“With more than 15 000 diagnoses performed by more than 8 000 companies, Italy continues to be at the top among the virtuous countries in the EU to actuate the energy audits in large enterprises and energy consuming companies as required by the Energy Efficiency Directive (EED).”[i]
In March this year, I wrote about the how the Italian model could unlock the great energy efficiency potential in the country’s SMEs. While energy audits are mandatory for large companies, Italy requires them for certain SMEs as well.
New data presented in the Energy Efficiency Annual Report 2017 published by ENEA, the Italian National Agency for New Technologies, Energy, and Sustainable Economic Development, confirms how the energy audits model continues to be successful in Italy. 2016 data reveals that 20% of the total energy audits received were performed by SMEs, and shows that potential savings between 0,8 Mtoe and 1,1 Mtoe could be achieved with a payback period equal or less then three to five years respectively.
What is the secret to this success? We already know that one of the keys is that the Italian model requires SMEs to undergo energy audits in case it is an energy consuming company, and mandatory implementations of the identified measures.
Let’s first look at some data - Results as of December 2016
According to ENEA, a total of 15 154 diagnoses from 8 130 companies were received as of December 2016, increasing by around 8% from the 2015 data.[ii] Among the enterprises obliged to undergo energy audits, around 65% of the diagnoses received were performed by large enterprises, while 30% by energy consuming companies, of which 20% SMEs and 10% large enterprises. About 2% were done by enterprises with ISO 50001, and approximately 3% were done on a voluntary basis by enterprises, municipalities, and consortia. The following figure depicts the percentages of enterprises performing energy audits as described.
Figure 1 Enterprises performing energy audits (%) by category (Source: data elaboration from ENEA)
The diagnoses received showed potential cumulative savings of about 1,5 Mtoe, of which almost 0,8 Mtoe could be achieved with slightly more than 8 000 interventions and a payback period equal or less then three years, while more than 1,1 Mtoe could be achieved with about 14 000 interventions and a payback period equal or less then five years. The following chart illustrates the progressive interventions and potential savings (Mtoe) in relation with payback time (years).[iii] Figure 2 Progressive intervention (numbers) and potential savings (Mtoe) in relation with payback time (years) (Source: data elaboration from ENEA)
A “cocktail” of best practices that lead to success
The secret of the Italian success is to find in the innovative approach that includes a mix of best practices. The result is a “cocktail” of these best practices that lead to success, where the main ingredients can be identified as Technical, Financial, and Communication & Awareness.
The Technical Ingredient
Overseen by ENEA, the technical ingredient includes Permanent Technical Tables, Standardized Accountability Systems, and Sectoral Guidelines along with Specific Procedure for Multi-Site Companies.
ENEA created several Permanent Technical Tables with the interested parties (experts in the sector, stakeholders, ESCo and trade association) to identify effective, efficient and shared solutions, in line with the Legislative Decree 102/2014. The Technical Tables delivered a series of proposals that were adopted by the Italian Ministry of Economic Development (MISE) respectively in May and October 2015, and November 2016.[iv] Moreover, this approach increased awareness among enterprises to meet the deadline for the presentation of the documentation.
“During the European Sustainable Energy Week 2017 (EUSEW,) ENEA and the Italian Thermotechnical Committee (CTI) emphasized to the representatives of the European Commission the role of the technical norms as fundamental instruments to reach the targeted objectives.”….“ENEA and CTI are working towards the definition of a European norm on the design of the energy efficiency measurements and monitoring plans.” Antonio Panvini, General Director CTI[v]
Along with the Permanent Technical Tables, ENEA proposed and developed an innovative and logical operative approach to articulate the energy audit, and a scheme to analyze the energy structure of the site subject to the audit. The scheme gives a complete overlook of the energy performance of the production site, for every energy carrier (electric, thermal, vapor, hot water, etc.). Below are examples (Italian version) of an Enterprise Energy Structure developed by ENEA. Figure 3 Example of enterprise energy structure of a productive site (Source: ENEA) Figure 4 Example of enterprise energy structure of a productive site (Source: ENEA)
Through the analysis of the diagnoses received ENEA also developed Energy Performance Indexes for each sector[vi] as follows:
- Energy performance index of the plant (toe/t)
- Energy performance index of the plant relative to the electricity consumption (toe/t)
- Energy performance index of the of the plant relative to the natural gas (toe/t)
Figure 5 shows an example of energy performance index developed for the iron foundry plant.
Figure 5 Example of energy performance index for the iron foundry plant (Source: ENEA)
Together with several Italian trade associations[vii], ENEA developed specific guidelines for each sector, and available for everyone. The guidelines provided the necessary information to fulfill the obligations of the article 8 of Legislative Decree 102/2014.
The Financial Ingredient
The Italian Government and Regions are working together to financially support the energy audits among SMEs. In particular, the Government with the Decree of 12 May 2015 allocated EUR 15 millions a year until 2020 to co-finance Regions and autonomous Provinces programmes to support the delivery of energy audits or for the adoption of energy management system in compliance with ISO 50001 standard by SMEs that are not obliged under Art.8 of the Legislative Decree 102/2014.[viii] Resources are allocated to the Regions based on a proportional number of SMEs on their respective territory. Regions intend to make available other EUR 15 millions, and the total of these financing should cover 50% of the costs to perform the energy audits. As of 2015 data, six regions made available EUR 11.5 million to SMEs for this purpose.[ix]
The Communication & Awareness Ingredient
ENEA carried out “Italy in Class A”[x] National campaign to stimulate energy efficiency. This is the first National campaign promoted by the Italian Ministry of Economic Development, in line with Art.13 of the Legislative Decree 102/2014. Objective 1 of the campaign for the year 2017 was to increase awareness and encourage large enterprises and SMEs to perform energy audits and to use the available incentives to install energy efficient technologies. Among the numerous initiatives is a dedicated website comprehensive of all the activities promoted during the campaign. Trade associations are also providing support and communication to their members to facilitate and boost energy audits.
Observations to the Italian energy audits model
These ingredients works well if used together. A proper regulatory framework, along with technical and financial support, not only stimulates companies to excel but also facilitate them to meet their deadlines. Proper communication is key to ensure the delivery of the message and to increase awareness. This cocktail of best practices create a virtuous cycle that benefits the entire industry, as confirmed by the Italian energy audits model.
Next step: Unlocking the energy efficiency potential
What is the amount of investments needed to unlock the 1,5 Mtoe potential cumulative savings described in the diagnoses? This and more will be covered in my next follow up post, so stay tuned!
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[i] Energy Efficiency Annual Report 2017 (Italian version), ENEA p. 82
[ii] Energy Efficiency Annual Report 2017 (Italian version), ENEA p.82
[iii] Energy Efficiency Annual Report 2017 (Italian version), ENEA p. 92
[iv] http://www.sviluppoeconomico.gov.it/images/stories/documenti/CHIARIMENTI-DIAGNOSI-14-nov-2016.pdf (Italian Version)
[v] Energy Efficiency Annual Report 2017 (Italian version),, ENEA p. 83
[vi] When data were not representative of the productive reality, a model “median value ± standard deviation was used instead.
[vii] Bank sector (ABI Lab), ceramic industry (Confindustria Ceramica), paper industry (Assocarta), telecommunication industry (Assotelecomunicazioni-Asstel, distribution industry (Federdistribuzione), real estate (Assoimmobiliare), glass industry (Assovetro), foundry industry (Assofond).
[ix] Energy Efficiency Annual Report 2017 (Italian version), ENEA p. 34