Expert Dialogue on Energy Efficiency: How to Combine Incentives and Regulation?

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1 Rethinking Franco-German Cooperation in the Context of Energy Transitions First Session Berlin, 23 January 2013 Expert Dialogue on Energy Efficiency: How to Combine Incentives and Regulation? Energy efficiency is without doubt one of the most important components of the transition towards a sustainable, competitive and secure energy system. In the context of the European climate and energy package and their respective national strategies, France and Germany have committed themselves to ambitious targets in order to reduce overall energy consumption and increase energy productivity over the next decades. However, despite the consensus on the significance of energy efficiency and its economic, environmental and social benefits, French and German societies as a whole face considerable difficulties to unlock the full potential for energy savings in the different sectors, due to numerous market failures and non-market barriers. Current measures will fall short of achieving the common European target of 20 percent more energy efficiency by The European framework is and will continue to be of utmost importance for progress in the field of energy efficiency. Simultaneously, possibilities for bilateral cooperation are sometimes overlooked, regardless of the numerous opportunities, ranging from the exchange of experiences to coordination and joint projects for R&D, industry, infrastructure and market mechanisms. A closer bilateral cooperation could help France and Germany take the steps needed to meet the existing efficiency targets in the short term. In the medium term, France and Germany could also play a key role in pushing for more ambitious European targets and mechanisms in the future. In order to address these issues from a Franco-German perspective, this workshop brings together high-level experts in energy efficiency from both countries, including public administrations, industry, financial institutions, think tanks and the academia.

2 The workshop opens a series of Franco-German expert meetings organized by IDDRI (Institute for Sustainable Development and International Relations, Paris) and the Institute for Advanced Sustainability Studies (IASS, Potsdam) to foster bilateral and European cooperation on the different aspects of the implementation of energy transitions. In addition to an exchange of best practices, the workshop series aims at exploring ways in which the countries can cooperate in the future to overcome the main bottlenecks and to achieve the common objectives. The second workshop of the series, on renewable energies, is planned for April 2013 in Paris. Expert Dialogue on Energy Efficiency: How to Combine Incentives and Regulation? Quadriga Forum, Werderscher Markt, Berlin 23rd of January :00 to 17:00 10:00 Arrival of participants - Coffee and refreshments Welcome and Opening The workshop begins with a comparative overview of current energy efficiency policies in France and Germany and an outlook on the potential for energy efficiency in Europe. This will serve as a basis for the ensuing sessions, where the future opportunities and challenges are addressed from a twofold perspective, combining the two main levers for energy efficiency: incentives on the one hand, the regulatory framework on the other hand. Whereas the division between incentives and regulation is partly artificial, this structure is intended to enable a fruitful debate on the implications of these often overlapping measures for the most important sectors buildings, industry, appliances and transport. Welcome and Introduction: Professor Klaus Töpfer, Executive Director, IASS Potsdam / Dr. Laurence Tubiana, Director IDDRI Dr. Michel Colombier, Scientific Director, IDDRI The role of energy efficiency in the German Energy transition and Climate policy Dr. Urban RID, Director of the department for the Energiewende, Climate Policy, European and International Environmental Policy at the Federal Ministry for Environment (BMU) The role of energy efficiency in the French Energy and Climate Policy Laurent MICHEL, Director at the Directorate General for Energy and Climate, French Ministry for Ecology, Sustainable Development and Energy (MEDDE)

