Comments Off on ENSMOV Plus shares experience to meet the challenge of higher energy savings targets
AMSTERDAM — Energy savings and efficiency have become central topics in the last years, having faced multiple crises. This has made many reconsider how they consume energy individually and globally. In European Green Deal, the EU is clearly increasing its climate ambition and aims at becoming the first climate-neutral continent by 2050.
Article 7 of the Energy Efficiency Directive (EED) is a key element of the European Union’s Fit for 55 Package. To meet the EU’s 55% net emissions reduction target and address energy poverty, national energy efficiency policy measures will be essential complements to EU law, such as eco-design and carbon pricing regulations.
With the EED recast, Article 7 will soon become Article 8, and will keep requiring Member States to achieve final energy savings. The changes brought by the EED recast are under final negotiations. What is clear already is that, likely from 2024 on, the rate of energy savings required will significantly increase, a share of these savings will need to be delivered amongst energy poor households (or other priority groups), and savings from new fossil fuel technologies would be excluded.
This means that Member States will need to ramp up the ambition of their policy measures, target specific end-users and shift the focus of technology support towards low-carbon options. These ambitious changes are entirely consistent with the 55% target, the EU Green Deal and the Renovation Wave, but they are also challenging. To meet these challenges, they can build on successes of the first Art. 7 EED obligation period (2014-2020) and continue to improve evaluation, measurement and verification (EM&V) practices to provide confidence in the impacts of policy measures.
This is why the ENSMOV Plus project will therefore play a central role by helping Member States to better navigate policy development, implementation and evaluation, and to learn from each other. This will be done through experience-sharing activities and resources tailored to the achievement of Article 7 EED objectives. Launched in December 2022, ENSMOV Plus is a three-year European project of the LIFE programme and builds on the previous ENSMOV project with a strong consortium that includes national energy agencies, national associations of stakeholders and research institutes from 12 Member States: Austria, Croatia, France, Germany, Greece, Hungary, Italy, Lithuania, the Netherlands, Poland, Romania and Slovenia.
“Based on the Commission’s report on the achievement of the 2020 energy efficiency targets, 21 Member States achieved their headline target in terms of final energy consumption not to exceed in 2020. And the EU headline energy efficiency target for 2020 was achieved. But this was partly due to COVID and the resulting lower energy demand,” says Jean-Sébastien Broc, coordinator of ENSMOV Plus at IEECP.
“The picture is even more mixed when looking at the Article 7 target about cumulative energy savings over 2014-2020: 14 Member States met their energy savings, with seven of them overachieving their target by more than 20% (and even sometimes by more than 50%). Whereas ten other Member States did not meet their energy savings obligation, with five of them missing their target by 25% or more. The over-achievements show that doing more is feasible, whereas the under-achievements remind us that not all policies have been successful. Every country and stakeholder can learn from what happened in other countries, provided that experience is analysed and discussed. This is what ENSMOV and now ENSMOV Plus are doing. In addition to make state-of-the-art knowledge easy to find and acquire, the project provides a unique forum for public bodies and private stakeholders from all EU27 countries to exchange.”
National authorities and market stakeholders have welcomed the opportunity to share experiences, and discuss challenges and solutions related to energy efficiency obligation schemes (EEOSs) and alternative measures. The previous ENSMOV project organised more than 100 events (EU & regional workshops, webinars and national meetings), gathering a total of more than 1,500 unique participants.
ENSMOV Plus will provide solutions to facilitate and expand sharing of knowledge and experience amongst Member States for the implementation of policies under Art.7 EED, and will further develop the already existing knowledge transfer platform.
Comments Off on Clean heat standards: New tools for the fossil fuel phaseout in Europe
Europe is heavily reliant on fossil fuels in the heating sector. The EU has set itself a goal of deploying 30 million additional heat pumps by 2030. To advance the transition away from fossil fuels in the heating sector, the EU and its Member States have recently proposed or agreed on several heat-related policies. This includes an emissions trading scheme for greenhouse gases from heating and transport. The European Commission also announced that it will propose a revision of ecodesign rules for heating appliances, meaning a de facto ban on the sale of standalone fossil fuel boilers by 2029. Despite these positive actions, additional policy measures are needed to achieve rapid, effective and fair decarbonisation of heating.
