Danish Energy Saving Report

Transcription

1 Danish Energy Saving Report May 2003 Draft translation

2 Table of contents 1. Introduction 3 2. Projection of energy consumption in Denmark 4 3. Effects of improvements in energy efficiency 7 4. Barriers and better market transparency 9 5. Savings targets for individual sectors New orientation of existing instruments 14 Energy labelling of large buildings ELO 15 Energy labelling of small buildings the house-labelling scheme 16 Energy labelling products 17 The Danish Electricity Saving Trust 20 Energy-savings activities by grid and distribution companies 22 The Agreement Scheme and energy management 23 Energy-conscious planning 25 Energy-savings initiatives by the public sector 26 Subsidies for energy savings by pensioners 27 Local energy savings committees 28 Information on energy savings New energy-savings initiatives 30 Promoting particularly energy-efficient refrigerators and freezers 30 Phasing-out traditional double glazing - voluntary agreement 30 Tightening building regulations 30 Efficiency requirements for boilers and circulation pumps 31 Strengthening energy-savings initiatives in the public sector 32 Reduction of standby consumption 33 Enhancement of research and development activities 34 ISSN: ISBN, printed edition: ISBN, electronic edition:

3 1. Introduction MAKING ENERGY-USE MORE EFFICIENT through energy savings can be seen in connection with the Danish government's growth strategy Determined Growth. Less energy consumption as a consequence of economically attractive energy-saving initiatives leads to smaller energy bills and thus improvements in competitiveness. At the same time, reductions in energy consumption mean that vulnerability towards increasing energy prices is reduced, and that security of supply is improved. Finally, energy savings are an instrument to reduce environmental impacts from the energy sector. Energy consumption in itself does not represent an environmental problem, however to the extent that use of energy leads to environmental impacts, including emissions of substances harmful to the environment during energy production, reductions in energy consumption will reduce environmental impacts. However, with regard to electricity savings, if lower Danish electricity consumption is not followed up with tighter CO 2 quotas, the result will be a corresponding increase in electricity exports. Electricity savings do not therefore in themselves lead to lower CO 2 emissions in Denmark unless they are accompanied by adjustments in CO 2 quotas for electricity production, cf. the Danish government's energy proposal Liberalisation of the Energy Markets (available at The Danish government emphasises that energy-savings initiatives should be cost-effective, both for society and for consumers. This means that costs should be recovered by the energy savings achieved after only a few years. Initiatives should also help promising technological solutions, and cooperation between business and the state should be developed so that energysaving initiatives support maturing the market for new, innovative energy solutions. The government's position is that energy-saving initiatives should be based on market initiatives instead of subsidies or new taxes. Energy savings should be promoted by making the markets function more efficiently. The markets should be made more transparent, and inappropriate barriers should be broken down so that more financially attractive savings can be realised. It should be easy for consumers and enterprises to choose energy-appropriate products and thus easy for them to identify good energy savings. At the same time, the supply of energy-efficient products and solutions should be promoted. Competition between market players should ensure that energy-saving appliances, products, and services are supplied effectively and as cheaply as possible. 3

4 The Danish government will be active in introducing common instruments to promote energy savings in the EU member countries. Internationally concerted initiatives ensure that this does not affect the competitiveness of Danish enterprises. These also promote the impact of initiatives and ensure greater savings at lower cost. Future national initiatives should therefore be regarded from an international perspective. The first part of this report contains a new projection of energy consumption and an assessment of the effect of energy-savings initiatives. The projection corresponds to the projection included in the government's Climate Strategy. After this, the report describes the effects of energy efficiency in end-use, and there is a description of the barriers, etc. to realising a number of energy savings that seem economically attractive. Further to this, the report takes status of the energy-saving elements in the action plan that is part of the agreement of 29 May 2001 between the previous government, Venstre - Denmark's Liberal Party, the Conservative Party, the Socialist Peoples' Party, the Centre Democrats, and the Christian People's Party on natural gas supplies and energy savings. This status deals with both the savings targets for individual sectors, and a review of the existing instruments, where focus is on how they can be made more market-oriented and cost-effective. Finally, the report contains proposals for a number of new energy-savings initiatives. These initiatives should be regarded in connection with the government's Climate Strategy, and they should help meet the savings targets agreed. Energy-savings initiatives do not include behaviour-regulating product taxes, as the government does not consider these as effective instruments to promote energy savings. 2. Projection of energy consumption in Denmark THE ENERGY AUTHORITY has prepared a new projection of the changes in final energy consumption up to 2010 for the different sectors (excl. the transport sector). The new projection is also included in the Climate Strategy. This is a so-called reference projection that assumes that existing initiatives and taxes continue unchanged and no new policies are adopted. Therefore, possible new but so far not adopted initiatives are not included. The projection must not therefore be mistaken for a forecast of the most likely developments. It should be stressed that because of their very nature, projections are very uncertain. The projection is based on energy consumption in

5 The projection shows a slight fall in total final energy consumption in 2002 (adjusted for climate changes). This is further to the slight fall from 2000 to The change should be considered in the context of moderate economic growth. The fall is primarily in manufacturing, while other sectors are expected to remain at the same level. After 2002, total final energy consumption (excl. transport) is expected to rise gradually by about 1% per year. A slight drop in energy consumption by households is expected, while relatively large rises are expected for agriculture and industry and the private-services sector. A slight fall is expected in the public sector. In households, an increase in electricity consumption is expected as a result of more appliances, with a fall in energy consumption for heating as a result of energy improvements, especially more efficient oil and gas boilers. Overall there is a slight projected fall in households' energy consumption by about 0.1% a year. The increase in the business sector is primarily in private trade and service (about 2% a year), but also relatively large for agriculture and industry (almost 1.5% a year). This increase reflects expectations of good growth in commercial production. Furthermore, a small fall in real prices of oil products is expected, and thus also a short-term fall in natural gas prices. Table 1: Comparison between the new projection and the projection in the Energy Savings Report 2001 (ESR 2001). PJ Climate ESR 2001 New projection ESR 2001 New projection adjusted Households Public services Private trade and services Agriculture and industry Total, excl. transport Domestic transport International air travel and defence transport Total incl. transport Note: the figures for 2001 are from Energy Statistics 2001 (available in English from www/ens/dk) The assumptions for economic growth are based on the Økonomisk redegørelse, januar 2002 (economic report, January only available in Danish). The report expects economic growth, measured in terms of real GNP to be about 1.8% from 2001 to 2010, and private consumption in real terms is expected to increase by about 2.2% per year. Because of overall increases in total energy efficiency, however, energy consumption is expected to grow by the 1% per year mentioned previously. The expected improvement in energy efficiency is, 5

