IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v14y2021i15p4467-d600379.html
   My bibliography  Save this article

The Bright and Dark Sides of Energy Efficiency Obligation Scheme: The Case of Latvia

Author

Listed:
  • Andra Blumberga

    (Institute of Energy Systems and Environment, Riga Technical University, Azenes Street 12/1, LV-1050 Riga, Latvia)

  • Reinis Āzis

    (Institute of Energy Systems and Environment, Riga Technical University, Azenes Street 12/1, LV-1050 Riga, Latvia)

  • Dāvis Reinbergs

    (Institute of Energy Systems and Environment, Riga Technical University, Azenes Street 12/1, LV-1050 Riga, Latvia)

  • Ieva Pakere

    (Institute of Energy Systems and Environment, Riga Technical University, Azenes Street 12/1, LV-1050 Riga, Latvia)

  • Dagnija Blumberga

    (Institute of Energy Systems and Environment, Riga Technical University, Azenes Street 12/1, LV-1050 Riga, Latvia)

Abstract

Evidence collected by researchers over several decades suggests that the successful implementation of the Energy Efficiency Obligation Scheme (EEOS) may deliver significant, cost-effective energy savings over many years. However, before starting EEOS in Latvia, predictions by energy efficiency policy researchers envisaged that it is at high risk of savings shortfalls. This study aims to carry out an ex-post policy evaluation of EEOS in Latvia and assess its ability to deliver significant savings in the first phase of the new EEOS. This paper questions whether the new EEOS can reach savings goals without prior experience with voluntary agreement schemes and emulation of successful EEOS from other countries. The second goal of the research is to create a web-based optimization tool as an Interactive Learning Environment to help policymakers and EEOS-obliged parties to create goal-oriented strategies. The study has found that, contrary to expectations, Latvia has reached and even overfulfilled EEOS saving goals. Estimated cumulative savings obtained during the starting phase (329.2 GWh) are 68% higher than the cumulative savings planned by the policymakers for 2020 (234 GWh). This success is related to the enforcement of a stick-type approach in the policy. However, the study also revealed the dark side of EEOS implementation by discussing different types of energy efficiency measures applied by EEOS and the role of implementing and monitoring institutions. The ex-ante evaluation projected that 50% of the EEOS savings would be derived from information and education measures and 50% through contributions to the Energy Efficiency Fund or by implementing the most cost-effective energy efficiency measures. The ex-post evaluation shows that around 95% of savings are achieved through information measures and the rest by introducing energy efficiency measures on the consumer side. EEOS parties do not contribute to the Fund because the cost of information measures (on average 4 EUR/MWh) is significantly lower than the contribution to the Fund (70 EUR/MWh).

