Energy Efficiency in Europe

Energy Efficiency in Europe Assessment of Energy Efficiency Action Plans and Policies in EU Member States 2013 Country Report LATVIA SURVEY REPORT Progress in energy efficiency policies in the EU Member States the experts perspective Findings from the Energy Efficiency Watch Project 2012 *

Summary Assessment Introduction This report is one of 27 country reports published within the Energy- Efficiency- Watch project and assesses both ambition and quality of EU Member States energy efficiency action plans and policy implementation (see more at www.energy- efficiency- watch.org). The Latvian NEEAP is a rather balanced plan. Despite of the fact that a link to relevant national planning documents has been established, no strategic long- term perspective has been developed. The involvement of stakeholders is predominantly organised through voluntary agreements for companies in the industry sector and obligations for energy companies. Opinions of the experts on the progress in energy efficiency (EE) in Latvia are divided: more than 40 % consider the progress as relatively good while nearly 60 % see only a bit or no progress. Also more than 40 % of the interviewees believe that the ESD target will not be achieved. While the general framework, the public and buildings sector are balanced, the appliances and industry sector could strongly be improved. The sectoral assessment is as follows: Sectoral Assessment There are some isolated strategic efforts to increase energy efficiency (EE) in the public sector by single cities or local authorities. However, a comprehensive public sector strategy at national level is not defined although there are some activities in terms of energy efficient public procurement and activities concerning public buildings mentioned. Overall, the policy package leaves room for improvement. There are some minimum requirements in the buildings sector defined but it is not clear if they exist for all building types. Investments are given for increasing EE in heating appliances especially in multi apartment buildings and are financed by EU structural funds. However, interviewed experts see huge problems in funding EE for residential buildings and the quality of efficiency measures for buildings. The appliances sector has implemented at maximum obligatory EU Directives. The national EE action plan does not cover additional policies and measures. There are no voluntary labelling schemes and no information campaigns to inform end- users and buyers about EE appliances. These gaps have to be addressed. In the industry sector Latvia uses different level agreements to promote EE. Agreements are planned or partly implemented. The agreements cover energy audits and obligations for EE action plans, improvement measures and the provision of information to the Ministry of Economics. There is a lack of binding regulations, information or advice to overcome barriers and economic incentives to reduce energy consumption. Except from R&D, Latvia uses all kind of instruments in the transport sector. Most of them are below average due to few information given. Regarding regulation only the implementation of EU regulation is mentioned, but further national regulatory instruments (e.g. speed restrictions, parking restrictions etc.) are missing. Concerning economic instruments there are some measures listed which are not very ambitious. In total this sector has to be improved broadly. The Latvian NEEAP is rather balanced. However, there is potential for further improvements especially in the appliances and industry sector. Following issues have to be addressed: Conclusions Public sector should develop a clear strategy for the national level Buildings sector needs a road map and continuous strengthening of standards. There should be more information on energy performance certificates and education & training must be mentioned in the NEEAP Appliances sector should integrate measures that go beyond EU requirements. Economic incentives and education & training must be mentioned Transport sector must broaden its focus on public transport concerning planning instruments. The same advice can be given for regulatory instruments. As well information measures should be strengthened and R&D support is not mentioned which should be done. 2

Screening of the NEEAP Overarching Energy Efficiency Governance Framework long- term strategy other actors involved energy- agencies coordina_on/financing energy services horizontal measures MRV Long- term EE target(s) and strategy Involvement of non- governmental and market actors, and sub- national authorities Energy agencies and climate protection agencies EE mechanisms for overall coordination and financing Favourable framework conditions for energy services Horizontal measures Monitoring, reporting and verification No strategic long- term perspecitive. Many measures address primary energy sector. Four voluntary agreements and cooperative instruments. Four regional agencies in place. Monitoring (control) authority. CCFI as budget programme. Law on energy efficiency adopted in 2010. State of implementation not clear. Plans to improve energy efficiency by many measures. Only top- down methods are used to calculate energy savings. Public Sector public sector strategy role model public procurement Public sector strategy Agreements on improving energy efficiency by developing and implementing local authority energy efficiency action plans are implemented since mid 2011. Individual cities have developed sustainable energy action plans within the framework of the Convenant of Mayors. However, a clear public sector strategy at national level is not defined. public buildings Role model, transparency, and demonstration Public procurement Public buildings Some public sector activities are likely to be visible. The existing project/competitions for energy- efficient public buildings all include project publicity measures. Green public procurement guidelines are implemented since 2009. The goal of 20% increase in number of green public procurements by 2013 seems ambitious. There is a number of measures aimed at improving energy efficiency in public buildings. Most of them have only been implemented after 2010, so no savings have been achieved yet. The policy package lacks a clear strategy and goals for the public sector. Different types of public buildings are addressed. 3