6 however, very small for businesses, but very large for households, and this is more or less in line with developments over the past years. Compared with the projection presented in The Energy Saving Report 2001, Danish Energy Authority, 2001 (available at growth in future energy consumption is considerably higher in the new projection. However, this does not apply for households and the public sector. Total energy consumption (excl. transport) in 2010 is estimated to be around 40 PJ higher, corresponding to about 10%, then the projection from last year. The expectation of higher energy consumption by the manufacturing sector and by private trade and services is due to many different factors. These include an expectation of slightly higher economic growth for goods producers, withdrawal of a number of subsidy schemes, especially for energy savings in industry, updating the calculation assumptions for technologybased efficiency improvements in the sector, lower real taxes (because of the tax freeze is it no longer foreseen that the energy taxes are regularly increased in line with inflation), and a number of other technical updates and adjustments in the methods and models behind the projection. Finally, the basis level for energy consumption has been raised due to the fact that energy consumption observed in 2001 was somewhat higher that predicted in connection with preparation of the last projection. The withdrawal of subsidy schemes, etc. accounts for about 20% of the increased growth in energy consumption. The remainder is due to the other technical factors mentioned and increased economic growth. Figure 1: Energy consumption by trade and industry, (excl. transport) Figure 2: Energy consumption by trade and industry and households PJ Manufacturing Private services Agriculture Construction Public services PJ Trade and industry Households The distribution of consumption between different types of energy is only expected to change very little. There is an increase within most energy types. Consumption of electricity and gas is expected to increase most - gas at the expense of oil products in the first part of the 6

7 projection period. This is primarily a consequence of the continuing transfer from oil heating to gas and district heating in households. The assumptions for energy prices for oil and coal are based on the International Energy Agency (IEA) data. Where there are no prices from the IEA, prices are based on the Danish Energy Authority's own estimates, including a limit on the increase in electricity prices as a result of slower expansion of renewable energy (RE) and falling settlements with RE. The forthcoming further liberalisation of electricity production and distribution is expected to reduce the costs of electricity supply significantly. This has not been included as the specific conditions have not yet been set. Similarly, the effects of gas liberalisation have not yet been included. 3. Effects of improvements in energy efficiency IMPROVING THE EFFICIENCY of energy use helps reduce energy consumption in the various sectors, and thus helps reduce gross energy consumption in Denmark. As can be seen in box 1, the total gross energy consumption (excl. consumption for transport and non-energy purposes) in 2001 would have been about 50% higher than it actually was if, from 1975 to 2001, there had not been improvements in efficiency in end-use consumption (energy savings) or improvements in efficiency in energy supply and production. As the figure shows, a great deal of the reduction in energy consumption is due to improvements in efficiency in the end-use consumption in these sectors. The objective of market-oriented energy-saving initiatives is to retain and develop efficiency improvements in the end-use consumption so that more services and greater production can be supplied without an increase in energy consumption. This requires the establishment of a good framework for investment in energy improvements, and that the energy-efficient solutions and products are accessible and attractive. Improvements in the end-use efficiency are linked to the fact that the various technologies, etc. have become more effective. For example, buildings are better insulated, refrigerators use less energy, production processes have become more energy efficient, etc. These improvements in energy efficiency are partly due to natural technological developments that would have taken place anyway, without special energy-savings initiatives. They are also due to the effects of the different energy-savings initiatives 7

8 It can often be difficult to separate the effects of energy-savings initiatives from the effects of natural technological development. However, in a number of areas there is no doubt that the initiatives have led to considerable increases in the effect, and at the same time, in many cases savings have been promoted. Box 1: Effects of improvements in efficiency by end consumers PJ Without improvements in efficiency Actual consumption Without improvemnets in efficiency by the end users The figure shows the development in gross energy consumption in households, trade and service, and production. The lower curve shows the actual total gross energy consumption in the three sectors. The upper curve shows how consumption would have changed if there had not been improvements in efficiency, either in end consumption, or in supply and production, ie. the changes in energy consumption resulting from economic growth in the three sectors. The middle curve shows how consumption would have developed without improvements in efficiency in end consumption, but with the actual developments in the efficiency of supply and production (incl. supply conversions). The difference between the lower and the middle curves reflects the effect of energy efficiency improvements by the end consumer, and the difference between the middle and upper curves reflects the effect of energy efficiency improvements in supply and production (incl. supply conversions). The figure shows that a very large improvement in efficiency in the end-use consumption occurred in the period from 1979 to This reflects the fact that in this period there were 8

9 extensive energy improvements in the existing stock of buildings, amongst other things as a result of soaring energy prices and a subsidy scheme for conserving heating. In recent years, CO 2 taxes, energy-labelling schemes, The Danish Electricity Saving Trust, energy-saving initiatives by grid companies, etc. have contributed to reducing consumption. 4. Barriers and better market transparency IN many areas there already exist energy-efficient products and solutions that could lead to significant energy savings. In many cases these products and solutions seem to be very attractive financially for consumers, ie. the additional costs of the energy-efficient solution can quickly be recovered through the energy savings achieved. Despite this, enterprises and consumers often do not choose the energy-efficient solutions when buying new products. One of the objectives of energy-savings initiatives is therefore to improve the efficiency of the market so that financially attractive energy savings are implemented. The reason consumers and enterprises do not buy more of these energy-efficient and costeffective products and solutions is partly that there are a number of barriers making the market for energy-efficient products and solutions not as transparent and efficient as could be desired. Firstly a lack of knowledge and incomplete information about energy consumption and savings opportunities obstruct the use or acquisition of cost-effective and energy-efficient technology. When buying products and solutions there is often a lack of knowledge about energy consumption and therefore it is difficult to assess the size of any energy savings as well as the financial effects of buying an energy-efficient product. Alternatively, there may be awareness of possible benefits, but after taking into account the costs (also in terms of time) of acquiring the necessary knowledge to make a qualified decision, it may no longer be advantageous for an individual to make energy-saving investments that may, on the face of it, look attractive. These barriers can be reduced if the general knowledge of consumers and enterprises on methods of saving energy is improved, or if there is easier and quicker dissemination of the specific knowledge in a particular buying situation. For example, this may be through energy labelling, information, etc. 9

10 Secondly, a lack of accessibility to energy-efficient products and solutions also represents a Box 2: Examples Circulation pumps: If a central heating installation uses an electronically regulated circulation pump instead of an unregulated standard pump, electricity savings of 35-40% can be achieved. The additional investment in the electronically-regulated pump can usually be recovered in less than two years. Despite this, only about 15% of the small circulation pumps sold for central heating installations are electronically regulated. Energy-saving windows: When changing double-glazing, considerable savings and significant improvements in comfort can be achieved by fitting energy-efficient double-glazing. This is double-glazing with a low-emission coating and gas filling. The additional price for this type of double-glazing is small, and the pay-back period is typically between 0 and three years. Despite this, only about 35% of double-glazing sold for use in existing buildings is low-energy panes. In connection with new construction low-energy panes are used exclusively, and therefore this accounts for more than 60% of total sales. Energy-conscious planning: Large energy savings can be achieved if energy-conscious planning is applied in new installations and buildings. Energy-conscious planning starts by identifying the needs for energy services and then assessing the total economics of the project, including operating and energy costs over its lifetime. Demonstration projects have shown savings of up to 50% compared with conventional installations, and a pay-back period of less than three years. Despite this, energy-conscious planning is only applied to a limited extent. barrier. If the energy-efficient models are not in the shops, in advertisements, or at suppliers and fitters, special initiatives and knowledge are required if consumers are to include these products when considering a purchase. Accessibility is a special problem for products that typically are bought through a fitter or builder. In many cases the consumer will buy products recommended by the supplier without further consideration. Experience shows that plumbers and other fitters often do not recommend energy-efficient products, even though these may be more financially attractive to consumers. Neither do they provide information about these alternatives. For example, this happens in connection with purchases of boilers, circulation pumps, etc. The reasons for this include lack of knowledge and uncertainty regarding reliability, installation, etc. The situation is that information on total costs (costs of acquisition, operation, maintenance, and disposal) is not adequately available for the buyer. Increased 10

