CELEX: 
Language: en
Date: 2018-12-13
Title: COMMISSION DELEGATED REGULATION (EU) …/... amending Annexes VIII and IX to Directive 2012/27/EU on the contents of comprehensive assessments of the potential for efficient heating and cooling

EXPLANATORY MEMORANDUM
            
            
               1.CONTEXT OF THE DELEGATED ACT
            
            
               Objective and legal basis of the proposed action
            
            
               This Delegated Regulation revises Annex VIII and Part 1 of Annex IX to Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency
                  1
                (the ‘EED’). The purpose of the revision is to simplify and clarify the content of the comprehensive assessments of the potential for efficient heating and cooling. The revision also aligns the content to the updated legislation of the energy union, notably the Energy Performance of Buildings Directive
                  2
               , Energy Efficiency Directive
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               , Renewable Energy Directive
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                and the Regulation on the Governance of the Energy Union and Climate Action
                  5
               .
            
            
               Article 14 of Directive 2012/27/EU requires that Member States carry out a comprehensive assessment of the potential for efficient heating and cooling by 31 December 2015. In these comprehensive assessments, Member States are required to describe and forecast the potential for introducing high-efficiency cogeneration and efficient district heating and cooling and to adopt policies that duly take into account the potential for using efficient heating and cooling systems.
            
            
               Annex VIII to the Directive lists the elements, which the comprehensive assessments must include, and Part 1 of Annex IX describes the general principles for the cost-benefit analysis that the Member States are required to carry out when assessing the most resource- and cost-efficient solutions to meeting heating and cooling needs.
            
            
               At the request of the Commission, the Member States must update and notify the comprehensive assessments to the Commission every 5 years. The Commission must make any such request at least 1 year before the due date. It follows from a review of the results of the first cycle of comprehensive assessments that the Commission should ask Member States to prepare a second cycle of comprehensive assessments.
            
            
               In order to simplify the he content of the comprehensive assessments, Annexes VIII and Part 1 of Annex IX need to be amended, which can be done by adopting delegated acts the empowerment that will be renewed in Articles 22 and 23(2) of the revised Energy Efficiency Directive.
            
            
               General context of the Delegated Regulation
            
            
               The Joint Research Centre of the European Commission (JRC) analysed the first cycle of comprehensive assessments. It concluded that while the assessments were useful for a number of reasons, their content should be improved before the next cycle. Among the identified benefits were the gathering of new data and the description of the new potential for heating and cooling, as well as improving the interaction between national and local administrations. The improvements that the JRC recommended included setting clearer requirements for the gathering and processing of data and allowing Member States to focus their analysis on locally relevant ways of heating and cooling in a technologically neutral way.
            
            
               The first cycle of the comprehensive assessments indicated that in order to continue deriving benefit from the potential of these assessments, their three structural elements should remain. These three elements are: (1) an overview of the current demand for, supply of and infrastructure for heating and cooling, along with a visual representation of this on a map and projections of future demand, (2) an analysis of the potential for efficient heating and cooling, and (3) an overview of existing and planned policies and measures and their impact.
            
            
               For the assessments to be more relevant for national policymaking and take less time to complete, Member States should have more flexibility around content that is relevant for their energy and environment policies.
            
            
               2.CONSULTATIONS PRIOR TO THE ADOPTION OF THE ACT
            
            
               Consultation of the Member States and stakeholders
            
            
               Due to the limited scope and technical nature of the simplification of content of the comprehensive assessments, a simplified procedure can be used for amending. In line with Article 23 of the revised Energy Efficiency Directive the Commission consulted the experts designated by the Member States as well as stakeholders.
            
            
               Member States and stakeholders were invited to a consultation meeting in Brussels on 25 October 2018. A draft working document was made available to the participants which was presented at the meeting. Participants from 16 Member States and 17 stakeholders were present. The majority of participants, including all of the stakeholders, supported the need for the Commission to request a second cycle of the comprehensive assessments.
            
            
               Several minor points were clarified, and some comments were received on the part of the text that describes what is required when collecting data for the overview of the current demand for, supply of and infrastructure for heating and cooling. In this part of the document, which is the most technical, several stakeholders proposed adjustments to the scope of the data gathering to ensure their sectors would be sufficiently represented. Three Member States proposed presenting the data of energy supply technologies at a more general, nationally aggregated level. In addition, three Member States requested a change in the threshold for the requirement to gather potential waste heat supply data from 20 GWh for annual energy generation, which comes from Annex VIII to the existing EED, to 20 MW generation capacity. Two Member States recalled the need to maintain consistency with the revised Renewable Energy Directive.
            
