Press release
New legislation introduced for the Energy Efficiency Obligation Scheme
From Department of the Environment, Climate and Communications
Published on
Last updated on
The Minister for the Environment, Climate and Communications, Eamon Ryan, has signed new legislation on the redesigned Energy Efficiency Obligation Scheme (EEOS). The EEOS places a legal requirement on larger energy companies (‘obligated parties’) to help energy users save energy. This can be achieved by supporting the energy user (financially or otherwise) to implement energy saving practices or to carry out energy upgrades in their property. Obligated parties work with energy users in the residential (including energy poor households), commercial and public sectors to deliver the required energy savings.
The scheme has been redesigned in response to amendments to the EU Energy Efficiency Directive (EED) and the government’s climate priorities. The introduction of this legislation follows on from the publication last October of the Minister’s decisions on the design of the new scheme.
The redesigned scheme, which will commence on 1 January 2023, will build on the obligation scheme that has been in place since 2014. It will contribute significantly to the delivery of Ireland’s energy saving target under the revised EED. The EEOS also plays an important role in supporting the delivery of Ireland’s broader climate and energy targets. As such, the scheme represents an important pillar of Ireland’s plan to tackle climate change.
Between 2014 and 2020 obligated parties supported energy efficiency actions in more than 290,000 dwellings and over 3,000 businesses. These savings represent an offset in CO2 emissions of around 1.2 Mt and recurring financial savings of approximately €240 million per year. The success of that scheme contributed to the decision by the Minister to use an obligation scheme once again to help Ireland achieve our 2030 energy saving target.
The new EEOS legislation can be found on the Irish Statute Book website.
ENDS
An obligation scheme, such as the EEOS, is a legal requirement on larger energy companies (‘obligated parties’) to help energy users save energy. This can be achieved by supporting the energy user (financially or otherwise) to implement energy saving practices or to carry out energy upgrades in their property. Obligated parties work with energy users in the residential, commercial and public sector and can deliver the required energy savings through their own programmes, counterparties or other partners or can work with the energy efficiency support schemes offered by the government through the Sustainable Energy Authority of Ireland (SEAI).
SEAI is the scheme administrator, and, amongst other functions, is responsible, on behalf of the Minister, for the monitoring and measurement of savings achieved under the EEOS. As part of this role, SEAI ensures that all savings counted against an obligated party’s target under the EEOS are compliant with the requirements of Article 7 of the EED and in turn reported to the EU.
For the 2014-2020 obligation period, Ireland chose to meet our Article 7 energy savings target through a combination of an obligation scheme and a series of alternative policy measures. Following a public consultation in late 2019, it was decided that for the new obligation period to 2030, Ireland would once again place an obligation on energy companies, to achieve a portion of the energy savings required under Article 7.
The publication of the Minister’s decision on the new EEOS and the preparation of the new legislation were preceded by a detailed public consultation process in 2021, with over 40 stakeholders providing input on the design proposals put forward by the Minister for the new scheme. Since the start of 2021 (and in advance of the new scheme commencing) the current scheme, with some adjustments to take account of new requirements under the revised EED, continued to operate and deliver energy savings.
The European Commission’s Clean Energy Package, launched in November 2016, sets out the Commission’s vision for energy efficiency, stating that energy efficiency should be the “first principle” of any future energy policies. One of the core components of the Clean Energy Package was a revised EED, which was published in 2018.
The EED places a requirement on each Member State to specify their contribution to this reduction, and the measures to be taken to achieve that contribution, in a National Energy and Climate Plan (NECP).
Under Article 7 of the EED, Ireland is required to make a defined amount of energy savings that meet specific criteria, by 2030. While the headline EU energy efficiency target ( Article 3 of the EED) is not legally binding for Member States, the target for Article 7, (paragraph 1) of the EED is and, thus, it importantly guarantees a minimum level of energy savings towards the headline EED target, likely more than half of the overall savings required.
The new EEOS, in addition to achieving a portion of the energy savings required under Article 7 of the EED, will better reflect Ireland’s increased climate ambition as set out in the National Energy and Climate Plan, the Long Term Renovation Strategy and the Climate Action Plan.
The new EEOS Regulations establish a new scheme from the year 2023 for the achievement of energy savings required under Article 7 of the EED. The Regulations revoke, other than Regulation 10, the European Union (Energy Efficiency Obligation Scheme) Regulations 2014 (S.I. No. 131 of 2014) which established the EEOS in 2014.
The EEOS, established under these Regulations, will place obligations and targets on the obligated parties which can be met by those parties achieving the required level of eligible energy savings.
These Regulations set out which persons are obligated; how the energy savings targets are calculated and issued; how obligated parties can meet these targets, including certain sectoral sub-targets; specific requirements to be met relating to the calculation, measurement and verification of energy savings; and how any non-compliance with targets and other aspects of the Regulations, such as the provision of relevant information, shall be managed and the steps that may be taken where an obligated party fails to meet its obligations.
Provision is also made for the appointment of SEAI for the performance of certain functions of the Minister under the Regulations, including the making and publication of guidance on the operation of the EEOS.