White Certificates Research Articles

White certificates — Energy efficiency programs under private information of consumers

Energy efficiency is an objective of public interventions at least since the Public Utility Regulatory Policy Act of 1978 (PURPA). Recently, conservation has received considerable attention in the United States and in particular in the European Union but this time in order to mitigate global warming. Policy measures include regulations at the technical level and the introduction of white certificates in order to force utilities and firms to invest into conservation in a way similar to the already existing renewable energy quota. This paper derives the optimal mechanism if utilities must deal with white certificates facing consumers holding private information. The optimal mechanism has some theoretically interesting features like restricted participation and a discontinuity.

Comparison of district heating CHP and distributed generation CHP with energy, environmental and economic criteria for Northern Italy

District heating CHP (combined heat and power) and distributed generation CHP have been compared in this paper on the basis of energy, environmental and economic criteria, and a deviation index has been proposed to establish, in aggregate form, what the improvement margins are for a given design choice. Three technologies that are suitable for both district heating and distributed generation have been chosen: a mature market technology, internal combustion engines, and recent entry market technologies, that is, microturbines, and fuel cells. The calculations have been based on the real heating load curve of a town in Northern Italy at the current market conditions: power and fuel prices, tax exemptions relative to cogeneration, white certificates, etc. Two scenarios have been considered: maximum energy saving and maximum present value saving. In the first scenario, district heating obtained better energy and CO2 savings than distributed generation, but critical values have been observed for local nitrogen oxides (NOx) and particulate matter emissions, when internal combustion engines are adopted. In the second scenario, all the options offer positive energy, environmental and economic savings, and the payback times are significantly reduced compared to the previous scenario. The district heating options show the best present value savings and payback times, while distributed generation is only economically viable when internal combustion engines are adopted. Microturbines leads to the best NOx savings. Finally, the comparison with an alternative separate production of heat and power has shown that there are scenarios where none of the analysed technologies leads to a significant improvement. All this information, analysed together, provides a sort of map for policy makers through which they can better orientate themselves among the different scenarios.

Le biomasse come opportunità per il territorio: analisi tecnico-economica per la Regione Basilicata

In Basilicata region there is a considerable amount of unused wood as well as the capacity to use it as feedstock for the production of bioenergy. Thus, the supply of renewable energy could be increased through greater utilization of forest biomass. However, for a better planning of the production and processing chain, the energy and forestry sectors require better estimates of the availability of unused roundwood and residues. The aim of the research was the development of a model for the spatial evaluation of biomass quantities obtainable from forestland. The results obtained point out a) significant amounts of biomass distributed on most of the territory; b) good opportunities related to white certificate trading and c) potential of business creation, entrepreneurship and local employment.

Legal Prerequisites for a Nutrient Trading Scheme to Control Eutrophication in the Baltic Sea

This paper explores the legal aspects of a nutrient trading scheme suggested as an effective ecosystem management of the Baltic Sea, especially for dealing with eutrophication – over-fertilisation – of the Baltic waters. The relevant sources of the law relating to the Baltic Sea are analysed, noting also features of the international emission trading scheme (iets), the European Union Emission Trading Scheme (euets) and the white certificate economic instrument. The legal prerequisites for a nutrient trading scheme are identified. Also, necessary changes in the legal framework of the Helsinki Commission/Baltic Marine Environment Protection Commission (Helcom) are suggested, should the Helcom parties consider such a scheme. The present work seeks to contribute to the legal knowledge needed for more effective and adaptive ecosystem management of the Baltic Sea, or other regional seas.

European experiences with white certifirecate obligations: A critical review of existing evaluations

White certificate obligations impose energy savings targets on energy companies and allow them to trade energy savings certificates. They can be seen as a means of internalizing energy-use externalities and addressing energy efficiency market failures. This paper reviews existing evaluations of experiences with white certificate obligations in Great Britain, Italy and France. Ex ante microeconomic analysis find that the obligation is best modelled as a hybrid subsidy-tax instrument, whereby energy companies subsidize energy efficiency and pass-through the subsidy cost onto energy prices. Ex post static efficiency assessments find largely positive benefit-cost balances, with national differences reflecting heterogeneity in technical potentials. Compliance involved little trading between obligated parties. Whether the cost borne by obligated parties was recovered through increased energy revenue could not be ascertained. Ex post dynamic efficiency assessments find that in addition to addressing liquidity constraints through subsidies, white certificate obligations seem to have addressed informational and organisational market failures. Confidence in these conclusions is limited by the fact that no econometric analysis was performed. Yet the lack of publicly available data, a counterpart to the rationale of the instrument of harnessing private financing, makes any empirical evaluation of white certificate obligations challenging.

