Means of Promoting and Monitoring Energy Conservation Measures in Finland

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Means of Promoting and MonitoringEnergy
Conservation Measures in Finland
Barriers for implementation of Kyoto Protocol in
Russia and local actions for promotion of
reducing green house gas emission Saint-Petersburg
, February 22-23
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• Electricity production procurement
• Electricity distribution
• District heat
• Natural gas
• Biogas

Vantaa City
Uusimaa county
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ENERGY SAVING COOPERATION IN THE BALTIC SEA
REGIONS. SOCIAL, ECONOMICAL AND ENVIRONMENTAL
APPROACH IN REGIONAL PLANNING OF RATIONAL ENERGY
USE

• Finland Uusimaa Regional Council, Vantaa City,
  Motiva, GreenNetFinland, Vantaa Energy, Jaakko
  Pöyry, Enprima,
• Austria Graz Energy Agency
• Estonia Association of Estonian Municipalities
• Latvia District Heating Association
• Lithuania Kaunas City, District Heating
  Association
• Germany Energy, Max Planck Institute,
  municipalities from Mecklenburg-Vorpommern
• Sweden Sollefteå Energiadalen
• Poland European Centre for Integration

Internet Portal www.esprojects.net
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• Long term cooperation with local and regional
  authorities, energy experts, energy utilities and
  other relevant stakeholders in the Baltic Sea
  Region
• Main objective to promote energy saving
  technologies and methods within the framework of
  Corporate Social Responsibility
• The Network promotes
• Energy saving and efficiency
• Usage of renewable energy
• Security of energy supply
• Development of technology for the demand side
• Adoption of Corporate Social Responsibility in
  regional and local energy production and demand
• Environmental quality, economic vitality and
  competitiveness of the partners

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The jointly agreed interest areas of the
networking partners

• Increasing of information flow between partners
• Increasing of the discussion about and
  development of joint research and development
  projects, business opportunities and financing
  models of energy saving projects
• Increasing of lobbying opportunities for the
  promotion of the development of regional and
  local energy production and demand

Contact Päivi Saarnia Green Net Finland
paivi.saarnia_at_greennetfinland.fi Tel. 358 9
8700 6332, 358 400 678 705 fax [phone]
6333http//www.greennetfinland.fi
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Corporate Social Responsibility (CSR)

• "A concept whereby companies integrate social
  and environmental concerns in their business
  operations and in their interactions with their
  stakeholders on a voluntary basis."
• - European Commission

Sustainable development
Economic
Environ- mental
Social
Accountability reliability
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CSR in Energy Industry Economic Pillar

• Cost-effective operations - profitability
• Competitive products and service
• Reliability of energy supply
• Financial risk management
• Potential for energy saving in different sectors
• Energy saving impact on municipal economy
• Energy saving in strategic planning

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CSR in Energy Industry Social Pillar

• Personnels welfare, skills and motivation
• Open interaction with stakeholders
• Product quality
• Good practice and co-operation, networking
• Influence on tariff regulation
• Quality of energy supply

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CSR in Energy Industry Environmental Pillar

• Awareness and reduction of environmental impacts
• Inputs use of raw materials
• Outputs pollution and emissions
• Constant development and recognising needs for
  changes
• Reduction of emissions
• Minimisation of use of fossil fuels

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The Main Focus of the CSR Policy of the European
Commission Today

• Gives a primary role to enterprises for CSR
• Reaffirms the voluntary nature of CSR
• Supports the Alliance, an open coalition with the
  objective to reinforce partnerships and
  cooperation
• The role of SMEs is reaffirmed, small companies
  are the engine of European economic growth
• The necessity to develop CSR on the European
  territory and a global scale.

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Motivations and justifications

• CSR requires investments, time, people and other
  resources. This may increase the t?reshold of
  integrating it into business operations,
  especially in the starting phase, and looking
  from a short term perspective.
• However, often these investments are seen to be
  far overweighed by the benefits in the long
  term.

