Abstract

The twin decrees issued by Italian Ministry of Industry (April, 24th 2001) set the obligation to Gas and Electricity Distribution Companies (DISCOs) to achieve certain primary energy savings in years 2002-2006 (directly, or subcontracting to ESCOs, or buying energy efficiency certificates). The Regulatory Authority defines rules for implementation. In this paper:

1. we analyse the scheme, including tariff regulation to eliminate the loss of net revenues for DISCOS and allow the recovery of costs of DSM programmes as identified by Legislation (1995 to 2001) and the Authority; we discuss the most critical design issues (e.g. implications of the level of cost recovery and its interaction with the certificate market, factors hindering ESCOs’ participation, …).
2. we present a spectrum of quantitative analysis on the effects of such scheme. Main results are:
   • the saving targets set by the Italian legislator, though considered ambitious, are achievable using a relatively small fraction of the actual energy saving potential in Italy.
   • taking into account a) present Italian conditions of installed stock, b) measured data on load curves and consumption of end-use devices, c) level of cost recovery proposed by the Authority, and d) the tariff mechanism which partially decouples revenues from sales volumes, a number of programme designs would result in considerable economic benefits to customers, DISCOs, ESCOs and efficient appliances manufacturing industry. For example CFLs, under a free distribution programme, could deliver a large amount of the savings in the first 2 years.

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Panels of

Panel 1. Energy efficiency – a strategic choice for Europe

Panel 2. Comfort and energy use in buildings

Panel 4. Building the bridge from lab to customer

Panel 3. Land use, transportation and mobility

Panel 6. Dynamics of consumption

Panel 5. Market-based instruments