AN ANALYSIS OF ROMANIA'S PROGRESS IN TRANSPOSING EU LEGISLATION GOVERNING ENERGY EFFICIENCY INTO DOMESTIC LEGISLATION Bryan W. Jardine Managing Partner - Wolf Theiss 1
PRIMARY ENERGY EFFICIENCY LAW Ø IN EU Energy Efficiency 2012/27/EU Directive Ø IN ROMANIA The transposition of Directive 2012/27/UE on energy efficiency Establishment of the Energy Efficiency Department National Energy Efficiency Action Plan 2
SPECIFIC PROVISIONS OF THE EU DIRECTIVE Energy distributors or retail energy sales companies have to achieve 1.5% energy savings per year through the implementation of energy efficiency measures EU countries can opt to achieve the same level of savings through other means, such as improving the efficiency of heating systems, installing double glazed windows or insulating roofs The public sector in EU countries should purchase energy efficient buildings, products and services Every year, EU governments will carry out energy efficient renovations on at least 3% of the buildings they own and occupy by floor area Empowering energy consumers to better manage consumption. This includes easy and free access to data on consumption through individual metering 3
SPECIFIC PROVISIONS OF THE EU DIRECTIVE Ø National incentives for SMES to undergo energy audits Ø Large companies will make audits of their energy consumption to help them identify ways to reduce it Ø Monitoring efficiency levels in new energy generation capacities 4
MAIN PROGRAMS IMPLEMENTED IN ROMANIA Ø NATIONAL INCENTIVES FOR SMES TO UNDERGO ENERGY AUDITS Large companies will make audits of their energy consumption to help them identify ways to reduce it Monitoring efficiency levels in new energy generation capacities Ø NATIONAL ENERGY EFFICIENCY ACTION PLANS In 2007, Romania drew up the First National Energy Efficiency Action Plan In 2011, the Second National Energy Efficiency Action Plan was developed 5
MAIN PROGRAMS IMPLEMENTED IN ROMANIA Ø SECTORAL OPERATIONAL PROGRAMS (FINANCED BY EU) The Program for the increase of energy efficiency of flat blocks approved by the Emergency Government Decision 1661/2008. The execution of the works will be financed by the following: 50% from the state budget allocations; 30% from the funds annually approved for this goal from the local and/or other sources legally established; 20% from the repair funds of the owners associations and/or other sources legally established. 6
MAIN PROGRAMS IMPLEMENTED IN ROMANIA Ø RABLA - Program for the renewal of the national auto fleet Ø EEFF - Financing mechanism for energy efficiency - energy efficiency financing facility 7
OBLIGATIONS Ø Under EU Directive To achieve the 20% reduction, energy distributers must achieve a 1.5% energy reduction every year from 1 January 2014 to 31 December 2020. This obligation contributes significantly to the reduction, but does not cover the full extent of the reduction. According to Article 7, Paragraph 4, each member state is required to ensure that all energy companies comply with the Energy Efficiency Obligation based on objective and non-discriminatory criteria. However, there is an exception for small retail companies to avoid disproportionate administrative burdens. 8
OBLIGATIONS Member states are required to regularly report progress to the EU Energy Commission by 30 April. Every three years, States have to submit National Energy Efficiency Action plans that cover significant energy efficiency improvement measure and expected and/or achieved energy savings. By 30 June 2016, the Commission must submit a report to the European Parliament and the Council on the implementation of Article 7. That report shall be accompanied, if appropriate, by a legislative proposal. 9
OBLIGATIONS Ø Alternatives if energy companies do not participate: Energy or CO2 taxes that have the effect of reducing end-use energy consumption Financing schemes and instruments or fiscal incentives that lead to the application of energy-efficient technology or techniques and have the effect of reducing end-use energy consumption Regulations or voluntary agreements that lead to the application of energy-efficient technology or techniques and have the effect of reducing end-use energy consumption Standards and norms that aim at improving the energy efficiency of products and services, including buildings and vehicles, except where these are mandatory and applicable in Member States under EU law Energy labelling schemes, with the exception of those that are mandatory and applicable in the Member States under EU law Training and education, including energy advisory programs, that leads to the application of energy- efficient technology or techniques and have the effect of reducing end-use energy consumption 10