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GRI CSR Reporting Framework

• GRI Reporting Framework is the global, generally
  accepted standard for CSR reporting
• The GRI Vision is to make the reporting on
  economic, environmental, and social performance
  by all organizations as routine and comparable as
  financial reporting
• GRI was first started as a project of CERES and
  the UNEP
• www.globalreporting.org

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EU Energy Strategy Instruments

• Communication documents
• Green Papers
• White Papers
• Action plans
• Directives
• Energy Performance of Buildings
• Directive GHG (greenhouse gases)
• Support programmes
• Research and development
• Studies
• Information activities
• Investment subsidies
• Partnerships and networks

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Green Papers, White Papers, Directives and
Programmes related to Energy in the EU

• Communication documents
• Transport policy white paper
• etc
• Items based on Treaties
• Security on supply
• etc
• Directives
• Appliance labelling
• Combined and and power production
• Energy performance of Buildings
• Energy End-use Efficency Energy Services
• Emission Trading of GHGs
• Liberalisation of EU electricity and gas markets
• Ecological design of products
• etc
• Support programmes
• Intelligent Energy - Europe' programme
• Alternative fuels for transport
• etc

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GREEN PAPER on SECURITY OF SUPPLY and the role of
RES and RUE
Europe-30 total energy balance (reference
scenario in Mtoe)

• Why the security of energy supply?
• Inevitable increase of energy consumption
• The Unions increasing dependence as regards its
  energy supplies 70 in 2030 from the current 50
• Distributing consequences e.g. rocketing oil
  prices
• New challenges climate change

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GREEN PAPER on SECURITY OF SUPPLY and the role of
RES and RUE

• Energy Efficiency Action Plan
• Promotion of measures to reduce energy
  consumption
• Target of 15 per year by 2010 above the
  spontaneous development
• Integration of energy efficiency into other EU
  policies
• Strengthening of existing measures
• New policies and measures, e.g. public
  procurement
• Appliance labelling

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Directive on the energy performance of buildings

• Energy performance of buildings
• Promotion of the improvement of the energy
  performance of buildings
• Methology of calculation of the integrated
  performance of buildings
• Minimum requirements new, retrofits
• Energy certification
• Regular inspection boilers, air-conditioning
  systems

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Directive on the promotion of cogeneration based
on a usefus heat demand in the internal energy
market

• Framework for promotion of CHP
• Guarantee of origin of electricity from
  cogeneration
• Analysis of the national potential for high-
  efficiency cogeneration
• Support schemes based on useful heat
• Guarantee of transmission and distribution

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Proposal for a Directive on energy end-use
efficiency and energy services

• A general, indicative energy end-use savings
  target of 6 within the period of 6 years
• Households agriculture commercial sector
  transport and industry
• All types of energy electricity and natural gas
  to district heating and cooling, heating fuel,
  coal and lignite, forestry and agricultural
  energy products and transport fuels
• An optional obligation on the sale of energy
  services
• Energy distributors and/or retail supply
  companies to
• The public sector
• Integration of energy efficiency improvement
  considerations into their investments and
  operating budgets

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Framework Directive on Ecological Design of
Products (EuPs)

• Aims at
• free movement of EuPs within the EU
• better overall environmental performance
• contribution to the security of energy supply
• preserving the interests of both industry and
  consumers
• The scope
• any EuP to be covered by implementing measures
• eligibility criteria for adopting implementing
  measures
• (e.g. large volume of sales)
• motor vehicles excluded
• contribution to the integration of life-cycle
  thinking into
• product design

