AUDIT II. Country Report CZECH REPUBLIC

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1 SAVE II Project AUDIT II I AUDIT II Country Report CZECH REPUBLIC Tibor Kantor Final Report

2 SAVE II Project AUDIT II II SUMMARY OF ENERGY AUDITING The National Energy Policy The Energy Policy was adopted by the Government of the Czech Republic in June In January 2000 the Government adopted a new revised and updated Energy Policy for the next 20 years closely related to the economic and raw material policies and respects the environmental policy of the State. It is based on the same principles as the energy policy of the European Union and sets the key strategic goals: protection of the environment while respecting the principles of sustainable development, security of the energy supply, support to the competitiveness of the economy. The legislative framework for the Energy Policy has the following particular objectives: organisation of the energy market and the rules of business activities in the energy sector, effective utilisation of energy sources, regulation in the energy sector. This framework is defined by the following acts: the Energy Management Act (in force since 1 January 2001) stipulates the rights and obligations of natural and juristic persons in the management of energy. Newly defines the National Programme for Rational Use of Energy and Utilisation of Renewable and Secondary Energy Sources (hereinafter National Programme) for the next 4 years based on the Energy Policy. The Act introduces Energy Audit in the legislation and obligation to undergo audit for target groups under defined conditions. the new Energy Act (in force since 1 January 2001) regulates conditions for business activities and execution of State administration in the energy branches. It defines the authority and competence of the State Energy Inspection (SEI), which is entitled to control observation of this Act and the Energy Management Act. It is competent to take decision on carrying out provisions proposed by the energy audits. Energy Audit Programmes In the Czech Republic there is one audit programme set by the Energy Management Act for a time scale of 5 years. The programme should be implemented by The programme is mandatory for all branches. The administration is done by the Ministry of Industry and Trade. The Czech Energy Agency acts as operating agent. The target groups are defined by the Energy Management Act according to the total annual energy consumption and includes all sectors. It concerns mainly buildings (schools, hospitals, office buildings, etc.) and SMEs. Carrying out audit is also compulsory for all applicants for state subsidy under the National Programme.

3 SAVE II Project AUDIT II III Other Programmes with Energy Audits State Programme of Support of Energy Savings and Use of Renewable and Secondary Energy Sources (hereinafter State Programme) It is declared each year by the Ministry of Industry and Trade for implementation of the National Programme. Within the State Programme subsidy from the state budget can be provided for promotion of selected energy savings projects. In one of the subprogrammes state support of energy audits is foreseen. The implementation of the State Programme is financed from the state budget. Subsidies are provided on application basis in accordance with the principles set by the Ministry of Industry and Trade. The administration is done by the Ministry of Industry and Trade. The Czech Energy Agency acts as operating agent. Support of projects under the State Programme is possible also from State Environmental Fund, which provides subsidy, soft loans or their combination for promoting projects of the State Programme aimed at utilisation of renewable sources of energy. The State Programme is targeted to all sectors. Subsidies are granted on the base of submitted applications, which are assessed in a selection procedure by commission appointed by the chairman of the Steering Committee of the CEA. The prerequisite for providing state subsidy is performance and submission of an energy audit related to the respective project. Other Activities including Energy Audits Programme for financial support of repair of panel buildings The programme has started in 2001 and has a time horizon of 20 years. In spite of having been built relatively recently, prefabricated panel buildings often suffer from very serious technical defects (static and safety problems). Under this programme the government provides financial aid to all owners of panel buildings, i.e. municipalities, housing cooperatives, private persons and corporations, in which the state has no ownership interest. In case when the repair is related to energy savings an energy audit must be a part of the application for the support. It must be carried out in accordance with the Energy Management Act. For financing the programme the State Fund of Housing Development was founded in 2000 by law. The programme is administrated by the Ministry for Regional Development.

