Irmeli Mikkonen. 3rd. Thematic Seminar: Alternative Financing tools for sustainable energy. STEP PROJECT. INTERREG IVC. Limerick 21/03/2014

1. Voluntary Energy Efficiency Agreements in
Finland
STEP Thematic Seminar
21 March 2014 Limerick, Ireland

3. 21 March 2014 Irmeli Mikkonen, Motiva Oy
Energy Conservation Agreements 1997–2007
Energy Efficiency Agreements 2008 - 2016
• Voluntary, no legislative obligations
• A flexible tool to implement national energy and climate strategy and
some EU policies related to the energy efficiency
• An alternative and complementary means for regulation and taxes
• Benefits for companies and other organisations to join agreements
• Flexible, target oriented and systematic procedure to improve energy
efficiency and to save in costs
• Possibility to prove energy efficiency to environmental authorities
• Energy audits and energy efficiency investments for those joined the
agreement scheme are subsidised by the government
• Sites and organisations report annually their energy efficiency actions
3

4. 21 March 2014 Irmeli Mikkonen, Motiva Oy
ENERGY EFFICIENCY AGREEMENTS FOR OIL
SECTOR – HÖYLÄ III
ENERGY EFFICIENCY AGREEMENT AND ENERGY
PROGRAMME FOR MUNICIPAL SECTOR
ENERGY EFFICIENCY AGREEMENTS FOR BUSINESS
SECTOR 2008-2016
INDUSTRY
SERVICES
ENERGY SECTOR
MUNICIPALITIES
JOINT MUNICIPALITIES
DISTRIBUTION OF LIQUID HEATING
AND TRANSPORT FUELS
OIL HEATED BUILDINGS
ENERGY EFFICIENCY AGREEMENTS FOR PROPERTY
AND BUILDING SECTOR 2010-2016
HOUSING PROPERTIES
COMMERCIAL PROPERTIES
ENERGY EFFICIENCY AGREEMENTS FOR
TRANSPORT SECTOR
GOODS TRANSPORT AND LOGISTICS
PUBLIC TRANSPORT
ENERGY PROGRAMME FOR FINNISH FARMS
2010-2016
FARMS
Voluntary Energy Efficiency Agreements 2008 –
2016
4

5. Energy Efficiency Agreement and
Programme in Municipal Sector 2008 –
2016
MEE – Association – Motiva
FRAMEWORK AGREEMENT
Municipalities
Joint
Municipalities
Municipalities over 20 000 inhabitants
Joint municipalities over 20 000 MWh/a
Municipality’s
ACCESSION DOCUMENT
ENERGY EFFICIENCY
PROGRAMME (KEO)
Cities
Motiva’s
PARTICIPANT REGISTER
Municipality* joins
MEE – City/Municipality/Joint municipality
ENERGY EFFICIENCY AGREEMENT (KETS)
Municipalities 5 000–20 000 inhabitants
Joint municipalities 5 000–20 000 MWh/a can choose
between Agreement or Programme
ENERGY EFFICIENCY
AGREEMENT (KETS)
Signed by Municipality*
Signed by MEE
ENERGY EFFICIENCY
PROGRAMME (KEO)
AGREEMENTSCHEME
Municipalities
Joint
Municipalities
Cities
Municipalities over 5 000 inhabitants
Joint municipalities over 5 000 MWh/a
*also a City or a Joint municipality
21 March 2014 Irmeli Mikkonen, Motiva Oy 5

6. Continuous Improvement
– a Key Element in Agreements
Energy Efficiency Management System
5. Management review
4. Surveillance
and remedial action
1. Energy policy
2. Planning
3. Implementation and
execution
Plan → Do → Check → Act -principal
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7. Obligations of a Party Joining the Agreement
• Implementation of the Energy Efficiency Management System
• in energy intensive industry and power production
• Setting targets
• Energy audits and analyses
• Implementation of the Energy Conservation Plan
• Energy conservation investments
• Energy efficiency in all investments and procurements
• Development of follow-up system for energy consumption
• Training of employees
• Communication – internal and external
• Annual reporting
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8. Benefits of Joining the Agreement
• Improved Energy Efficiency
• Decrease in Energy Costs
• Less Environmental Impacts
• Subsidies for Energy Audits and Energy Efficiency Investments
• Verification of Energy Efficiency for Environmental Permits
• Better Public Image
→ Competitiveness Increases
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9. Establishing a Successful
Energy Efficiency Agreement Scheme
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10. Establishing a Successful Energy Efficiency
Agreement Scheme
• What is the timeline?
• Who are the key players?
• What kind of an agreement?
• What are the important steps of the implementation?
• How to monitor the results?
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11. Key Players and Their Responsibilities
21 March 2014 Irmeli Mikkonen, Motiva Oy 11
AUTHORITY
• large scale aims, big picture
• goals for agreements
• development
• legislation
• EU directive interfaces
• financial incentives
• evaluation
SECTOR ASSOCIATION
• goals for sector agreements
• development
• marketing, motivation
• monitoring, reporting
• participation in reporting
• co-operation forums
• guidance, training
PARTICIPANT / COMPANY
• goals for company
• energy use scan, audits
• saving measures
• energy monitoring
• training of staff
• reporting
• co-operation
• development of own performance
AGENCY / OPERATOR
• monitoring system development &
operation
• database, classification of data
• data collection, processing, evaluation
• reporting
• guidance, training
• marketing, motivation
CONSULTANTS, ENERGY AUDITORS
ESCOs
11

