Energy agencies

1. co-ordinating the implementation of energy efficiency policies, programmes, and projects
2. help to overcome a lack of information and capacity that can be a barrier to progress in energy efficiency. They do so by providing information, assistance and training as well as enforcing the exchange and co-operation between relevant stakeholders.

Worldwide implementation status
Several countries as well as federal states have setup an energy agency. Some examples:

The Bureau of Energy Efficiency (BEE) in India is a national government agency responsible for co-ordinating the implementation of energy efficiency policies.
In Denmark, the Danish Energy Agency, also installed at a national level, is an agency responsible for co-ordinating the implementation of energy efficiency policies, such as the Danish energy saving obligations for energy companies.
ADEME, the French Environment and Energy Management Agency, is the national government agency responsible for co-ordinating the implementation of energy efficiency policies but also operating a network of local energy information centres.
Furthermore, there are examples for energy agencies at a federal state level, like the Energy Agency of North Rhine-Westphalia in Germany, providing free initial advice to local authorities and SMEs, informing the public, and supporting topical network-building. It created the “mission E” programme to promote energy-efficient behaviour in large organisations such as the German armed forces.
The Berlin Energy Agency in Germany supports not only policy implementation, but in particular prepares and organises Energy performance contracting for pools of public buildings in the City of Berlin, saving up to 30 % of energy.

Governance level
Energy agencies exist on international, national, regional and local levels.

Related sectors

• services
• residential
• industrial

All appliances can be addressed by an energy agency.

All actors can be addressed by the different types of activities implemented by energy agencies.

The range of possible beneficiaries of energy agencies is very wide. On the supply side, actors mainly benefit from knowledge exchange and trainings as well as demonstration projects (manufacturers, construction companies, system suppliers, architects, engineering consultants, real estate agents, facility management companies). On the demand side, actors mainly benefit from information, assistance and training (Investor-user, investors, users -tenants, buyers, household members-, facility management staff). In other cases, the material and services provided by energy agencies can complement and lessen the work of other entities, such as ESCOs, consultants, administrations, consumer organisations, and trade associations.

Indirectly, demand for energy efficient appliances can be enhanced by the campaigns and actions of energy agencies.

Relevant barriers

• Knowledge and information barriers: Energy agencies mainly address knowledge and information barriers with their own programmes and projects. They provide information and minimise information and search costs.
• Lack of interest and motivation in energy efficiency-improvement: In some cases they also tackle the lack of motivation, e.g. by initiating competitions.

Relevant incentives

• Saved energy costs: The services of energy agencies are attractive for actors on the demand side, because they enable them to save energy costs and protect the environment.
• Unique selling proposition for suppliers: Actors on the supply side are interested in training, certification and knowledge exchange provided by energy agencies, because their products and services can be improved.

Energy agencies can act as a one-stop-shop for energy policy. They can be helpful to develop and implement energy policies. For example, with regard to ESCOs, energy agencies are important for their successful establishment and in some cases even act as ESCOs themselves (cf. Bertoldi et al. 2005). However, if energy agencies implement a set of other activities, that pursue the same function as ESCOs, they can also hamper the ESCO development. The information and motivation campaigns of the agencies are supposed to influence consumer behaviour and can thus influence the demand and interest for other policies (e.g. grants and preferential loans for energy efficient retrofitting). It is important that the activities of the energy agency are aligned with other energy policies.

Agencies or other actors responsible for design and implementation
Energy agencies can be established within existing institutions or be newly founded.

Funding
Energy agencies are usually financed from public budgets. They therefore need the corresponding annual budget allocation and will benefit from long-term public funding schemes.

Test procedures
No specific test procedures for energy efficiency are needed for an energy agency itself, but the programmes and projects it implements will rely on test procedures that are generated, e.g. in the preparation of MEPS and energy labels.

Other
Depending on its tasks, an energy agency needs highly qualified staff with knowledge of energy efficiency solutions and potentials as well as programme design, implementation, and evaluation.

When setting up an energy agency, it can be useful to gradually add tasks to its portfolio. Thus, experiences can be gained and networks be set up before more complex tasks are tackled (e.g. starting with information and motivation tasks, then adding consulting and assistance, then market facilitation). (cf. Bleyl et al. 2004, p. 1524; Matrix Insight and Ecologic Institute 2010, p. 12; Neuhäuser 2012)

Quantified target
It will be difficult to define a quantitative energy savings target for an energy agency. However, depending on the activities it implements, operational targets will likely be useful.

Co-operation of countries
Energy agencies should continuously develop new ideas for their services. This can be facilitated through international exchange of ideas and experience.

