White certificates

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When determining the extent of energy saving, the energy use is compared against a baseline, which is an estimate of the energy use in the absence of any attempt at saving energy.

In environmental policy, White certificates are documents certifying that a certain reduction of energy consumption has been attained. In most applications, the white certificates are tradable and combined with an obligation to achieve a certain target of energy savings. Under such a system, producers, suppliers or distributors of electricity, gas and oil are required to undertake energy efficiency measures for the final user that are consistent with a pre-defined percentage of their annual energy deliverance. White certificates are given to the producer whenever an amount of energy is saved whereupon the producer can use the certificate for their own target compliance or can be sold to (other) obliged parties. Quite analogous to the closely related concept of emissions trading, the tradability in theory guarantees that the overall energy saving is achieved at least cost, while the certificates guarantee that the overall energy saving target is achieved.

[edit] Practical applications

In Europe several countries have implemented a white certificate scheme or are seriously considering doing so. Italy started a scheme in January 2005; France a year later. Great Britain has combined its obligation system for energy savings with the possibility to trade obligations and savings. Denmark and the Netherlands are seriously considering introduction of a white certificate scheme in the near future.

In the UK, the Energy Efficiency Commitment 1 (2002-2005) program required that all electricity and gas suppliers with 15,000 or more domestic customers must achieve a combined energy saving of 62 TWh by 2005 by assisting their customers to take energy-efficiency measures in their homes: suppliers must achieve at least half of their energy savings in households on income-related benefits and tax credits. In the current (2005-2008) EEC 2, energy saving targets were raised to 130 TWh suppliers, and here suppliers with at least 50,000 domestic customers (including affiliated licenses) are eligible for an obligation.

[edit] References

White Certificates: concept and market experiences, EuroWhiteCert project brochure.
[1], EU SAVE 'White and Green' project
International Energy Agency/Demand Side Management Task XIV 'Market Mechanisms for White Certificates Trading'IEA/DSM Task XIV