11 accessibility to energy-efficient products and focus on the products that are usually bought by fitters, etc. could reduce this barrier. Thirdly, some enterprises and consumers seem to be short-sighted in their decision-making. Even though information on savings opportunities is available, they do not seem to be willing to spend the extra money on energy-efficient solutions, despite the fact that these can pay back within a very few years. This means that economically attractive savings are not implemented. Information about experience and savings from applying energy-efficient solutions can, in some cases, help to reduce this barrier. Finally consumers' choice is often influenced by other factors than the price of the product. These include the functionality of the product, its design, etc. To the extent that these factors for an energy-efficient product differ from the traditional product, there may be a welfare loss for consumers buying the energy-efficient product rather than the traditional product, despite the fact that it is more cost-effective to buy the energy-efficient product. Many enterprises consider reliable operation as crucial, and therefore they are reluctant to choose energyefficient equipment if it has not been adequately tested, and if there is uncertainty regarding reliability. This barrier is naturally reduced as energy-efficient products are developed and marketed that are fully comparable with traditional products regarding functionality, design, etc. Development is motivated by financially attractive energy savings. In some cases the energy-efficient products are too expensive to be profitable. This may be due to real increases in production costs, but it is often because, in the start phase, products with a small market share are relatively expensive due to short production runs, etc. In these cases a market-oriented energy policy can help promote sales of these products and thus reduce the price so that products become competitive. As mentioned in the introduction, the government considers that cost-effective energy-savings initiatives should be based on market initiatives. The various instruments should help increase market transparency and break down inappropriate barriers so that more of the financially attractive savings are realised. The individual enterprise and household should have better information on energy consumption and savings possibilities, and the range of energy-efficient products and solutions should be expanded. Competition between market players should ensure that energy-saving appliances, products, and services are supplied effectively and as cheaply as possible. At the same time, energy savings should contribute to cost-effective fulfilment of Denmark's climate commitments. 11

12 5. Savings targets for individual sectors IN the political agreement of 29 May 2001 on natural gas supply and energy savings, as well as in the associated Action Plan to promote energy savings specific targets for energy savings by 2005 were set for households, the public sector, private trade and service, and agriculture and industry. The targets for energy savings were laid down in order to ensure that the overall targets for energy savings were met. The Political Agreement states that the Action Plan should be adjusted regularly in the annual Energy Savings Report, and, as part of this, new initiatives necessary to meet the savings targets will be presented. The savings targets laid down for 2005 are relative targets based on the expected consumption in the latest projection of the individual sectors in This means that targets for energy savings require that further savings initiatives are taken, in addition to the savings included in the projection. The savings targets are stated in table 2, and this also shows current energy consumption and energy consumption in the latest projection, cf. table 1. Table 2: Energy-savings targets laid down for Energy-savings targets 2005 Sector Current consumption Projection without new initiatives PJ Savings PJ Estimated CO2 reduction '000 Tonnes Savings in % compared with projection in 2005 Households Public services Private trade and service Agriculture and industry Total, excl. transport Sub-targets, for example savings targets for individual sectors, are in conflict with the desire for an overall target in the most cost-effective way. If economic inefficiency is to be limited, there is therefore a need to adjust regularly the total savings target and the distribution of initiatives between sectors. The savings targets laid down correspond to the proposed targets in the Promotion of Energy Savings report of September 2002, which was part of the Energy Savings Report The proposed targets were based on assessments of the effects of a number of new specific costeffective instruments. 12

13 As these are relative savings targets, it can be difficult to calculate whether the targets have been met. Energy consumption in 2001 was, apart from private trade and service, slightly less than consumption in Consumption in 1999 was the basis for setting the targets. The positive development in energy consumption over the past couple of years is considered to be partly due to previous energy-savings initiatives. The new projection shows significantly higher energy consumption for private trade and service, and agriculture and industry than the baseline projection for energy-savings targets, cf. chapter 2. The higher energy consumption in 2005 is due to a number of factors, including the withdrawal of certain subsidy schemes to promote energy savings that were included in the previous projection. Compared to the previous projection, realisation of the targets for energy savings would have brought the final energy consumption for all the sectors down to 410 PJ. The new projection brings consumption down to 433 PJ. Some specific instruments included in the basis for the proposed savings targets are developing as predicted, however several of the instruments have not been implemented to the extent anticipated, partly due to the withdrawal of anticipated funding. The new orientation of the existing instruments, as described in chapter 6, primarily aims at making initiatives more efficient and market-oriented, but it is also estimated that it could lead to a certain increase in the savings achieved. The proposals for new energy-savings initiatives, as presented in chapter 7, will help enhance savings initiatives and thus contribute to meeting the targets for savings. As many of the initiatives will only have a serious impact from 2004, however, they cannot have a significant effect in 2005, and therefore they will not ensure that the targets are achieved. 13

14 6. New orientation of existing instruments OVER many years there have been efforts to promote energy savings, and as can be seen in chapter 3, eff iciency improvements by the end users of energy have considerably aided reductions in overall energy consumption. The most important current instruments for the different sectors appear in table 3. Table 3: The most important (statutory) instruments to promote energy savings Sector Instrument Remarks Households Energy and CO 2 taxes Applies to all energy consumption Energy labelling of small buildings Must be implemented on the sale of the building primarily heating consumption Energy labelling of large buildings - ELO Energy labels and an energy plan must be prepared regularly for all large buildings. Includes heating, water, and common electricity Energy labelling of appliances Energy labelling (A-G) of white goods, etc. is compulsory The Danish Electricity Saving Trust conversion of electricity/heating Requirements for energy companies, markets fixed-price agreements, advises customers, and grants subsidies The Danish Electricity Saving Trust Prepares market analyses and campaigns focusing on the efficient appliances price and energy efficiency of appliances Electricity, gas, and district heating companies energy-savings activities Public sector Energy and CO 2 taxes Applies to all energy consumption Energy labelling of large buildings - ELO Organises campaigns and consumer-oriented activities to promote energy savings Energy labels and an energy plan must be prepared regularly for all large buildings Includes heating, water, and common electricity The Danish Electricity Saving Trust conversion of electricity/heating Requirements for energy companies, markets fixed-price agreements, advises customers, and grants subsidies The Danish Electricity Saving Trust efficient appliances Focus on barriers- The Trust makes it simple, safe, and cheap to trade in an energy-appropriate manner Electricity, gas, and district heating companies energy-savings activities Companies offer free energy consultancy and participate in campaigns. Particularly extensive re. electricity Private services Energy and CO 2 taxes There are CO 2 taxes on all energy consumption. Only energy consumption for heating (ie. not electricity) is subject to energy taxes Agriculture and industry Energy labelling of large buildings - ELO Electricity, gas, and district heating companies' energy-savings activities Energy and CO 2 taxes Agreement schemes Electricity, gas, and district heating companies' energy-saving activities Energy labels and an energy plan must be prepared regularly for all large buildings Includes heating, water, and common electricity Companies offer energy consultancy free of charge There are CO 2 taxes on all energy consumption. Only energy consumption for heating (ie. not electricity) is subject to energy taxes Enterprises entering into an agreement receive significant CO 2 tax rebates. Only relevant for particularly energyintensive enterprises Companies offer energy consultancy free of charge 14