            
               3.LEGAL ELEMENTS OF THE DELEGATED ACT
            
            
               Legal basis
            
         
         
            
               The legal basis for acting at EU level on energy efficiency is Article 194 of the Treaty on the Functioning of the European Union (TFEU). Article 194 gives the EU the objective ‘in the context of the establishment and functioning of the internal market and with regard for the need to preserve and improve the environment’. Union policy shall aim to, among other objectives, to ‘ensure security of energy supply in the Union’ and ‘promote energy efficiency and energy saving and the development of new and renewable forms of energy’. 
            
            
               This Delegated Regulation is to be adopted pursuant to Articles 22 and 23(2) of Directive 2012/27/EU, which empowers the Commission to adopt delegated acts to adapt Annex VIII and IX.
            
            
               
            
               Proportionality
            
            
               The requirements for the comprehensive assessments of the potential for efficient heating and cooling are set out in the EED. Heating and cooling is the most significant energy end-use sector, consuming about 50 % of the total energy demand in the European Union. Therefore, in order to compare and align policy and to achieve energy savings across all Member States, it is important to legislate at the European Union level. The proposal to update and simplify the content of the comprehensive assessments is therefore proportional to the intended outcome.
            
            
               Summary of the proposed action
            
            
               The Delegated Regulation simplifies the comprehensive assessments of the potential for efficiency in heating and cooling by reducing the amount of information that Member States are required to provide. It is structured in four blocks: (a) an overview of the current heating and cooling demand, supply and infrastructure, along with a visual representation of this on a map and a projection of future demand, (b) objectives, strategies and policy measures contributing to the five dimensions of the energy union, (c) an economic and financial analysis of the potential for efficient heating and cooling and (d) potential new strategies and policy measures.
            
            
               The simplification streamlines the reporting obligation and aligns the assessments to other initiatives of the energy union legislation.
            
            
               Choice of instrument
            
            
               The proposed form of action is a Delegated Regulation amending and supplementing Annex VIII and Part 1 of Annex IX to Directive 2012/27/EU.
            
            
               Budgetary implication
            
            
               The proposal has no impact for the EU budget.
            
            
               COMMISSION DELEGATED REGULATION (EU) …/...
            
            
               of XXX
            
            
               amending Annexes VIII and IX to Directive 2012/27/EU on the contents of comprehensive assessments of the potential for efficient heating and cooling
            
            
               THE EUROPEAN COMMISSION,
            
            
               Having regard to the Treaty on the Functioning of the European Union,
            
            
               Having regard to Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency
                  6
               , and in particular Article 14 thereof,
            
            
               Whereas:
            
            
               (1)Directive 2012/27/EU establishes the framework and content of the comprehensive assessments by the Member States on the potential for efficiency in heating and cooling.
            
         
         
            
               (2)Articles 22 and 23(2) of the Directive 2012/27/EU empowers the Commission to adopt delegated acts to adapt the requirements of Annexes VIII and IX.
            
            
               (3)The first cycle of comprehensive assessments was analysed by the Commission. Gathering new data, identifying new potentials and exchanging best practices for energy efficiency for heating and cooling confirmed the benefits of the comprehensive assessments and confirmed the need for the Commission to request that Member States update and notify the second cycle of comprehensive assessments.
            
            
               (4)The assessments varied in methodology and content, so clearer requirements, technological neutrality and better link to policy were identified as areas for improvement. The requirements on the content of the comprehensive assessments need to be updated before the second cycle in order to increase the usefulness of the gathered information for the Member States and the Commission, to simplify the information to be provided and to better link to other legislation of the energy union, namely Regulation (EU) 2018/XXX
                  7
                [OP: please insert here the references of the Governance Regulation] and Directives (EU) 2018/844
                  8
               , 2018/XXX [OP: please insert here the references of the revised Energy Efficiency Directive], and 2018/XXX
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                [OP: please insert here the references of the revised Renewable Energy Directive]. 
            
            
               (5)Member States and stakeholders have been consulted on the process of the comprehensive assessments and on a draft working document of the updated Annex VIII at a joint consultation meeting on 25 October 2018.
            
            
               (6)Annex VIII and Part 1 of Annex IX to Directive 2012/27/EU should therefore be adapted,
            
            
               HAS ADOPTED THIS REGULATION:
            
            
               Article 1
               Potential for efficiency in heating and cooling
            
            
               (1)Annex VIII to Directive 2012/27/EU is replaced by the text in Annex I.
            