Energetic and economic assessment of cogeneration plants: A comparative design and experimental condition study

In the present paper, the nominal design data and the experimental data of eleven industrial cogeneration power plants, based on different prime mover technologies and actually in operation in Italy, have been compared. The aim of the study is to compare the expected energetic and economic results with the real performance and economic profitability of the plants in operation: the analyses have highlighted that, in the design phase, the simple payback time is usually underestimated. An assessment of the European incentives policy on cogeneration has also been undertaken, focusing on Italian legislation, which foresees a tax reduction for fuel and Tradable White Certificate support mechanisms: these incentives allow an average SPB (Simple PayBack) reduction of about 15–20%. A sensitivity analysis on the SPB has also been performed, changing the fuel and maintenance costs, and the thermal and electrical energy prices, and the particular features of the different CHP (Combined Heat and Power) technologies have been pointed out.

Why some electricity utilities actively promote energy efficiency while others do not—a Swiss case study

Electricity utilities are key players for promoting energy efficiency (EE) because of their close link to consumers. Utility-centered EE policy frameworks, such as white certificate schemes coupled to saving obligations, have been shown to be both effective and efficient in several US states and various European countries. In Switzerland, where such a policy framework is absent on a national level, large differences occur among utility providers in their activities to promote EE. This study sheds light on this issue, using data from a survey of Swiss utilities (N = 114). A two-step cluster analysis was used to identify three groups of utilities. It is based on these utilities’ evaluation of 20 incentives and constraints for promoting EE. An analysis of variance found significant differences between the clusters regarding size (number of employees), share of production, number of large clients, and—most importantly—level of activity in implementing EE programs. The most active cluster comprises mainly larger utility companies, which primarily see the incentives of promoting EE. The passive cluster consists of small companies, focusing primarily on constraints. There is also an ambivalent cluster. It includes middle-sized companies, which see both clear incentives and many constraints – mainly a lack of human and capital resources—for engaging in EE. Based on our analysis, we conclude that due to the large heterogeneity of Swiss utilities, there is a need for contextualized policies targeting different types of utilities in order to effectively promote EE.

Ordered weight averaging multicriteria procedure and cost-effectiveness analysis for short rotation forestry in the Basilicata region, Italy

Optimisation of bio-energy chains and the establishment of a bioenergy district can make a positive contribution to territorial development, while reducing environmental pollution. The Ordered Weighted Averaging (OWA) multi-criteria analysis was applied to Basilicata Region in southern Italy to identify suitable areas for Short Rotation Forestry: 4659 ha, 8847 ha and 4742 ha could be planted with eucalyptus, poplar and black locust, respectively. Based on the results, financial analysis compared different management and production scenarios and explored the possibility of accessing national incentives. Economic results are positive above certain yield thresholds (> 15 t.d.m/ha) that can be ensured only with irrigation in summer: the NPV/ha ranged from €111 for black locust to €1360 for poplar. Further economic benefits could be generated by the access to the white certificate market and to the voluntary carbon credit market. Lastly, the results obtained have been confirmed by a sensitivity analysis.

Turkey's energy efficiency assessment: White Certificates Systems and their applicability in Turkey

The last decade has seen an increase in the importance of energy efficiency and the sustainable use of energy resources due to their significant benefits for reducing a country's dependence on foreign energy resources and increasing awareness on environmental problems. Turkey aims to reduce its energy intensity by 20% up to 2023, and in order to accomplish this target, the country plans to use energy more effectively in various industries and develop financial mechanisms for energy efficiency. Although much effort has been made to improve energy efficiency, additional policies such as marked-based incentives are still necessary. This article deals with one of the many market-based energy efficiency policies, called Tradable White Certificates (WhC) or Energy Efficiency Obligations. The current situation of the energy field in Turkey and energy consumption by industries is presented first in this paper, followed by potentials for energy efficiency in each industry and energy efficiency policies. Furthermore, the theory and applicability of a WhC System is introduced and discussed in terms of market conditions, choice of obligated participants and market mechanisms and barriers for the Turkish electricity and natural gas market to benefit from the residential and industrial energy savings potential.