15 The government emphasises that the current instruments to promote energy savings should help break down the barriers to implementing energy savings as extensively as possible. Instruments should help make it easy for consumers and enterprises to choose energy-correct products and solutions. It is also vital that instruments are cost-effective. On this basis, the most important current instruments are reviewed below. In a number of cases there are suggestions for amendments and adjustments to the instruments to improve market transparency and to make them better able to reduce the various barriers limiting the sale of energy-efficient products and solutions. These amendments should also help make the instruments more cost-effective. In the near future energy-savings initiatives will have a new orientation, partly in order to ensure that energy savings are promoted so that they enhance competitiveness and business development within the areas where Danish industry is strong, and partly to aid cost-effective achievement of climate targets. Energy labelling of large buildings ELO The Energy Management Scheme (Energiledelsesordningen or ELO scheme) targets energy savings in larger buildings (1500m 2 or more), and targets making sensible energy-savings initiatives more visible for the owners of properties, thereby making it easier and cheaper to implement savings initiatives. In accordance with the scheme, each year larger properties should be inspected by an energy consultant who should describe the opportunities available to reduce the consumption of energy and water by the property. In the scheme was evaluated, and the evaluation demonstrated significant savings, although the scheme is not always financially attractive, partly because it covers all properties, including those with very few savings opportunities, and partly because, in its current form, it is not always useable by the owner of a building. Further to this, and in light of the EU Directive on the energy performance of buildings as well as a number of other considerations, last year work began on reforming the ELO Scheme. Overall, the Reform aims at making the scheme cheaper and more targeted towards consumers in order to improve implementation of energy savings and further the efficiency of the scheme. This will be through adjusting the frequency of visits, increasing competition between consultants, and privatising consultant approvals. 15

16 The Reform is being implemented in several stages. Firstly, the existing statutory order was amended in October 2002, and later the legislative framework will be amended. The amendment to the statutory order in 2002 reduced the frequency of visits for some buildings from annual visits, to visits every three years. Furthermore, the possibility to replace energy management with energy labelling has been introduced to a limited extent. The amendments will aim at implementing the new EU buildings directive, and also relax requirements. A more general reduction in the frequency of visits from the current annual visits, and possibilities to relax requirements for special categories of buildings will be considered. Finally, a certification scheme to replace the current approval scheme for consultants may be introduced in which responsibility for consultants is transferred to private hands. In parallel with this, in cooperation with users, there will be work to develop the concept behind the scheme so that it is more directed towards the needs of users. Special efforts will be made to take account of the needs of special target groups, and, as far as possible, developments will be implemented in cooperation with relevant users. Energy labelling of small buildings the house-labelling scheme In accordance with the scheme, energy labelling of small properties (less than 1500m 2 ) and owner-occupied flats have to be implemented in connection with their sale. The objective of this is to provide potential purchasers with qualified information about the energy performance of the building before the purchase, as well as to make specific proposals for energy improvements. Thus, the scheme provides useful consumer information and makes visible opportunities for energy savings at a time when many purchasers choose to make improvements to their dwelling. Every year, energy savings amounting to almost DKK 1bn. are identified. Evaluations of the scheme were completed in 2001, and they show, however, that the scheme is poorly covered in some areas and that many of the possibilities for savings identified are not implemented. This is very much due to a lack of awareness of the scheme and the fact that purchasers often do not carry out projects, even though they have a short financial pay-back period. Therefore, in cooperation with the most important players and the registration committee for the scheme, the Energy Authority has prepared an action plan to help improve awareness of the scheme and increase interest in implementing savings. The main elements in this plan are, 16

17 more information and involvement of supply companies and the most important commercial actors in the market. The plan is to help improve the relationship between savings introduced and the costs of the scheme. The Danish scheme is a model for the regulations in the EU Buildings Directive, which was adopted during the Danish Presidency. This will ensure that similar schemes are spread to all countries for the benefit of, amongst other things, Danish exports of energy solutions and products. The new rules will also mean that the schemes are extended to a greater proportion of the buildings stock. It will be necessary to develop the schemes further, not least with respect to owner-occupied flats, rental buildings, and co-operative buildings, etc. to ensure that the schemes are also as cost-effective and user-friendly as possible for this type of building. Energy labelling products Energy labelling has proved to be an extremely effective instrument in increasing the choice and sales of the most energy-efficient appliances on the market. Increasing demand for the most energy-efficient products is also an important factor motivating producers to develop and market new and even more efficient technologies. Energy labelling makes it easy for consumers, etc. to identify energy-efficient products and financially attractive solutions, and in this way it helps make markets function more appropriately. Moreover, energy labelling is a good basis for other energy-savings initiatives as well as campaigns, the Danish Electricity Saving Trust's A-Klub, voluntary agreements, minimum-efficiency standards, etc. Many products are already covered by international or national energy-labelling schemes. Examples of international labelling schemes are the EU compulsory energy labelling scheme (with the A-G scale), primarily covering white goods, the Energy Star labelling scheme for office equipment (based on an agreement between the EU and the US), and the voluntary Energy Arrow scheme for office equipment and consumer electronics (based on cooperation between five European countries). In addition there are voluntary national labelling schemes for windows and oil boilers (based on the A-G scale of the European scheme), and for electric motors and ventilation equipment used by industry. Future work on labelling will concentrate on improving and tightening existing labelling schemes and extending energy labelling to include products where there is still large, financially attractive savings potential. 17

