (DECs). [Note on p5 the consultation is incorrect in saying the threshold continues to be 1000m2; it is 500m2 after 9 Jan 2013; http://www.seai.ie/Your_Building/BER/Large_Public_Buildings/DEC_FAQ/#whatis] Regarding 8.2, at present many such buildings lack such certificates and this should be rectified immediately. DECs are comparatively easy to assess, requiring only the total area and the electricity and heating bills. The actions proposed here (see 8.3 to 8.8) appear to be irrelevant and if carried out would create unnecessary bureaucracy. DECs are straightforward as a basic snapshot of energy usage from year to year. The key point of energy audits is that payment should be linked to actual results. Before work takes place energy audits need to be undertaken to establish baseline recording of energy usage and costs needs to be carried out. Any energy efficiency work should be carried out by an unrelated company and such work should be related to results using energy performance contracts. However, it is essential that public sector bodies have the technical and investment capability to judge the likely value of such contracts so that the cost/energy/emissions savings made are as large as possible.

 Articles 9 to 11 - Metering and informative billing; As above – please see the submission points regarding Article 7 - a key failing in almost all building energy management for public and private sectors is that energy suppliers only provide energy and cost data separately causing serious delays in energy accounting. This renders effective energy management impossible. This data problem could be easily addressed by Government insisting that all billing data from all energy suppliers is done on a per building basis and contains all cost, energy and emissions data on a single line of digital data according to a prescribed layout. Any energy supplier unwilling to provide bills in this format should be unable to provide energy to any building. This change should be made immediately.

 Article 14 - Promotion of Combined Heat & Power (CHP) and District Heating & Cooling (DHC); Please see below.

 Article 15 - Efficiencies in energy transmission and distribution. Please see below. Barriers to Energy Efficiency Targets in Ireland Current Irish policy and fiscal measures for energy efficiency are undermined by:

 the lack of climate legislation with legally binding sectoral targets,

 An inadequate level of carbon tax and exclusion of sod peat, the most inefficient emission-intensive heating source in terms of level of GHG emissions per kW unit,

 The failure to ring-fence carbon tax revenue in energy efficient investment,

 The failure to link the Budget 2014 home improvement tax relief scheme to energy efficiency, and

 The lack of any significant investment programme in insulation and efficient heating systems households in fuel poverty dependent on Social Protection fuel allowances with an annual fuel grant of €211 million, with total annual fuel subsidies standing at in or around €450m. Please see the attached document in which Mr Jim Scheer sets out a proposal to enhance energy efficiency while delivering an overall saving to taxpayers’ as a whole (attachment titled Scheer proposal).

 Lack of effective support for CHP and district heating schemes,

 Lack of support for local area, street or community energy co-ops, and

 SEAI grant-funding of new gas and oil heating boilers perpetuating fossil fuel dependence

Recommendations

Legislation  Binding annual greenhouse gas reduction targets are required as part of effective national climate change legislation that covers both mitigation and adaptation, and has targets for all key sectors, including electricity generation heating and transport.

Regulation  Government needs to impose effective legal and regulatory provisions to meet progressive energy efficiency targets and, in particular, set a terminal date for the sale and distribution of coal as well as the sale and distribution peat / peat-based fuel. There is a need to bring to an end the extraction of all sod peat, exempting only hand-cutting in areas without drainage and where there is sufficient natural recovery capacity. Standards  Enhance efficiency standards for all heating and ventilation systems, and all energy systems appliances and installations in all sectors.  Enhance thermal performance installation building materials installation standards, together with inspection and certification, to meet progressive energy efficiency targets.  Adopt progressive European standards (most likely drawn from Germany / Austria or the Scandinavian countries).  Put in place standards for the production, cultivation and use of biomass - both imported and domestically sourced - to avoid land-use conflict with biodiversity and food production and low carbon cycle rating

Fiscal  Ireland needs to takes leadership by phasing out and removing all its own fossil fuel subsidies. Further, a carbon accounting measure that taxes all fuel and energy sources, including biofuels and biomass, according to carbon intensity, covering all stages of the energy production process, is required. This entails backing a strong Fuel Quality Directive at EU level, and giving active support to progressive countries on EU biofuels reform (the Renewable Energy Directive).  Extend carbon tax to peat sod extraction.  Introduce a tax credit (similar in concept to the Budget 2014 Home Renovation Incentive Scheme) but at the 20% rate to provide a tax relief for home energy enhancement. Sectoral Actions  Residential: o Public Housing Stock  Adopt an annual clear target for retrofitting public housing stock - both local authority housing and voluntary housing associations - with an appropriate annual budget and measurement of annual emission savings on tenants’ fuel subsidy. o Households Dependant on Social Protection Fuel Allowances.  Ensure an adequate annual budget and support of energy efficiency measures for old age pensioners and other households dependant on fuel allowances, together with measurement of annual emissions-savings and reduction of fuel subsidy (see Scheer proposal). o Other Housing Stock  Recognise varying income levels, levels of fuel poverty, know-how levels, levels of efficiency and thermal performance and capacity of households to invest in the proposed ‘pay as you save’ (PAYS) scheme to be introduced after 2013.  Ensure that an appropriate annual capital fund is in place for energy efficiency through a combination the National Pensions Reserve Fund and other financial institutions and pension funds.  Commercial/Industrial o Tax Relief Measures  To invest in energy efficiency contingent on appropriate standards.  Public Sector o Provide an adequate measure, allied with budgetary, technical, and implementation support so that state and public bodies, local authorities, the HSE and schools achieve energy efficiency targets, including investment in retrofitting and alternative heating systems. Support of neighbourhood / community schemes  Provide a support structure in urban and rural areas for residents, landowners and business to initiate area-based energy efficiency schemes and energy sourcing from a range of low carbon sources.  Support pilot schemes that provide alternatives to fossil fuel in the form of low-carbon energy sourcing, biogas combined heat and power, for example.

Following European Best Practice on EED Implementation The Coalition for Energy Savings, which represents more than four hundred associations, some 150 companies, 15 million supporters, around two million employees, and around 1,000 cities and towns across thirty European countries, has produced the EU Energy Efficiency Directive (2012/27/EU) Guidebook for Strong Implementation. This outlines a range of measures for the implementation for the Energy Efficiency Directive. Please find it attached. Each area, issue and measure in this document should be carefully evaluated for application to Ireland.