12. New
LTA
4
Evaluation
3
Implementation
2
Negotiation
1
Initiation
0
Scanning
Time-frame 12-18 months Time-frame 3…5…9… years
Development of financial incentives
Upkeep & developmentDevelopment of monitoring system
Visual image design
MarketingGeneral marketing Marketing of new LTA
Information dissemination
Support to participating companies
Development and pilot projects New projects
Timetable set LTA signed Evaluation
Go/no-go decision
for new LTA
Go/no-go
decision
Timeline of an Energy Efficiency Agreement
Source: IEE EU-LTA Uptake
21 March 2014 Irmeli Mikkonen, Motiva Oy 12

13. Successful Elements of a Long-term Agreement
(LTA)
Good communication
• between authorities and industrial associations
• associations represent their members
• co-operation, open discussion
Simple administration
• low costs without risking quality
• better cost-effectiveness
• different targets or even LTAs for energy intensive industry and SMEs
• learning by doing
Motivating targets
• financial incentives are needed to motivate participating companies
• challenging company-specific targets
• precisely phrased commitments
21 March 2014 Irmeli Mikkonen, Motiva Oy 13

14. Successful Elements in a Long-term Agreement
(LTA)
Efficient monitoring and reporting
• needed to prove the effectiveness of the LTA
• resources for developing, maintaining & running
• good guidelines and strict deadlines are needed
• web-based tool makes reporting easier
• good quality of input data is essential
Support to participants
• from association or operator
• financial support - direct or indirect
• marketing, reporting
• advice, tools, best practices, working groups…
• development projects !
21 March 2014 Irmeli Mikkonen, Motiva Oy 14

15. Successful Elements of a Long-term Agreement
Combining with existing activities
• administration / participant
• energy auditing, energy management
• existing energy efficiency subsidy schemes
• “LTA puts energy efficiency on the agenda”
Personal enthusiasm
• key player representatives & participating companies
• faith, commitment, expertise, communication skills
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16. Main Barriers and Weaknesses
• Uncertainty in government policies
• Uncertainties in target-setting and cost-effectiveness
• Lack of knowledge and tools
• Limited resources in administration
• Limited resources in participating companies
• Confidentiality risks
• Heavy reporting
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17. Interim Results 2008 – 2012
Industries Municipalities Property and Building
Sector
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19. 21 March 2014
Energy Efficiency Agreements 2008-2016
Agreement with Finnish industries:
• Covers now about 80% of the total use of energy in Finnish industry
• Energy intensive industry
• Almost 100% of the energy use
• Energy production
• More than 95% of electricity production
• Small and middle sized companies (food, chemistry, plastic, wood,
technology)
• Depending on a sector: 35–70% of the energy use
Irmeli Mikkonen, Motiva Oy 19

20. Annual Impact of Implemented Measures
Industries Municipalities Property and Building Sector
• savings in heating energy and fuels 5.85 TWh
• electricity savings 2.25 TWh
• savings in energy costs €344 million
• carbon dioxide (CO2) emissions reduced nearly by 2.5 million tonnes
The savings equal to 2.1 % of Finland’s total energy consumption (378 TWh
in 2012)
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21. Realised Energy Savings
Industries Municipalities Property and Building Sector
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7% IN OTHER SECTORS:
- Municipal Sector
- Energy Service Sector
- Property & Building Sector
- Private Service Sector
73%
INDUSTR
Y
20%
ENERGY
PRODUCTI
ON

22. Energy Efficiency Investments
Industries Municipalities Property and Building Sector
21 March 2014 Irmeli Mikkonen, Motiva Oy 22
10% OTHER SECTORS:
- Energy Service Sector
- Property & Building Sector
- Private Service Sector
46%
INDUST
RY
34%
ENERGY
PRODUCTION
10% MUNICIPAL SECTOR

23. Investment Subsidies Granted
Industries Municipalities Property and Building Sector
21 March 2014 Irmeli Mikkonen, Motiva Oy 23
25
72
151
304
434
0
50
100
150
200
250
300
350
400
450
500
0
10
20
30
40
50
60
2008 2009 2010 2011 2012
Investointituki, sopimusyritykset ja -yhteisöt yhteensä
Investointitukihankkeiden lukumäärä, sopimusyritykset ja -yhteisöt yhteensä
Investment subsidies
Number of Sites
Million € Cumulative

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121
414
832
1,204
1,623
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
1
2
3
4
5
6
7
8
9
2008 2009 2010 2011 2012
Energiakatselmustuki, sopimusyritykset ja -yhteisöt yhteensä (kumulatiivinen)
Energiakatselmuskohteiden lukumäärä, sopimusyritykset ja -yhteisöt yhteensä (kumulatiivinen)
Million € Cumulative
Subsidies
Number of Sites
Number of Energy Audits Launched and
Subsidies Granted in Total
Industries Municipalities Property and Building Sector

26. Volumes of Energy Audited Service Sector
Buildings
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0
20
40
60
80
100
120
140
160
180
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Milllion m3
MunicipalitiesPrivate Service Sector

27. www.energyefficiencyagreements.fi