Fuel poverty and energy efficiency obligations – A critical assessment of the supplier obligation in the UK

Energy efficiency obligations (or white certificates) are increasingly used to reduce carbon emissions. While the energy efficiency obligations were originally intended as carbon reduction and not fuel poverty policies, due to recognition of the potential for regressive outcomes they often include provisions for vulnerable and low-income customers. Intuitively, reducing carbon emissions and alleviating fuel poverty seem to be two sides of the same coin. There are, however, considerable tensions between the two when addressed through energy efficiency obligations, particularly arising from the potentially regressive impacts of rising energy prices resulting from such obligations, but also the complexity of targeting fuel poor households and the implications for deliverability. Despite those tensions, the UK government decided to use energy efficiency obligations, the supplier obligation, as the main policy for reducing fuel poverty. In light of the proposals, this paper provides an analysis of the main tensions between carbon reduction and fuel poverty alleviation within energy efficiency obligations, outlines the fuel poverty provisions of the British Supplier Obligation, assesses its rules for identifying the fuel poor, and provides a critical analysis of the planned policy changes. Based on this analysis, alternative approaches to targeting fuel poverty within future supplier obligations are proposed.

Applicability of Energy Saving Obligations to Indian electricity efficiency efforts

This paper investigates end-use electricity efficiency policies and DSM related aspects within the Indian electricity sector. This work also identifies lessons for India from White Certificate schemes and Energy Saving Obligations in the UK, France and Italy. These two analyses aim to identify lessons which are applicable for a utility based energy saving obligation scheme within India. Most relevant results and recommendations are that an obligation is suggested, that no elements should be simply copied and that standardization could offer benefits to the Indian context. However, a number of steps would be required prior to introduction of such obligation.

A critical microeconomic analysis of modelling the interaction of WCTS and EU ETS

This paper presents an alternative approach to a graphical analysis of the interaction of White Certificates with the EU emission trading scheme as the approach of Sorrell et al. (2009a contains the following aspects that require some clarification: first, the issue of a clearer distinction between conventional and alternative energy supply is brought up. Second, the concept of a minimum requirement for energy demanded is discussed. Third, the correlation between demand for energy and demand for energy efficiency measures is displayed in a more intuitive manner. The effects of introducing WCTS and EU ETS into the market setting are then analyzed accordingly. • Interaction of White Certificates with the EU ETS—clarifying a previous approach. • Distinction between conventional and alternative energy within the model setup is discussed. • Concept of a minimum requirement for energy demanded is introduced. • Correlation between demand for energy and energy efficiency is displayed in a more intuitive manner.

Can Competition Accelerate Energy Savings? Options and Challenges for Efficiency Feed-in Tariffs

Numerous studies have documented the critical market barriers that suppress consumer investments in energy efficiency well below economically optimal levels. Meanwhile, the policy imperatives for increasing such investments – particularly the need to address global climate change – have never been more compelling. This paper examines how a new policy construct – an energy efficiency feed-in-tariff (EE FiT) – might be designed to address this problem. While an EE FiT will not always be the best approach, its potential benefits merit serious consideration where alternative programmatic routes to efficiency are not well-established. In particular, EE FiTs offer the potential to create new markets and enable new market entrants to uncover and deliver EE resources. This market-based approach may also have advantages in jurisdictions facing political objections to other methods of funding efficiency initiatives. However, as the European experience with FiTs for renewable power reveals, any jurisdiction considering adoption of an EE FiT will need to consider a range of questions, both fundamental and practical. This paper identifies key policy issues and options for EE FiT design. No jurisdiction to date has created an explicit EE FiT; this paper draws on experience in Europe with white certificate programmes, and in the US with utility efficiency mandates and regional capacity markets, in particular the “standard offer” programmes that have been offered by obligated entities over the past two decades. The standard offer programmes differ from a pure efficiency FiT, as they have been offered as part of a portfolio of measures designed jointly to meet an energy savings obligation, not as the fundamental policy construct for achieving savings. Nevertheless, they offer valuable insights into the policy and implementation choices that would need to be made to enable an EE FiT to effectively deliver on its promise.