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Transport Policy White Paper
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Climate Change Strategy of Finland
Implementation Programmes
Energy Conservation Programme 2002
Programme for the Promotion of Renewables 2002
Decision to expand nuclear power 2002
Measures directed towards decrease in the use of
coal
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GOVERNANCE OF FINNISH ENERGY SAVING POLICY
MINISTRY OF THE ENVIRONMENT
HOUSING ENVIRONMENT
ENERGY, TRANSPORT INDUSTRY TERTIARY SECTOR
MINISTRY OF TRADE AND INDUSTRY
Energy conservation agreements Energy audit
(methodology, subsidiaries, monitoring,
authorisation of auditors, pricing) Energy
Efficient Technology Renewable Energy
Sources Information Dissemination Communication,
Networking, International Cooperation
Branch associations
Organisations
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GOVERNANCE OF FINNISH ENERGY SAVING POLICY
MINISTRY OF THE ENVIRONMENT
HOUSING ENVIRONMENT
ENERGY, TRANSPORT INDUSTRY TERTIARY SECTOR
MINISTRY OF TRADE AND INDUSTRY
Energy conservation agreements Energy audit
(methodology, subsidiaries, monitoring,
authorisation of auditors, pricing) Energy
Efficient Technology Renewable Energy
Sources Information Dissemination Communication,
Networking, International Cooperation
Branch associations
Organisations
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THREE INSTRUMENTS OF FINNISH NATIONAL ENERGY
SAVING PROCEDURE
4,1 TWh/a
Reporting boundaries
Voluntary Agreements
Energy Audits
1,5 TWh/a
0,5 TWh/a
Subsidies
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Voluntary Energy Conservation Agreements
Implementation and roles
Annual Reporting
Monitoring
Marketing

• Steering Group
• Ministries
• Branch Organisation
• Companies
• Motiva

Companies Municips
BranchOrganisation
Motiva

• Government support
• energy audits 40-50
• energy saving investments
• - conventional technology 10-20
• - new technology ... 30

• External expertise
• authorized
• auditors

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THE FINNISH ENERGY AUDIT SCHEME 2
Financing Marketing Reporting Guidance
THE ADMINISTRATOR
THE OPERATING AGENT
THE AUDITOR
THE CLIENT
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BENEFITS OF VOLUNTARY ENERGY CONSERVATION
AGREEMENTS

• Voluntary Agreement helps energy management and
  naturally suits as a part of corporate
  environmental programme
• Implementation of VA improves energy efficiency
  and reduction of energy costs
• Emission benefits and creating of positive public
  image
• Economic benefits
• Subsidies for energy audit up to 40
  (municipalities 50)
• Subsidies for investments up to 25-20 (min 25 T
  investment, Max subsidy 150 T, pay back gt 2
  years, )

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VOLUNTARY ENERGY CONSERVATION AGREEMENTS
COVERAGE OF VOLUNTARY ENERGY CONSERVATION
AGREEMENTS 60 of the total energy consumption 31
December 2005
Within agreement scheme Maximum coverage of the
agreement in Finland
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ENERGY CONSERVATION PROGRAMME
Estimated saving potential with the proposed
measures by 2010 Fuels Electricity Heating of
buildings 12 15 Industry 6 3 Transport 9 Othe
r sectors 3 4
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ENERGY CONSERVATION PROGRAMME

• Saving potential
• Service sector (appr. 1200 buildings)
• Heat 15
• Electricity 6
• Water 7
• Small and medium size industry (appr. 190
  buildings)
• Heat and fuels 25
• Electricity 8
• Water 11
• The saving potential in the energy intensive
  industry and power heat sectorare considerably
  smaller

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Voluntary Energy Conservation Agreements
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Voluntary Energy Conservation Agreements
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Voluntary Energy Conservation Agreements in
municipal sector
Duties of the municipalities

• appointing a person to be in charge of the
  implementation of the agreement
• setting the targets for efficiency improvement in
  the use of heat and electricity ( transport
  fuel)
• setting the target for the coverage of energy
  audits
• setting the target for continuous consumption
  monitoring
• working out an energy conservation plan
• working out a plan for the use of renewable
  energy sources
• favouring of CHP and cooperation with industry
• competitive bidding in project implementation
• monitoring of energy consumption during the whole
  life cicle
• financing of ES, including ESCOs
• training and public awareness in ES
• promotion of a compact city structure in city
  planning
• reporting of the energy use, both initial and
  annual
• carrying out energy audits and energy analyses
• carrying out conservation measures proposed in
  the audit reports
• providing the requested data and other
  information to Motiva for the annual report to be
  delivered to the Ministry