4 SAVE II Project AUDIT II IV Energy Audit Programmes in Czech Republic Energy Audit Programme Other Programme related to Energy Auditing Other Activity related to Energy Auditing Industrial plants with high energy intensity Large industrial plants SME s Energy Management Act State Programme Private service sector Public service sector Repair of panel buildings Blocks of flats Small residential buildings < 700 GJ/year Table of EAP features coverage (incl. other programmes and other activities with energy audits) Energy Management Act State Programme Status Administration EA models Auditors tools Training, authorisation Quality control Monitoring Volumes, results Evaluation = Detailed information available ++ = Some information available + = Very little information available = No information available / does not exist Repair of panel buildings

5 SAVE II Project AUDIT II V Contacts Irena Plocková Václav Šrámek Czech Energy Agency, U Sovových mlýnů Praha 1 Association of Energy Auditors, Buzulucká Praha cea@ceacr.cz aea@aeaonline.cz Country Report Country Report written by Tibor Kantor CityPlan Ltd. Reviewed by Otto Starzer E.V.A. Disclaimer The information contained in this report has been gathered from publicly available sources and through interviews. All efforts have been made to secure the veracity of the report, however the authors cannot guarantee the content.

6 SAVE II Project AUDIT II VI Table of Content 1. Background and Present National Energy Policy Energy Audit Programmes Energy Audit Programme set by the Energy Management Act Goals Target sectors Administration Implementing Instruments Energy Audit Models Auditors Tools Training, authorisation and quality control Results, Monitoring, Evaluation Observations and Future Plans Other Programmes with Energy Audits State Programme of Support of Energy Savings and Use of Renewable and Secondary Energy Sources Goals Target sectors Administration Energy Audit Models, Auditors Tools, Training, authorisation, quality control Results, Monitoring, Evaluation Observations and Future Plans Other Activities including Energy Audits Programme for financial support of repair of panel buildings... 11

7 SAVE II Project AUDIT II 1 COUNTRY REPORT 1. Background and Present National Energy Policy Previous activities In 1992, the Government of the Czech Republic adopted the Energy Policy of the Czech Republic, of which in particular the following targets have been met: The Agreement on the Energy Charter was ratified in 1996 (the Czech Republic became member of the OECD), Act 222/1994 Coll. on the business conditions and execution of State administration in the energy branches and on the State Energy Inspection Board was adopted as a basis for the energy legislation, the regulation of prices of solid fuels was lifted in 1994 and that of liquid fuels in 1997; subsidies to the prices of the supply of heat from district heating systems to the population were removed in 1998, the consumption of coal has been substantially reduced, especially its use in end consumption, where it has been replaced mainly by natural gas and also by electricity (in households), coal-fired power plants which are planned to remain in use on a long-term basis, were desulphured and denitrified before the end of 1998 and their operation currently meets the strict emission limits of as per Act 309/1991 Col. - the Clean Air Act; together with the marked reduction of pollutant emissions, the adverse environmental impact of electricity generation has been significantly reduced, in October 1999 the Czech Republic was invited to become member of the International Energy Agency by the OECD. In January 2000 the Government adopted a new revised and updated Energy Policy for the next 20 years that is closely related to the economic and raw material policies and respects the environmental policy of the State. It is based on the same principles as the energy policy of the European Union ("EU"). This means that it emphasises the requirements for securing: the objectives of protection of the environment while respecting the principles of sustainable development, security of the energy supply, support to the competitiveness of the economy. State support of energy savings commenced in In period the Energy Agency acted as operating agent, which was in 1995 transformed to the Czech Energy Agency. In 1995 the Czech Energy Agency (CEA) was established by decision of the Ministry of Industry and Trade (MIT) to initiate and facilitate activities aimed at energy savings and reducing impact of energy use on the environment. It is also responsible for the State Programme of Support of Energy Savings and Use of Renewable Energy Sources established by the MIT.

