Energy Efficiency Agreement between the Ministry of Trade and Industry and the Municipality of ( )

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1 Dnro 7202/804/2008 Unofficial translation Energy Efficiency Agreement between the Ministry of Trade and Industry and the Municipality of ( ) 1 The starting points and grounds for the agreement With this agreement, the Ministry of Trade and Industry (hereinafter the Ministry) and the municipality of (hereinafter the Municipality) agree on co-operation to implement measures required by the targets of the Finnish Energy and Climate Strategy in accordance with the government report submitted to Parliament. One of the key cornerstones of the Energy and Climate Strategy is to meet the Kyoto Protocol obligations to cut greenhouse gas emissions. Finland must meet its international environmental obligations so that the energy policy supports balanced economic growth and development of employment, maintains the security and diversity of energy supply, and contributes to the development of a competitive economy. The agreement primarily aims to improve energy efficiency, but it also includes targets and actions related to the promotion of renewable energy. Increased energy efficiency and use of renewable energy promote the same targets of the energy and climate policy, and partly the same measures can be used in the promotion activities. Therefore, it is justified to examine both sections together, where applicable. Measures related to energy efficiency and increasing the use of renewable energy sources are included in a number of EU policy actions, and Finland as a member of the European Community has committed itself to meeting the obligations derived from these policy actions. In relation to energy conservation, the most important Community-level policy action is the directive on energy end-use efficiency and energy services, which entered into force in May The Energy Services Directive sets for its member states an indicative energy saving target of 9% in the period and obliges them to ensure that the public sector plays an exemplary role in the promotion of energy saving in accordance with the directive. Targets and promotion obligations have also been set with directives for electricity produced with renewable energy and for biofuels in transport. Improved energy efficiency and the use of renewable energy can enhance the Municipality s economic activities and create jobs while reinforcing the regional economy and entrepreneurship. Launched in the 1990s, the energy efficiency agreement system is a cost-effective and productive course of action. In accordance with the Energy and Climate Strategy, these agreements are taken into account in the dimensioning of any new steering methods in the sectors where the actors commit themselves to target-oriented and effective energy efficiency agreements. Energy saving and energy efficiency In this agreement, energy saving means the reduction of current consumption or prevention of any future consumption, which would otherwise follow without the actions. Energy saving can also be achieved by improving energy efficiency. Energy efficiency means the relation between a performance or service and the energy input needed for its production. Thus, indicators describing changes in energy efficiency, such as specific energy consumption, can be used in the calculation of the amount of energy saving. However, energy efficiency cannot improve by itself without active measures. Energy-saving and energy-efficiency improvement measures can be technical or they can be related to procedures, behaviour and the use of energy-consuming appliances. Improving the efficiency of other 1

2 operations of the Municipality can also enhance the energy efficiency of service provision and achieve the energy savings which are the objective of this agreement. Safety and health, for example, in street lighting and indoor air of buildings, are always taken into account in the promotion of energy conservation. Correctly implemented energy-saving measures improve working and living conditions and also contribute to the prevention of damp and mould problems in buildings. Renewable energy sources In this agreement, promotion of renewable energy sources means the utilisation of energy obtained from renewable biomass, biogas, hydro power, solar energy, wind, the biodegradable part of refuse-derived fuel and the heat content of the soil, water, air or waste water in the Municipality s own operations. 2 2 Limitations of the agreement This agreement applies to the energy use of buildings in the possession of the Municipality, including residential buildings, street and other outdoor lighting, water and waste management, the use and maintenance of the street network and other common areas, and traffic and transport where these operations are not covered by another agreement 1. Enterprises fully owned by the Municipality are also covered by this agreement unless they are included in another agreement. This agreement shall apply to outsourced services only through the application of procurement procedures. Energy saving as a result of measures implemented by the Municipality, but not applying to the Municipality s own energy use, can be attributed to the Municipality unless the saving comes under the sphere of another agreement sector. 3 Key target of the agreement The target of this agreement is an indicative energy saving 2 of nine per cent for the period The overall energy saving target 3 of the Municipality is a fixed 4 energy amount 5 of GWh, and efforts are made to achieve this target by the end of Joining this agreement is also a commitment to act in an exemplary way in the promotion of energy efficiency and the use of renewable energy sources, to actively distribute information about these kinds of activities and their results, and also to contribute in the reduction of Finland s greenhouse gas emissions in this way. 1 This agreement excludes energy production and public transport with separate existing agreements. 2 In this agreement, energy saving means the impact gained with conservation measures, expressed in energy units. The quantity of energy consumption in 2016 is not required to be 9% lower than in In addition, so-called imputed saving, meaning the prevention or reduction of future consumption, which would occur without any measures, is also included as energy saving. 3 The overall target may also include impacts of measures implemented in and, for particularly justified reasons, also the conservation impacts of measures implemented in as far as it can be shown that the impact will still be effective in The energy saving calculation methods will be confirmed at a later date taking the European Commission s guidelines into account. 4 The amount of fixed energy saving can be revised in 2010, 2013 and 2016 based on the written proposal of the Municipality by the decision of the management group referred to in section 7 if this energy amount would require a significantly higher level of energy saving than 9 per cent by the Municipality in 2016 due to structural or ownership changes that have taken place during the validity of the agreement. 5 The energy amount is nine per cent of the Municipality s actual consumption of heat, electricity and fuel other than that used in public transport in 2005, in which no normalisation has been carried out with the heating degree-days for the share of energy used in heating. The calculation criteria for the energy amount are presented in a separate appendix to this agreement.

