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Activity 3: Program Evaluation – Program and Process Evaluations Consultancy Services on Policy Gap Analysis and Energy Efficiency Program Evaluation Page iii September 2015

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Activity 3: Program and Process Evaluations

Consultancy Services on Policy Gap Analysis and Energy Efficiency Program Evaluation Procurement ref: MENR-CS-02

May 2016

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Activity 3: Program Evaluation – GDRE Energy Efficiency Programs Consultancy Services on Policy Gap Analysis and Energy Efficiency Program Evaluation Page ii

Activity 3: Program and Process Evaluations

Consultancy Services on Policy Gap Analysis and Energy Efficiency Program Evaluation

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May 2016 This report has been produced by MWH Mühendislik ve Müşavirlik Ltd. Şti (MWH) and Wuppertal Institute for Climate, Environment and Energy GmbH (WUPPERTAL) Joint Venture (JV) for the Ministry of Energy and Natural Resources (MENR) with the financial assistance of the Global Environment Fund (GEF) and is based strictly upon the scope agreed between the JV and the MENR. Therefore this report may have limitations, assumptions or reliance on data or requests that are not categorically stated in the document itself. Reliance should not be made upon this report without consultation with the JV. Any interpretations and recommendations given in this report represent the opinions of the JV in accordance with a specific brief and as such do not necessarily address all aspects that the subject area may include. JV’s liability for this report is limited to its agreement with the MENR. Any use of this report by any other person is done so entirely at their own risk. No liability is accepted by the JV with respect to use of this report by any other person. The views expressed herein are those of the JV and can therefore in no way be taken to reflect the official opinion of the MENR and GEF.

Policy Gap Analysis and Energy Efficiency Program Evaluation

Report Name: Methodology Report

Controlled Copy

Rev. N. Date

Description Amendment

Edited by Reviewed by Approved by

0 22/12/2015 Evaluation Report

S. Thomas D. Kiyar L. Tholen

R Janssen M. Sarioglu

1 16/02/2016 Revised Final Report










R. Janssen

R. Janssen M. Sarioglu

Activity 3: Program Evaluation – Program and Process Evaluations Consultancy Services on Policy Gap Analysis and Energy Efficiency Program Evaluation Page iii September 2015

CONTENTS 1 Introduction .................................................................................... 1

Evaluation framework ......................................................................................... 11.1 Turkish Energy Efficiency Law and 2023 Targets .............................................. 21.2

2 Voluntary Agreements ................................................................... 4 Characterization of the instrument ..................................................................... 42.1 Program Evaluation ............................................................................................ 62.2 Process Evaluation ........................................................................................... 142.3 Impact Evaluation ............................................................................................. 152.4 Meet the 2023 targets and opportunities .......................................................... 172.5 Recommendations ........................................................................................... 182.6

3 VAP program ................................................................................ 21 Characterization of the instrument ................................................................... 213.1 Program Evaluation .......................................................................................... 233.2 Process Evaluation ........................................................................................... 303.3 Impact Evaluation ............................................................................................. 313.4 Meet the 2023 targets and opportunities .......................................................... 333.5 Recommendations ........................................................................................... 343.6

4 Licensing of Energy Audit Companies ...................................... 35 Characterization of the instrument ................................................................... 354.1 Program Evaluation – Methodology ................................................................. 384.2 Process Evaluation ........................................................................................... 404.3 Meet the 2023 target and opportunities ............................................................ 414.4 Recommendations ........................................................................................... 414.5

5 Awareness program .................................................................... 43 Characterization of the instrument ................................................................... 435.1 Program evaluation .......................................................................................... 445.2 Process evaluation ........................................................................................... 475.3 Meet the 2023 target and opportunities ............................................................ 475.4 Recommendations ........................................................................................... 485.5

6 Energy Management Obligation, Certification of Energy Managers, and Mandatory Reporting (Web Portal) ....................... 49

Characterization of the instrument ................................................................... 496.1 Program evaluation .......................................................................................... 516.2 Process evaluation ........................................................................................... 536.3 Meet the 2023 target and opportunities ............................................................ 556.4 Recommendations ........................................................................................... 576.5

Activity 3: Program and Process Evaluations Policy Gap Analysis and Energy Efficiency Program Evaluation

iv

7 Exemptions for Licensing for micro-cogeneration and waste heat recovery systems ..................................................................... 59