This paper explores how novel policy tools called ‘clean heat standards’ could reinforce the EU framework for heat decarbonisation. Clean heat standards place a quantitative target on market actors, such as energy network companies, energy suppliers and manufacturers of heating equipment, to decarbonise heating and provide some flexibility in how to achieve it. This definition captures different tools, including some already discussed or in use in France, Ireland, the United Kingdom and the United States. These tools can complement other clean transition policies, for instance appliance standards and bans can directly rule out certain technologies from the market, while clean heat standards could provide a positive target for market actors to meet.
Clean heat standards, coupled with complementary policies, can help accelerate the transition away from fossil fuel heating. RAP offers recommendations to help decision-makers make the most of these tools.
Comments Off on Regret-ready: A briefing on United Kingdom proposals for the mandating of ‘hydrogen-ready’ gas boilers
The government of the United Kingdom is currently consulting on whether it should mandate that all new gas boilers sold from 2025 be ‘hydrogen-ready’ — that is, they can potentially be converted to run on pure hydrogen in case the gas network is ever converted. This policy change has been proffered as a ‘low-regrets’ policy change.
The government is expected to take a decision on the use of hydrogen heating in 2026. Until such a decision is made, the mandating of ‘hydrogen-ready’ boilers seems to be a case of putting the cart before the horse. The vast majority of independent analysis suggests only a niche role for hydrogen in heating, with heat pumps and heat networks by far the most cost-effective technologies. Far from a ‘low-regrets’ option, the proposed mandate could create risks for heat decarbonisation and long-term disadvantages for consumers. There is a major risk of greenwashing leading to consumer confusion and delay, a risk that boiler prices increase and the potential for government to end up in a heat decarbonisation ‘blame-game.’
This brief details the risks of a ‘hydrogen-ready’ boiler mandate being made before the government’s decision on the use of hydrogen heating. The brief suggests that if hydrogen heating should be found favourable in 2026, only then should mandates around hydrogen boilers be considered and even then only in conjunction with a heatmapping process. Until such time, the proposed mandate of ‘hydrogen-ready’ boilers is also ‘regret-ready.’
Comments Off on To Serve Everyone, IRA’s Climate Grants Need Inclusive Participation
As expansive and even overwhelming as the Inflation Reduction Act (IRA) seems to be, it is important to remember that the IRA authorizes a number of different programs that will benefit states — programs, for example, that may come out of the Department of Energy to state energy offices, or from the Environmental Protection Agency (EPA) to state environmental agencies.
The EPA’s Climate Pollution Reduction Grants program (CPRG) is likely to be some of the first IRA funding that states will see. The CPRG will provide states with a significant springboard to reduce their carbon emissions. Before suggesting how states can make the most of this, let’s take a moment and outline the program.
What Is Clear: An Opportunity for States
The CPRG is a two-part program. Part 1 ($250 million) provides formula grants to every state. This will support states to develop a carbon reduction plan. Part 1 is on its way; the announcement and guidance will be coming out on March 1, and a Notice of Intent to Participate from states will be due March 31.
Part 2 ($4.6 billion) sets out a program of additional grants, funding for states to carry out elements of their plans and will probably roll out in early 2024. While Part 1 provides every state money for planning, Part 2 will require states to compete for funding to support the implementation of their carbon reduction programs.
For states that have yet to develop climate plans, this is an opportunity to use federal funding to explore ways to modernize your state’s economy. More specifically, this is a chance to look at the ways that your citizens, for example, manufacture products, grow crops, transport themselves, and heat and cool their homes — all sectors of your economy that produce significant carbon emissions.
In case a state doesn’t think that GHG planning is important, the CPRG provides for political subdivisions within a state, such as municipalities or local air agencies, to participate. Even where states have already developed climate action plans, these federal dollars could be very useful in updating and improving existing plans.
What Is Not Clear: Support for All Communities
While the CPRG will support states in developing carbon reduction plans, it is not clear the degree to which the program will support improving the outreach and public engagement necessary to ensure that a plan is equitable and that it will serve all communities.
This is a challenge for even successfully developed state plans. For example, in 2021, the Vermont Climate Council, spent over 10 months developing the Vermont Climate Action Plan. This was a significant undertaking by state agencies and citizens and the plan is an admirable start. However, the plan’s authors acknowledge in its preface that robust marginalized community representation was missing from the stakeholder participation:
This initial Climate Action Plan represents one of the first public processes in the State of Vermont to acknowledge and try purposefully to incorporate equity and the principles of a just transition in both its development and outcome — but we know we fell short. During our meetings and outreach, too few Vermonters had their voices lifted up to join the voices of those who have also participated in similar endeavors in the past. In our development of pathways, strategies, and actions, we faced challenges creating programs and policies organically in partnership with marginalized communities and individuals in Vermont and to envision new ways to ensure a just transition for all of us. As we continue forward, we have a strong desire to engage more Vermonters deeply and equitably in this transition, recognizing the historical and present harms and systemic injustices that are at work here in Vermont and elsewhere.