8 SAVE II Project AUDIT II 2 In the early 1990s new environmental legislation was introduced. In 1995 the Government approved a comprehensive State Environmental Policy, which was revised and updated in 1999 in accordance with the EU legislation. It sets out objectives for the integration of environmental concerns into sector policies. It is closely linked with the Energy Policy and defines environmental requirements for Energy Policy: support efficient use of energy, introduction of low emission energy generation use renewable and secondary energy sources to greater degree on the basis of the State Programme promote increased efficiency of energy cycles. In 1991 a law for economic promotion of environmental protection and clean technologies established the State Environmental Fund. Present national energy policy The Energy and Environmental Policies are being implemented by amending the Czech legislation in harmony with the needs of the Czech economy and with the conclusions of the pre-entry negotiations with the EU. The legislative framework for the Energy Policy has the following particular objectives: organisation of the energy market and the rules of business activities in the energy sector, effective utilisation of energy sources, regulation in the energy sector. This framework is defined by the following acts: the Energy Management Act (in force since 1 January 2001) stipulates the rights and obligations of natural and juristic persons in the management of energy. On the basis of the Energy Policy, the regions, the City of Prague, and the statutory cities shall produce Territorial Energy Policies for the next 20 years. A Territorial Energy Policy shall constitute the binding basis for master planning. They shall lay down the objectives and principles of energy management at regional level. Newly defines the National Programme for Rational Use of Energy and Utilisation of Renewable and Secondary Energy Sources (hereinafter National Programme) for the next 4 years based on the Energy Policy. The Act introduces Energy Audit in the legislation and obligation to undergo audit for target groups under defined conditions. Also introduces the obligation of ensuring a defined minimum efficiency in generating electricity and heat and of labelling of energy consuming appliances produced in series. the new Energy Act (in force since 1 January 2001) regulates conditions for business activities and execution of State administration in the energy branches including electric energy, gas and heat supply, as well as rights and obligations of natural and juristic persons related to these activities. It defines the authority and competence of the State Energy Inspection (SEI), which is entitled to control observation of this Act and the Energy Management Act. It is competent to take decision on carrying out provisions proposed by the energy audit. For implementing the Acts a set of decrees has been issued.

9 SAVE II Project AUDIT II 3 The legislative framework of the key targets of the Environmental Policy related to the energy sector includes amendment of the Clean Air Act of The new Clean Air Act was passed by the Parliament on 12 March 2002 with effect from 1 June A set of related decrees is being prepared to the Act, where, among others, new emission limits will be defined. A modern Environmental Code will be prepared as well as legal instrument for implementing the environmental policy. The key economic instruments of the State for promotion of energy savings and implementation of the National Programme are: State Programme of Support of Energy Savings and Use of Renewable and Secondary Energy Sources (hereinafter State Programme) is declared each year for implementation of the National Programme. Within the State Programme subsidy from the state budget can be provided for promotion of selected energy savings projects and also of energy audits State Environmental Fund, which provides subsidy, soft loans or their combination for promoting projects of the State Programme aimed at utilisation of renewable sources of energy. The prerequisite for providing state subsidy is performance and submission of an energy audit related to the respective project. 2. Energy Audit Programmes 2.1 Energy Audit Programme set by the Energy Management Act The Energy Management Act requires carrying out energy audit for: the state organisational units, the regional and municipal organisational units and the bodies entirely or partly financed from the national budget with a total annual energy consumption exceeding GJ all juristic or juristic persons, with the exception of the bodies entirely or partly financed from the national budget, with a total annual energy consumption exceeding GJ owners of buildings and premises independently supplied by energy with a total energy consumption per year exceeding 700 GJ. The energy audit is also compulsory for heat or electricity producers with a total output over 5 MWt respectively 10 MWe in case of building new sources or reconstructing existing sources in order to investigate feasibility of cogeneration. The obligation to carry out energy audit is related to use of gas turbines with output above 2 MWe and use of internal combustion engines with output above 0,8 MWe. The audits must be carried out within 3 years after entering the Act into force. In cases where the total annual energy consumption is at least tenfold higher than the above values, this time limit is 5 year. The State Energy Inspection (SEI) is in charge of checking performance of audits, implementation of measures proposed by the audits and their terms. In general, observation of both the Energy Management Act and the Energy Act is supervised by SEI.