Residential Sector - Buildings MEPS other regula_ons economic incen_ves financing instruments EPCs advice and audits informa_on demonstra_on educa_on and training Minimum Energy Performance Standards (MEPS) Other regulations Economic incentives Financing instruments Energy performance certificates (EPCs) Energy advice and audits Information tools Demonstration projects Education and training for stakeholders There are some minimum requirements, but it is not clear if they exist for all building types. Neither a roadmap for regular strengthening nor a mechanism for enforcement are mentioned. Regulations for inspections. Mandatory for energy performance certification. Investments into Increasing heat energy efficiency in multi apartment buildings. Measures to improve the thermal stability of apartment blocks. EPCs were introduced in 2009. Neither the 2 nd NEEAP nor MURE provide much relevant details on this measure. Energy advice, audits and construction supervision are available in some instances, but not yet on a large scale. There is only one information campaign mentioned, addressing only one type of building (apartment blocks). The various support programmes/competitions for low- energy buildings etc. include publicity measures. Not mentioned in the NEEAP. Policy mix is rather balanced, different actors (owners of different building types) are addressed. Suppliers of energy efficient building solutions are not addressed. Residential Sector - Appliances MEPS economic incen_ves energy labels informa_on tools educa_on and training Minimum Energy Performance Standards (MEPS) Economic incentives Energy labels Information tools Education and training for retail staff and other supply chain actors The Ecodesign Directive 2009/125/EC was implemented on national level (no additional measures). The Ecodesign Directive is not mentioned in the NEEAP. Not mentioned. Partly included due to the EU labelling regualtion 2010/30/EC. Latvia implemented no voluntary labelling scheme. Information campaigns on national level not mentioned. The NEEAP mentiones the AS Latvenergo Energy Efficiency Center. No information about education and training programmes. There are some efforts to combine policies and measures. Only a few of the aspects of an adequate policy package have clearly been addressed. 4

Industry and Tertiary Sector standards ES&A targets obliga_ons economic incen_ves tradable permits energy taxa_on energy labelling other measures Standards for equipment, production process, products Energy savings and action targets for individual companies Obligations / commitments Economic incentives Tradable permits Energy or CO 2 taxation Energy labelling Other measures Partly included through the ecodesign Directive. There is an overall target for agreements on energy efficiency. However, it is not clear which companies are covered or whether it is voluntary or not. Agreements, which put the companies under the obligation to provide an energy efficiency action plan with saving targets and to carry out energy efficiency improvement measures are in place. A co- finanancing scheme which provides incentives to reduce GHG emissions in manufacturing buildings is established. Even though energy efficiency is not focus of the scheme, it is partly included in the regulation. The EU Emission Traiding System is implemented with all its subsidies functioning. Minimum tax rates are established. Partly included in all MS due to EU energy labelling regulation which does not cover all appliances though. Development of a binding regulation for industrial energy audits. The policy mix is balanced and includes economic incentives, financial instruments and regulations for the industry sector. Both, supply and demand side of markets are addressed. Transport Sector planning instruments regulatory instruments Planning instruments Development of public transport network but only measures concerning public transport are mentioned. No push- and/or pull- measures dealing with other transport modes are mentioned. economic incen_ves informa_on R&D support Regulatory instruments Economic incentives Information and advice R&D support Only one measure (implementation of biofuel quotas/biofuel mix obligation requirements) is mentioned. Differentiated annual tax rates for passenger cars depending on engine size and age but not on CO2 emissions. Special tax for business entities depending on engine size. No car labelling is mentioned. No measures are mentioned. Only few measures in the transport sector have been taken and performance of measures is below average. 5

Findings from the Expert Survey In 2011 and 2012, Energy- Efficiency- Watch conducted a quantitative and qualitative survey with national experts on implementation of energy efficiency policies in EU Member States. 17 Latvian experts were interviewed to assess the level of quality and ambition of the NEEAP. According to them, Latvia is among the Member States that has made medium progress in energy efficiency policies. Opinions on the progress in energy efficiency are divided: more than 40 % consider the progress as relatively good while nearly 60 % see only a bit or no progress. Also more than 40 % of the interviewees believe that the ESD target will not be achieved. The buildings sector is seen as the most critical sector in terms of energy efficiency policies, especially funding of energy efficiency for residential buildings and the quality of building efficiency measures were criticised. Also, the implementation of the EPBD, the European Buildings Directive, is reported to be very slow. Latvia: overall ambivon of the energy efficiency policies On the positive side, experts report that municipalities have become much more active in energy efficiency and taken concrete actions. Awareness both among consumers and stakeholders on energy efficiency issues has increased. Through various channels some limited funds are available for energy efficiency measures. Experts report that in the residential sector, Latvia is faced with a high percentage of multi- apartment buildings in need of refurbishment. As most apartments are owned by the occupants, solid majorities among the owners are needed for positive decision to implement energy efficiency measures, these are usually hard to come by. Latvia has a highly centralised heating sector with high costs for district heating. Many residential blocks have large unpaid bills. In Riga, for example, the district heating system is owned by the city where the lack of the cash flow from the unpaid heating bills makes it harder for the city to invest in efficiency. In the service and industry sector, a lack of awareness on energy efficiency and the saving potentials was reported. Energy management schemes are to be established, but the process is seen as very slow. In the transport sector, modernising and optimising systems is the main challenge. Among specific policy measures, energy audits (88 % partly or very effective) are seen as the most effective policy instrument, followed by qualification, accreditation and certification schemes (56 % partly or very effective). 6% 18% 41% generally, rather low 35% ambi_ous in a few sectors, less so in most others ambi_ous in a range of sectors, less so in a few others generally, rather high Latvia: achievement of navonal energy savings target 12% target will not be achieved 19% 44% target will be achieved but will not lead to a lot of addi_onal savings target will probably be achieved 25% target will certainly be achieved 6

