Scaling Up Energy Efficiency –

Experiences from Germany

17-05-09 Referent 1 IEA: Efficiency is the most important means of reducing CO

2 emissions.

fossil fuel subsidies; 12%

upstream CH4 reductions; 18%

power generation; 21%

road transport; 6%

industrial motors; 14%

appliances and lighting; 14%

heating and cooling; 15%

Andere; 0,49

energy

efficiency,

49%

State of Play

3

Domestic

Production Imports

Total Domestic Energy

Primary Energy Consumption

Export and Storage

Non-energy consumption

Conversion losses

Consumption in energy sector

Final Energy Consumption

Industry Transport Households Commerce, Trade, Services

Energy consumption

in Germany 2014 Source: AGEB, 2015

State of Play

Development of Germany’s final energy consumption by sector

Historic data shows little change in the overall distribution between sectors. The largest savings were achieved by the trade, commerce and service sectors.

17-05-09 Referent 4

So

urc

e: A

GE

B 2

01

5

0

2.000

4.000

6.000

8.000

10.000

Pe

tajo

ule

[P

J]

trade, commerce& service

households

transport

industry

State of Play – where do we use energy?

Efficiency targets and energy productivity in Germany

Efficiency measures allow clean growth by decoupling economic growth from energy consumption.

So

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fys 2

01

5

5

0

50

100

150

200

250

300

350

Index 1990=100

final energyproductivity

final energyproductivity target

GDP

primary energydemand

primary energydemand target

GHG emissions

GHG emissions target

National targets:

+2.1% final energy productivity p.a.

2020/2050: 20/50% reduction vs. 2008

2050: 80-95% reduction vs. 1990

153.7* Status 2014

145.0

88.9

75.2**

* Status 2013

** Status 2012

Development since 1990

17-05-09 6

GJ/1000 € GDP GJ/Head

Primary Energy / GDP Primary Energy Consumption / Head

On average since 1991

On average since 1991

2050 Energiewende targets

The energy transition follows a transparent, long-term strategy with specific targets.

17-05-09 7

So

urc

e: F

ed

era

l G

ove

rnm

en

t 2

01

0, B

MU

/BM

Wi 2

01

4,

BM

Wi 2

01

5,

AG

EE

-Sta

t 2

01

4, A

GE

B 2

01

5, B

MW

i 20

16

Climate

Renewable

Energies

Energy

Efficiency

% gross final energy

consumption

% gross electricity

consumption

% primary energy

consumption (vs. 2008)

final energy productivity

(vs. 2008)

building renovation

% greenhouse gas

reduction (vs. 1990)

2020 2025 2030 2035 2040 2050

+2.1% p.a. (2008-2050)

doubling of renovation rate: 1% 2% p.a.

-40 -55

-70 -80 to -95

35 40 to 45 50 65

80 55 to 60

18 30

45 60

-20

-50

13,7%

32.6% (2015)

- 7.3 % (2015)

1.7% p.a.

~1% p.a.

-27%

Achieved

2014

1.7% % transport energy

consumption (vs. 2008) -10 -40

Efficiency is in the heart of the German energy transition

Energy Efficiency Policy

8

2030 Targets

Energy Efficiency Directive (EED)

Energiekonzept (2010)

National Action Plan on Energy Efficiency

(NAPE) (2014)

Energy Efficiency Strategy for Buildings

(2015)

Energy efficiency policy frameworks

Germany’s energy efficiency policy is embedded in the EU framework.

17-05-09 Speaker 9

Ecodesign and Energy

Labelling Directive

Energy Performance of

Buildings Directive (EPBD)

EU

policy

Policies in

Germany

So

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01

5

1. Awareness: information and consulting services

2. Financial incentives: 3 billion € p.a. (2 billion alone for CO2 building modernization programme; provision of grants & low-interest rate loans)

3. Regulation (building codes, ecodesign & labeling directive, energy audits in industry, ETS)

4. Energy taxation

What does Germany do for efficiency?

IEA: Germany avoided 30 billion USD of fossil fuel imports in 2014 alone as a result of energy efficiency investments since 1990 (all IEA-members: 80 billion USD).

17-05-09 10

4 Pillars of the German Efficiency Policy

17-05-09 Speaker 11

What does Germany do for efficiency?

Provision of information by the public sector

Offers of advice

Comprehensive communication measures

KfW CO2 building renovation programme

Market incentive programme

Technology grants, (e.g. renewable energies)

Highly efficient “cross-sectional technologies“

Competitive invitations to tender for power efficiency (STEP up!)

and much more …

Statutory requirements placed on building quality and energy consumption for new buildings and renovations (EnEV)

EDL Act

Energy consumption labelling (EU)

Energy charge Electrictiy tax, Car tax

Truck toll

EU emissions trading

Broad-based and well networked energy research

Information &

advice Financial assistance Regulatory law Price measures

Quantitative

measures

Research &

development

Efficiency Instruments and Measures of the German energy transition

Energy efficiency policies find a balance between consultation, information, incentives and regulation.

