Case Study 19: Municipal energy conservation agreements

May 26, 2009

CB_Case19.jpgMunicipalities join a voluntary agreement to conduct energy audits, make energy plans and implement cost-effective investments

1997-2005/2007, Finland



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Summary of the case

The energy conservation agreements (or the voluntary agreements on energy conservation) are framework agreements, under which sector associations undertake to promote energy conservation and encourage their membership to join in the energy conservation agreement scheme. Companies and communities subscribing to the agreements undertake to carry out energy audits or analyses in their own properties and production plants, to draw up an energy conservation plan, and to implement cost-effective conservation measures. Energy conserva-tion agreements contain action programmes agreed between ministries and sector associa-tions, aiming at improving energy efficiency in the sectors covered by the agreements.

The first voluntary energy conservation agreements were signed in Finland in the early 1990s, but the activity really took off in 1997, when the national Energy Conservation Programme was updated. This is when the principal industry associations of the economy decided to join in.

The majority of the voluntary energy conservation agreements signed mainly in 1997 were due to expire at the end of 2005. Based on evaluation of the agreement scheme and feedback received from the field, it was decided that the agreements would be extended by two years.

The municipal energy and climate agreement is the only one of the agreements also explicitly covering use of renewable energies. In the other agreement sectors, attention has been drawn to renewable energies by relevant questions attached to annual reporting.

The new agreement scheme (2008) for the municipal sector has two alternative agreement models. Large and medium-sized municipalities can join a bilateral energy efficiency agree-ment between the Ministry of Employment and the Economy and the municipality in ques-tion. Small companies can adhere to an energy programme managed by Motiva Oy, which the municipality can join by signing the accession document. The energy efficiency agreement with the Ministry of Employment and the Economy can be signed by a town or municipality with more than 5,000 inhabitants and federations of municipalities with energy consumption exceeding 20,000 MWh per year. Towns or municipalities with 5,000-20,000 inhabitants and federations of municipalities with energy consumption between 5,000-20,000 MWh per year can choose between an energy efficiency agreement or an energy programme.