Suggested Citation

  • Andra Blumberga & Reinis Āzis & Dāvis Reinbergs & Ieva Pakere & Dagnija Blumberga, 2021. "The Bright and Dark Sides of Energy Efficiency Obligation Scheme: The Case of Latvia," Energies, MDPI, vol. 14(15), pages 1-20, July.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:15:p:4467-:d:600379
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/14/15/4467/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/14/15/4467/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Font Vivanco, David & Kemp, René & van der Voet, Ester, 2016. "How to deal with the rebound effect? A policy-oriented approach," Energy Policy, Elsevier, vol. 94(C), pages 114-125.
    2. Rosenow, Jan & Bayer, Edith, 2017. "Costs and benefits of Energy Efficiency Obligations: A review of European programmes," Energy Policy, Elsevier, vol. 107(C), pages 53-62.
    3. Bertoldi, Paolo & Labanca, Nicola & Rezessy, Silvia & Steuwer, Sibyl & Oikonomou, Vlasis, 2013. "Where to place the saving obligation: Energy end-users or suppliers?," Energy Policy, Elsevier, vol. 63(C), pages 328-337.
    4. Moser, Simon, 2013. "Poor energy poor: Energy saving obligations, distributional effects, and the malfunction of the priority group," Energy Policy, Elsevier, vol. 61(C), pages 1003-1010.
    5. Reuter, Matthias & Patel, Martin K. & Eichhammer, Wolfgang & Lapillonne, Bruno & Pollier, Karine, 2020. "A comprehensive indicator set for measuring multiple benefits of energy efficiency," Energy Policy, Elsevier, vol. 139(C).
    6. Rosenow, Jan & Skoczkowski, Tadeusz & Thomas, Samuel & Węglarz, Arkadiusz & Stańczyk, Wojciech & Jędra, Michał, 2020. "Evaluating the Polish White Certificate scheme," Energy Policy, Elsevier, vol. 144(C).
    7. Mundaca, Luis, 2008. "Markets for energy efficiency: Exploring the implications of an EU-wide 'Tradable White Certificate' scheme," Energy Economics, Elsevier, vol. 30(6), pages 3016-3043, November.
    8. Kenneth Gillingham & Amelia Keyes & Karen Palmer, 2018. "Advances in Evaluating Energy Efficiency Policies and Programs," Annual Review of Resource Economics, Annual Reviews, vol. 10(1), pages 511-532, October.
    9. Moser, Simon, 2017. "Overestimation of savings in energy efficiency obligation schemes," Energy, Elsevier, vol. 121(C), pages 599-605.
    10. Blumstein, Carl & Goldstone, Seymour & Lutzenhiser, Loren, 2000. "A theory-based approach to market transformation," Energy Policy, Elsevier, vol. 28(2), pages 137-144, February.
    11. Bertoldi, Paolo & Rezessy, Silvia & Lees, Eoin & Baudry, Paul & Jeandel, Alexandre & Labanca, Nicola, 2010. "Energy supplier obligations and white certificate schemes: Comparative analysis of experiences in the European Union," Energy Policy, Elsevier, vol. 38(3), pages 1455-1469, March.
    12. Duzgun, B. & Komurgoz, G., 2014. "Turkey's energy efficiency assessment: White Certificates Systems and their applicability in Turkey," Energy Policy, Elsevier, vol. 65(C), pages 465-474.
    13. Rosenow, Jan, 2012. "Energy savings obligations in the UK—A history of change," Energy Policy, Elsevier, vol. 49(C), pages 373-382.
    14. Azhgaliyeva, Dina & Liu, Yang & Liddle, Brantley, 2020. "An empirical analysis of energy intensity and the role of policy instruments," Energy Policy, Elsevier, vol. 145(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Afshari, Afshin & Friedrich, Luiz, 2016. "A proposal to introduce tradable energy savings certificates in the emirate of Abu Dhabi," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 1342-1351.
    2. Franzò, Simone & Frattini, Federico & Cagno, Enrico & Trianni, Andrea, 2019. "A multi-stakeholder analysis of the economic efficiency of industrial energy efficiency policies: Empirical evidence from ten years of the Italian White Certificate Scheme," Applied Energy, Elsevier, vol. 240(C), pages 424-435.
    3. Paolo Bertoldi & Marina Economidou & Valentina Palermo & Benigna Boza‐Kiss & Valeria Todeschi, 2021. "How to finance energy renovation of residential buildings: Review of current and emerging financing instruments in the EU," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 10(1), January.