In developing its 2021 Climate Action Plan, Vermont saw first-hand that these working Vermonters did not have the time or capacity to participate and engage. This was not because they weren’t notified or encouraged to participate. People are busy earning a living. And their representatives are also challenged to participate because they work on many other pressing equity-related topics besides climate mitigation, including housing, transportation, policing, food, racism, and education. Frontline advocates generally recognize the importance of this work, but simply don’t have the bandwidth or the means to meaningfully participate.
Hearing from and consulting with marginalized communities isn’t just a matter of equitable inclusion — it’s essential to achieve the goals of climate policies, period. We need programs that are able to deliver GHG savings in all communities and to all income levels. Greater inclusion in planning will yield better, more comprehensive initiatives, in addition to more equitable program designs and benefits.
So, hopefully the EPA will recognize this need and enable states to provide direct support for community participation in CPRG-funded state planning efforts. The agency will have to make that determination.
If the EPA determines that the IRA does not allow for this, then hopefully the agency will still recognize the need and identify any other resources that it might have to help states to support this critical piece of carbon planning. The EPA may have available other funding for communities that are disproportionately impacted by air pollution and climate change. For example, there is air monitoring funding, along with environmental and climate justice block grant opportunities, that may support this work and can be stacked with CPRG funding. Finessing support for intermediaries like civic organizations or faith-based groups might also be helpful in incorporating the voices of frontline communities.
Apart from the question of the federal funding for state carbon planning, states agencies could still ask whether or not their public engagement is as thorough as it might be or whether it needs to be more welcoming to the public to be truly representative. RAP’s Public Access and Participation Plans: A Starter Kit for State Agencies is a document that outlines simple steps that state agencies can take to improve their outreach, and public participation.
Comments Off on Damali Rhett Harding Named Acting U.S. Program Director
MONTPELIER, Vt. – The Regulatory Assistance Project (RAP) announces that Damali Rhett Harding has been named acting director of its U.S. program, effective March 17.
Harding, a highly regarded expert in renewable energy and electric utilities, joined RAP last year as the U.S. program’s managing principal. As acting director, she will succeed Mandy Mahoney, who is stepping down to pursue further opportunities in energy and environmental work.
”For 30 years, RAP has been the leader in creating data-driven policy and analysis in support of the clean energy transition for regulators, and I am honored to lead this transition,” Harding said.
She previously worked for Oracle as an account strategy and relationship director, advising utilities such as Duke Energy and National Grid on behavioral load shaping, customer engagement strategies, and demand response management.
Harding also served as executive director of the Energy Co-op, a Philadelphia-based nonprofit that provides renewable energy to thousands of homes and businesses in Pennsylvania. She currently holds seats on the board of directors for the Co-op and the American Association of Blacks in Energy.
“Damali’s organizational expertise and deep understanding of the energy transition landscape have been assets to the U.S. program,” RAP President and CEO Richard Sedano said. “I am pleased to have her step into this role and lead the team as we continue to provide innovative thought leadership and crucial support for regulators and policymakers.”
Harding holds an MBA from the Tuck School of Business, is a proud member of Delta Sigma Theta Sorority, Inc., and in her spare time works passionately to eradicate energy poverty.
Comments Off on Staying the course: Keeping the key role of the energy savings obligation in focus as negotiations reach their endgame
As we move towards the endgame in the Energy Efficiency Directive (EED) revision, what should negotiators be considering as they recraft the key energy saving provisions — the energy savings obligation?
The right level of ambition …
As part of their response strategy to the energy crisis, EU legislators have committed to finalise the revision of the EED, the main legislation to deliver energy savings. Legislators are planning to meet on 2 March to advance this discussion. Last year, the Commission proposed a 13% energy efficiency target for 2030 and urged legislators to align the energy savings obligation (Article 8) with the REPowerEU goals.
The Russian invasion of Ukraine, the consequent disruption in fossil fuel supplies and the resultant increase in energy prices make action on energy efficiency more urgent than ever. The Council’s position is to gradually increase ambition over time, when what is needed is a ramp up in ambition now.
As political deadlines to resolve negotiations loom, it is important that last minute, seemingly innocuous changes do not undermine the good work put in over the preceding months.