18 From 1 January 2003 the EU compulsory energy labelling scheme includes refrigerators and freezers, washing machines, tumble driers, combined washing machines/tumble driers, light sources, dishwashers, air conditioning equipment, and electric ovens for household use. Thus, most of the products named in the existing framework directive are covered by the scheme. According to the EU directives on the energy-labelling scheme, Member States are obliged to take all the measures necessary to ensure that suppliers and dealers domiciled in the country fulfil their obligations with regard to EU directives. The Energy Authority is the supervising authority for the scheme in Denmark. Supervision includes that appliances in shops are labelled (through shop inspections), and that information on the labels is correct (through testing products). The Energy Authority tests white goods in cooperation with the Danish Consumer Information. In connection with this inspection and testing it has been noted that products are not always correctly labelled, and the latest measurements indicate that compliance with labelling by suppliers is slipping. Incorrect labelling is misleading marketing to consumers, and this can undermine consumer confidence in the labelling scheme and ultimately influence the effect of the scheme. This also distorts competition for suppliers and dealers who comply with the labelling rules. The Danish Energy Savings Act (Act no. 450 of 31 May 2000) gave the minister authority to introduce the stricter supervision previous experience had demonstrated was necessary in order to maintain consumer confidence and the sector's respect for the energy label, as well as to meet Denmark's EU commitments. Further to this, four executive orders (of May 2002) on labelling of various products have been revised. The most important amendments compared to the previous executive orders are that the Energy Authority has better possibilities to intervene in cases of incorrect labelling, and that requirements for technical documentation from suppliers, which is the basis for energy labelling, have been made more precise. Furthermore, in future, suppliers must pay the Energy Authority's costs in connection with checking and measuring, if initial checks do not confirm the supplier's labelling of an appliance. In connection with enhancing inspection procedures, it has been decided to establish an energy-labelling secretariat to take charge of the practicalities of inspection at shops, random testing, and the preliminary correspondence with suppliers and manufacturers. Further to a limited EU tendering procedure, in July 2002 a contract with the Danish Institute for 18

19 Informative Labelling was entered into, and the secretariat is being established. The secretariat will provide the Energy Authority with considerably more cohesive and effective supervision. The EU Framework Directive on energy labelling of household appliances is being revised. It is expected that the Commission will propose that the Framework Directive should cover many more product types in the future. On the basis of experience to date considerations should be to include windows, oil and gas boilers, and circulation pumps, as well as institution machines (washing machines for institutions, industrial kitchen equipment, etc). In addition a new Framework Directive should lay down simpler guidelines for implementation of supervision by the authorities in order to make it both cheaper and more uniform throughout the Member States. In view of the great success of the labelling scheme, the government will ensure that the revision is implemented as quickly as possible. The Energy Star and the GEEA-label are voluntary labelling schemes. The Energy Star covers office equipment and it is based on an agreement between the US and the EU. The GEEAlabel covers office equipment and consumer electronics, and it is based on cooperation between seven European countries. These are products that are increasingly used throughout all sectors in society. In addition to energy consumption in the use phase, these products also consume energy when they are on standby, and even when they are switched off, and this to a great extent represents an unnecessary energy cost. In order to reduce unnecessary energy costs and energy consumption from these products, awareness of the Energy Star and GEEA-label will be made more widespread amongst buyers (private consumers, enterprises and public supervision), retailers, and suppliers/manufacturers. The energy-savings activities by the Danish Electricity Saving Trust and electricity grid companies will help with this. Furthermore, internationally there will be efforts for the Energy Star and GEEA-label to set ambitious and dynamic criteria for the energy consumption of appliances on standby and in off modes, and for products where it is also relevant in the operation phase. Work will also aim at establishing international agreements on reducing standby consumption in general. There is a voluntary energy-labelling scheme for windows and panes within the framework of the product-oriented subsidy scheme and in cooperation with the sector. This is an area where there are large and very profitable energy savings. Labelling schemes will be promoted and there are efforts to establish an international labelling scheme for windows and panes. Similarly, a voluntary labelling scheme has been established for oil boilers. Significant savings can be achieved through using more efficient boilers. 19

20 Positive lists of the energy-efficient products have been established for electric motors and ventilators. Work is taking place on a scheme for pumps. These three consumption categories together represent about 47 per cent of industry's total electricity consumption. Significant electricity savings can be achieved if products are renewed with more efficient products. The extra price of more efficient products is so low that the pay-back period is usually very short. The schemes are administered by ELFOR, which maintains the lists of efficient electric motors and ventilators. As part of energy-savings initiatives by supply companies, the lists will be promoted for the industry. Denmark is working to introduce labelling schemes for the most commonly used equipment for industrial production (electric motors, ventilators, pumps, compressors, etc.) within the EU framework. For example, this could be through extending the current revision to the Framework Directive on labelling so that it also covers industrial products. The Danish Electricity Saving Trust The Danish Electricity Saving Trust was established in 1997, and it is to ensure electricity savings in the household sector and the public sector. The political agreement on supply of natural gas and energy savings of 29 May 2001 lays down that the Trust's resources can also be offered to industry and business if there are spin off effects of initiatives that aim at the housing sector and the public sector. However, the Trust cannot give subsidies to activities primarily aimed at business and industry. The Danish Electricity Saving Trust has a special task to develop, test, and implement costeffective instruments that make it, simple, safe, and cheap for consumers to acquire and use energy-efficient appliances and systems (eg. lighting, white goods, IT equipment, and ventilation), or to convert from electric heating to district heating or natural gas. The results and evaluations of the Danish Electricity Saving Trust so far show that, through a combination of subsidies, voluntary agreements, and targeted initiatives that address the different barriers to energy-correct behaviour, it is possible to ensure economically attractive electricity savings that also limit the Trust's own expenditure. The Danish Electricity Saving Trust cooperates with - and makes requirements of - market players regarding quality and price of energy-efficient equipment and associated installation work. Through framework agreements, and product and price lists, the Trust aims at promoting market transparency, competitiveness, and lower prices. The Danish Electricity Saving Trust works closely with other players, including electricity, district heating and 20

21 natural gas companies, local energy offices, manufacturers of electricity-consuming equipment, retailers, fitters, etc. Converting electric heating to district heating and natural gas is the main task of the Trust. The Trust has made subsidies conditional upon customers with electric heating having favourable connection conditions from the energy companies, as well as favourable framework agreements for central-heating installations. The basic idea is that consumers of electric heating should receive financial savings significantly larger than the subsidies from the Trust. The prices of plumbers, district heating and natural gas are published regularly on the website. and this also contains a calculation programme where, with information on local supply conditions, prices, actual electricity consumption, etc., electric heating customers can calculate the financial aspects of converting from electric heating to district heating or natural gas for their own dwelling. The Danish Electricity Saving Trust has prepared an agreement concept for energy-correct procurement by the public sector, where municipalities, counties, and government institutions commit themselves to only procuring equipment with low electricity consumption the socalled A agreements or A-Club members. This is an organisational initiative, where, through procurement requirements, framework agreements, market reviews and consultancy, the Danish Electricity Saving Trust will help users to achieve energy and financial savings in procurement and operation. The political agreement of 29 May 2001 states that the public sector must enhance energysavings initiatives. The agreement highlights the spread of the Danish Electricity Saving Trust's A agreements with the state, counties, and municipalities as an important part of this process. The agreement also states that the field of activity of the Danish Electricity Saving Trust should be extended to cover private business, and that special initiatives should be taken in relation to IT and office equipment in public and private services. With this background, in 2003 the Danish Electricity Saving Trust will: Initiate a campaign on public and private offices, focusing on making electricity consumption and savings opportunities visible in combination with specific measures regarding IT and office equipment, lighting and ventilation. Enhance the Trust's initiatives for schools and teaching institutions, focusing in particular on lighting, ventilation, and teaching materials. 21