            
               (2)Annex IX to Directive 2012/27/EU is amended as set out in Annex II.
            
            
               Article 2
               Entry into force and application
            
            
               This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
            
            
               This Regulation shall be binding in its entirety and directly applicable in all Member States.
            
            
               Done at Brussels,
            
            
               
                     For the Commission
                     The President 
               
               
                     Jean-Claude JUNCKER
               
            
         
         
            
                  
                     (1)
                  
                        OJ L 315, 14.11 2012, p. 1.
               
               
                  
                     (2)
                  
                        OJ L,, p. .
               
               
                  
                     (3)
                  
                        OJ L,, p. .
               
               
                  
                     (4)
                  
                        OJ L,, p. .
               
               
                  
                     (5)
                  
                        OJ L,, p. .
               
               
                  
                     (6)
                  
                        OJ L 315, 14.11 2012, p. 1.
               
               
                  
                     (7)
                  
                        OJ L,, p. . [OP: please insert here the full title and references of the Governance Regulation]
               
               
                  
                     (8)
                  
                        OJ L,, p. . [OP: please insert here the full title and references of the Governance Regulation]
               
               
                  
                     (9)
                  
                        OJ L,, p. . [OP: please insert here the full title and references of the Governance Regulation]
               
            
      
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               ANNEX I
               Amendment to Annex VIII
            
            
               Annex VIII of Directive 2012/27/EU is replaced as follows:
            
            
            
               ‘ANNEX VIII
            
            
               Potential for efficiency in heating and cooling
            
            
               The comprehensive assessment of national heating and cooling potentials referred to in Article 14(1) shall include and be based on the following:
            
            
               Part I: OVERVIEW OF HEATING AND COOLING
            
            
               1.quantification of heating and cooling demand in terms of useful energy
                  1
                and final energy consumption in GWh per year
                  2
                by sectors:
            
            
               (a)residential;
            
            
               (b)services;
            
            
               (c)industry;
            
            
               (d)other (such as agriculture or fishery) that individually consume more than 5 % of total national useful heating and cooling demand;
            
            
               2.identification of current heating and cooling supply:
            
            
               (a)by technology, within sectors mentioned under point 1.:
            
            
               (i)heat-only boiler using:
            
            
               –fossil fuels;
            
            
               –renewable sources;
            
            
               (ii)heat and power cogeneration:
            
            
               –fossil fuels;
            
         
         
            
               –renewable sources;
            
            
               (iii)district supply that is not reported under point 2.(a)(ii):
            
            
               –fossil fuels;
            
            
               –renewable sources;
            
            
               (iv)energy from renewable sources
                  3
               ;
            
            
               (v)other conventional sources;
            
            
               (b)identification of installations that generate waste heat or cold and their potential heating or cooling supply
                  4
               :
            
            
               (i)thermal power generation installations that can supply or can be retrofitted to supply waste heat, with a total thermal input exceeding 50 MW;
            
            
               –fossil fuels;
            
            
               –renewable sources;
            
            
               (ii)cogeneration installations using technologies referred to in Part III of Annex I using:
            
            
               –fossil fuels;
            
            
               –renewable sources;
            
            
               (iii)waste incineration plants;
            
            
               (iv)renewable energy installations with a total thermal input exceeding 20 MW other than the installations specified under point 2.(b)(i) and (ii) generating heating or cooling using the energy from renewable sources;
            
            
               (v)industrial installations with a total thermal input exceeding 20 MW which can provide waste heat;
            
            
               (c)share of energy from renewable sources and from waste heat or cold in the final energy consumption of the district heating and cooling sector over the past 5 years, in line with Directive (EU) 2018/ XXX [OP: please insert here the references of the revised Renewable Energy Directive];
            
            
               3.a map covering the entire national territory identifying (while preserving commercially sensitive information):
            
            
               (a)heating and cooling demand areas following from the analysis of point 1., while using consistent criteria for focusing on energy dense areas in municipalities and conurbations;
            
            
               (b)existing heating and cooling supply points and transmission installations of point 2.;
            
         
         
            
               (c)planned heating and cooling supply points and transmission installations district heating installations;
            
            
               4.a forecast of trends in the demand for heating and cooling to maintain a perspective of the next 30 years, in GWh, taking into account in particular projections for the next 10 years, the change in demand in buildings and different sectors of the industry, and the impact of policies and strategies related to the demand management, such as long-term building renovation strategies under Directive (EU) 2018/844;
            