10 SAVE II Project AUDIT II Goals The programme is aimed at definition and implementation of energy savings measures especially in public buildings. The audits are to reveal the level of energy utilization, the technical potential of energy savings and to define the optimal measures for their realization Target sectors The programme is targeted to all sectors corresponding to the total annual energy consumption defined above. It is related mainly to public buildings and SME Administration The programme is compulsory for all branches. The administration is done by the Ministry of Industry and Trade. The technical requirements and rules of energy auditing are set by the Ministry of Industry and Trade. The Czech Energy Agency acts as operating agent Implementing Instruments The programme is a compulsory instrument for the clients specified by annual energy consumption. The cost of the audit is paid by the client, but subsidy from the budget of the State Programme coordinated by the Czech Energy Agency can by provided on application basis. The subsidy for elaboration of an audit can cover up to 30 % of the total costs up to a maximum of CZK ( 16129). Table 1: Overview of implementing instruments Mandatory / legal schemes Voluntary schemes Energy audits are mandatory by the Energy No voluntary schemes exist. Voluntary audit may Management Act in cases defined by the Act and be a part of company energy management corresponding regulation (see chapter) strategy to reduce energy costs Fiscal incentives (taxes) Fiscal incentives (subsidies) No link Possible subsidies for energy audits up to 30 % (max CZK) Marketing tools None Policy issues Audits are mentioned in the National Programme as a tool for energy savings

11 SAVE II Project AUDIT II Energy Audit Models The contents and structure of the audit report is defined by the Ministry decree on energy audits to the Energy Management Act: identification data on the audited client, operator of the equipment, auditor, subject of the audit description of the initial state (sources, energy distribution systems, energy inputs and outputs, operation regimes, technical parameters) evaluation of the initial state (energy balances, losses, consumption, calculation of attainable energy and cost savings etc.) proposal of measures for achieving energy savings in variants (energy balances for the variants) economic evaluation environmental impact evaluation conclusions of the audit (evaluation of the present energy use, proposal for the optimal solution incl. economic evaluation, the achievable energy savings) summary This model is compulsory and common for all sectors (industry, buildings). The audit procedure is not regulated. It is the responsibility and task of the auditor to fulfil the above requirements. In the course of the training the following procedure is recommended to the new auditors: start-up meeting with the client (clarification of the goals and data needed, designation of cooperating persons ) field work, site inspections, collecting the data (energy bills, operation records, interviews) analysis of the data mid-term meeting with the client (reporting on the preliminary results and conclusions, additional data collection if needed) drafting the report final reporting to the client Auditors Tools There are no compulsory tools. The content and structure of the report on the energy audit is determined by a regulation to the Energy Management Act. The Czech Energy Agency has published a series of guides. They are selected by the Agency and developed and used by the Energy Consultancy and Information Centres (EKISs) forming a network of the Agency throughout the country and provide consultancy and advice to the public and companies in the field of rational energy use. EKISs are prevailingly private consulting companies engaged in the energy sector. The guides are recommended to auditors and can be used also by energy managers and technicians. Examples of guides for auditors: Legislation related to energy audits Energy economy for the energy audits Methodology of energy audits in industrial factories Energy auditing models for buildings

12 SAVE II Project AUDIT II 6 Methodology of energy audits for renewable energy sources Economic assessment of energy investments Energy management Principles of energy saving measures for energy sources, distribution and consumption and an energy auditing model Principles of creating and analysing energy balances Legal responsibility of the energy auditor Energy audit of systems with gas cogeneration Energy audit of systems with conventional energy source Sector specific guides for efficient energy use in the industry and buildings. The guides are developed and published within the State Programme and financed from state subsidy. They are distributed to the EKISs as hard copies and are available on the website of the Agency ( The guides are related to a wide range of sectors (industry, buildings), energy technologies, fuels and energy sources used as well as progressive methodologies, procedures and practices for efficient energy utilisation. Another tool are seminars and lectures for the energy auditors organised by the Association of the Energy Auditors, which is a voluntary organisation of individual or corporate members and issues its own Bulletin for the members. Also the Czech Chamber of Authorised Engineers and Technicians issues publications, which can serve as guide for the auditors Training, authorisation and quality control The energy auditor is a natural person entered onto the record of energy auditors kept by the Ministry of Industry and Trade. A person may be entered onto the record of the energy auditors after fulfilling basic requirements on qualification set by the Energy Management Act: passing the expert examination university education in a technical or natural science and three years of professional experience, or secondary education in a technical field and six years of professional experience. The exam for auditors consists of a comprehensive written test and oral exam before the examining board. The examining board is appointed by the Ministry of Industry and Trade. The auditor must not have any interest in the audited company. He must be fully independent on it. The authorisation (certificate) for auditors is an official document issued by the Ministry. It has unlimited validity, however, the Ministry has the competence to withdraw the authorisation in case when the auditor ceases to meet requirements of the law or disobeys his duties or does not perform audits during a five years period. Another group of energy auditors is that with authorisation of the Czech Chamber of Authorised Engineers and Technicians, which has own rules of examination. However, this authorisation is not sufficient for audits required by the Programme but can be used for audits according to voluntary schemes.