Since the activities of energy agencies are ‘soft’ measures, in most cases, such as information and training, their monitoring and evaluation is mainly based on empirical methods, e.g. by surveys. Databases should be maintained on recipients of the services offered and the energy end uses, fuels, energy efficiency actions and technologies targeted.
Energy agencies co-ordinating policy implementation should also monitor and evaluate these, using the respective set of data and evaluation methods (see the other policies and measures analysed on bigee.net).

Relevant individual dynamics and side-effects

• Avoiding lost opportunities: The programmes and projects implemented by energy agencies should aim to avoid lost opportunities by promoting only very energy-efficient technologies and solutions.
• Minimising rebound effects: Energy agencies should try to design their programmes and projects so that they minimise rebound effects. They are in a good position to do so by educating consumers on energy-efficient use of buildings and equipment and promoting building energy management schemes.
• Minimising snap-back effects: Snap-back effects can also be minimised through continuation of programmes as long as needed to mainstream energy-efficient technologies and solutions. Securing these levels through legal minimum energy performance standards may reduce the need to continue information and incentive programmes.
• Minimising free-rider effects: The programmes and projects implemented by energy agencies should also be designed to minimise free-rider effects, e.g. by promoting only technologies and solutions with high energy efficiency levels while maximising uptake of these at the expense of low-efficiency solutions.
• Creating Spill-over effects: Spill-over effects can be achieved if the material(s) and services provided by the energy agency can be used by entities with similar tasks, such as consultants and consumer organisations.
• Dynamic market transformation and/or innovation: The key fields of actions of most energy agencies (information, assistance, training) aim at energy-efficient purchase and use of appliances. Experienced and thus well-connected energy agencies aim at market facilitation for energy efficiency innovations (cf. Matrix Insight and Ecologic Institute 2010, p.12; Neuhäuser 2012).

Sustainability aspects
Energy agencies should design their programmes and projects to promote sustainability aspects (like resource efficiency or health aspects).

Co-benefits
All kinds of co-benefits (i.e. “non-energy benefits” such as health improvement, labour market effects etc.) may arise from implementing such programmes and projects, depending on their scope and design.

The following barriers are possible during the implementation of the policy:
The establishment of an energy agency requires a long-term commitment by the funding institution (cf. Matrix Insight and Ecologic Institute 2010, p.8, p.39). The energy agency needs a wide network and thus needs staff that already has or can easily build up such a network.

The following measures can be undertaken to overcome the barriers:
Securing stable and sufficient funding is the obvious solution to the funding barrier. This will depend on political will but can be supported by visible success and benefits created by the agency for society, market actors, and consumers.
The head of an energy agency should be a personality with excellent leadership qualities including high persuasive power and political networking skills.

Obviously, the energy savings that an energy agency can contribute to will depend in its range of activities. Agencies in charge of co-ordinating national or local energy efficiency policy implementation will contribute to the savings from all of these policies, but the savings will primarily be monitored and evaluated for each of these policies or sectoral policy packages. If energy agencies mainly implement information, advice, training and similar measures, then the energy savings from such ‘soft’ measures will be difficult to measure but they would contribute to the effectiveness of many other policies, such as Minimum energy performance standards or financial incentive programmes.
In any case, energy agencies should aim to carefully evaluate the impact of their activities.

The costs for an energy agency are often mainly the employees’ salaries (cf. Matrix Insight and Ecolologic Institute 2010, p. 6). Additional costs for information material, communication, conferences, trainings, awards etc. depend on the measures that are implemented by the agency.

Regarding the number of employees, ADEME e.g. employs about 820 persons (figures for 2009) in three central offices in Angers, Paris and Valbonne with a budget of €638 million (ADEME 2009). EA-NRW, Germany’s largest federal energy agency, has a staff number of about 80 employees and a financial volume of €79 million (elektrowärme international; LRH 2011, p. 151). The New York State Energy Research and Development Authority employs 344 people and has a financial budget of about $740 million, of which only 5.5% are spent on salaries and benefits; the biggest part of the budget is spent on energy efficiency programs (53.7%) (NYSERDA 2012).

In the European Union, the Intelligent Energy Europe programme provided grants to set up local and regional energy agencies until 2009. With the budget of €5.2m allocated for this measure (funding period 2007-2011), 21 energy agencies were established and received co-funding of 50 % of the cost to establish them between 2007-2009 (cf. Intelligent Energy Europe 2012, p. 44). Such local agencies usually only have a few employees.

If well designed and implemented, the energy efficiency programmes and projects managed by an energy agency will be cost-effective for consumers and society. As the costs of the agency itself are only a minor part, they will not change the picture.