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Review of Energy Efficiency Policies in Lithuania

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Review of Energy Efficiency Policies in Lithuania J. Vasauskaite, D. Streimikiene 628 ISSN 1648 - 4460 Problems and Prospects of Different Industry Sectors ---------TRANSFORMATIONS IN -------- Vasauskaite, J., Streimikiene, D. (2014), “Review of Energy Efficiency BUSINESS & ECONOMICS Policies in Lithuania”, Transformations in Business & Economics, Vol. 13, No 3C (33C), pp.628-642. © Vilnius University, 2002-2014 © Brno University of Technology, 2002-2014 © University of Latvia, 2002-2014 REVIEW OF ENERGY EFFICIENCY POLICIES IN LITHUANIA 1Jovita Vasauskaite 2Dalia Streimikiene Department of economics Department of Business School of economics and Economics and Management business Kaunas Faculty of Humanities KaunasUniversity of Vilnius University Technology Muitinės str. 8 K. Donelaicio str. 20 LT – 44280 Kaunas LT-44239 Kaunas Lithuania Lithuania Tel.: +370 37 401 958 Tel.:+370 37 300 550 E-mail:[email protected] E-mail: [email protected] 1Jovita Vasauskaite holds PhD in Economics. She is associated professor at Kaunas University of Technology. Currently J. Vasauskaite works as a postdoctoral fellow in Lithuanian Energy Institute. The researcher has experience in the projects related to corporate social and environmental responsibility, entrepreneurial competence. Her main research fields are: new technology implementation, energy efficiency development in industry. She has published around 15 articles in indexed international data basis. 2Dalia Streimikiene, PhD, is a senior research fellow at the Social cultural institute of Kaunas Faculty of Humanities, Vilnius University. The main areas of research are: environmental policy, energy policy and economic tools of environmental regulation in energy sector. Prof. Dr. Dalia Streimikiene holds PhD in Economics. She is professor and Leading Research Associate at Vilnius University Kaunas Faculty of Humanities. D. Streimikiene has experience in various projects related to sustainable development, environmental and climate change mitigation policies. The main area of her research is sustainability assessment of policies, technologies and products in energy field, development of indicator frameworks for sustainability assessment. Received: August, 2014 ABSTRACT. Energy efficiency is the main target of sustainable st 1 Revision: September, 2014 development policy as energy efficiency improvement allows to save nd 2 Revision: October, 2014 means, to reduce energy consumption, energy import dependency Accepted: October, 2014 and GHG emissions. TRANSFORMATIONS IN BUSINESS & ECONOMICS, Vol. 13, No 3C (33C), 2014 J. Vasauskaite, D. Streimikiene 629 ISSN 1648 - 4460 Problems and Prospects of Different Industry Sectors The EU is aiming for a 20% cut in Europe’s annual primary energy consumption by 2020. The aim of the paper is to review the newest EU energy efficiency policies and Lithuanian attempts to implement these policies. The paper analyses the newest EU policy documents on energy efficiency and reviews Lithuanian energy consumption and energy efficiency development trends. The Lithuanian energy savings targets and progress achieved in implementing these targets were assessed. Lithuanian energy efficiency policies and measures are analysed and policy recommendations are provided based on analysis performed. KEYWORDS: energy efficiency, energy intensity, energy saving targets, policies and measures, Lithuania. JEL classification: Q2, Q4, Q5. Introduction The 2012 EU Energy Efficiency Directive (EED) is the most important energy policy document as provides for tapping Europe’s large energy savings potential and reducing GHG emissions and Europe’s high dependency on energy imports. EU has mandatory end-use energy savings targets for Member States of 1.5% each year from 2014 to 2020. It also requires them to demonstrate how they will reach these savings via measures that are material and additional to what would have happened anyway. Energy efficiency is the main task of sustainable energy development and the main measure to reduce GHG emissions from energy production and consumption (Streimikiene, Volochovic, 2011; Streimikiene, 2012; Streimikiene et al., 2012a; 2012b). Very important issue in EED is energy savings obligations (EEO). The energy savings to be achieved by EEOs and/or alternative measures must be at least equivalent to achieving new savings each year from 1 January 2014 to 31 December 2020 of 1.5% of the annual energy sales to final consumers of all energy distributors or all retail energy sales companies by volume averaged over the previous three consecutive years where data is available (baseline). The implementation of EEO is foreseen in Lithuanian policy documents however the scheme is so far not developed. However Lithuania