13 SAVE II Project AUDIT II 7 The application for the registration on the list of the energy auditors shall be submitted to the Ministry in writing. To the application shall be attached proof of education copies of energy audit reports performed in the recent two years in which the applicant had participated certificate of the energy auditor confirming such participation certificate on expert examination. The training of new auditors is organised by the Association of Energy Auditors and other nongovernmental organisations on a voluntary basis and takes in total approximately 220 hours. The training consists of a number of lectures embracing all issues of auditing both technical and legal aspects. The participants or their employers should pay a participation fee. Both the training and exam is universal for all applicants and for all sectors. Up to now, about 80 auditors have passed the examination. The CEA controls the quality of the submitted audits. They must strictly fulfil the methodology of the law. The training course is developed with respect to the practical needs and reflects both the auditors experience and the quality control Results, Monitoring, Evaluation The Programme is at its beginning and no results are available. Monitoring and evaluation is done by the state, regional and local organisational units Observations and Future Plans The time scale of the programme is given by the Energy Management Act. There is no plan for future development. 3. Other Programmes with Energy Audits 3.1 State Programme of Support of Energy Savings and Use of Renewable and Secondary Energy Sources The State Programme incorporates branch energy efficiency programmes of the respective branches (Industry and Trade, Environment, Agriculture, Regional Development, Health, Defence, Interior, Culture, Justice), in which requirements on performance of energy audits are specified. Implementation of the branch programmes is responsibility of the branch ministries. The Ministry of Industry and Trade announces the programme yearly along with the principles of providing financial support from the state budget. The Czech Energy Agency is in charge of the programme.

14 SAVE II Project AUDIT II 8 Performance of energy audit is compulsory for all natural or juristic persons applying for a state subsidy under the programme Goals The programme is declared for the purpose of implementation of the National Programme for Rational Use of Energy and Utilisation of Renewable and Secondary Energy Sources. It is aimed at introduction of energy savings measures in the field of production, distribution and consumption of energy, wider use of renewable and secondary sources of energy and development of combined heat, cold and power generation. The programme supports implementation of measures for efficient energy utilisation and reduction of environmental impact with high efficient use of the finances from the budget, promotion of consultancy, public education resulting in efficient use of energy and renewable and secondary energy sources. The goal is to reduce the energy intensity of the economy, saving of energy sources and minimisation of environmental impacts. The State Programme is open to all natural and juristic persons meeting its requirements. It is divided in the following sub-programmes: Support for preparation of regional energy concepts, energy audits and passports Regional Energy Concepts Energy Audits Energy Passports Equipment for the production and distribution of energy Improved utilisation of energy in production and distribution facilities Combined Heat and Power Increased utilisation of renewable and secondary sources of energy Support for measures to increase the efficiency of energy use Comprehensive package of measures to reduce energy demand Projects financed through energy savings Support for the development and utilisation of modern technologies and materials for use in measures for the increase of energy efficiency Consultancy, training and dissemination of information for the efficient utilisation of energy and improved environmental conditions Energy Advise Centres Regional Energy Agencies Training and dissemination of information for the efficient utilisation of energy and renewable sources of energy with a beneficial impact on environmental conditions Materials and aids to support consultancy, training and dissemination of information for the efficient utilisation of energy and use of renewable sources of energy with a beneficial impact on environmental conditions.

