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Increasing building efficiency via Energy Efficiency Obligations: a report by ECEEE

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New actions and related funding to save energy in buildings are being triggered via Energy Efficiency Obligations to energy companies and other entities, says a briefing on the "European experience from energy efficiency obligations (EEOs)" published by ECEEE (www.eceee.org).

The report judges that:  "Despite the variations in national schemes, all have been judged successful by their governments and they have expanded their EEOs accordingly. There is now around €2 billion per year being spent by energy companies in the EU to deliver energy efficiency under EEOs. "

Also: "One recent development is that in the UK some energy suppliers have been establishing heating companies, insulation subsidiaries and renewable micro generation companies (e.g. British Gas, E. ON). In principle, this can be viewed as these companies finally taking on board that the message that they should be seen in the future as energy service companies rather than commodity energy suppliers. Similar developments are starting in Italy. However, it is early days and more experience is required to decide whether this is indeed the case."

The report evaluates that: "There is clear evidence that well designed EEOs, both in the EU and globally, can overcome many of the barriers to energy efficiency which prevent the uptake of such measures, particularly by households and small organisations. Barriers can be overcome through the inclusion of personalised advice, technical knowledge, finance on favourable terms or through subsidies, lowering transaction costs, providing quality assurance and confidence through a well-known brand. At the heart of any EEO is an obligation on some part of the energy company to prove that the activities they have promoted or funded have resulted in energy savings in eligible end use customers’ premises or homes coupled with the threat that if they fail to deliver those energy savings, the company will incur financial penalties. The threat of financial penalties has meant that in over fifty years of operational experience in 5 EU countries, no energy company has missed their total energy saving target."

This briefing was prepared by eceee as a background paper for the European Commission's Bucharest Forum working group on Energy Companies role in the Energy Efficiency Services Market. It includes a history of and a snapshot of EEOs and their impacts within the EU as of September 2011.