OBLIGATIONS There is no legislation in place under this 2012 Directive for sanctions if Member States do not meet their targets. The member states will be referred to infringement proceedings if they do not meet their obligation deadlines. Article 24, Paragraph 10, allows for the Commission to propose more aggressive proposals if they will not meet their 2020 targets 11
OBLIGATIONS Ø Under Romanian Legislation establishment of Energy Efficiency Department NEEAP III - the National Energy Efficiency Action Plan (2014-2020) 12
MANDATORY AUDIT OF LARGE INDUSTRY Ø EU Directive Member States can have programs to support energy audits, but the expectation is that companies pay for their own audits. The rationale is that companies will ultimately profit from energy efficiency, and the audit will pay for itself. There are no established parameters for how large an industry must be in order to be audited. These will be set by Member States. The Commission states that the industry should be larger than a Small and Medium Enterprise (SME), which is a company with less than 250 employees, a turnover less than 50 million and a balance sheet total of less than 43 million. There is no obligation to implement recommended measures from an audit, but it is contemplated that the potential savings identified through such an audit will be enough to convince companies to invest in energy efficient measures. 13
MANDATORY AUDIT OF LARGE INDUSTRY Ø Romanian Legislation ANRE Decision no. 2794/2014 - Regulation for certification of energy managers, energy service provider companies, and for authorizing industrial energy auditors ANRE Decision no. 2123/2014 - Guide for energy audit Model for developing the Program for increasing energy efficiency of establishments with a population exceeding 5000 inhabitants - ANRE Decision no. 7/DEE/12.02.2015 14
STRATEGIES EU Directive Ø Long Term Renovation Strategies Ø Public Sector Energy Efficiency 15
STRATEGIES Romanian Legislation Ø National Energy Efficiency Strategy approved by GD 163/2004 Ø National Strategy on Supply of Heat to localities by means of district heating systems approved by GD 882/2004 Ø Energy Strategy of Romania 2007-2020 approved by GD 1069/2007 Industry Transport Residential Public Sector Agriculture Cogeneration Renewable Energy Sources Biofuel 16
NATIONAL STRATEGY FOR ROMANIA'S SUSTAINABLE DEVELOPMENT 2013 2020 2030 Ø Approved by GD 1460/2008; Ø The strategy establishes that the efficient utilization of energy and promotion of RES are essential for ensuring sustainable development in the long term. 17
HARMONIZATION WITH EU LEGISLATION Ø EU Targets This directive only sets an indicative energy savings target for 2020, unlike targets set for climate change and renewable energy. These targets are binding for member states. The three main cross sectoral targets are: - 20% EU energy savings target. Defined in Article 3.1(a) as a maximum of 1474 Mtoe (Million Tones of Oil Equivalent) primary energy or 1078 Mtoe final energy consumption in 2020. The energy savings gap under current policies is estimated to be around 190 Mtoe. - The indicative national efficiency targets. Defined in Article 24.7. Member states must set their own energy efficiency targets that are at least as efficient to achieve the 20% reduction by 2020. This will be assessed by the Commission, and will then consider proposing a binding target. - The national binding target for end-use savings. Defined in Article 7, sets a general binding target to deliver 1.5% cumulative annual energy end-use savings. 18
HARMONIZATION WITH EU LEGISLATION Ø Romanian Targets GD 1043/2007 Law 220/2008 on the establishment of a system for the promotion of energy production from RES with its subsequent modifications and completions EGO 152/2005 on the prevention and integrated control of pollution with its subsequent modifications and completions EGO 40/2011 on the promotion of the non-polluting and energy efficient road transport Several Government decisions on the establishment of the requirements relating to labelling, energy efficiency and introduction of receivers in the market 19
THANK YOU FOR YOUR ATTENTION! Bryan W. Jardine Managing Partner WOLF THEISS RECHTSANWÄLTE GmbH & Co KG Bucharest Corporate Center Building 58-60 Gheorghe Polizu St., 13th floor Bucharest Tel. +40 21 3088100 308 81 5 bryan.jardine@wolftheiss.com 20