Characterization of the instrument ................................................................... 597.1 Program evaluation .......................................................................................... 617.2 Process evaluation ........................................................................................... 637.3 Meet the 2023 target and opportunities ............................................................ 637.4 Recommendations ........................................................................................... 657.5

8 Conclusion and overall recommendations ............................... 66

9 References .................................................................................... 68


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LIST OF ABBREVIATIONS

BAU Business as Usual

EE Energy Efficiency

EECB Energy Efficiency Coordination Board

EED Energy Efficiency Directive

ESCO Energy Service Company

EVD Energy Audit Companies

GDRE General Directorate of Renewable Energy

KPI Key Performance Indicators

Ktoe kilotons of oil equivalent

kWh kilowatt hour

MENR Ministry of Energy and Natural Resources

NEEAP National Energy Efficiency Action Plan

SWOT Strengths, Weaknesses, Opportunities, and Threats

TL Turkish Lira

TWh terawatt hours

VA Voluntary Agreements

VAP Energy Efficiency Improvement Project


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LIST OF FIGURES

Figure 1: The role of the energy efficiency coordination board .............................................................................. 3Figure 2: Status of the voluntary agreement scheme ............................................................................................. 5Figure 3: Voluntary Agreements: Application – Evaluation – Support .................................................................... 7Figure 4: Program theory of the Voluntary Agreements Program .......................................................................... 8Figure 5: Program theory of the VAP program ..................................................................................................... 24Figure 6: Energy Saving (toe) by VAP program ................................................................................................... 32Figure 7: ESCOs / EVDs in the organizational structure of Turkey’s EE Law ...................................................... 36Figure 8: Program theory of the EVD program ..................................................................................................... 39Figure 9: Program theory of the Awareness Program .......................................................................................... 45Figure 10: Program theory of the energy manager program ................................................................................ 52Figure 11: Share of sectors among the total 24% of companies that implemented energy management ........... 55Figure 12: Policy Pathway: Energy Management Programs for Industry ............................................................. 56Figure 13: Installed capacity (MW) in Turkey 1992-2013 ..................................................................................... 59Figure 14: Changes of Natural Gas and Electricity Prices ................................................................................... 60Figure 15: Program theory of the exemptions for licensing for micro-cogeneration program ............................... 62Figure 16: Key factors in development and operation of co-generation and DHC projects .................................. 64


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LIST OF TABLES

Table 1: Projected annual energy savings ............................................................................................................. 4Table 2: Investment costs and total savings for participating companies (2009-2010) .......................................... 6Table 3: Key performance indicators – Voluntary agreements ............................................................................... 9Table 4: Questions for VA beneficiaries and those unsuccessful ......................................................................... 11Table 5: Input data and data sources for impact evaluation ................................................................................. 13Table 6: Summary of Findings from SWOT Analysis ........................................................................................... 14Table 7: Energy Consumption of companies before (actual) and after (calculated) implementation of VA (period 2010-2012) ............................................................................................................................................... 16Table 8: Energy Consumption of companies before (actual) and after (calculated) implementation of VA (period 2011-2013) ............................................................................................................................................... 17Table 9: Projected energy savings of the VAP program ....................................................................................... 22Table 10: Key performance indicators - VAP program ......................................................................................... 25Table 11: Questions for VAP beneficiaries and those unsuccessful .................................................................... 27Table 12: Answers to the questionnaire ............................................................................................................... 28Table 13: Input data and data sources for impact evaluation ............................................................................... 29Table 14: VAP participants ................................................................................................................................... 30Table 15: Summary of findings from SWOT analysis ........................................................................................... 31Table 16: Energy and cost savings of the VAP program ...................................................................................... 32Table 17: Analysis of pack back times ................................................................................................................. 33Table 18: Projected annual energy savings and economics of the measure ....................................................... 37Table 19: Key performance indicators – Licensing of Energy Audit Companies .................................................. 39Table 20: Summary of Findings from SWOT Analysis ......................................................................................... 40Table 21: Key performance indicators – Awareness program .............................................................................. 45Table 22: Summary of Findings from SWOT Analysis ......................................................................................... 47Table 23: Key performance indicators - Energy manager program and mandatory data reporting ..................... 53Table 24: Summary of Findings from SWOT Analysis ......................................................................................... 54Table 25: Key Performance Indicators – Exemptions for Licensing for micro-cogeneration ................................ 63Table 26: Summary of Findings from SWOT Analysis ......................................................................................... 63


