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Energy saving obligations—cutting the Gordian Knot of leverage?


Better leverage of public funding is essential in order to trigger the investment needed for energy efficiency. In times of austerity governments increasingly look at policy instruments not funded by public expenditure and energy saving obligations represent one option. Because energy saving obligations are paid for by all energy customers, the degree to which they are able to raise additional private capital for energy efficiency investments is crucial with regard to the financial burden on consumers. In this paper, we systematically assess how successful energy saving obligations were in levering capital from parties other than the obligated entities including private investors and other public bodies. We analyse three countries with substantial experience with energy saving obligations, identify the main design differences and the effect this has on the degree of leverage. We conclude that the design of energy saving obligations largely determines the degree of leverage and that that there appears to be a trade-off between high leverage and additionality.

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  1. For a more detailed description of saving obligation principles, see Bertoldi and Rezessy (2008).

  2. We exclude policy instruments like product regulation that require private investment with no matching public money.

  3. No data is available yet about the interaction between the obligation and the soft loan scheme, which was only implemented in 2009.

  4. Direct costs represent only 35 % of the total costs incurred by obligated parties in France. In contrast, this share is 85 % in the UK.

  5. The CERT update gives a number of nearly 2.5 million wall insulation measures and 3.5 million loft insulation measures, which covers about 20 % of the British building stock.


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Correspondence to Clemens Rohde.

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Rohde, C., Rosenow, J., Eyre, N. et al. Energy saving obligations—cutting the Gordian Knot of leverage?. Energy Efficiency 8, 129–140 (2015).

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  • Energy saving obligation
  • Leverage
  • Financing