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Voluntary Energy Conservation Agreements
Municipal Sector
specific consumptions (ref. 2001)
heat electricity 3 by 2005 stop
the growth by 2005 7 by 2010 turn to
decline after 2005

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Voluntary energy agreement in Vantaa city

• Current agreement was signed in 2006 and it valid
  untill the end of 2007.
• Initiator City Council
• Parties
• 1. Real Estate Centre of Vantaa City
• 2. Finnish Ministry of Trade and Industry
• Annual potential of energy saving in municipal
  real estate in Vantaa
• 7200 MWh heat and fuel
• 1300 WWh electricity
• 7900 m3 water.

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Voluntary energy agreement in Vantaa city

• Short term plan
• Development of monitoring, automation and
  information management
• Programme of energy audit
• Investments to energy conservation
• Training of maintenance personnel
• Long term plan
• Development of methodology of building design
• Maintenance of building facilities

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Voluntary energy agreement in Vantaa city

• PROBLEMS in quantative determination
• Retrofiting of building facilities raises energy
  consumption because of new requirements of
  microclimate quality. E.g. airconditioning, heat
  requperation, mandatory ventilation.
• Imperfect statistics
• Intensity of use of premises

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Voluntary Energy Conservation Agreements
Recommended chart and schedule of implementation
procedures of voluntary energy conservation
agreement. Valid e.g. for Vantaa city
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Voluntary Energy Conservation Agreements
Main principles of data management
Branch Associations
MOTIVA
INDUSTRY(TT) TT-ESSU RUN TIME-VERSION
MUNICIPALS (KU) KU-ESSU RUN TIME-VERSION
ELECTRICITY GENERATION (VL) VL-ESSU RUN
TIME-VERSION
ESSU ACCESS-DATABASE FOR ENERGY CONSERVATION AGRE
EMENTS
ELECTRICITY DISTRIBUTION (SJ) SJ-ESSU RUN
TIME-VERSION
DISTRICT HEATING (KL) KL-ESSU RUN TIME-VERSION
PRIVATE SECTOR (KR) KR-ESSU RUN TIME-VERSION
MOTIVA
TRANSPORT TRUCK AND VANS (SK) OWN DATABASE
TRANSPORT BUS AND COACH (LA) OWN DATABASE
RUN TIME-VERSION BRANCH ASSOCIATIONS PART
OF ACCESS DATABASE ESSU
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Voluntary Energy Conservation Agreements
Cumulative saving effects reported by Industry,
Energy, Estate Building sectors
6,1
5,0
4,4
3,2
2,4
1,3
0,5
The industrial sector accounts for 87 of
implemented savings at the end of 2002
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Voluntary Energy Conservation Agreements

• Profitability of the proposed energy saving
  measures of 1 265 buildings

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Estimated impact by 2010
Voluntary Energy Conservation Programme

• Mtoe/a
• Energy and related taxation 0.4
• Energy conservation agreements 0.4
• Building regulations 0.2
• Energy subsidies and renovation support 0.1
• Development of urban structure 0.1
• Subtotal 1.2
• ENERGY EFFICIENCY PROGRAMME TOTAL 1.5

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Voluntary Energy Audit Programme
Input of resources

• About 2 man-years of work is required per year
  to
• run the Energy Audit Programme
• The staff involved is
• 3-4 persons in Motiva
• 1-2 persons in the Ministry of Trade and Industry
• 2-4 consultants for quality control, training,
  development
• Total costs of operation and development in
• 1992-2002
• about 2,2 million

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The Finnish Carbon Procurement Programme
(Finnder)