3 3 4 Operational targets and measures of the Municipality 4.1 Organisation of operations in compliance with the agreement and the Municipality s management systems The operational target is to include the promotion of energy saving and the use of renewable energy sources as part of the Municipality s current or future management systems in an appropriate way. In order to achieve the target, the Municipality shall: appoint a contact person for the Municipality s agreement and, where appropriate, an organisation in charge of the agreement procedure with responsible persons for each administrative branch or operating unit draw up an Action Plan presenting the measures of improving the Municipality s energy use by 31 December 2008, however, not later than within one year of joining the agreement. The Action Plan shall be approved by the responsible organ of the Municipality. 4.2 Intermediate targets and early actions in energy saving In order to achieve the targets in accordance with this agreement, the Municipality shall: when joining the agreement, set an intermediate energy-saving target of GWh for the year 2010 and GWh for the year 2013 present in its annual reporting for 2009 an estimate of the level of energy saving achieved by 31 December 2007 with energy efficiency improvement measures implemented in and of the level of permanency of their impacts throughout the agreement period of present in its annual reporting for 2010 specified calculations of the impacts of the energy efficiency improvement measures the Municipality has decided to include in the final list of early actions and on the basis of which the initial situation 6 of energy saving on 1 January 2008 achieved with the Municipality s early actions will be determined. 4.3 Energy efficiency guidelines for public procurement The operational target is to gain energy efficiency as one of the criteria in all public procurement where the selection of a more energy efficient appliance, system or procurement entity will result in more advantageous end result in its overall economy. In order to achieve the target, the Municipality shall: include the energy efficiency guidelines of public procurement as part of the Municipality s procurement guidelines and instruct the personnel responsible for procurement in the use of these guidelines 4.4 Planning control taking energy efficiency into account The operational target is that the energy efficiency and life-cycle costs of the implementation alternatives are taken into account in decision-making related to construction, land use and traffic management. In order to achieve the targets, the Municipality shall: develop the planning control of buildings so that the future energy and other operating costs of the building are taken into account in addition to the investment costs in the selection of appliances, construction parts and systems of the Municipality's new construction and renovations 6 Energy saving achieved with early actions may be calculated as part of the Municipality s overall target in energy saving presented in section 3 whenever this energy saving will still be valid in 2016.

4 4 provide guidelines for the planning and construction control of new building and renovation so that the technical choices are based on highest possible life cycle economy and energy efficiency aim to influence the energy efficiency of the Municipality s community structure through town and traffic planning 4.5 Implementing energy audits and the energy saving measures detected in them The operational target is commitment to systematic implementation of energy audits in order to find out economical energy-saving possibilities in buildings 7 and other operations. The Municipality shall determine the following quantitative targets for the energy audit operations: 80% of the Municipality s buildings, measured by the cubic volume of buildings, will have undergone an energy audit by the end of (2010/2013) 8 a follow-up audit will be carried out on a building with an abnormal change in energy consumption based on consumption monitoring data, which cannot be explained by changes in the use of the building. The need for a follow-up audit is assessed separately for each building, the first/previous energy audit of which was carried out more than 10 years ago starting from 2008, a commissioning audit will be carried out on all new buildings of at least m 2 and on buildings that have undergone extensive renovation or the use of which has changed to a significant effect when auditing a building that offers public services for a large number of people, the Municipality shall also take into account the possibility of drawing up a certificate on the energy performance of the building a study of the energy saving possibilities by 2013 is carried out with respect to the Municipality s energy use elsewhere than in buildings (such as outdoor lighting, water management, transport), with a focus on operational sectors with significant energy use or potential energy saving implement the measures, identified in energy audits, which are appropriate and cost effective taking the current and future use of the building into account. 4.6 Use of new savings guarantee and/or funding procedures in the implementation of investments The operational target is to ensure that the Municipality is able to and can use new procedures in the implementation of investments. With these procedures, the procurement of energy-efficient systems and appliances can, if necessary, be carried out fully or partly in new building and renovation projects regardless of the rest of the investment budget. In order to achieve the target, the Municipality shall: acquire the expertise in the use of the ESCO service to implement the investments find out if there are any obstacles restricting the use of the ESCO service in the Municipality s own administrative and decision-making processes and aim to contribute to the removal of any obstacles in the introduction of these services 7 As the Ministry does not grant energy aid for energy audits of residential buildings, the obligations presented in this section apply to other buildings than the Municipality s residential buildings. The energy audit of residential buildings is a recommendation. 8 The target year is 2010 for those municipalities that have joined the Energy Saving Agreement of Municipalities or the Energy and Climate Agreement ( ). For other municipalities joining this energy efficiency agreement, the target year is 2013.