22 Develop the Danish Electricity Saving Trust website ( with positive lists, product and price lists that make visible electricity consumption, and tools to help consumers assess their own electricity consumption and savings possibilities. Energy-savings activities by grid and distribution companies In accordance with the current Supply Acts, electricity grid companies, natural gas distribution companies, and district heating companies are central players in realising energy savings. In recent years, the grid companies have had an increasingly important role in implementing energy savings, and their activities are very significant for compliance with energy-savings targets. Initiatives by the companies will help make the market for energy and energy efficiency transparent and thus ensure that consumers and enterprises obtain the knowledge necessary to reap benefits from the opportunities for energy efficiency. Activities take the form of campaigns, energy consultancy and other activities that are carried out as public-service obligations by grid companies. The activities are funded by consumers through their energy bills. The government is extremely keen that these initiatives are cost-effective. This means that initiatives must promote cost-effective savings both for society and for consumers, so that the costs of implementing energy-savings initiatives are recovered in a few years through lower energy bills. In particular, activities aimed at enterprises should lead to lower energy bills. In 2002 consultancy by electricity companies for enterprises was expanded. The government is also keen that future initiatives also have a considerable scope. However the government will consider how energy-intensive enterprises, which have entered into an agreement on energy efficiency with the Energy Authority and thus receive repayment of much of their CO 2 taxes, should be included in the scheme in the future. There remains a need for efficiency improvements and development of initiatives by grid companies. This will take place through, amongst other things, better evaluation methods, and through the application of benchmarking. At the same time, in accordance with the political agreement of 29 May 2001, work will continue on trials with contracting out certain activities, ie. allowing other players to perform tasks. The objective of this is to make performance of tasks more efficient. In 2002 more systematic planning of the activities of gas companies was commenced. In future the energy-savings activities of natural gas companies will be expanded.. With regard to district heating, systematic activities will be initiated and for the first time this will be in the large/medium-sized companies. 22

23 Electricity, natural gas, and district heating companies will carry out activities on the basis of an annual plan for initiatives. There will also be efforts to improve coordination of activities between the three forms of supply through coordinating ordering of tasks, planning routines, etc. Initiatives aimed at public institutions will be increased. Furthermore, there will be efforts to make initiatives aimed at the small consumers, both households and enterprises, more systematic and efficient, and there will be work regarding informative electricity bills. In connection with energy savings, electricity grid companies, district heating companies, and natural-gas companies must cooperate, and this includes assisting the local energy savings committees to become a local forum for coordinating energy-savings initiatives. The companies must also cooperate with the Danish Electricity Saving Trust, especially on promoting conversion of electric heating. The Agreement Scheme and energy management As part of the CO 2 package for business and industry, the Agreement Scheme provides energy-intensive enterprises with an opportunity to achieve significant reductions in their CO 2 taxes, if they enter into an agreement. Enterprises entering into an agreement commit themselves to implementing energy-saving investments with a pay-back period of less than four years, implementing energy management, and completing special investigations. Almost 100 individual agreements and sector agreements with energy-intensive enterprises have been made. About half of the total energy consumption by industry is by enterprises which have entered an agreement. In addition a sector agreement has been made with the horticultural sector which covers 200 enterprises and about 70 per cent of the energy consumption by this sector. The Agreement Scheme was evaluated in 1998, and it was decided that, provided production remained unchanged, continuing the scheme to 2005 would result in reductions of about 6 per cent in enterprises' total CO 2 emissions compared to a reference process without agreements. More than half of this reduction is due to the requirement to apply energy-management systems. The evaluation showed that the Agreement Scheme is a cost-effective tool to reduce energy consumption and CO 2 emissions, however, adjustments in a number of areas could reduce enterprises' costs and improve the effect of the scheme. Further to the evaluation, the Agreement Scheme has been adjusted so that there is more emphasis on energy management and the concept for special investigation has been changed. 23

24 The special investigations have been changed to aim more at directing enterprises' savings initiatives towards their core processes, where there is considered to be significant potential for savings. The special investigations should help make this potential more visible and thus form the basis for implementing savings in the long term as well. Furthermore, in December 1999 the Danish Parliament adopted an amendment to the basic allowance and subsidies for energy taxes on space heating, hot water, etc. Moreover the process list was expanded, and in special cases space heating can be defined as a light process. These amendments entered into force on 1 July 2002, after being approved by the European Commission. The amendments mean, amongst other things, that in future agreements can also be made on space heating. Work continues on developing the Agreement Scheme so that it makes energy savings visible and helps anchor energy-savings initiatives in enterprises. For example, there is work to revise the requirements of the special investigations, and it is intended that, because of positive experience, energy-conscious planning should in future have a greater emphasis in agreements. In future the Agreement Scheme should also be regarded in connection with the forthcoming EU directives on energy taxes and trading quotas. When these schemes are placed in a more secure framework, the government will consider whether and how the Agreement Scheme can continue so that it contributes to cost-effective fulfilment of the Danish CO 2 reduction commitments. Energy management is a central element of energy-savings initiatives at agreement enterprises. Energy management is part of the general management tasks at enterprises, and it controls enterprises' energy conditions in order to ensure that energy is exploited efficiently so that energy costs are reduced to the greatest possible extent. With a view to promoting energy management, a Danish Standard (DS 2403) has been prepared for energy management. The Standard has been developed with the same structure and terminology as the environmental management standard ISO and the quality management standard ISO 9001 and thus it can be integrated into these. It is also possible to apply the energy management standard in connection with EMAS (the Community ecomanagement and audit scheme). The energy management standard provides enterprises with a good opportunity to market themselves as energy-efficient enterprises. The basis for accreditation of the energy management standard has been completed, and DANAK (Danish 24

25 Accreditation) can now accredit certification bureaus so that they can certify the energy management system at enterprises according to the standard. The energy management standard has been based on more than just broader application of agreements, and it can be of benefit for other enterprises than agreement enterprises, including the service sector. In autumn 2001, a campaign was conducted to promote the application of energy management and the standard. The campaign concentrated on medium-sized enterprises without an agreement. The campaign was initiated by the Energy Authority and contracted out to Project Værktøjskassen. Project Værktøjskassen started in 1995 as an initiative by the Energy Authority. The objective was to develop tools for energy management and energy-correct procurement, as well as to report these specialist tools to relevant partners. In recent years, the objective has been exclusively to promote energy management. Project Værktøjskassen was funded by the Energy Authority's subsidy scheme for energy savings, etc. in business and industry, and it was concluded in 2002 when the subsidy scheme expired. Experience from the work by Project Værktøjskassen will be incorporated into initiatives by the Danish Environmental Protection Agency to promote integration of energy management and environmental management. The government is keen to promote energy management. It will consider whether to place requirements on grid and distribution companies so that they promote energy management as part of their energy consultancy. The energy management standard has clear international perspectives. This could form the basis for designing energy management standards in other countries, and for an independent international energy management standard. Energy-conscious planning In connection with previous energy-savings initiatives for business and industry, there has been work to develop energy-conscious planning and industry labelling schemes. This initiative has primarily been funded by the subsidy scheme that has now expired. Energy-conscious planning is a systematic method that means that energy and cost-effective solutions are selected in connection with new processing plant and buildings, and larger renovations of installation/buildings. The method is based on an analysis of the actual needs for energy services and the overall economy in a project, ie. in addition to investment costs, operating and energy costs are also incorporated over the lifetime of the installation. 25