This is particularly problematic with provisions such as Article 8, with its highly technical measurement processes set out in Annex V of the directive. The one non-negotiable technicality is the principle of additionality to EU law. Without this principle, the energy savings obligation will not play its role in meeting the Fit for 55 and REPowerEU targets, endangering their achievement. For example, energy savings from EU product and equipment standards require minimum energy performance levels that cannot be counted towards Member States obligations.
As political deadlines to resolve negotiations loom, it is important that last minute, seemingly innocuous changes do not undermine the good work put in over the preceding months.
The introduction of a new EU Emissions Trading System (ETS) does not significantly impact the delivery of energy efficiency policy measures under Article 8. During the most recent obligation period (2014-2020), countries reported numerous policy measures that saved energy covered by the current EU ETS — amongst both energy intensive industries and electricity consumers. The ETS meant that subsidy rates might have been a little lower than otherwise needed.
The extension of emissions trading to other energy sources used in buildings, transport and industry, will not significantly shrink the amount of savings that Member States can achieve through their national energy efficiency schemes. Indeed, Article 8 is the perfect complement to ETS 2. Emissions trading internalises the external costs of carbon, while Article 8 tackles the other market failures and barriers affecting energy efficiency take-up.
Removing indefensible fossil fuel subsidies
In its Net Zero by 2050 strategy, the International Energy Agency said that there should be no new fossil fuel boiler sales after 2025. The EED proposal moves in this direction by excluding energy savings from fossil fuel combustion technologies in its proposal. This makes a lot of sense, especially in the buildings sector, where the continued subsiding of fossil fuel boilers creates stranded assets that will need to be removed before the end of their lifetimes as carbon emissions becomes scarcer in the 2030s.
For Member States wishing to fulfil their energy savings obligations through buildings sector policy measures, the fossil fuel exclusion makes very little difference. The most efficient fossil fuel boilers are only slightly more efficient than the minimum standard boilers required through EU Ecodesign regulations. Policy measures that persuade consumers to switch to electrically powered heat pumps deliver around 15 times the energy savings than even the most efficient boilers, making electrification policies a no-brainer from an energy efficiency standpoint.
Delivering a more equitable energy transition
The one area where the negotiators’ positions appear to converge is on the benefits of targeting energy efficiency actions amongst vulnerable groups. The Commission’s proposal requires a minimum proportion of energy savings to be made amongst energy poor, vulnerable or households living in social housing. This aligns well with the social objectives of the Fit for 55 Package, including the use of ETS 2 revenues through the Social Climate Fund.
All these issues must be considered as negotiators move towards finalising the legal text in March. Energy efficiency policies lie at the heart of a cost-effective and equitable Fit for 55 Package. An ambitious energy savings obligation is the way to ensure this happens.
Comments Off on How to solve the UK’s heat pump problem
With fossil fuel prices skyrocketing, emissions from homes in the UK stubbornly high and the price of clean electricity from renewables tumbling, it’s clear that we are not taking the right approach to heating our buildings. Heating, which is dominated by gas, makes up a large share of energy consumption and contributes 23 per cent of the UK’s greenhouse gas emissions, so tackling it is vital for both energy security and clean energy goals.
Government and much independent analysis identifies heat pumps as the key technology to replace gas boilers. The British government has committed to installing 600,000 of them a year by 2028. Yet while the number of heat pump installations is growing, deployment in the UK remains at very low levels.
Preliminary estimates for 2022 show that the UK installed only 60,000 heat pumps – equivalent to two heat pumps per 1,000 households. This puts the UK at the bottom of the European heat pump league table. In Finland, which tops the rankings, nearly 70 heat pumps per 1,000 households have been installed.
How can the UK become a European leader in heat pumps? The House of Lords’ Environment and Climate Change Committee has carried out an inquiry into the UK’s main heat pump support scheme, called the Boiler Upgrade Scheme (BUS). It concluded that the scheme is “failing to deliver on its objectives with a disappointingly low take-up of grants”; at the present rate only half of the allocated budget would be spent. The design of BUS is not perfect, but it has stimulated the market, even without any government promotion. After failed programmes such as the Green Deal and the Green Homes Grant, the UK can ill-afford yet another scheme that does not meet its potential.
Grant policies such as BUS are typical in all markets with significant heat pump deployment, but it is only one of many ingredients for a successful programme. When we analysed successful heat pump policies around the world, we found that in addition to funding programmes such as the BUS, three other ingredients are needed.
