White certificates
Encyclopedia
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. If energy producers do not meet the mandated target for energy consumption they are required to pay a penalty. The white certificates are given to the producers 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) parties who cannot meet their targets. 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.
A white certificate, also referred to as an Energy Savings Certificate (ESC), Energy Efficiency Credit (EEC), or white tag, is an instrument issued by an authorized body guaranteeing that a specified amount of energy savings has been achieved. Each certificate is a unique and traceable commodity carrying a property right over a certain amount of additional energy savings and guaranteeing that the benefit of these savings has not been accounted for elsewhere.
seriously considering doing so. Italy started a scheme in January 2005; France and Denmark a year later. Great Britain has combined its obligation system for energy savings with the possibility to trade obligations and savings. The Netherlands and Poland are seriously considering the introduction of a white certificate scheme in the near future.
In the UK, the Energy Efficiency Commitment
(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 second (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. The third phase runs from 4/2008 to 12/2012 and is suopposed to deliver 185 MtCO2 lifetime savings by 2012.
, Pennsylvania
, and Nevada
have adopted Energy Efficiency Portfolio Standards that require regulated utilities to meet a certain percentage of their projected power needs through energy efficiency. Utilities must meet their obligations by either reducing their consumers’ energy usage, or by purchasing energy efficiency certificates (white certificates). More states are expected to follow in the near future.
There is also a voluntary market where large corporations are purchasing energy efficiency certificates as a way of meeting their corporate commitments to reduce their carbon footprint
s. Sterling Planet (http://www.sterlingplanet.com/), a market maker in renewable energy certificates (RECs) is also making a market for voluntary purchases of White Tags. Sterling Planet helped develop Connecticut's Energy Efficiency Standard and is presently the only company actively involved in this space.
The white certificate concept is an offshoot of the more mature renewable energy credit or ‘green tag’ trading. http://en.wikipedia.org/wiki/Green_tag. The market for white certificates is expected to grow larger than the green tag market because it requires less government approval and expense to install energy efficiency measures in factories and commercial buildings than to construct most renewable energy projects.
One issue arising is how to avoid allowing customers to “double dip” in white tag and other incentive programs for energy efficiency, such as ISO New England’s forward capacity market and the Regional Greenhouse Gas Initiative3.
Environmental policy
Environmental policy is any [course of] action deliberately taken [or not taken] to manage human activities with a view to prevent, reduce, or mitigate harmful effects on nature and natural resources, and ensuring that man-made changes to the environment do not have harmful effects on...
, white certificates are documents certifying that a certain reduction of energy consumption
World energy resources and consumption
]World energy consumption in 2010: over 5% growthEnergy markets have combined crisis recovery and strong industry dynamism. Energy consumption in the G20 soared by more than 5% in 2010, after the slight decrease of 2009. This strong increase is the result of two converging trends...
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. If energy producers do not meet the mandated target for energy consumption they are required to pay a penalty. The white certificates are given to the producers 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) parties who cannot meet their targets. Quite analogous to the closely related concept of emissions trading
Emissions trading
Emissions trading is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants....
, 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.
A white certificate, also referred to as an Energy Savings Certificate (ESC), Energy Efficiency Credit (EEC), or white tag, is an instrument issued by an authorized body guaranteeing that a specified amount of energy savings has been achieved. Each certificate is a unique and traceable commodity carrying a property right over a certain amount of additional energy savings and guaranteeing that the benefit of these savings has not been accounted for elsewhere.
Europe
In Europe several countries have implemented a white certificate scheme or areseriously considering doing so. Italy started a scheme in January 2005; France and Denmark a year later. Great Britain has combined its obligation system for energy savings with the possibility to trade obligations and savings. The Netherlands and Poland are seriously considering the introduction of a white certificate scheme in the near future.
In the UK, the Energy Efficiency Commitment
Carbon Emission Reduction Target
The Carbon Emission Reduction Target in the United Kingdom is a target imposed on the gas and electricity transporters and suppliers under Section 33BC of the Gas Act 1986 and Section 41A of the Electricity Act 1989, as modified by the Climate Change and Sustainable Energy Act 2006The original...
(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
TWH
TWH or twh could refer to:*Tennessee Walking Horse, a breed of horse* Toronto Western Hospital, a hospital in Toronto, Canada* TWH Bus & Coach, a bus company in Romford, England* Terrawatt-hour, measure of electrical energy, 1012 watt-hours...
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 second (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. The third phase runs from 4/2008 to 12/2012 and is suopposed to deliver 185 MtCO2 lifetime savings by 2012.
United States
ConnecticutConnecticut
Connecticut is a state in the New England region of the northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, and the state of New York to the west and the south .Connecticut is named for the Connecticut River, the major U.S. river that approximately...
, Pennsylvania
Pennsylvania
The Commonwealth of Pennsylvania is a U.S. state that is located in the Northeastern and Mid-Atlantic regions of the United States. The state borders Delaware and Maryland to the south, West Virginia to the southwest, Ohio to the west, New York and Ontario, Canada, to the north, and New Jersey to...
, and Nevada
Nevada
Nevada is a state in the western, mountain west, and southwestern regions of the United States. With an area of and a population of about 2.7 million, it is the 7th-largest and 35th-most populous state. Over two-thirds of Nevada's people live in the Las Vegas metropolitan area, which contains its...
have adopted Energy Efficiency Portfolio Standards that require regulated utilities to meet a certain percentage of their projected power needs through energy efficiency. Utilities must meet their obligations by either reducing their consumers’ energy usage, or by purchasing energy efficiency certificates (white certificates). More states are expected to follow in the near future.
There is also a voluntary market where large corporations are purchasing energy efficiency certificates as a way of meeting their corporate commitments to reduce their carbon footprint
Carbon footprint
A carbon footprint has historically been defined as "the total set of greenhouse gas emissions caused by an organization, event, product or person.". However, calculating a carbon footprint which conforms to this definition is often impracticable due to the large amount of data required, which is...
s. Sterling Planet (http://www.sterlingplanet.com/), a market maker in renewable energy certificates (RECs) is also making a market for voluntary purchases of White Tags. Sterling Planet helped develop Connecticut's Energy Efficiency Standard and is presently the only company actively involved in this space.
The white certificate concept is an offshoot of the more mature renewable energy credit or ‘green tag’ trading. http://en.wikipedia.org/wiki/Green_tag. The market for white certificates is expected to grow larger than the green tag market because it requires less government approval and expense to install energy efficiency measures in factories and commercial buildings than to construct most renewable energy projects.
One issue arising is how to avoid allowing customers to “double dip” in white tag and other incentive programs for energy efficiency, such as ISO New England’s forward capacity market and the Regional Greenhouse Gas Initiative3.
External links
- White Certificates: concept and market experiences, EuroWhiteCert project brochure.
- http://www.iiiee.lu.se/whiteandgreen, EU SAVE 'White and Green' project
- International Energy Agency/Demand Side Management Task XIV 'Market Mechanisms for White Certificates Trading'IEA/DSM Task XIV
- Energy Efficiency Credits by RESNET
- Energy Conservation Credits Launched An article about Sterling Planet's "white tag" program by EnergyVortex.com
- http://www.incisivemedia.com/energyrisk/Environmental_Risk/PDFs/Spring2008/7_EnvRisk_EnergyEfficiency.pdf An article by Elisa Wood on white certificates in Energy Risk magazine
- http://www.sterlingplanet.com Sterling Planet
- http://www.neuwingenergy.com Neuwing Energy
- Neuwing's partnership with IBM
- An article about an EEC program created by Neuwing, IBM, and ConEd