3 11.25 The contribution of energy efficiency measures to climate protection within the EU Dr. Wolfgang EICHHAMMER, Head of Competence Center Energy Policy and Energy Markets, Fraunhofer ISI Part I: Incentives and the financing of energy efficiency Financing energy efficiency measures is a challenge for most economic actors. Thermal retrofits of buildings in particular require high up-front investments and relatively long payback periods. Additionally, due to the lack of experience and feedback regarding energy efficiency financing, private banks are reluctant to implement new mechanisms. In this context, public financing instruments play a major role in triggering private investments and unlocking further energy savings. This part of the workshop will, among others, address the following questions: - How do current financial incentives in both countries (KfW loans and grants in Germany, tax credits and preferential loans in France) perform against the double criteria of increasing the rate and depth of thermal retrofits? How can the effectiveness of support instruments be monitored? - The German experience in financing energy efficiency: what lessons can be drawn of the KfW programs? What are the challenges for the future? - Public financing of energy efficiency in France: which institutional framework and actors and which scale for intervention? - Shifting the balance: how can public financing bridge the gap between exploiting only the most cost-effective measures and tapping the full energy saving potential? - What is the added value of new public-private partnerships? What institutional models exist in both countries? - What are the needs for new financing instruments to support energy efficiency measures in the industry? - Energy Savings Obligations: how can their effectiveness be increased and transaction costs limited? Experiences from France. - Identifying new chances for cooperation on financing instruments on the bilateral and European level. Dr. Kathrin Goldammer, Project Leader, IASS Potsdam Energy efficiency financing mechanisms in France - eco-loans, tax credits and the energy savings obligation scheme Pierre Douillard, Economic Research and Forecasting Department, French Environment and Energy Management Agency (ADEME) The French model of Mixed Economy Societies - an innovative approach to energy efficiency funding Frank Hovorka, Strategy department, Caisse des Dépôts et Consignations Comment on incentive schemes for energy efficiency in France Dr. Karsten NEUHOFF, Head of Department for Energy and Climate Policy, DIW Berlin

4 LUNCH BREAK The German model for energy efficiency financing - Experience of the KfW Dr. Vivien Lo, Vice President, Economic Research, KfW Bankengruppe Comment on incentive schemes for energy efficiency in Germany Jerome Degryse, Head of Strategy, Schneider Electric France Discussion Part II: Regulatory measures Given the current structure of the building stock in both countries, thermal insulation of existing buildings represents simultaneously the biggest potential and the greatest challenge for energy efficiency. Facing the ambitious mid- and long-term goals, support mechanisms might not be enough to foster a massive deployment of energy efficiency projects across the different sectors. Striking the balance between regulation and incentives will be a major challenge in this regard, in particular in the building sector. This part of the workshop will deal with questions such as the following: - What approach is used in current national thermal regulations, regarding energy performance requirements for existing buildings in particular? - Can a retrofitting obligation be a mid-term solution to address the efficiency challenge? - What push policies are needed on the supply side to structure the construction branch in order to face these challenges? - How can the regulatory framework support the emergence of new market-based mechanisms (public guarantees, legal framework for energy performance contracting, etc.)? Dr. Dolores Volkert, Research Scientist, IASS Potsdam The regulatory framework for energy efficiency in Germany Christian NOLL, Executive Director, German Business Initiative for Energy Efficiency (DENEFF) Comment on the German regulation Antoine DE FLEURIEU, Executive Director, Gimélec France (tbc) Discussion COFFEE BREAK The regulatory framework in France Jérôme GATIER, Director of the Strategic Committee, Sustainable Building Plan, MEDDE France

5 15.30 A comparison of the national models Comment by Dr. Sibyl Steuwer, Freie Universität Berlin, Member of the German Advisory Council on the Environment (SRU) Discussion Conclusion On the basis of the discussions during the workshop it should be possible to identify several priority areas where France and Germany could work closer together on the European level or to learn more from each other s best practices in order to improve their respective energy efficiency measures. In addition to summing up the debate, the concluding remarks should also outline a mandate for the organizers (IDDRI, IASS) to work on a brief outcome document highlighting the main policy suggestions in this field. Michel Colombier, Scientific Director, IDDRI Contact details IDDRI - Institute for Sustainable Development and International Relations Andreas Rüdinger andreas.rudinger@iddri.org IASS - Institute for Advanced Sustainability Studies Petri Hakkarainen Petri.Hakkarainen@iass-potsdam.de