26 A number of large demonstration projects have been completed using energy-conscious planning. These projects show that it is not unusual to save 50 per cent of energy costs compared with conventional installations, and pay-back periods are typically less than three years, or even negative for certain installations. This demonstrates that this can be a very costeffective method of reducing energy consumption. In future, work to propagate the method, so that it becomes normal practice to apply energyconscious planning in connection with all new installations and buildings, will primarily be carried out by the various stakeholders. These include grid companies that in future will promote utilisation of energy-conscious planning as part of their energy consultancy for enterprises. Energy-savings initiatives by the public sector Energy-correct procurement is a central element in active energy-savings initiatives in the public sector. If emphasis is placed on the energy efficiency and costs of products over their lifetimes when procuring new products or changing existing products, significant savings can be achieved. The Danish Electricity Saving Trust is a central player in realising electricity savings in the public sector, especially in connection with promoting energy-correct procurement. As part of this effort, in the near future the Danish Electricity Saving Trust will take special initiatives regarding energy-efficient office and IT equipment. The Danish Electricity Saving Trust's A-Club makes it easy for institutions to ensure that purchases of electric appliances and equipment are exclusively A-labelled products, and this is an important element in promoting energy-correct procurement. The Danish Parliament, the Ministry of Economic and Business Affairs, the Ministry of the Environment, the National Audit Office of Denmark, and a number of municipalities are currently members of the A- Club. The A-Club utilises the different energy-labelling schemes (see previous chapter), where the Energy Authority is currently working for ambitious criteria for labelling such products as office equipment (GEEA and the Energy Star). In association with the A-Club, the Danish Electricity Saving Trust has established a website with the developments in electricity consumption in a number of institutions, including 26

27 analyses of consumption over a 24-hour period. The website shows that typically 40 per cent of electricity consumption is outside normal working hours. Enhancing energy-correct procurement is part of general green procurement policy via cooperation with the Energy Authority, the Danish Electricity Saving Trust, the Environmental Protection Agency, and National Procurement Denmark A/S. Denmark. There will be focus on documentation and proactive procurement policy, ie. that focus is not only on choosing the best in the market, but also on pulling the market towards increased energy efficiency. The public-sector procurement portal is to support this. Energy consultancy by electricity grid companies as well as district heating and natural gas companies provides a valuable contribution to promoting energy savings in the public sector. Grid companies provide activities that support energy-savings initiatives in the public sector. The establishment of energy savings committees creates a forum where municipalities and counties can present, discuss, and coordinate their energy-savings plans with grid companies' plans for energy consultancy. Liberalisation of the electricity market means that the supply of electricity is becoming a new service which the public sector must buy on the open market. In this connection public institutions must demand energy savings that can improve the bottom line of the electricity bill. Thus there is not only focus on the lowest possible price per kwh. Just as in other areas, the public sector must contribute to influencing market developments so that the market also focuses on making suppliers of electricity help reduce consumption. Energy performance should also be a competitive parameter, in line with the price of electricity. Subsidies for energy savings by pensioners The subsidy scheme has existed since 1993, and it provides the possibility to apply for a taxfree state subsidy for energy-saving improvements in dwellings occupied by pensioners receiving heating supplements under the Social Pensions Act. The subsidy covers up to 50 per cent of the costs of energy-savings measures up to a maximum of DKK 25,000 per dwelling eligible for subsidy. Today the appropriation amounts to about DKK 44 million per year. The objective of the scheme is to advance initiation of work that reduces heating costs and thus the costs of the heating supplement. However, improvements in buildings, including better insulation, windows, etc. also lead to better indoor comfort and thus increase the value of the dwelling and the quality of life for pensioners. On the basis of the evaluation of the scheme in 1999, if the energy savings and CO 2 reductions 27

28 achieved are seen in isolation, this is a cost-effective instrument. Work is currently taking place to assess the future status of the scheme. Local energy savings committees In accordance with the Danish Energy Savings Act, 32 local energy savings committees have now been established in Denmark to promote local cooperation on coordinating energysavings activities. These cover the entire country Grid and distribution companies (electricity, gas, and district heating) are statutory members of the committees, but many committees also have municipalities, counties, and other parties (eg. business councils, residents associations, green organisations, etc.) as members. There are great variations in the extent to which different committees have implemented activities. Some committees are relatively new, while others are carrying out activities such as coordination of consultancy, establishment of experience (erfa) groups, and elucidating the status of energy. In future, the committees could play a central role in connection with coordination and support for energy savings in local areas, including initiatives for municipalities and counties. In order to promote cross-cutting exchange of information between committees and to stimulate further work, in November 2002 a rally was organised for local energy savings committees, while the existing website for local energy savings committees has been improved. In 2003 work will continue to enhance exchange of experience between the committees with electronic newsletters and further development of the website and development of a special information package for committees having difficulties in getting started. For example this may be a collection of good ideas, brochures, etc. developed by other committees, combined with participation by representatives for one or more other committees, the Energy Authority and the Secretariat for the local energy savings committees in an individual committee meeting. Follow-up will also be carried out by all the statutory members participating in the relevant committees. Finally, in 2004, there will be improvements in gathering a large-scale collection of experience and evaluating the activities of the committees (task descriptions and invitations for tenders, etc.). 28

29 Information on energy savings Information on the most efficient energy solutions is a central element in a market-oriented approach. The Energy Authority has previously initiated information activities in several areas, including energy-saving windows, energy management, and energy-conscious planning, and has thus completed campaigns and developed a large number of publications, websites, etc. In future, the Energy Authority will work to improve information for enterprises and consumers on energy savings. As part of this, the Authority will develop a strategy for future information initiatives to promote energy savings. A number of players, including grid companies, also use information as a tool to promote energy savings, and the strategy will therefore take account of how the Energy Authority's initiatives can best be coordinated with activities by other players. Furthermore, the strategy will be designed so that energy consumers can continue to benefit from experience from the subsidy scheme for energy savings, etc in business and industry (websites, publications, etc.). It is being considered to base the efforts on a web solution. 29