Good Practice Examples Latvia has established a balanced policy package for the public sector. Two of the sector s measures can be taken as good practice examples i.e. public procurement and public buildings. Green public procurement guidelines are in place since 2009. It is as well planned to have increased the number of green procurements by 20% in 2013, which seems ambitious. In regard to public buildings there is a number of measures aimed at improving energy efficiency in public buildings. Most of them have only been implemented after 2010, so no savings have been achieved yet. However, in the public sector there are measures that have to be addressed for improvement as well. For instance the public sector strategy has good underlying measures but fails to have clear targets and a long- term strategy. Concerning role modals, transparency, and demonstration some activities are visible. Still improvement can be made taking other NEEAPs as good practice examples into account which can be found in Denmark and Belgium. The Danish NEEAP provides measures for public buildings and procurement as well as measures to ensure that energy consumption and energy savings are transparent. Also the public sector in Belgium may be seen as a role model in some fields. For instance, the public sector has designed strict criteria for procurement and buildings, information and pilot projects and a comprehensive mobility management system. The Latvian transport sector policy package needs strongly to be improved. Orientation offers the Finnish NEEAP. Finland has implemented a policy package for the transport sector, which utilizes the complete set of instruments to achieve energy efficiency. One overarching goal of the policy package is the induction of a modal shift by making public transport, cycling and walking more attractive. Finland also makes use of regulatory measures. Among these is the introduction of a general speed limit and mandatory tyre- pressure checks twice a year. In Finland vehicle tax rates are dependent on the car s emissions. The expansion of public transport systems is financially supported e.g. by funding the construction of right- of- way lanes for buses and subsidized tickets. Various measures aim to give guidance through information. Among these is the inclusion of energy- efficient driving in the curricula of driver s education. A good practice example from Slovenia is to link the subsidy for public transport providers to the number of km travelled by passengers and no longer to the number of km travelled on the road. 7

Disclaimer The sole responsibility for the content of this publication lies with the authors. It does not necessarily reflect the opinion of the European Union. Neither the EACI nor the European Commission are responsible for any use that may be made of the information contained therein. The analysis performed here is based almost exclusively on the information provided in the NEEAPs. Consequently, a low score for any of the criteria analysed could also be the result of a NEEAP lacking detailed information. The purpose of this assessment is not an absolute ranking among Member States but is focusing on each Member State s individual conditions. The Project In 2006, the European Union adopted the Directive on energy end- use efficiency and energy services ("ESD"). The Directive sets an indicative energy saving target of 9 % by 2016 as well as obligations on national authorities regarding energy savings, energy efficient procurement and the promotion of energy efficiency and energy services. It requires Member States to submit three National Energy Efficiency Action Plans (NEEAPs), scheduled for 2007, 2011 and 2014. The Energy- Efficiency- Watch Project aims to facilitate the implementation of the Energy Service Directive and the Energy Efficiency Directive. This Intelligent Energy Europe project tried to portray the progress made in implementation of energy efficiency policies since the Energy Service Directive via NEEAPs screening and an extensive EU wide expert survey. www.energy- efficiency- watch.org The Authors Ralf Schüle, Thomas Madry, Vera Aydin, Jonas Fischer, Jan Kaselofsky, Thorsten Koska, Carolin Schäfer- Sparenberg, Lena Tholen (Wuppertal Institute) Daniel Becker, Nikolas Bader (Ecofys) Christiane Egger (O.Ö. Energiesparverband) with contributions by Reinhold Priewasser, Michaela Kloiber (University of Linz) Nils Borg (eceee), Dominique Bourges (Fedarene), Peter Schilken (Energy Cities) List of Abbreviations EE Energy Efficiency, EED Energy Efficiency Directive, EPC Energy Performance Certificates, EPDB Energy Performance of Buildings Directive, ES&A Targets - Energy Savings and Action Targets, ESCO Energy Service Company, ESD Energy Service Directive, EU European Union, EEW Energy- Efficiency- Watch, MEPS Minimum Energy Performance Standards, MRV Monitoring, Reporting and Verification, MURE Mesures d Utilisation Rationelle de l Energie, NEEAP National Energy Efficiency Action Plan, R&D Research and Development Photography Credits: PhotoDisc, istock, www.openclipart.org