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Introduction 1This “ policy gap analysis” project is designed to provide technical assistance to the Turkish Ministry of Energy and Natural Resources to better understand the impact of its energy efficiency policies and programs in order to strengthen the policies and activities to achieve its long-term policy objectives and to provide a range of benefits to the Turkish economy as a whole. This project is an element of the World Bank’s “Small and Medium Enterprises (SMEs) Energy Efficiency Project” that was developed with an aim to increase the efficient use of energy by SMEs through increasing access to commercial bank credits. The project is financed through a loan of USD 201 million by the International Bank for Reconstruction and Development distributed among three public banks and through a grant of USD 3.64 million by Global Environment Facility (GEF). Turkey is in the midst of building upon its legislative and policy foundation to more fully develop its energy efficiency strategy in order to achieve more of the cost-effective energy efficiency potential. There are many preparatory studies and projects currently underway. At the same time, Turkey is also planning to integrate the full range of EU energy efficiency directives as part of the pre-accession process. Currently, energy efficiency activities cover all end-use sectors. Specifically, the terms of reference calls for the project to: • Conduct a policy gap analysis with respect to energy efficiency and develop actions and

institutional shortcomings for improvement; • Review existing government energy efficiency informational and incentives programs for

energy efficiency in SMEs; and • Undertake process evaluations and recommend actions for their impact.

To fully understand how energy efficiency (EE) policies and programs will evolve in Turkey, it is fundamental that the full effectiveness of the existing programs be undertaken. Activity 3 builds on the foundation provided in Activity 1. Activity 1 determined what data are available, what is the capacity to implement the program (organization of the program team, quality of the team, whether it has a monitoring and evaluation process integrated), how the program is marketed to target audiences, what is the program’s mandate, any awareness issues, whether the program has penetrated well into the energy efficiency market, etc. (e.g. from 2007 Regulation on Increasing Efficiency of Energy resources and End Use). This basic information was used for the due diligence for Activity 1 and also for the full program evaluation in Activity 3. This SWOT analysis from Activity 1 is an initial step for the EE program evaluation (Activity 3). The results have been summarized in “standardized templates” according to the type of instrument and include a brief identification of the existing market barriers that are being addressed by the policy instrument and the general findings of the SWOT analysis that would include whether those barriers are sufficiently addressed. The more comprehensive program evaluation implemented in Activity 3 also uses these findings.

Evaluation framework 1.1The evaluation framework consists of a program theory and the process evaluation. The process evaluations help to understand how well a program is designed and implemented in order to understand and, if possible, improve the program performance.


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Sources of information used for the evaluation Several meetings were held throughout the project1 and numerous documents were screened and analyzed. For each program a desk research was used to find relevant data and to map the current situation in Turkey. Primary sources are e.g. the Energy Efficiency Law, the respective by-laws, the Energy Efficiency Strategy Paper and the MENR Strategic Plan. Another main source is the Interim Report, which was finalized in August 2015. Other sources are reports prepared by non-governmental organizations (like the International Energy Agency), scientific articles and presentations (see list of references). Furthermore, several interviews were conducted during the project period. The results of these interviews were analyzed and incorporated into the evaluations. Ideally, for a full analysis of the industry’s perception, a broad survey would have been needed to actually assess the impact of the different programs It was beyond the scope of the project. Additionally, the preliminary results of the National Energy Efficiency Action Plan (NEEAP) were used. The NEEAP is currently being prepared and only preliminary results are available. The plan was not officially signed yet. The report provides data about current energy savings and projections for the year 2023. This draft NEEAP was prepared by a non-governmental organization and it is debatable in what way the Turkish government feels obliged to meet these targets. It is important to note that the preparation of the NEEAP is a requirement of the EU Energy Efficiency Directive (EED). The Member States have to report energy improvement measures and energy efficiency targets every three years to the European Commission. Therefore, the NEEAP should be prepared in-house by the Ministry of Energy and Natural Resources to underline that the NEEAP is an official document with a binding character. An official NEEAP could also improve the monitoring and evaluation activities of single programs significantly. According to the EED, Article 24 (2) “the National Energy Efficiency Action Plans shall cover significant energy efficiency improvement measures and expected and/ or achieved energy savings, including those in the supply, transmission and distribution of energy as well as energy end-use.” Annex XIV of the EED gives the general framework for National Energy Efficiency Action Plans. The general methodology for the evaluation is based on a program theory approach (step 1). The formula for impact evaluation (step 2) and the key performance indicators (KPIs) for monitoring, process and impact evaluation are based on the specific program theory to be developed for each program. In step 3, the methods to develop the necessary data and information for the KPIs, other questions regarding the process evaluation, and the input data for the impact evaluation will be developed.

