Bridging the Industrial Energy Efficiency Gap: Assessing the Evidence from the Italian White Certificate Scheme

34 Pages Posted: 31 Mar 2016

See all articles by Jan Stede

Jan Stede

German Institute for Economic Research (DIW Berlin)

Date Written: March 2016

Abstract

The Italian white certificate scheme is the main national policy instrument to incentivise energy efficiency of the industrial sector. The mechanism sets binding energy-saving targets on electricity and gas distributors with at least 50,000 clients and includes a voluntary opt-in model for participation from other parties. This paper investigates and assesses the elements of the scheme that help overcome several barriers to deliver industrial energy efficiency. Results from a survey conducted among leading experts indicate that the Italian system provides a strong financial incentive to energy efficiency investments, covering a significant share of investment costs and thus reducing payback time. Moreover, the scheme fosters the development of energy service companies (ESCOs), which are key to developing, installing and arranging finance for projects on the ground. In conjunction with other policies, the mechanism also raises awareness of energy efficiency investment opportunities, thus helping overcome the market failure of insufficient information. Core challenges remain, including tackling regulatory uncertainty and improving access to finance.

Keywords: White certificates, energy efficiency obligations, financial incentives, policy evaluation, ESCOs, industrial energy savings, market barriers

JEL Classification: D22, D82, L14, L97, Q48

Suggested Citation

Stede, Jan, Bridging the Industrial Energy Efficiency Gap: Assessing the Evidence from the Italian White Certificate Scheme (March 2016). DIW Berlin Discussion Paper No. 1565. Available at SSRN: https://ssrn.com/abstract=2756357 or http://dx.doi.org/10.2139/ssrn.2756357

Jan Stede (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

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