            
               Part II: OBJECTIVES, STRATEGIES AND POLICY MEASURES
            
            
               5.planned contribution of the Member State to its national objectives, targets and contributions for the five dimensions of the energy union, as laid out in Article 3(2)(b) of Regulation (EU) 2018/XXX [OP: please insert here the references of the Governance Regulation], delivered through efficiency in heating and cooling, in particular related to points (a), (b), (c) and (d)(3) of Article 4 and to point (4)(b) of Article 15 of Regulation (EU) 2018/XXX [OP: please insert here the references of the Governance Regulation];
            
            
               6.general overview of the existing policies and measures as described in the most recent report submitted in accordance with Articles 3, 19, 20 and 27(a) of Regulation (EU) 2018/XXX [OP: please insert here the references of the Governance Regulation];
            
            
               Part III: ANALYSIS OF THE ECONOMIC POTENTIAL FOR EFFICIENCY IN HEATING AND COOLING
            
            
               7.an analysis of the economic potential
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                of different technologies for heating and cooling shall be carried out by using the cost-benefit analysis referred to in Article 14(3) and shall identify alternative scenarios for more efficient and renewable heating and cooling technologies.
            
            
               The following technologies should be considered:
            
            
               (a)industrial waste heat and cold;
            
            
               (b)waste incineration
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               ;
            
            
               (c)high efficiency cogeneration using:
            
            
               (i) fossil fuels;
            
            
               (ii) renewable sources;
            
            
               (d)other renewable energy sources (such as geothermal, solar thermal and biomass not used for high efficiency cogeneration
                  7
               );
            
            
               (e)heat pumps
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               ;
            
            
               (f)reducing heat losses from existing district networks;
            
            
               8.this analysis of economic potential shall include the following steps and considerations:
            
            
               (a)Considerations:
            
            
               (i)the cost-benefit analysis for the purposes of Article 14(3) shall include an economic analysis that takes into consideration socio-economic and environmental factors, and a financial analysis performed to assess projects from the investors point of view. Both economic and financial analyses shall use the net present value as criterion for the assessment;
            
            
               (ii)the baseline scenario should serve as a reference point and take into account existing policies at the time of compiling this comprehensive assessment and be linked to data collected under Part I and point 6. of Part II of this Annex;
            
         
         
            
               (iii)alternative scenarios to the baseline shall take into account energy efficiency and renewable energy objectives of Regulation (EU) 2018/ XXX [OP: please insert here the references of the Governance Regulation]. Each scenario shall present the following elements compared to the baseline scenario:
            
            
               –economic potential of technologies examined using the net present value as criterion;
            
            
               –greenhouse gas emission reductions;
            
            
               –primary energy savings in MWh per year;
            
            
               –impact on the share of renewables in the national energy mix.
            
            
               The assessment and decision-making should take into account costs and energy savings from the increased flexibility in energy supply and from a more optimal operation of the electricity networks, including avoided costs and savings from reduced infrastructure investment, in the analysed scenarios.
            
            
               (b)Costs and benefits
            
            
               The costs and benefits referred to in the first paragraph point 8. (a) shall include at least the following benefits and costs:
            
            
               (i)Benefits:
            
            
               –value of output to the consumer (heat and electricity);
            
            
               –external benefits such as environmental, greenhouse gas emissions and health and safety benefits, to the extent possible;
            
            
               –labour market effects, energy security and competitiveness, to the extent possible.
            
            
               (ii) Costs:
            
            
               –capital costs of plants and equipment;
            
            
               –capital costs of the associated energy networks;
            
            
               –variable and fixed operating costs;
            
            
               –energy costs;
            
            
               –environmental, health and safety costs, to the extent possible;
            
            
               –labour market costs, energy security and competitiveness, to the extent possible.
            
            
               (c)Relevant scenarios to the baseline:
            
         
         
            
               All relevant scenarios to the baseline shall be considered, including the role of efficient individual heating and cooling. Scenarios that are not feasible due to technical reasons, financial reasons or national regulation may be excluded at an early stage of the cost-benefit analysis if justified based on careful, explicit and well-documented considerations 
            
            
               (i)the cost-benefit analysis may either cover a project assessment or a group of projects for a broader local, regional or national assessment in order to establish the most cost-effective and beneficial heating or cooling option against a baseline for a given geographical area for the purpose of planning;
            
            
               (ii)Member States shall designate the competent authorities responsible for carrying out the cost-benefit analyses pursuant to Article 14. Member States shall require competent local, regional or national authorities or operators of individual installations to carry out the economic and financial analyses. They shall provide the detailed methodologies and assumptions in accordance with this Annex and establish and make public the procedures for the economic analysis.
            
