Energy Utilities (Gas and Electricity) Obligation to Increase End Use Efficiency

Legislative Decrees 79/1999, 164/2000 and 93/2011, implementing the European Directives on the opening of the electricity and gas markets, require that the government concession to electricity and gas distribution companies include an obligation to implement measures and interventions aimed at the improvement of energy efficiency in end uses, measured according to quantitative targets (a 0.5 Mtoe reduction by 2002, and 2.9 Mtoe in 2006). These targets, the modalities for designing and implementing the energy-saving programmes, along with the procedures to be adopted to monitor and evaluate them, were defined by two ministerial decrees issued on 24 April 2001 by the Ministry of Production Activities in collaboration with the Ministry of Environment. The obligations were in force for distributors providing electricity or gas to more than 100,000 end-users by 31 December 2001. An innovative element is represented by the establishment of a trading scheme of energy efficiency "certificates". Moreover, cogeneration is allowed for priority dispatching. The projects designed to comply with the requirements of the Decrees may be implemented in three ways: - Actions carried out directly by distributors - Through companies owned/controlled by the distribution companies themselves - Through ESCOs. The costs incurred by distributors for the implementation of projects can be covered with part of the annual proceeds coming from the carbon-tax and from tariffs paid by all end-users (either captive and eligible customers). Additional measures may be required to implement the EU Draft Directive on Energy End-Use Efficiency and Energy Services if and when it is approved.

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