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As stated in the “Report on energy saving and energy efficiency under Article 7” submitted by Spain on 5 June 2014, Spain 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).

Within ENSPOL Spain’s newly adopted energy efficiency obligation (EEO) scheme has been analyzed, exploring possible hurdles related to its introduction. In addition a general status quo of Spain has been examined by means of specific criteria, evaluating the actual capability and readiness to undertake such an obligation scheme. Furthermore the most important alternative measures have been analyzed by examining their key implementation and design features.

Design of Energy Efficiency Obligation scheme (EEO)

Spain is fully committed to the energy efficiency targets under the Directive 2012/27/EU which demand a 20% reduction of primary energy in the European Union as a whole by 2020.

Type of measures: Spain has adopted a combination of alternative measures as set out in Article 7 of the Directive and an energy saving obligations scheme for energy utilities and distributors of energy products. The cumulative energy saving target refers to annual energy sales to final consumers of energy sales companies and energy distributors, excluding the transport sector.

Obligated parties: All the sellers of electricity, gas, liquefied petroleum gases and wholesalers of petroleum products. Even though the transport sector is excluded from the calculation of savings, sellers of petroleum products for transport are considered to be obligated parties of the EEO scheme.

Furthermore, as highlighted in the first notification report of December 2013 there would be a threshold predefined by law regarding the volume of sales to final costumers in order to consider a retailer as an obligated party. However, no further details specifying the level of the threshold are provided in the first or in the second notification report (June 2014).

Target setting: Since Spain decided to make use of the flexibility mechanism and reduced the final target of 21.305 ktoe by 20,8% for the overall period from 1 January 2014 to 31 December 2020. The new optimum target is 15.979 ktoe and it refers to energy sales to final consumers of energy sales companies and energy distributors. This is equivalent to an annual additional savings of 1,5%, averaged over the most recent three-years period. The alternative measures are expected to generate a total energy saving of 4.662 ktoe, whereas the cumulative savings of the Energy Efficiency National Fund are estimated up to 4.961 ktoe. As a result the remaining savings to be achieved through the EEO scheme is 6.356 ktoe. 

Calculation method savings: The saving target will be distributed over the obligated parties also on a linear basis over the entire period of the obligation. The saving target for all obligated parties will be set annually, according to their market shares, using as baseline information for the initial distribution the sales in the financial year 2013. This information will be provided by the companies themselves. 

Additionality: The recognised savings to be included in the catalogue for each action will be set by reference to the results of previous energy improvements which have undergone independent checks at similar installations (Annex V, point 4(f)). In this framework, the benchmark used will be the savings defined by using bottom-up methods for the measures included in the energy efficiency action plans implemented previously in Spain as part of the Energy Saving and Efficiency Strategy 2004–2012. 

It is important to note that the energy efficiency measures to be implemented as a result of the obligation scheme, whether by obtaining certificates or in the form of measures by the Energy Efficiency National Fund, are in addition, to the measures to be generated by the price signal resulting from fiscal measures, and so will not under any circumstances lead to double accounting (no further information are available on how to ensure additionality).

Monitoring & Verification: During the first implementation phase of the scheme, verification and monitoring actions will not be necessary, since compliance with the scheme will be imposed automatically through the financial payments by the obligated parties to the Energy Efficiency Fund.

In case that certificates become effective, at the beginning of each year the obligated parties should select either to comply with their obligations by obtaining saving certificates or to pay an equivalent amount to the Energy Efficiency National Fund. The obligated parties conforming with their obligations would, at the end of the year, provide IDAE with the energy efficiency certificates accrediting sufficient fulfilment of the defined by law obligation, otherwise they should pay an equivalent amount to the Energy Efficiency National Fund.Once completed, the catalogue will include the estimate of the savings (ex ante) that will be accepted from the companies for implementing each of the actions included therein, as well as the full list of the supporting documentation that the companies must submit to IDAE to request the issuing of the energy efficiency certificates that may apply to them. IDAE may have support from specialist external entities to verify the proper implementation of the energy efficiency measures by energy service companies and/or obligated parties.

Control and Compliance: The main control and compliance instruments will be the financial penalties to the Energy Efficiency National Fund for not achieving sufficient energy savings among final consumers in order to obtain the necessary energy efficiency certificates. The penalty calculation will be based on the ex-ante repurchase price, considering the financial cost as well as the opportunity cost to the Energy Efficiency National Fund related to the delay in achieving the savings because of not having access to corresponding payment at the end of the obligation period. Moreover, additional certified savings to the ones initially undertaken will be credited for the next year. The penalty will be calculated on an annual basis and IDEA will be responsible for the supervision of whole process.

Administrator - Institutional set up: The Institute for Energy Saving and Verification, IDAE, is assigned as the competent authority to regulate and implement the EEO scheme. Moreover, IDAE may be supported from specialized external entities to verify the proper implementation of the energy efficiency measures by energy service companies and/or obligated parties. Despite the fact that IDAE will be in general responsible for the administration of the EEO scheme, the responsibility for the Energy Efficiency National Fund and funding procedures will be delegated to a group of departments of different Ministries including the Ministry of Industry, Tourism and Energy.

Flexibility: At first, the Spanish EEO scheme will provide only one compliance option. At a later more mature stage in the scheme’s implementation, it is envisaged to function combined with the more flexible energy saving certificates.

For the full Report on the Spain EEO scheme click here.

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