• The Finnish Carbon Procurement Programme
  (Finnder) seeks Joint Implementation (JI) and
  Clean Development Mechanism (CDM) projects
  worldwide with the aim of buying carbon credits
  from these projects for the Government of
  Finland. These Operational Guidelines provide
  information and guidance for developing CDM and
  JI projects under the Finnder.
• As a general criteria, projects must result in
  emission reductions or removals by sinks
  additional to any that would occur in the absence
  of the project.
• Participation in projects is voluntary. Written
  approval by the involved countries is required,
  including if applicable the authorization of
  private entities to participate in a specific
  project activity.
• www.environment.fi ? Finnder
• http//www.environment.fi/default.asp?node18782l
  anen

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Criteria for projects
Five evaluation categories price, volume,
project type, status and risks.

• The host is a Party to the Kyoto Protocol
• For CDM proposals are of eligible project type
• Under CDM does not accept projects regarding
  destruction of HFC-23 in new HCFC-22 plants nor
  proposals concerning carbon dioxide capture and
  storage (CCS).
• Hydro projects gt 20 MW must respect the criteria
  of the World Commission on Dams.

• Finnder is most interested in projects that are
  able to generate at least 250 000 tCO2e of carbon
  credits in total by the year 2012 (approx. 50 000
  t/year) and that apply already approved baseline
  and monitoring methodologies.  

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GHG Reduction Project Cycle by Finnder
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Finnder project portfolio (October 2006)
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Main technology measures for GHG reduction in
Russia

• -Combined gas steam cycle
• -Switch to gas
• -Renewables (Hydro, Bioenergy, Solar, Wind)
• -CHP
• -Local improvements (Energy efficiency,
  optimisation of operation, etc.)

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Examples of JI projects by Russian Energy Carbon
Fund

• Ufa CHP plant No. 4 - gas turbine
• 2x3.15 MW Pravdinsk Hydro No. 3 small Hydro
• 50 MW off-shore wind park in Kaliningrad region
• 450 MW unit at Shekinsky TPP - combined cycle
  technology
• 450 MW unit at Tomsk CHP No. 3 combined cycle
  flare gas
• 6.5 MW unit at Mutnovckaya Geo Power Plant
  Geothermal Plant
• Mednogorsk CHP - 2x10 MW combined cycle
  district heating
• Kirishi TPP switch from heavy oil to gas (2
  boilers)
• Amursk CHP No. 1 switch from coal to gas (2
  boilers) optimisation of the plant performance

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Example of joint Finnish Russian implementation
of JI Pilot projectExpansion of Pravdinsk Hydro
power plant, Kaliningrad region

• Implementation Stage planned conditional in
  respect to the signature of MoU on joint
  implementation)
• The Finnish Pilot Programme on Joint
  Implementation (JI) has received a project
  proposal from Fortum Corporation related to the
  enlargement of the Pravdinsk Hydro Power Facility
  in Kaliningrad. Two new 3.15 MW turbines would be
  installed thereby increasing the annual
  electricity production by 40 GWh and reducing the
  greenhouse gas emissions by approximately 116,000
  tons of CO2 during the first commitment period of
  the Kyoto Protocol 2008 2012. The requested
  contribution from the Finnish Pilot Programme is
  about 1 million euro. Finland would receive about
  77 of the certified emission reductions. The
  Pilot Programme Steering Committee has
  tentatively included this project in its pipeline
  and it is waiting for the signature of the
  Memorandum of Understanding on Joint
  Implementation and an official endorsement of the
  project by the Russian authorities.

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The Next Step

• Approval of National institutional framework for
  JI projects between Finland and Russia.
• From Finnish side the approval organisation is
  Designated Focal Point (DFP) of Finland
  Environmental Protection Department Ministry of
  the Environment of Finland P.O. Box 35
  FIN-00023 Government Finland

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THANK YOU !
Juri Markovitch Vantaan Energia Manager,
International Business Operations Phone 358 50
349 6237, 358 9 829 0297 Fax 358 829
0415 E-mail juri.markovitch_at_vantaanenergia.fi