30 7. New energy-savings initiatives In accordance with the political agreements of 29 May 2001 and 19 June 2002, the government will start the initiatives described below in order to promote efforts within energy saving. The initiatives are to contribute to meeting the targets agreed for energy savings. Promoting particularly energy-efficient refrigerators and freezers In combination with campaigns by the Danish Electricity Saving Trust and the grid companies, energy labels have contributed to the fact that around 60 per cent of refrigerators and freezers sold have the A label and that this percentage is still rising. Products exist today that are significantly more energy efficient than the A requirements, and considerable savings can be achieved if sales of these particularly energy-efficient products are increased. In relation to this, the Energy Authority will advise the Danish Electricity Saving Trust to make a special effort during the next years in order to promote sales of these products. The basis of this is that the Trust, as part of these efforts, will give subsidies during a certain period to the particularly energy-efficient products. Phasing-out traditional double glazing - voluntary agreement In connection with replacement etc. of double-glazing in existing buildings, traditional doubleglazing is still being used to a significant extent, despite the fact that energy-efficient doubleglazing is economical very attractive for the consumers and leads to a significant improvement in comfort. Use of energy-efficient double-glazing allows for significant energy savings. At the same time significant savings can be achieved by the use of better window systems, including secondary glazing. In this context, the government has decided to enter into an agreement with the glazing sector that will ensure that the sale of traditional, inefficient double-glazing for normal use effectively ceases. At the same time, the agreement is to promote the sale of energy-efficient window systems. Tightening building regulations Buildings have generally a very long lifetime. Therefore it is important that new buildings have a good level of energy efficiency such that they are able to contribute to reducing heating requirements and therefore consumer energy costs for many years to come. The new EU directive on energy performance of buildings was adopted by the EU during the Danish Presidency, and it suggests that Member States must evaluate the possibilities for tightening 30

31 energy requirements every five years. In light of the fact that it is today possible to reduce energy-use significantly below the level stipulated in the current building regulations from 1995/98, the Danish government will tighten the provisions on energy in the building regulations, which have their legal basis in the Buildings Act (Byggeloven). The new provisions on energy are to enter into force by 1 January Tightening the energy requirements by per cent is the starting point, however the specific requirements will be set according to an assessment of the technological possibilities as well as according to the fact that the requirements must reflect the desire to achieve viable energy savings in both an economic and financial perspective. However, the greatest potential for savings lies in existing buildings where in many circumstances significant savings can be made. Large savings at a reasonable expense can especially be achieved in connection with conversions, improvements, renovation, urban renewal etc. Therefore, in light of the EU directive on energy performance of buildings, the government will consider how energy requirements can be tightened regarding improvements etc. in existing buildings. Efficiency requirements for boilers and circulation pumps In a number of areas significant and very profitable energy savings can be achieved by installing energy-efficient products when existing products are due for replacement. This applies for oil and gas boilers as well as for heat supply circulation pumps, etc. In these areas, the energy-efficient products are generally very profitable for consumers, but because of a number of barriers etc. energy-efficient products only account for a limited part of total sales. Consumers cannot generally get a clear picture of the market for these products. An effective measure to ensure that new oil and gas boilers, as well as heat supply circulation pumps, are energy efficient is to introduce energy-efficiency requirements for these products. The government will examine the possibilities for introducing efficiency requirements either through an amendment to legislation on building and construction, or within the framework of the existing legislation on standards for energy efficiency in energy-consuming equipment. The possibilities will be more closely examined in relation to EU legislation. Several EU Member States have, however, already introduced tighter requirements for boilers. 31

32 Strengthening energy-savings initiatives in the public sector The government wishes to strengthen energy-savings initiatives in the public sector. Great demands are placed today on general improvements in efficiency in the public sector. Naturally, this also applies to energy use. The public sector must implement energy savings which are economically sound. As a general guideline, savings ought to be implemented where the extra investment has a reasonable pay-back period. In this way, the public sector can contribute to changing the market for the various products and services and as such influence developments in other sectors. In comparison with total energy consumption, consumption in the public sector is relatively small. Nevertheless, annual total expenditure on energy does reach DKK 6 to 8 billion per year. With a view to strengthening energy-saving initiatives in the state sector the government will: Enhance energy-correct procurement by state-sector institutions. This is based on institutions having to purchase energy-efficient products (A products, products with the Energy Arrow, etc.) so long as these products live up to reasonable requirements as regards function, quality, and economy. The Danish Ministry of Economic and Business Affairs has informed the other ministries and state-sector institutions about the possibility of A-Club membership. A revision of the circular from 1995 on energy efficiency. The new circular will include enhancement of the energy management principle. The duties for drawing up plans to implement energy-savings activities will be extended. The basis for this is that state-sector institutions carry out energy savings with a simple pay-back period of under five years, provided that the investments can be adjusted to the existing budgetary frameworks. Green accounting and energy-conscious planning will be other central elements in future rules. Benchmarking and making energy consumption more visible. As part of the enhancement of initiatives, institutions must make their energy consumption visible, and consumption must be comparable across different institutions etc. This initiative will be implemented in cooperation with the Danish Electricity Saving Trust. In the municipal sector, the following initiatives will be taken, aiming at promoting the voluntary energy-savings initiatives: 32

33 Information about initiatives that can contribute to promoting activities for energy-correct procurement, including information about membership of the A-Club of the Danish Electricity Saving Trust. As a point of departure, savings initiatives with a pay-back period of less than five years ought to be implemented, provided that the investments can be adjusted to the existing budgetary frameworks etc. In conjunction with this, the reports of the Energy Management Scheme can be regularly collated into an overall plan for energy-savings initiatives by the municipality. As part of the liberalised energy market, municipalities are being encouraged to demand energy-saving services or to enter into contracts that give energy suppliers incentives to reduce energy consumption. For example, contracts can be made for purchasing energy services which focus on the total energy cost and not just the price of energy. In order to improve the basis for energy-savings initiatives in municipalities, an investigation of the barriers to energy savings in municipalities will be carried out. Amongst other things, the investigation will shed light on municipal energy policy, barriers to implementation of economically viable energy savings and experience from previous energy-efficiency initiatives. Furthermore, a stakeholder seminar will be staged, where relevant stakeholders can discuss the necessary measures for achieving further implementation of energy savings in local authorities. The results of the above investigation, together with other relevant experience and ideas, will form part of a debate, intended to result in a concrete proposals for action. In a broad-based initiative, the Danish Electricity Saving Trust, in cooperation with grid companies, will be requested to focus on reducing electricity consumption outside normal working hours. In connection with this, for example, targeted information material on possible initiatives can be made. Grid companies can also make this a special topic in their energy consultancy for public institutions. Reduction of standby consumption A significant part of electricity consumption is increasingly due to appliances in standby mode. In households, standby consumption by televisions, video recorders, Hi-Fi systems, computers, chargers etc. typically accounts for around ten per cent of total electricity consumption. In the office sector, measurements show that in many cases around 40 per cent of electricity is used outside normal working hours. A significant part of this is standby electricity consumption. In most cases, it is technologically possible to reduce electricity 33

34 consumption significantly. By year-end 2003, the Minister for Economic and Business Affairs will present an action plan with a proposal for initiatives that can contribute to reducing standby electricity consumption. The action plan will focus on the office sector, in which standby electricity consumption is significant, not least for computer equipment. The action plan will include assessments of possibilities to create greater openness about electricity consumption by public institutions, and possibilities to reduce electricity consumption by electric chargers will be investigated. Enhancement of research and development activities Energy-efficient energy technologies that can lead to large savings in energy consumption already exist in a number of areas. However, an effort needs to be made in research and development of energy savings, which will be able to contribute to development of further improved products and consequently promote energy-saving initiatives in the slightly longer term. At the same time, a research and development initiative may contribute to making energy-efficient solutions more competitive. Therefore the government has decided to authorise an increase in grid-company subsidies to research and development of energy efficiency from DKK 10 million per year to approximately DKK 25 million per year. 34