France opted for alternative policy measures in combination with an existing energy efficiency obligation scheme (EEO) to fulfil Article 7 of the Energy Efficiency Directive (EED). France’s energy efficiency obligation scheme (EEO) has been in place for almost 10 years. The rules and specifications of the current obligation period (2015-2017) have been described, along with the history of scheme, the different design decisions adopted during various phases of the scheme, and reflections on its performance. In response to Article 7 requirements, France is also largely relying on savings expected from its existing energy efficiency policies (tax credit, zero rate loans…), and from new policies introduced recently (tax on energy products, guarantee fund for energy refurbishment…). The most significant ‘alternative’ policies are described within ENSPOL.
The majority of France’s savings within the frame of article 7 are expected to come from its EEO (almost 90% of the global saving target). France’s EEO has been in place since 2006. The 3rd period of the scheme is currently running. Each period has known different design characteristics, resulting from learning experiences and increasing ambitions.
Type of measures: The French EEO covers all energy consuming sectors and targets sectors of dispersed activities: the building sector mainly, both residential and tertiary, but also the light industry, the transport and the agriculture sectors. It covers energy efficiency measures such as building insulation, heating equipments, industrial processes…
Obligated parties: All suppliers of electricity, gas, home heating oil, district heating and cooling, LPG for heating and all distributors of automotive fuels (including LPG) above a certain threshold.
Target setting: The obligation is set in kWh cumac, the final energy savings taken into account being cumulated over the lifetime of measures, and actualized at a 4% rate.
The obligation is distributed among energies based on each energy value for 75% (annual volume x price) and volume for 25%. This allows establishing a coefficient per energy, giving for each obligated party its annual obligation from its annual sale volume.
Calculation method savings: The French EEO relies mainly on “standardized operations”, elementary operations for which deemed savings have been established and gathered within a catalog. Standardized operations are defined through ministerial decisions and created within working groups gathering all relevant stakeholders.
For energy efficiency operations that cannot be standardized, a specific procedure is also available, and requires dedicated calculation of the savings.
Additionality: Only savings that go beyond what is legally required at the European and/or national level can be taken into account. In addition, only savings that go beyond “business as usual”can be taken into account, so that only the more efficient technologies are promoted(ie: deemed savings used for standard operation stake into account the level of penetration of the technology). Finally, ESC cannot be attributed for measures receiving financial support from ADEME.
Monitoring & Verification: Obligated parties are required to submit their ESC application within a year after a measure implementation. Applicants declare the ESC there are entitled to following an operation with minimum information on the operation and the beneficiary, and the Ministry then controls a significant sample of operations.
Control and Compliance: In the event of a failure to deliver the obligation, obligated parties face a 20€/MWh cumac penalty, in full discharge of obligations. In the event of a failure during a control,obligated parties can face the loss of the ill-gotten ESCs and a fine up to 40€/MWh cumac.
Administrator - Institutional set up: The Ministry for the Environment sets all the scheme specifications, including targets, by Ministerial decisions. The scheme is administered by a dedicated unit within the Ministry, and receives technical support from ADEME and ATEE.
Flexibility: Obligated parties can obtain ESCs for savings generated from any type of consumers, in any sectors and on any energy (fungibility). The French scheme also involves volunteer parties, which can obtain ESC for their energy efficiency projects. ESCs can be traded between obligated and volunteer parties through the ESC market place.Finally, once delivered, ESCs remain valid for 3 periods.
For the full Report on the French EEO scheme click here.