The National Action Plan on Energy Efficiency (NAPE)

17-05-09 Speaker 12

4

40

12,5 10 10

29,5

74,5

50,5

85

51,5 10

Quality assurance and optimising energy consulting

Incentives for energy-efficient renovations (total savingsnot clear)Upgrading, continuation and increased funding of theCO2 building renovation programmePromoting “energy performance contracting“

National energy-efficiency label for old heatinginstallationsUpgrading the KfW energy efficiency programmes

Energy efficiency networks initiative

Obligation to perform energy audits for non-SMEs

National top runner initiative

Introduction of a competitive tendering scheme for energyefficiencyAdditional immediate measures

NAPE: Additional energy efficiency measures in Germany

These measures shall lead to additional energy savings of 350-380 PJ by 2020.

13

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Savings in PJ

Key pillars of the National Action Plan on Energy Efficiency

14

Stepping up energy efficiency

in buildings

Energy efficiency as a return and business model

Individual responsibility for energy efficiency

All the measures under the NAPE adhere to a common principle: supply information - provide support - demand action.

Buildings: CO2 building modernization programme (+200 million; inclusion of commercially used buildings; heat pump programme)

Buildings: Energy renovation roadmaps (on-site consultation aiming on phased building modernization)

Industry: New promotional schemes (horizontal technologies, waste heat utilization)

Strengthening of consulting services

Awareness campaign

NAPE - Strengthening existing schemes

17-05-09 15

Tendering scheme (using competition to define scope of incentives and technologies)

500 energy efficiency networks of companies (building awareness and capacity through business-to-business exchange in networks)

Energy performance contracting (public guarantees for contracting projects by SMEs and public authorities)

Metering savings programme (supporting digital services to measure savings)

NAPE - Innovative approaches

17-05-09 16

Challenges/Outlook

17

Framework Conditions:

At present „head-wind“ from low fossil energy prices

The „Baake –Effect“ will maintain this low cost environment

Questions:

How can we create tail-wind for more efficiency and less use of fossil fuels?

Germany has started consultations for a Green Paper Process

17-05-09 18

Main principle: Efficiency First – the new compass for the energy transition: 1. Energy efficiency 2. Direct use of renewable energies 3. Sector coupling: energy efficient use of renewable electricity in the areas

of heat, transport and industry

Creating a cost-efficient synergy between EE and RE, “Friendly Twins”

The Greenpaper Process:

Thinking the next level of energy efficiency

Main Question:

What are suitable Instruments for creating a level playing field for clean fuels?

Price measures? Quantitative measures? Regulation?

The Greenpaper Process at present analyses the status quo and possible

instruments and consults stakeholders.

Aim: A whitepaper for the next government coalition

Thank you for your attention!

17-05-09 19

Thank you for your attention!

17-05-09 20

Its efficient to cut down on

your expenditures for heating,

Not for traveling

NAPE: Efficiency measures and their expected savings

A balance of information, support and regulation.

17-05-09 Speaker 21

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4

Quality assurance and optimising of energy consulting 4.0 PJ

Incentive programme for energy-efficient renovation up to 40 PJ

Continuation and increased funding of the CO2 building modernisation programme 12.5 PJ

Promoting “energy performance contracting“ 5.5-10 PJ

National energy-efficiency label for old heating installations 10.0 PJ

Introduction of a competitive tendering scheme for energy efficiency 26-51.5 PJ

Upgrading the KfW energy efficiency programmes 29.5 PJ

Energy efficiency networks initiative 74.5 PJ

Obligation to perform energy audits for non-SMEs 50.5 PJ

National top runner initiative 85.0 PJ

Pilot programme for energy savings meters -

32-76.5 PJ

savings

180.5-206 PJ

savings

85 PJ

savings

NAPE immediate

measures

• Energy efficiency

incentive programme

• Enhancement of the

KfW programmes for

energy-efficient

construction and

renovation

Energy efficiency in buildings

Buildings have great potential, but greater efforts are needed to achieve a virtually climate neutral building stock.

17-05-09 Speaker 22

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d o

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GE

B,

20

14

, B

MW

i 2

01

4 Sector measures

• Information campaign

• Energy consulting

• KfW programmes for energy-

efficient construction and

renovation

• Heating check and labelling

• Energy saving legislation (EnEV)

• Energy performance certificates

• Key points of the energy

efficiency strategy for buildings

35,0%

Sector relevance

of final energy

consumption in 2014 35% 3,027 PJ

Buildings’

consumption

Industrial efficiency: challenges and measures

Some barriers still inhibit the implementation of economically-viable energy efficiency measures.