5 when preparing investments, take into account the possibility of using the ESCO services when the lack of funding prevents the implementation of an investment that has been estimated to be cost effective. 4.7 Consumption monitoring and key indicators describing energy efficiency The operational target is to organise the monitoring of the Municipality s energy use so that the monitoring data is utilised systematically in order to maintain a good level of energy efficiency and to avoid unnecessary energy consumption. Another operational target is to develop the key indicators, on the basis of which it is possible to estimate the changes in the efficiency of energy use as a result of efficiency measures on the Municipality s other operations by utilising consumption monitoring. In order to achieve the targets, the Municipality shall: set a monthly target on the extent of monitoring of at least 80% of the energy use of buildings and the annual target of monitoring at least 90% of the overall energy use of the Municipality by the year 2013 actively utilise the monitoring data in order to identify the needs for action and to launch remedial measures participate in development projects it has deemed appropriate in order to develop and introduce key indicators describing the energy efficiency of the Municipality s operations and the information systems supporting the national monitoring of this agreement procedure. 4.8 New operating models The operational target is to develop and introduce new operating models to promote energy conservation. In order to achieve this target, the Municipality shall: launch pilot projects promoting energy conservation and participate in joint development projects with other agreement municipalities it has deemed appropriate introduce cost-effective operating models to promote the efficiency of its energy use, such as in the management of the electricity consumption of its office equipment and lighting. 4.9 Training and communication The operational target is to ensure that the employees of the Municipality have the necessary information and skills related to their own tasks and operations and the preparedness for efficient use of energy and energy saving. In terms of communication, the operational target is that the Municipality acts in an exemplary way in matters concerning energy saving and energy efficiency and, to demonstrate this, actively communicate on its operations both within and outside the organisation. In order to achieve the targets, the Municipality shall: include issues related to energy conservation and efficient use of energy in training given to its own employees and the Municipality s elected officials, as well as in education and teaching activities actively communicate on the implementation of the agreement to its own employees and elected officials using various channels and encourage them to mutual exchange of information act in co-operation with the media and with organisations responsible for the promotion of energy saving and renewable energy sources and to organise exhibitions and other events to provide information to citizens and communities. display prominently the energy performance certificate of the building in buildings where such a certificate has been drawn up and where it is appropriate to display the certificate to indicate the exemplary operations by the Municipality. 5

6 Introducing renewable energy sources The operational target is to promote the use of renewable energy sources in the area of the Municipality and especially in the Municipality s own operations. In order to achieve the target, the Municipality shall: explore the possibilities of increasing the use of renewable energy sources with an energy audit covering the entire area of the Municipality or in an appropriately selected area by 2013 where possible, introduce renewable energy sources in buildings and other energy-consuming places contribute to the introduction of renewable energy sources in energy production located in the Municipality aim to increase the share of electricity and heat produced with renewable energy in the Municipality s energy produrement in an appropriate way, include measures related to the promotion of renewable energy sources in the Action Plan on the implementation of this agreement and in reporting on operations in accordance with this agreement implement the training and communication measures and development projects related to the promotion of renewable energy sources in a way it deems appropriate 5 The Ministry s actions In order to reach the targets and taking into account the annual available appropriations, the Ministry shall: support the Municipalities energy audits on energy conservation and the use of renewable energy 9. The Municipality s commitment to long-term energy saving and promotion of renewable energy sources is taken into account as a positive factor when determining the amount of aid support investments 10 related to energy conservation and renewable energy sources established in the Municipality s energy audits or similar analyses, meeting the general terms and conditions of energy aid. Projects promoting the introduction of new technologies and procedures take priority participate in joint development projects with the objective of supporting the implementation of this agreement and the measures by agreement municipalities in order to achieve the overall energy saving target allocate resources for Motiva Oy so that Motiva Oy can participate in the development of the agreement scheme, monitor the implementation of the agreement, participate in the compiling of annual reports, and participate in the production of communication and training material and implementation of training suitable for municipalities. 6 Reporting of activities in accordance with the agreement The Municipality shall report on the energy use of the previous year, the actions in accordance with the agreement and the implementation of the set targets to Motiva Oy by the end of April each year. Motiva Oy shall draw up a summary of the operations and results of the entire agreement sector based on the annual reporting. 9 The Ministry does not grant energy aid for energy audits of residential buildings. 10 The Ministry does not grant energy aid for standard energy saving investments in residential buildings.

