Report: Potential Of Energy Savings Certificates In Boosting Energy Efficiency

by | May 30, 2007

The Center for Resource Solutions has released a white paper entitled “The Potential for Energy Savings Certificates (ESC) as a Major Tool in Greenhouse Gas Reduction Programs.” (PDF) The paper was funded by the Henry P. Kendall Foundation.

The paper examines the status of energy savings certificates in Europe and the U.S. and assesses their potential use to help fight global climate change by stimulating increased energy efficiency. While energy efficiency measures have been touted as a critical component for greenhouse gas reduction for years, the report’s authors say that this is the first investigation of the potential for ESCs to help boost energy efficiency’s contribution to climate change mitigation.

According to the report, the design of an effective energy efficiency program that uses ESCs must have the following elements:

• Transparent rules and procedures:
In developing their rules and procedures, each of the ESC programs that were examined made a concerted effort to
make relevant materials available, usually via the Internet, and provided a process for the general public to review and comment. Based on public comments, drafts were reviewed and revised prior to issue. In addition, the results of audits and other program findings were also made available to the public.
• Little or no proprietary information is withheld from the public:
The report’s authors were not aware of any concerns over the release of proprietary information.
• A measurement and evaluation system that ensures real, measurable, verifiable, and additional energy savings:
All ESC programs reviewed provided a flexible approach for calculating energy savings for groups of measures (e.g., deemed/stipulated savings, or energy monitoring -? Italy provides a good example). These approaches are based on
international methods that have been tested in the field for over twenty-five years.
• Independent third-party auditing for verification and compliance:
All ESC programs reviewed included a third-party verification system to ensure credibility and accountability. For example, the Independent Pricing and Regulatory Tribunal of New South Wales conducts audits for verification and compliance.
• A process for issuing and tracking certificates that avoids double counting:
All the ESC programs reviewed included a process for issuing and tracking certificates. For example, the regulators in Great Britain and Italy – along with the market operator – are responsible for issuing and tracking the ESCs.
• A system for detecting and penalizing noncompliance:
Reviewed programs incorporated penalties for noncompliance in their programs. For example, France and New South Wales had fixed penalties while the penalties in Italy and Great Britain varied depending on the circumstances. 

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