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Ireland has chosen to effect the provisions of Article 7(9) of the Energy Efficiency Directive (Directive 2012/27/EU), through opting to combine alternative policy measures and an energy efficiency obligation scheme (EEOS) to meet the national target.

Design of Energy Efficiency Obligation scheme (EEO)

Ireland has chosen to migrate its voluntary programme of energy savings by energy suppliers for the period 2011-2013 to an obligation scheme from 2014 on. Ireland hopes that the provisions made for this obligation scheme will contribute to the implementation of Article 7 of the EED.

Type of measures: The EEO is based on a system of Energy Credits for realised Primary Energy Savings. These credits relate to individual measures. For the residential sector the measures are energy efficient retrofit measures/technologies: insulation of roofs, walls, floors, windows and doors; high efficiency boilers (gas, oil fired), heating controls upgrade; biomass boilers; room heaters (solid fuel, biomass); solar water heating installation; boiler services; lighting, other… For non-residential projects the scope is broad and eligibility is evaluated on project-by-project basis. The savings have to be split to 75% for non-residential sectors, 20% residential sectors and 5% residential sectors with fuel poverty.

Obligated parties: Energy distributors and retail energy sales companies that have market sales in Ireland of greater than 600 GWh final sales in any relevant year, regardless of the sector they supply. The number of obligated energy suppliers is estimated at 16. There are also some large solid energy suppliers (coal, peat) just under and above the threshold, which may change within the next years. For heating oil the obligation lies on the importer of oil since oil suppliers are more in number but smaller in size.

Target setting: The anticipated savings from the are 550 GWh (PEE) per annum in the period 2014-2020, equal to 50% of the total annual target.

Calculation method savings: Residential: based on simulated improvements within an average dwelling. Non-residential: project-by-project basis. Metered savings will primarily correspond with non-residential new and innovative initiatives, where it is not clear in advance what savings will result from their installation.

Additionality: The energy supplier must provide either funding or services (pre-audits, project manager, MRV). This demonstrates materiality (i.e. that the measure is implemented in reality. In the grant scheme for households, results of earlier research show that measures are generally not implemented without the grant. In the planned scheme some related research will also be conducted to survey the degree of additionality. For the not grant aided projects, a robust audit system is put in place with checks for quality/additionality.

Monitoring & Verification: The responsibility for compliance with the article 7 of the EED rests with the energy supplier responsible for realising the necessary energy savings credits, backed up by appropriate independent verification and audit by the SEAI. In the first instance, energy suppliers will be required to develop and implement a quality control process that will ensure that any energy savings claimed against their target are reliable, verifiable and undertaken to an appropriate standard.

Control and Compliance: Ireland introduced a buyout price and a penalty price (a multiple of 1.25 of the buyout price across all sub-sectors) to provide market certainty and create opportunities for the emergence of trading of energy credits. The buyout price will be set equal to what it would cost the SEAI to realise an equivalent amount of energy savings from the market.

Administrator - Institutional set up: Responsibility for scheme delivery is delegated to the SEAI. Responsibility for compliance with the EED rests with the energy supplier responsible for realising the necessary energy savings credits, backed up by appropriate independent verification and audit by the SEAI. In many cases in the residential sector there is a project manager who manages the whole project and requests for the energy performance certificate. There are a number of models across energy suppliers that consist of a counterparty that partners contractors to provide the measures on the one side and act as an agent of the energy supplier on the other side. This agent sometimes acts as the energy supplier to the household. For the non-residential sector there are also models with energy supplier – client company applying for energy credits – contractors.

Flexibility: Obligated parties can buyout up to a maximum of 30% of their total cumulative target, whether or not they have achieved their minimum cumulative target. For any portion of the minimum annual target not achieved, exchanged or bought out, a penalty will be imposed. The price of buyout and penalty will be set and published by the Minister and reviewed as appropriate.

For the full Report on the Ireland alternative measures planned click here. [interlink with Ireland part of D2.1.1.]

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