17-05-09 Speaker 23

Sourc

e: F

raunhofe

r IS

I, IR

EE

S

and H

assan 2

013

Barriers

• Amortisation

requirements

• Operational

write-offs

• Financing

• Upfront-investment

• Lack of information

and time

Measures

• KfW credits and loans

• Grants for cross-cutting

technologies and energy efficient

production processes

• Competitive tendering

• Energy audits

• Energy management systems

• Energy efficiency networks

The NAPE adresses existing barriers and new areas

24

Stepping up energy efficiency in buildings, i.a.

• Continuation and upgrading (+200 million € p.a.) of CO2 Building

Modernisation Programme (extension to commercial buildings)

• Quality assurance and optimizing of energy consultation (e.g. on-

site consultations with renovation roadmaps for phased renovations)

• Introduction of “heating checks” (using voluntary local heating

checks whereby specialists [e.g. craftworkers or chimney sweeps]

pinpoint weak points of existing heating systems)

Energy efficiency in trade/services and industry

These sectors’ contributions depend strongly on reforming the EU emissions trading scheme.

17-05-09 Speaker 25

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01

5

Industry

29%

Transport

30%

Households 26%

Trade and

services …

Sector relevance

of final energy

consumption in 2014

3,806 PJ

44% NAPE

immediate

actions

• Competitive

tendering

• Energy

efficiency

networks

Sector measures

• Obligatory energy audits

• Exemptions from EEG levy and

eco tax when implementation of

energy management system

• KfW credits and loans

• Grants for cross-cutting

technologies and energy efficient

production processes

• European emissions trading

• Voluntary agreements with the

manufacturing sector

NAPE

immediate

actions, e.g.

• Promoting the

use of

electrical

drives

• Extension of

road toll for

heavy vehicles

• Promoting

public transport

Energy efficiency in transport

Fuel taxes are the dominant measure in the transport sector.

17-05-09 Speaker 26

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co

fys 2

01

5

Sector

measures

• Fuel taxes

• E-mobility strategy

• Motor vehicle

taxation

• Mobility and fuel

strategy

Industry; 2.508

Transport;

2.629

Households; 2.212

Trade and

services; 1.298

Sector relevance

of final energy

consumption in 2014 30% 2,629 PJ

Scientific assessment of energy efficiency potentials in 2030

17-05-09 Referent 27

Heating and cooling

Power and fuels

Information/ communication

Building renovation, renovation heating system and new

building

Lighting

Building renovation, renovation

heating system

Households Trade, commerce, services Transport

Washing machine, tumble dryer

Refrigerators, freezers

ICT equipment

Optimizing HVAC systems

Refrigeration and freezing systems

Street lighting

Lighting

Efficient cars

Relocating urban car traffic to public transport and cycling Truck driver

training

Introducing hybrid buses

Introduction hybrid light-commercial vehicles

Energy-efficient driving

Low rolling resistance tire cars

Low rolling resistance tire trucks

Trucks: low-viscosity oils

Crosscutting technologies

Basic chemicals

Metal production

other engine systems

Electric motors

Cooling supply Condensing

gas boiler

Ventilation systems

Paper industry

Pump systems

Lighting

Non-ferrous metals

Food industry

Compressed air

Minerals

Glass and ceramics

A square of this size

German final energy consumption 2010: approximately 9000 PJ.

corresponds to a savings of 16 PJ / yr.

Industry

LED traffic lights

Office equipment

Industry-specific technologies

Lighting

So

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EU

, F

rau

nh

ofe

r IS

I, P

rog

no

s, G

WS

et

al. 2

01

1

28

Competitive tendering scheme for energy efficiency

The tendering scheme will motivate ESCOs, municipal utilities, energy cooperatives, manufacturers and others to identify economic ways to save energy.

• Measures with the most economic cost-benefit ratio will be awarded

• Initial focus on electricity; first tendering procedure in 2016

• Measures on company/institution level as well as bundled projects

• Open auctions (technology neutral) plus closed auctions for

specific technologies

Energy efficiency networks

EE networks are a suitable instrument for advancing a culture of energy efficiency in industry, commerce and trade.

29

• Regional best-practice exchange among 8-15 company practitioners

in one network

• Networks aim on improving capacity within companies to plan and

execute profitable investments in energy efficiency

• Pilot project with 30 networks (doubling of efficiency improvement

compared to industry average)

• Goal of agreement between Federal Government and 20 industry and

business associations: 500 networks until 2020

Energy efficiency improvements in the G7 countries

Energy productivity levels differ largely, even between G7 countries.

17-05-09 Dr. Martin Schöpe 30

0

50

100

150

200

250

300

350

Prim

ary

en

erg

y p

rod

uctivity

in U

S$

20

05

/ G

J

Germany

France

UK

Italy

USA

Canada

Japan

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A 2

01

3; W

orl

db

an

k 2

01

4