    4. Giacomo Di Foggia & Massimo Beccarello & Marco Borgarello & Francesca Bazzocchi & Stefano Moscarelli, 2022. "Market-Based Instruments to Promote Energy Efficiency: Insights from the Italian Case," Energies, MDPI, vol. 15(20), pages 1-16, October.
    5. Martin K. Patel & Jean-Sébastien Broc & Haein Cho & Daniel Cabrera & Armin Eberle & Alessandro Federici & Alisa Freyre & Cédric Jeanneret & Kapil Narula & Vlasios Oikonomou & Selin Yilmaz, 2021. "Why We Continue to Need Energy Efficiency Programmes—A Critical Review Based on Experiences in Switzerland and Elsewhere," Energies, MDPI, vol. 14(6), pages 1-28, March.
    6. Moser, Simon, 2017. "Overestimation of savings in energy efficiency obligation schemes," Energy, Elsevier, vol. 121(C), pages 599-605.
    7. Stede, Jan, 2017. "Bridging the industrial energy efficiency gap – Assessing the evidence from the Italian white certificate scheme," Energy Policy, Elsevier, vol. 104(C), pages 112-123.
    8. Liping Liao & Chukun Huang & Minzhe Du, 2022. "The Effect of Energy Quota Trading on Energy Saving in China: Insight from a Quasi-Natural Experiment," Energies, MDPI, vol. 15(22), pages 1-17, November.
    9. Bertoldi, Paolo & Labanca, Nicola & Rezessy, Silvia & Steuwer, Sibyl & Oikonomou, Vlasis, 2013. "Where to place the saving obligation: Energy end-users or suppliers?," Energy Policy, Elsevier, vol. 63(C), pages 328-337.
    10. Petrella, Andrea & Sapio, Alessandro, 2012. "Assessing the impact of forward trading, retail liberalization, and white certificates on the Italian wholesale electricity prices," Energy Policy, Elsevier, vol. 40(C), pages 307-317.
    11. Vlasis Oikonomou & Alexandros Flamos & Niki-Artemis Spyridaki & Wytze Gaast & Ariane Dominicis & Nicolas Chung, 2012. "White certificates and domestic offset schemes: possible synergies," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 17(2), pages 187-205, February.
    12. Hesselink, Laurens X.W. & Chappin, Emile J.L., 2019. "Adoption of energy efficient technologies by households – Barriers, policies and agent-based modelling studies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 99(C), pages 29-41.
    13. Rosenow, Jan & Skoczkowski, Tadeusz & Thomas, Samuel & Węglarz, Arkadiusz & Stańczyk, Wojciech & Jędra, Michał, 2020. "Evaluating the Polish White Certificate scheme," Energy Policy, Elsevier, vol. 144(C).
    14. Guibentif, Thomas M.M. & Patel, Martin K. & Yilmaz, Selin, 2021. "Using energy saving deficit distributions to assess calculated, deemed and metered electricity savings estimations," Applied Energy, Elsevier, vol. 304(C).
    15. Du, Minzhe & Wu, Fenger & Ye, Danfeng & Zhao, Yating & Liao, Liping, 2023. "Exploring the effects of energy quota trading policy on carbon emission efficiency: Quasi-experimental evidence from China," Energy Economics, Elsevier, vol. 124(C).
    16. Kerr, Niall & Gouldson, Andy & Barrett, John, 2017. "The rationale for energy efficiency policy: Assessing the recognition of the multiple benefits of energy efficiency retrofit policy," Energy Policy, Elsevier, vol. 106(C), pages 212-221.
    17. Saunders, Harry D. & Roy, Joyashree & Azevedo, Inês M.L. & Chakravarty, Debalina & Dasgupta, Shyamasree & De La Rue Du Can, Stephane & Druckman, Angela & Fouquet, Roger & Grubb, Michael & Lin, Boqiang, 2021. "Energy efficiency: what has research delivered in the last 40 years?," LSE Research Online Documents on Economics 114344, London School of Economics and Political Science, LSE Library.
    18. Anil Markandya & Xavier Labandeira & Ana Ramos, 2013. "Policy Instruments to Foster Energy Efficiency," Working Papers 01-2014, Economics for Energy.
    19. Safarzadeh, Soroush & Hafezalkotob, Ashkan & Jafari, Hamed, 2022. "Energy supply chain empowerment through tradable green and white certificates: A pathway to sustainable energy generation," Applied Energy, Elsevier, vol. 323(C).
    20. Argun, Irem Duzdar & Kayakutlu, Gulgun & Ozgozen, Neslihan Yilmaz & Daim, Tugrul U., 2021. "Models for Energy Efficiency Obligation Systems through different perspectives," Technology in Society, Elsevier, vol. 64(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:14:y:2021:i:15:p:4467-:d:600379. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.