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The Project

PPA LTA Bulgaria Project - First Phase

The Bulgarian Ministry of Economy and Energy has requested the Netherlands assistance in strengthening its capacity on the development of policy for business associations on public private partnerships concerning energy efficiency, particularly in industry, which accounts for 50% of the nation's final energy consumption.

The Dutch Ministry of Economic Affairs has granted this request, and has appointed SenterNovem as the Dutch counterpart in the project for energy efficiency improvements in Bulgarian industry through Long Term Agreements (LTA), a particular form of voluntary agreements.

The instrument of LTA is extensively used in the Netherlands , and is established between enterprises, governmental bodies and other institutions or agents, who set ambitious but realistic targets to improve energy efficiency.

The purpose of the project is to strengthen the capacity of the Bulgarian Ministry of Economy and Energy on the development of policy for business associations on public-private partnerships concerning energy saving. More specifically, after a successful completion of the project, the representatives of the Bulgarian Ministry of Economy and Energy and other relevant stakeholders will have better insight in the instrument of voluntary agreements on energy-efficiency improvement, they recognise the added value of this instrument for the Bulgarian situation, and know how it can be applied in the Bulgarian industry in an appropriate way.

The project has a maximum duration of 6 months, with the starting date at February 1, 2006 . There are 5 steps towards the development of a Bulgarian-specific voluntary agreement scheme for energy-efficiency improvement in industry, as:

  • Network of interested stakeholders
  • Insight in the Bulgarian context in which voluntary agreements will have to be applied
  • Insight in strengths and weaknesses of voluntary agreements in the Netherlands / EU
  • Blueprint for adoption of a Bulgarian-specific VA scheme for energy efficiency in industry
  • Proposal for implementation of a Bulgarian-specific VA scheme
PPA LTA Bulgaria Project - Second Phase

Second Phase of the Project started in March 2007.

1. Current Context in Bulgaria
Energy efficiency has been a key topic during accession discussions between the EU and Bulgaria. All main documents concerning the Bulgarian accession to the EU note that Bulgaria has to pay particular attention and take practical steps for putting in place pro-active policies and co-ordinated actions to reduce the energy intensity of the Bulgarian economy. Indeed, energy intensity in Bulgaria is considerably higher than EU average, and industry accounts for a large part of the final energy consumption. Measures for improving energy efficiency (EE) are necessary, not only to comply with national laws and EU directives, but also to improve the industries international competitiveness. At the same time, EE measures will contribute to a more efficient economy and a better environment.

In order to improve energy efficiency in industry, the Bulgarian Ministry of Economy and Energy is investigating the possibilities of implementing Long Term Agreements (LTA), making use of the valuable experience gained with this instrument in the Netherlands. During the first PPA LTA project in Bulgaria (PPA04BG816, carried out Feb - Aug 2006), SenterNovem helped create insight in the instrument of LTA, as well as insight in the added value of such an instrument for Bulgaria. The industrial organisations consider LTA as an opportunity to reduce energy costs and become more competitive, while the government sees LTA as an effective form of public-private partnership to contribute to fulfilling EU regulation without having to enforce new national laws or having to introduce large subsidy schemes.

The project was concluded successfully with a proposal for an appropriate LTA scheme for Bulgaria and the signing of Letters of Intent (LOIs) between the Minister of Economy and Energy and:
- The Confederation of Employers and Industrialists in Bulgaria
- The Bulgarian Industrial Association (BIA)
- The Bulgarian Chamber of Mining and Geology
- The Bulgarian Chamber of Chemical Industry
- The Branch Chamber of ferrous and nonferrous metallurgy

The implementation period of the first project was insufficient to conclude the actual Long Term Agreements, but the results of the first project provide a solid starting base for this. The stakeholders now have a general idea on how LTA can be applied in Bulgaria, and the next step is to work out the details for drawing up the actual agreements.

2. Problem Definition
Keeping in mind the ultimate goal of energy efficiency improvement in industry, the first PPA LTA project in Bulgaria was only a first step of a larger trajectory. In the end, industry will have to take real energy measures, while the government has to provide sufficient means for monitoring and facilitation. The Long Term Agreements between the Bulgarian government and industry provide the framework for this setting. However, before these Agreements can be concluded, several issues have to be resolved first. These issues are mentioned in the final report of the first PPA LTA project, describing an appropriate scheme for LTA in Bulgaria. These issues require additional surveys, consultations and negotiations, and evolve around target setting for EE improvement in industry, providing (financial) government incentives, and setting up a monitoring framework.

3. Project Purpose Second Phase
Goal of the second phase in the process of LTA knowledge transfer is to conclude (a select number of) actual Long Term Agreements between government and industry.
In order to reach this objective, the issues pointed out at the end of the first phase need to be further investigated and negotiated. The issues evolve around three main tracks:
A) Setting targets for EE improvement in the Bulgarian industry
B) Providing government incentives to support EE measures in industry
C) Establishing an administrative body for facilitation and monitoring

Pilot projects with motivated companies are used to develop concrete guidelines, trainings, formats and proposals that form the basis for the negotiations of the final Agreements.

The following outcome is foreseen at the end of the second phase project:
- A broad support base among stakeholders for implementing LTA in Bulgaria
- At least 3 signed Long Term Agreements related to the pilot companies
- Guidelines are available to assess the potential for energy efficiency improvement in (branches of) industry, and for setting ambitious but realistic targets, including all necessary formats
- A ready-to-implement proposal for government incentives is available
- A ready-to-implement proposal for the creation of an administrative body is available, including a description of the tasks and responsibilities, as well as the necessary formats (for monitoring) and tools (for information dissemination)
- Consultancies skilled to perform Energy Potential Scans for determining EE improvement potential and targets in industrial companies
- Effective communication channels (e.g. consultative group) between government and industry


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