has implemented energy efficiency policies and reported according requirements of the Directive 2006/32/EC on energy end-use efficiency and energy services about progress in reaching the 9% indicative energy savings target by 2016. NEEAPs should describe the energy efficiency measures. Furthermore, the NEEAPs were supposed to describe how Member States intended to comply with the provisions on the exemplary role of the public sector and the provision of information and advice to final consumers. The aim of the paper is to review the newest EU energy efficiency policies and Lithuanian attempts to implement these policies. The main tasks to achieve this aim are: To analyse the newest EU policy documents on energy efficiency; To review Lithuanian energy consumption and energy efficiency development trends; To review Lithuanian energy savings target and progress achieved in implementing these targets; To analyse Lithuanian energy efficiency policies and measures and provide assessment of these policies; TRANSFORMATIONS IN BUSINESS & ECONOMICS, Vol. 13, No 3C (33C), 2014 J. Vasauskaite, D. Streimikiene 630 ISSN 1648 - 4460 Problems and Prospects of Different Industry Sectors Provided policy recommendations based on reviews performed. 1. New EU Energy Efficiency Policies Energy efficiency is the main target of sustainable development policy. Energy efficiency improvement allows to save means, to reduce energy consumption, energy import dependency and GHG emissions. The EU is aiming for a 20% cut in Europe’s annual primary energy consumption by 2020. On 8 March 2011, the EC adopted the Communication "Energy Efficiency Plan 2011" for saving more energy through concrete measures. The set of measures proposed aims at creating substantial benefits for households, businesses and public authorities: it should transform our daily lives and generate financial savings of up to €1000 per household every year. It should improve the EU’s industrial competitiveness with a potential for the creation of up to 2 million jobs. The European Commission has proposed several measures to increase efficiency at all stages of the energy chain: generation, transformation, distribution and final consumption. The measures focus on the public transport and building sectors, where the potential for savings is greatest. Other measures include the introduction of smart meters (which encourage consumers to manage their energy use better), and clearer product labeling. The most important for all branches of economy are: EU directive 2012/27/EU (on energy efficiency), EU Directive 2010/31/EU (on the energy performance of buildings); EU Directive 2010/30/EU (on the indication by labeling and standard product information of the consumption of energy; EU Directive 2008/98/EU (on waste and repealing); Directive 94/62/EC (on packaging and packaging waste) and EU Directive 2008/1/EC (concerning integrated pollution prevention and control) and Directive 2006/32/EC on energy end-use efficiency and energy service (Katinas et al., 2014; Gaigalis, Skema, 2014a). Under the framework of the Directive 2006/32/EC, Member States were required to show in their National Energy Efficiency Action Plans (NEEAPs) how they intended to reach the 9% indicative energy savings target by 2016. NEEAPs should describe the energy efficiency measures. Furthermore, the NEEAPs were supposed to describe how Member States intended to comply with the provisions on the exemplary role of the public sector and the provision of information and advice to final consumers. EU MS including Lithuania prepared and submitted two NEEAPs and reported their progress in implementing targets set by Directive 2006/32/EC. 2012 EU Energy Efficiency Directive (EED) establishes a common framework of measures for the promotion of energy efficiency within the Union in order to ensure the achievement of the Union’s 2020 20% headline target on energy efficiency. Commission Directive 2012/27/EU on energy efficiency requires all EU-28 countries to use energy more efficiently at all stages of the energy chain– from the transformation of energy and its distribution and final consumption. The new Directive will help remove barriers and overcome market failures that impede efficiency in the supply and use of energy and provides for the establishment of indicative national energy efficiency targets for 2020. EU target defined in the legal text and national indicative targets for 2020 to be set by MS. The MS should prepare Roadmaps for the renovation of building stock, increase the role of the public sector and to implement energy efficiency obligation schemes or alternative policies to be set by MS to address final consumption. The measures to promote energy services are also required. Accurate and frequent individual metering and billing, mandatory energy audits for large companies and
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