Green, Brown, and Now White Certificates: Are Three One Too Many? A Micro-Model of Market Interaction

In recent years, European environmental policy has focused primarily on the reduction of carbon emissions and on fostering the expansion of renewable energy production. In 2008, the EU established the 20/20/20 vision, demanding that carbon emissions and energy consumption both be reduced by 20%, and that the production of Green Energy be further increased in order to account for 20 percent of total energy production by 2020. Regarding the reduction of emissions, a cap-and-trade system (Brown Certificates) was implemented. for the fostering of so called renewable, i.e. Green, energy different nations chose different measures, such as direct subsidies, feed-in-tariffs (e.g. Germany), or Green Certificate markets based on a quota system (e.g. Denmark). Recently, a market-based instrument (White Certificates) intended to improve efficiency of non-commercial energy consumption is also on the agenda of several European nations (demand side management). All of these instruments are directed towards the energy market. Therefore, this paper deals with identifying interdependencies and trade-offs that might occur, if both, supply and demand side, of a single market are regulated by different policy measures. Our results show that, in fact, significant interdependencies and trade-offs exist. In our model, a feed-in tariff in combination with an emission cap or tax renders the most favorable results—in the absence of demand side management.

Special Issue on Challenges and Opportunities in the 21st Century Energy Infrastructure

Special Issue on Challenges and Opportunities in the 21st Century Energy Infrastructure

An empirical typology of energy services based on a well-developed market: France

The investigation is an attempt to apply a set of consistent and official definitions of energy services (ES), energy efficiency services (EES) and energy performance contracting (EPC) on a well-developed market: France. After defining the historical context of the French market the authors describe the types of offers that are presently made and that fall within the definition of energy services. There are many classic and novel factors for the success of energy services. For instance, the energy services market is now partly structured by the CEE scheme, the French ‘white certificates’ or ‘energy certificates scheme’. Also the grid problems lead to new services. The companies active on the market are described as a result of an empirical survey of ES market in France. This empirical survey of ES market in France includes estimates of the number of companies and of their turnover both for ES and EES. Examples and case studies are developed as a background.

The change and the significance of the form of crimson certificate and white certificate in the late Goryeo period and the early Joseon period

The change and the significance of the form of crimson certificate and white certificate in the late Goryeo period and the early Joseon period

White Certificates in the Italian Energy Oligopoly Market

In this article we deviate from neoclassical assumptions of fully competitive energy markets and represent a more realistic oligopolistic market, given the reconsolidation tendencies of energy companies. We focus on policies for energy efficiency improvement for electricity suppliers, namely on white certificates. The behavior of each supplier is based on a detailed decision tree, which determines the optimal move given the expectation on the competitor's behavior. According to our preliminary findings, the introduction of white certificate obligations should encompass larger increases in the electricity prices. In order to test our theoretical findings we make use of a typical oligopolistic market in Italy, where we depict that a leader company can serve the main part of electricity and energy efficiency projects, through financing them with white certificates, while the residual demand is more expensive and must be covered at a high cost from follower companies.

Assessing the impact of forward trading, retail liberalization, and white certificates on the Italian wholesale electricity prices

How do policy actions affect the dynamics of deregulated electricity prices? We investigate this issue in the context of the Italian Power Exchange (IPEX), using data on the daily average day-ahead price (PUN) between April 2004 and December 2008. Estimates of baseline time series models (SARMAX and SARMAX-EGARCH) and their forecasting performances suggest that the trend in natural gas prices, market power indicators, deterministic weekly patterns, perceived temperatures, persistence in conditional volatility, and the inverse leverage effect are essential features of the PUN dynamics. We then augment the best-performing models with dummies that account for changes in the market architecture, such as the introduction of contracts for differences (CfDs) to support renewables, trading of white certificates for energy efficiency, and the demand-side liberalization. The findings show that changes in the market architecture affected both the PUN level and its volatility. Specifically, wholesale electricity prices and volatility appear to have decreased upon the introduction of CfDs, only to be pushed upwards following the start of white certificates' trading and retail liberalization. Moreover, after controlling for reforms the inverse leverage effect vanishes, and the persistence in volatility is lower than in the baseline estimates.

Energy Saving Obligations and White Certificates: Ideas and Considerations for the Transport Sector

ABSTRACT A lot of policy interest and analysis has been focused on energy saving obligations on energy distributors or suppliers (mainly electricity and gas) coupled with trading of certified energy savings via tradable white certificates. While in the European Union the Energy Services Directive (2006/32/EC) also applies to transport fuels and some of the existing energy saving obligations allow certification of savings from transport projects, as of the end of 2009 no EU Member State has energy saving obligations on transport fuel distributors. The article explores the application of energy saving obligations in road transport, discussing the imposition of energy saving obligations on transport fuel suppliers, the definition of eligible technologies and projects, and considering energy saving obligations as a stand-alone tool or integrated with existing electricity and gas obligations. The article intends to open further discussion and research on the topic.