7 7 7 Management group of the agreement sector The operations in accordance with this agreement are supervised by the management team, for which the Ministry appoints a chairman and one member, the Association of Finnish Local and Regional Authorities appoints one member, and six cities (Helsinki, Espoo, Tampere, Vantaa, Turku and Oulu) appoint one member from amongst themselves. In its first meeting, the management group decides on a procedure for adding one appointed member to the management group from other municipalities, which have joined the agreement by 30 April The municipalities, which have joined the agreement, may express to the Ministry their interest on the membership of the management group. When deciding on the above-mentioned further member of the management group, the management group shall take these expressions of interest into account. The tasks of the management group include: providing general instructions and interpretations related to the implementation of the agreement, when necessary monitoring the implementation of the targets of the agreement evaluating the results achieved by the year 2013 and, when necessary, preparing the changes applying to actions related to the end period of the agreement in accordance with section 8 deciding on the publication of the progress reports of the agreement activities in 2011 and 2014 and of the end report to be published in 2017 confirming the procedure, according to which the municipalities shall report on their activities in accordance with the agreement deciding on the publication of the annual summary drawn up by Motiva Oy processing cancellation in accordance with section 8 before the Ministry s decision on the matter The management group shall specify its own procedures itself in further detail. 7.1 Changes, duration and cancellation of the agreement This agreement shall enter into force on 1 January 2008 and it will be valid until 31 December However, the Municipality shall commit itself to reporting on its energy use in 2016 and on other measures and implementation of the set targets in accordance with the agreement by 30 April 2017 as an obligation included in this agreement. In 2013, the management group shall estimate the sufficiency of energy savings achieved in the agreement sector in the period of in relation to the energy-saving target of the agreement sector and the implementation of other obligations in accordance with this agreement. If it seems unlikely that the indicative energy-saving target set for 2016 can be achieved, the management group shall prepare proposals for changes applying to period At the same time, the management group shall decide how to agree on the implementation of the proposals with the municipalities, which have joined the agreement. The Ministry or Municipality may terminate the agreement if the other party does not fulfil its obligations or if the operating environment or conditions have fundamentally changed compared with the situation at the time of signing the agreement. The Municipality may cancel this agreement by notifying to the Ministry in writing. The Ministry may terminate the agreement of the Municipality if the Municipality will not implement the obligations it has

8 8 committed itself to in accordance with this agreement. This termination will always be dealt with in the management group referred to in section 7. The Ministry shall notify the municipality in question on the termination not later than six months before possible termination of the agreement. Termination will enter into force two weeks after a separate notice of termination has been sent to the municipality. The state aid received by the municipality, which has given or has been given notice of termination, may be collected according to the conditions on recovery recorded in the aid decision in question. The parties to the agreement aim to act in such a way that the measures in accordance with this agreement will be carried out. The judicial nature of the agreement is comparable to a target plan and, in addition to the termination of this agreement; its violation will not bear any legal consequences other than referred to above on state aid. This agreement is drawn up in two identical copies, one for each party Signature Name in block capitals Job title _ APPENDIX Accession details of the energy efficiency agreement

9 APPENDIX Unofficial translation Accession details of the Energy Efficiency Agreement for 1 Contact person of the Energy Efficiency Agreement Name Job title Postal address Post code Town Telephone Mobile Fax 2 Energy use for Service buildings Residential buildings Purchased heat MWh Purchased heat MWh Electricity MWh Electricity MWh Fuels 2 MWh Fuels MWh Total MWh Total MWh Cubic volume of buildings m 3 Cubic volume of buildings m 3 Or buildings in total Other consumption 3 Purchased heat MWh Heat MWh Electricity MWh Electricity MWh Fuels MWh Fuels MWh Total MWh Total MWh Cubic volume of buildings m 3 Buildings and other consumption in total MWh 3 Energy-saving targets Intermediate target in energy saving (2010) MWh % Intermediate target in energy saving (2013) MWh % Overall target in energy saving (2016) MWh % 1 It must be mentioned separately in the appendix if the presented energy consumption data is not for the year Net heat contents published by Statistics Finland are used as the conversion factors for fuels. 3 Other consumption means here e.g. the energy use of street and other outdoor lighting, water management and own work machines and vehicles, but not fuels used in energy production and public transport. If reliable monitoring data is not available, an estimate of the quantity of other consumption must be presented.

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