Ingredient one: the running costs of heat pumps need to be significantly lower than those of fossil fuel heating to encourage consumers to make the switch. While heat pumps are currently cheaper to run than gas boilers, the cost savings are relatively modest. The reason for this is that in the UK electricity is taxed for carbon emissions and the majority of levies for environmental and social programmes are attached to electricity bills. Gas and heating oil are subject to no carbon tax and much more limited levies. Several countries have faced similar problems and have begun to reform how they tax and attribute levies to energy, making heat pumps a much more affordable proposition. The UK government is working on this through its electricity market review but this is being held up by delays.
Ingredient two: market certainty through clear regulation and phase-out dates for fossil fuel heating systems. The International Energy Agency says no more fossil fuel heating systems should get installed after 2025 to meet net-zero targets. Many countries have adopted and announced such bans and once put in place, investment in heat pumps has followed. As the Lords committee points out, mixed messages around hydrogen for heating and the lack of clarity about the future of the gas grid is not aiding the transition away from fossil heating. Chris Skidmore MP was right to call for a firm end date for the installation of gas boilers in his net-zero review. The government should also firm up its proposals to ban fossil fuels in new homes and homes off the gas grid.
Ingredient three: wider co-ordination around heat pumps, alongside effective communication to consumers. As the Lords committee points out, 80 per cent of people in the UK have little or no awareness of heat pumps and almost two-thirds are not aware of the need to change their heating system as part of the journey to net zero. A well-designed and executed engagement programme that boosts the role for local authorities and local heating solutions is crucial.
The decarbonisation of UK heating was previously primarily a legal requirement. It’s increasingly clear, however, that it’s an economic imperative, too. Significant political capital is needed to reform the UK’s policy around heating, but that investment will return dividends. The sooner the system can be reformed, the better the returns will be.
The original version of this article first appeared in the New Statesman.
Comments Off on NOx Standards for Water Heaters: Model Rule Technical Support Document
RAP developed a model rule for use by U.S. state and local air quality regulators to reduce nitrogen oxide (NOx) emissions from water heaters. This technical support document was published to assist regulators and staff in understanding and making use of the model rule. It describes why water heaters are a significant source of air pollution, why NOx emissions standards are an excellent tool for reducing the environmental impact of water heaters and how those standards can promote electrification and market transformation. It also explains in detail the design and structure of the model rule.
Comments Off on Better, faster, stronger: A look into further electricity market reforms
The European energy crisis was not caused by the electricity market. But it sure made people pay closer-than-usual attention to its design. That is not a bad thing. The electricity market becomes ever more important as large swaths of the economy further electrify. The electricity market therefore needs to be fit-for-purpose. In this briefing, RAP lays out how the electricity market can deliver better, faster and stronger for the energy transition and the people living it.
Any follow-up to the crisis should aim to speed up the replacement of fossil fuels with renewables, demand-side flexibility, storage and energy efficiency. The focus of market reform induced by this crisis should be to elevate the demand side on par with supply-side resources and improve hedging in the market to alleviate the remainder of the ongoing crisis and prepare for the next. This requires boosting a new portfolio of longer-term market features to share risks and benefit consumers.
Here, RAP discusses the following advances in market design:
Short-term markets see location and scarcity
Forward markets allocate risks
Contracts for Difference are carefully designed and procured
Infrastructure planning and operation integrates sectors
Windfall profit taxation as the exception
Capacity remuneration mechanisms fit for flexibility
Comments Off on Climate Action is Energy Security: Recent Developments in the Power Sectors of India, China, and Europe
Significant progress has been made in the renewable energy sector, with wind and solar power making up a substantial portion of global power production, accounting for almost one-quarter of noncarbon-emitting generation. This is a considerable improvement from just a decade ago when they produced less than 1% of total global electricity. Furthermore, wind and solar power are now often the long term, least cost options, making them an attractive investment for countries looking to decarbonize their energy systems.
Despite the growing momentum towards renewable energy, global coal-fired generation still totaled a record high in 2021, up by 8.5% from the previous year. The lion’s share of CO2 emissions still come from countries committed to becoming net-zero carbon in the next few decades. Nonetheless, this article suggests that a decarbonized global power system is still possible and the transition can be achieved at a low cost while maintaining high levels of reliability.
To support this clean energy transition, the article discusses the power sector reforms that are currently underway in India, China and Europe. Despite their different institutions, history and power system setups, these regions share some common trends: they rely heavily on planning and recognize the value of demand-side resources. These regions offer promising pathways for power sector reform and they provide hope for a decarbonized energy future.
