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Renewable Energies and Energy Efficiency in the consumer level - Role of Civil Society

Adv. Lorenc Gordani, PhD | October 29, 2014

The current difficulties in the energy sector and the needs of sustainable development are making that the importance and role of energy saving and efficiency use come in increase Albania. In this regard, with focus the upcoming plans in energy efficiency revolving fund (EERF) took part on 30 October the discussion forum "Renewable energies and energy efficiency at the consumer level - Role of Civil Society" at the Tirana International Hotel. A forum organized by REC Albania, within the program SENIOR-A, in cooperation with the Ministry of Energy and Industry.

Overview Energy Efficiency Sector in Albania

Albania applies a Law on Energy Efficiency of 2005. Despite the fact that the Law on Energy Efficiency addresses some important aspects, such as the development of national energy efficiency programmes, energy audits, energy labelling, financing through an energy efficiency fund, etc., it has never been properly implemented. Most of the implementing legislation was never adopted, and the envisaged Energy Efficiency Fund was never created.

A new Law on Energy Efficiency was prepared in 2011 in close cooperation with the ECS (Secretariat of Energy Community). However, its adoption was delayed for more than two years. As a consequence, the Secretariat initiated infringement action against Albania in November 2013 for the lack of transposition and implementation of Directive 2006/32/EC. The Ministry of Energy and Industry replied to the Secretariat’s Opening Letter in January 2014, presenting an ambitious timetable for adoption of legislation and strategic documents in 2014.

In April 2014, the draft Law on Energy Efficiency was updated with the aim to transpose Directive 2006/32/EC. The draft provides for an indicative energy savings target, and also envisages institutional strengthening, i.e. the establishment of the Energy Efficiency Fund and the Energy Efficiency Agency. The approval of this Law by the Government has been postponed until the third quarter of 2014.

In regard of conservation of thermal energy in buildings in 2002 was establishes the legal basis for setting up secondary rules and taking mandatory action for the conservation of thermal energy in buildings. In September 2013, also a new Directorate for Renewable Energy Sources and Energy Efficiency was established within the Ministry of Energy and Industry.

Public Building EE Market in Albania

The 2012 regional market assessment on energy savings in buildings, commissioned by the Energy Community Secretariat (ECS) concluded that the potential annual energy savings amount to about €462 million or 7,940 GWh (ECS 2012). A substantial portion of this amount is in the public sector: although the study did not estimate energy savings for the entire public sector, it identified annual energy savings in schools and hospitals to be €35.4 million or 515.4 GWh. Regard the Albania potential energy savings is 53.7 GWh/year that means 5.1 Million €/year. The all will require 33.3 Million € investment with an average payback 6.5 Years.

Challenges and Barriers to Improving EE in Public Buildings

The last studies of World Bank shown, that implementation of EE projects in public facilities in the Western Balkans faces many key challenges and barriers, including: Limited number of credit worthy municipalities and borrowing capacity; Restrictive budgeting and procurement regulations; Low energy tariffs; Norm-based billing systems for heating; Relatively high interest rates charged by commercial banks; Small project sizes, leading to high project development and transaction costs; Lack of development of energy and low existing comfort levels.

An energy efficiency revolving fund (EERF) is the only viable option for scaling up energy efficiency (EE) financing in the public sector in the Western Balkans. The establishment of an EERF anymore requires the development of a legal framework comprising national legislation as well as supporting secondary legislation or regulations that will define the structure of the EERF. Options include creating the fund under an existing ministry, energy agency, or development bank; creating a new legal entity (Independent Corporation or new statutory agency); not-for-profit entity; or establishing a public-private partnership (PPP).

Oversight Arrangements Experiences

Although oversight arrangements vary, they typically include all relevant ministries that have some authority over EE, such as those responsible for finance, construction, economy/energy, environment, or urban/regional development. For example in the case of the Bulgarian Energy Efficiency Fund, or BEEF, oversight is by a management board (MB) appointed by the national government.

Among other examples: The Renewable Resources and Energy Efficiency (R2E2) Fund in Armenia is governed by a government-appointed board of trustees and comprises representatives from the government, private sector, NGOs and academia; The Romanian Energy Efficiency Fund (Fondul Român pentru Eficienţa Energiei, or FREE) is governed by a government-appointed board of administration consisting of seven members, of whom five are private sector representatives; and Salix Finance in the U.K. has a three-person board, of whose members two are from the private sector.

Conclusions and priorities in case of Albania

However, the above differences, most of these governance arrangements are similar in terms of featuring representation from both the public and private sectors. In more, the deadline for the transposition of Directive 2010/31/EU expired on 30 September 2012. Therefore, priorities for Albania foreseen the adopting of a new Law on Energy Efficiency as essential importance for the further development of the legislative framework and for the implementation of energy efficiency measures foreseen for the achievement of energy efficiency targets.

Furthermore, Albania needs to improve and adopt immediately the second EEAP, following requirements of the Directive 2006/32/EC and the template developed by the Energy Efficiency Coordination Group. Besides this, the institutional framework should be developed and strengthened, with clearly defined roles and responsibilities. In last, the establishment of the Energy Efficiency Fund will significantly contribute to the implementation of the EEAP.

In conclusion it has to say that the establish of an environmental fund has always seen the action of civil society as a promoter. In meanwhile, it is the Ministry of Energy and Industry, that has taken the first step, on the unveiling a new approach for establishing an eco-fund in efficiency energy that search for more action of civil society on the lobbying of the rise of energy efficiency. Therefore, the hope is that this opportunity given for the first time to the civil society will be be turn in an added value for the all society.

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