15 SAVE II Project AUDIT II Target sectors The State Programme is targeted to all sectors. The sub-programme of energy audits is targeted to buildings and energy installations with energy consumption at a single location exceeding 1500 GJ/year: industrial sector energy systems and installations, buildings and operational or manufacturing facilities of industrial enterprises) public sector energy systems and installations for energy supply of housing estates energy systems and installations and buildings of schools, health care, civic facilities, public institutions blocks of flats Administration The Ministry of Industry and Trade is responsible for implementation of the State Programme. The administration of the State Programme is executed by the Czech Energy Agency as operating agent. The run of the Agency is financed from the state budget. It is the chief co-ordinator of the State Programme. The representatives of the Agency are members of the examining board for energy auditors. It takes part in developing and implementation of the State Programme, monitors and evaluates the results, takes care of quality control of audits and evaluates implementation of the measures recommended by the audits Implementing Instruments Subsidies The Government for respective years approves the financial limit for the support of the State Programme. The support is provided as state subsidy. Producing the energy audits may also be subsided. Support of projects within the Programme is possible also from the State Environmental Fund directly (subsidies, soft loans or combination of these) or indirectly (partial covering the interests of a loan). The support is granted on the base of submitted applications, which are assessed in a selection procedure by commission appointed by the chairman of the Steering Committee of the CEA. Granting subsidy from the State Environmental Fund is the competence of the Minister of the Environment. The Council of the Fund evaluates the applications. The Council is an advisory body of the minister. In cases when energy audit is mandatory by legislation the expenses shall bear the audited company. Within the Programme, the subsidy for elaboration of an energy audit ca cover up to 30 % of the total costs, up to a maximum of CZK ( ).

16 SAVE II Project AUDIT II 10 Table 2: Overview for schemes/instruments linked to energy audits: Mandatory / legal schemes The State Programme supports audits both mandatory (see chapter 2.1) and other Fiscal incentives (taxes) No link. Marketing oriented schemes Promotion of energy saving measures and audits is carried out by publications, journals, exhibitions, seminars and conferences. Voluntary schemes No voluntary schemes exist. Voluntary audit may be a part of company energy management strategy to reduce energy costs Fiscal incentives (subsidies) Subsidies for energy audits required by the Programme or for investments related to measures identified by audits Policy issues Audits are mentioned in the National Programme as a tool for energy savings Energy Audit Models, Auditors Tools, Training, authorisation, quality control See chapter Results, Monitoring, Evaluation The Czech Energy Agency monitors the subsidised audits. The investors are obliged to report to the Agency on implementation of the measures proposed by the auditors and savings achieved. The Agency collects and evaluates yearly the following data on the audited projects: number of the supported projects investment costs amount of the support annual energy saving cost of the saving in CZK/GJ subsidy per GJ of energy saving It is assumed that over the next five-year thousands of audits must be performed that required by legislation. The yearly amount of the subsidy and thus the quantitative target depends on the possibilities of the state budget approved by the government. For year 2002 a sum of 90 millions CZK ( 2,9 million) is available of which 20 millions will be provided as subsidy for energy audits.

17 SAVE II Project AUDIT II 11 In 2001, the results of the State Programme subsidised by the Agency were as follows: Number of subsidised projects 396 Investments 18,9 million Subsidy 3,1 million Energy savings GJ/year Investment on energy savings 57,8 /GJ Subsidy for energy savings 8,3 /GJ Observations and Future Plans The Programme will continue. It is announced yearly and in the next years greater emphasis shall be laid on auditing. Audits shall be used also for education, training, consultation and propagation in the field of energy savings. 4. Other Activities including Energy Audits 4.1 Programme for financial support of repair of panel buildings The programme has started in 2001 and has a time horizon of 20 years. In spite of having been built relatively recently, prefabricated panel buildings often suffer from very serious technical defects (static and safety problems). Under this programme the government provides financial aid to all owners of panel buildings, i.e. municipalities, housing cooperatives, private persons and corporations, in which the state has no ownership interest. The subsidy may not exceed 50 % of the estimated costs of repair. In case when the repair is related to energy savings an energy audit must be a part of the application for the support. It must be carried out in accordance with the Energy Management Act. The same audit procedure is applied as in other programmes, see chapter 2.1. For financing the programme the State Fund of Housing Development was founded in 2000 by law. The programme is administrated by the Ministry for Regional Development.

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