Energy Saving Certificates (ESCs) are also known as ‘White Certificates’. In Spain, they are referred to as CAEs (Certificados de Ahorro Energético).
The ESC scheme was born out of the need to generate new energy savings by undertaking projects that would provide additional energy efficiency. The scheme will help ensure that the Basque Country meets its obligations under the EU’s Energy Efficiency Directive. The scheme is also intended to foster investment in energy efficiency technologies by promoting a market for this sector.
A catalogue of standard energy saving measures (in areas such as HVAC, thermal envelopes, lighting, industrial processes, mobility, etc.) has been published. ESCs can be obtained by anyone undertaking any of these measures.
Introduction of the new scheme has created a market on which ESCs can be traded. Bodies that are legally obliged to meet energy savings targets, known as obliged parties (sujetos obligados) can buy credits from other organisations or individuals who undertake energy-saving projects and subsequently certify them. Alternatively they can purchase the ESCs directly from other obliged or eligible parties.
The mechanism was introduced by Royal Decree and the detailed regulations are set out in a series of official orders (See the section below on Regulations).
What is an ESC?
An ESC (Energy Savings Certificate) is an electronic document acknowledging a specific degree of savings in final energy consumption, achieved by means of an energy efficiency measure.
The energy savings obtained from a particular measure can be certified, either using the catalogue of standard (easily replicable) measures, or as special measures (actuaciones singulares).
An ESC is an asset (in the form of income from the sale of energy savings) that can be traded to improve the cost effectiveness of energy efficiency investments.
An ESC is NOT a subsidy, tax, building energy performance certificate or a carbon emission allowance.
Who can have an ESC?
ESCs can only be held by an obliged party (OP) or an eligible party (EP) to whom an ESC has been issued or by whom it has been purchased via a legal transaction.
However, any individual or organisation implementing an energy efficiency measure can benefit from the ESC System.
In order to generate income from the energy savings they have introduced, the owner of the facility needs to contact an OP or EP and sell the savings to them. The two parties have to sign an ESC Agreement setting out the transaction conditions.
Why are ESCs needed?
The measures developed by Spain’s National Energy Efficiency Fund (FNEE) have been shown to be insufficient to meet the energy savings targets Spain has accepted under the EU’s Fit-for-55 package. Under the new ESC system, it will be possible to enter large numbers of energy-saving measures in the accounts (and promote them) in addition to those that can be registered under existing FNEE-promoted measures.
Los CAE permitirán:
- Transform the energy efficiency model, with the emphasis on obliged and eligible parties, who can actively propose energy efficiency investments to the beneficiary.
- Monetise energy savings made by end consumers.
- Allow previously unrecordable mass energy savings to be accounted, since they will be based on a fully digitised system.
- Stimulate employment and business competitiveness in the places where the energy efficiency measures are carried out.
- Give end consumers easier access to energy efficiency and help them to create demand for energy-saving measures, exercising a “pull” effect on the market.
- Catalyse innovation in the energy efficiency industry.
- Contribute efficiently to meeting the final energy savings target for 2030.
What energy-saving measures are ESC-eligible?
A catalogue of measures has been published, consisting of a set of data sheets with a list of standard final energy saving measures that are eligible for issuance of a valid ESC.
The data sheets contain detailed specifications of the final annual energy savings (in kWh) achieved by implementing each of the standard measures — e.g. installing new windows, substituting a heat pump for a boiler, replacing a motor with a high efficiency motor, etc.
Under the ESC scheme there are two possible types of measure:
- Standard measures: those which are easy to replicate, due to their characteristics and technical features.
- Special measures: those which cannot be included in the catalogue, due to their special characteristics and technical features. Special measures may be eligible for an ESC once they have been implemented and the annual energy savings have been accredited by a savings verifier.
Who is the beneficiary of an ESC?
The beneficiary is the individual or organisation that owns, rents or occupies the premises where the energy efficiency measure has been introduced and benefits from the positive impact of the final energy savings. Examples might include a company upgrading its electric motors or an individual replacing an old boiler with a heat pump.
The beneficiary is not necessarily the owner of the final energy savings. The owner is the individual or (public or private) organisation who invests in the energy efficiency measure to achieve final energy savings for itself or another.
For this reason, an ESC Agreement is needed between the obliged or eligible party and the owner of the final energy savings, whereby the energy savings are transferred in exchange for a consideration.
What sectors can energy saving measures be made in?
- Industry
- Residential
- Services
- Transport
- Agriculture
What agents are involved in the ESC system?
- National Coordinator: Ministry for Ecological Transition and the Demographic Challenge (MITERD).
- Regional manager: In the Basque Country, Ente Vasco de la Energía (EVE).
- Energy savings verifier: a body accredited by ENAC.
- Obliged parties under the National Energy Efficiency Obligation Scheme. Energy companies (gas and electricity retailers and wholesale oil and LPG operators).
- Eligible Parties: intermediaries accredited by the National Coordinator who help obliged parties to obtain ESCs. Official list of eligible parties
- Savings owner: The individual or company that has invested in an energy efficiency measure generating ESC-eligible savings. Ownership of the savings can be transferred to a third party in exchange for a consideration.
Example of application of the ESC system
1
Company A, a developer, plans to implement a measure that will generate (primary or final) energy savings in its industrial process. Following a preliminary analysis, it calculates the savings generated in MWh/year.
2
An obliged party (OP) or eligible party (EP) is trying to locate energy savings measures to meet its obligations under the National Energy Efficiency Obligation Scheme (SNOEE). The OP has an annual obligation which it can settle either with ESCs or by paying directly into the FNEE Fund.
3
Company A contacts the OP or EP and the two agree to sign an ESC Agreement, under which Company A sells its savings to the OP or EP before undertaking the measure. Alternatively, it can sell them the savings generated after the measure has been introduced, provided it was completed no earlier than 26 January 2023.
4
The measure may be recorded as:
- one or more of the standard measures listed in the catalogue of data sheets approved by the Ministry.
- a special measure.
5
The agreement should cover aspects such as: the amount paid to Company A per MWh/year saved (€/MWh); the method of payment; proof submitted to the OP or EP that the measure has been implemented, etc.
6
Once the measure has been implemented, Company A will receive financial compensation for the savings (not considered as a subsidy), and the OP or EP will submit a request for ESCs (the same number as the kWh/year saved) via the platform provided for this purpose. The OP or EP can use the ESCs to meet its obligations or trade them on the ESC market, to which only OPs and EPs have access.
ESC Application
Any measures completed on or after January 26, 2023 and that meet the requirements established by the Energy Efficiency Directive and other regulations are eligible to generate ESCs.
Only obliged and eligible parties can request issuance of ESCs, after receiving a favourable report from the verification authority for the measure or measures corresponding to the request.
These may be either standard measures (i.e. easily replicable measures listed in the catalogue) or special measures (more complex or specific ones, not included in the catalogue).
An application for issuance of ESCs must be made via the e-platform of the ESC System, which is currently under development. The Regional Manager analyses the request. If everything is in order, it issues the corresponding ESCs. The National Coordinator registers the ESCs in the National Register. Once the ESCs have been registered, they may be traded or swapped for a savings obligation.
Catalogue of data sheets
Related legislation
Operation of the ESC Scheme
Royal Decree 36/2023, of 24 January 2023, establishing a system of Energy Savings Certificates.
Catalogue of standard measures
Order TED/845/2023, of 18 July 2023, approving the catalogue of standard energy efficiency measures.