            
               (d)Boundaries and integrated approach:
            
            
               (i)the geographical boundary shall cover a suitable well-defined geographical area;
            
            
               (ii)the cost-benefit analyses shall take into account all relevant centralised or decentralised supply resources available within the system and geographical boundary, including technologies considered under point 7. of Part III of this Annex, and heating and cooling demand trends and characteristics.
            
            
               (e)Assumptions:
            
            
               (i)Member States shall provide assumptions, for the purpose of the cost-benefit analyses, on the prices of major input and output factors and the discount rate;
            
            
               (ii)the discount rate used in the economic analysis to calculate net present value shall be chosen according to European or national guidelines
                  9
               ;
            
            
               (iii)Member States shall use national, European or international energy price development forecasts if appropriate in their national and/or regional/local context;
            
            
               (iv)the prices used in the economic analysis shall reflect socio economic costs and benefits. It should include external costs, such as environmental and health effects, to the extent possible, i.e. when a market price exists or when it is already included in European or national regulation.
            
            
               (f)Sensitivity analysis:
            
            
               (i)a sensitivity analysis shall be included to assess the costs and benefits of a project or group of projects based on different energy prices, levels of demand, discount rates and other variable factors having a significant impact on the outcome of the calculations.
            
            
               Part IV — POTENTIAL NEW STRATEGIES AND POLICY MEASURES
            
            
               9.legislative and non-legislative policy measures, including financing measures and programmes that may be adopted over the period of the comprehensive assessment, not prejudging a separate notification of the public support schemes for a State aid assessment, to realise the economic potential identified in accordance with points 7. and 8., along with their foreseen:
            
            
               (a)greenhouse gas emission reductions;
            
            
               (b)primary energy savings in GWh per year;
            
            
               (c)impact on the share of high-efficiency cogeneration;
            
            
               (d)impact on the share of renewables in the national energy mix and in the heating and cooling sector;
            
            
               (e)links to national financial programming and cost savings for the public budget and market participants;
            
         
         
            
               (f)estimated public support measures, if any, with their annual budget and identification of the potential aid element.’
            
            
               ANNEX II
               Amendment of Annex IX to Directive 2012/27/EU
            
            
               In Annex IX to Directive 2012/27/EU Part 1 and the heading of Part 2 are deleted.
            
            
               The reference to Part 1 of Annex IX in Article 14(3) of the Directive 2012/27/EU shall be read as Annex VIII.
            
            
               The reference to Part 2 of Annex IX in Article 14(5) of the Directive 2012/27/EU shall be read as Annex IX.
            
         
         
            
                  
                     (1)
                  
                        The amount of thermal energy needed to satisfy the heating and cooling demand of end-users.
               
               
                  
                     (2)
                  
                        The most recent data available should be used
               
               
                  
                     (3)
                  
                        The identification of ‘renewable cooling’ should be carried out in accordance with Directive (EU) 2018/ XXX [OP: please insert here the references of the revised Renewable Energy Directive].
               
               
                  
                     (4)
                  
                        Amount of energy that is currently available and that is not used within the installation for the purposes of heating and cooling, in MWh.
               
               
                  
                     (5)
                  
                        The analysis of the economic potential should present the volume of energy (in GWh) that can be generated per year by each technology analysed.
               
               
                  
                     (6)
                  
                        Including the assessment referred to in Article 15, paragraph 7 of Directive 2018/ XXX [OP: please insert here the references of the revised Renewable Energy Directive].
               
               
                  
                     (7)
                  
                        Including the assessment referred to in Article 15, paragraph 7 of Directive 2018/ XXX [OP: please insert here the references of the revised Renewable Energy Directive].
               
               
                  
                     (8)
                  
                        Only heat pumps in the meaning of Directive 2018/ XXX [OP: please insert here the references of the revised Renewable Energy Directive] shall be taken into account.
               
               
                  
                     (9)
                  
                        The recommended social discount rate is 5 % in cohesion countries and 3 % for the other Member States. Member States may establish a benchmark for the discount rate which is different from 5 % or 3 %, on the condition that: (i) justification is provided for this reference on the basis of an economic growth forecast and other parameters; (ii) their consistent application is ensured across similar projects in the same country, region or sector.