Energy Efficiency Policies around the World: Review and Evaluation

3.2 Institutions and Programmes

There are two main questions related to institutional aspects of energy efficiency policies and their implementation. Firstly, are public energy efficiency agencies necessary to sustain national efforts to improve energy efficiency? Secondly, is it necessary to have strong institutionalisation of energy efficiency measures, through an energy efficiency law or a national programme approved by the parliament?

3.2.1 Energy efficiency agency

Two thirds of the surveyed countries have set up a national energy efficiency agency.

Energy efficiency programmes usually require a dedicated technical body able to reach remote and varied energy consumers. Some measures, such as energy pricing or the introduction of international standards may however be implemented without a specific energy efficiency institution.

About two thirds of the surveyed countries have a national energy efficiency agency and over 90% a Ministry department dedicated to energy efficiency (Figure 3.2). An energy efficiency agency is defined here as a body with strong technical skills, dedicated to implementing the national energy efficiency policy, as well as in some cases the environmental policy (see Annex 2). Such agencies are usually separated from ministries, but may be part of a Ministry, as in Denmark, Canada, the US or the Philippines. In Europe, most of the countries have a national energy efficiency agency; several countries have created a new agency since 2000, such as Germany and Norway. In some countries, these agencies also cover environmental issues (e.g. France, the Netherlands). Energy efficiency agencies are increasingly recognised in the EU as necessary instruments to foster energy efficiency policies. The European Commission has recently set up a new agency dealing with the management of EU programmes on energy efficiency and renewables, the Intelligent Energy Executive Agency (IEEA) Energy efficiency agencies have the mission and capabilities, first of all, to design, implement and evaluate programmes and measures, to contract a range of stakeholders, such as companies, local authorities, or NGOs and, finally, to ensure coordination with higher or lower levels of authorities (international, national, regional and local). These agencies are usually public institutions funded by the State budget, and in developing countries are often supported by overseas technical assistance funds. In a few countries, part of the budget is based on a tax on energy (e.g. Norway) and some countries have set up agencies with private sector participation (e.g. Morocco, Portugal), whilst others are expecting their agency to operate as a partially private body that has to earn income.

In countries with a federal or decentralised structure, such as Spain, Germany, Belgium, the US and Canada, energy efficiency agencies have been set up by regional administrations. In addition, many countries have set up local or regional agencies . In addition, many EU countries have set up local or regional agencies, very often through the Energy Intelligence for Europe programme  of the European Commission that provides funding to the agencies. As a result, there are presently about 600 local or regional agencies in the EU. These regional and local agencies aim at providing more targeted measures, as they are closer to consumers and better able to take into account regional circumstances (climate, energy resources, etc.). Local information centres that many countries have set up complement them.  The EU now has about 800 information centres and agencies dealing with energy efficiency. At world level, half of the countries have local or regional agencies.

The primary objective of all these institutions is to provide technical expertise to governments and consumers, something that cannot always be found in existing institutions. The poor quality of energy efficiency equipment and services is often seen as an obstacle to their good diffusion. Energy agencies can play a role in that field by certifying those which have the required quality. Government ministries do not, in general, have the required expertise to carry out all the activities of energy agencies. Another important function of energy efficiency agencies is to act as a promoter of energy efficiency vis-à-vis energy companies. Electric utilities, although very active in some countries, are above all in the business of selling electricity and thus do not necessarily have a strong interest in energy efficiency over the long-term, especially in the context of a growing competition. There is, therefore, a need for agencies to deal with energy efficiency on a long-term basis.

Yet another function of energy efficiency agencies is to act as a coordinator of all governmental initiatives in the field of energy efficiency to avoid scattered and uncoordinated actions by different ministries. In particular, the veto of such agencies has proved very useful in negotiating sectoral agreements with groups of consumers or equipment producers to reach specific targets for efficiency improvements.

In countries that receive aid from international development assistance programmes, such agencies can in addition act as the national counterpart with whom donors negotiate the implementation of financial packages for energy efficiency. More generally, such agencies can be the counterpart to financial institutions to develop new funding schemes.

The fact that most countries have set up an energy efficiency agency is in a way an empirical justification of their usefulness.

3.2.2 National energy efficiency programmes and laws with quantitative targets

Increasingly, countries adopt national energy efficiency programme with quantitative targets , with generally yearly monitoring requirement: this is now the case in slightly less than half of the surveyed countries and around 55% in OECD and non OECD Asia (Figure 3.3, left). The EU, not since recently an official target of energy efficiency improvement of 1% p.a. between 2008 and 2016 (9% cumulated in 2016) and 20% by 2020 . These programmes are either purely devoted to energy efficiency or combined with programmes for greenhouse gas reduction or promotion of renewables (in most EU countries). 

In some countries, such as Brazil, Colombia, India, the Philippines and Peru, an energy efficiency law has been adopted only recently (since 2000).   Such laws and programmes ensure a certain continuity of public efforts and a better co-ordination of the various actions and measures.

The targets are expressed in different ways depending on the country. The target may refer first of all to a rate of energy savings or efficiency improvement, which is the most popular target used in about 30 countries (Figure 3.3, right). This is the case of all EU countries with the Energy Service Directive , New Zealand, Japan, and Vietnam. In some countries, such targets only apply to a specific sector (e.g. buildings in Sweden, households in UK, or the energy sector in Mongolia).    

The second type of targets considered by some countries is to achieve a specified energy saving (in GWh or Mtoe). This is the case of Spain, France, Italy, UK, Norway, Iran, Sri Lanka, Philippines, Thailand, Algeria, Morocco, and Tunisia.

In other countries, the objective is to achieve a specified rate of decrease of the energy intensity (usually in %/year or as a percentage over a period). France, Germany, Bulgaria, The Czech Republic, Hungary, Russia, China, Taiwan China and Tunisia are examples of countries with a target on the energy intensity.

Some countries have chosen to achieve a rate of reduction in the energy consumption (%) (e.g. Finland, Switzerland, Korea). Finally, and this is more recent, the target is to lower the value of the energy consumption elasticity to the GDP  to a target value (e.g. Estonia, Thailand, Indonesia). Some countries have even set up different targets (e.g. France, Spain).