Turkish Energy Efficiency Law and 2023 Targets 1.2The Regulation on Increasing Efficiency of Energy Resources and Energy Use (EE Regulation) came into force in 2007; it has been amended in 2008 and 2011 (EIE 2007; EIE 2008; MENR 2011). The EE Regulation sets the rules for the energy management in the industrial sector, regulates (financial) project support as well as training and awareness.

1 Meetings were held with the General Directorate’s personnel responsible for VAP, Voluntary Agreement, Authorization, Energy Management Practices, Certification of Energy Managers, Authorization of the Universities, Professional Chambers and EVD Companies, Cogeneration Implementations, Awareness Raising Activities, monitoring of Energy Consumptions and Enver Portal and also with such relevant stakeholders as the General Directorate of Industry, KOSGEB, OSBUK, Ministry of Economy, Ministry of Development, Ministry of Environment and Urbanization, Turkish Standards Institute, World Bank and Delegation of the European Commission to Turkey.


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Furthermore, Turkey has formulated an overall target to reduce its energy intensity by 20% until 2023 compared to the 2011 level (MENR 2012). With view to the industry sector, the aim is to not only reduce energy intensity and energy losses, but also to ensure the market transformation of energy-efficient products. Mandated under the EE Regulation, the Energy Efficiency Coordination Board (EECB) was appointed, which is composed of members of different Ministries (with the Ministry of Energy and Natural Resources functioning as Chairman and Secretary) as well as several other Turkish institutes and organizations.2 The tasks of the EECB are to carry out energy efficiency studies within all relevant organizations in the country, to monitor the results and to coordinate the efforts. Furthermore, the EECB has to prepare the National Energy Efficiency Strategy, to approve energy efficiency projects to be given financial incentives, to approve Voluntary Agreements of industrial establishments and to determine of certificate and energy efficiency training fees annually (Gümüsderelioglu 2013). Figure 1: The role of the energy efficiency coordination board

Source: 2007 Energy Efficiency Law

2 The primary participants in EECB are representatives of the Ministry of Interior, Ministry of Finance, Ministry of Development, Ministry of National Education, MoEU, Ministry of Transport, MoSIT, Ministry of Forests and Water, the Treasury, the Energy Market Regulatory Authority (EMRA), the Turkish Standards Institute, the Turkish Scientific and Technological Research Institution (Tubitak), the Turkish Union of Chambers and Commodity Markets (TOBB), the Turkish Union of Chambers of Engineers and Architects (TMOBB), and Turkish Union of Municipalities.


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Voluntary Agreements 2

Characterization of the instrument 2.1Since 2009, the Voluntary Agreements (VAs) were implemented to motivate companies to achieve a minimum of 10% decrease in energy intensity over a three year period. The target groups are industry companies with a minimum of 1,000 toe of annual energy consumption (or average of the last three years should be 1,000 toe. (This means that the program was designed for more than 1,400 enterprises). The government makes available grants to stimulate the investment in energy efficiency measures. If a company meets the target set by the agreement, then up to 20% of the annual energy costs can be granted during the first year. The maximum amount is 200,000 TL. The General Directorate of Renewable Energy (GDRE) signs the agreements with the company on the basis of the energy intensity value of the last five years. Then the companies undertake individual energy efficiency projects. There is a requirement to apply for ISO 50001 Energy Management Standard Certificate, to have an energy manager and also to register to the Energy Efficiency Portal (see process evaluation of these programs below). In 2009, 11 agreements were signed. In 2010, 11 companies applied for the VA and signed the agreement. In the period 2011-2013, the interest was low and only three companies currently participate in the program (these companies are still in the monitoring process). Aim and target Energy efficiency is a main component to reduce greenhouse gas emissions in Turkey while increasing competitiveness of the economy. A target has been set to improve the level of energy efficiency by 20% for the year 2023 (MENR 2012). The Voluntary Agreements were introduced to realize significant energy savings to reach this target. The Voluntary Agreements are currently revised. The National Energy Efficiency Action Plan, which was published on December 21st 2015, estimates annual savings of 0.5% for the main subsectors (iron and steel, cement, textile) between 2018 and 2023. The next table shows the estimated annual savings in ktoe until 2023 Table 1: Projected annual energy savings

2017 2018 2019 2020 2021 2022 2023

Yearly energy savings (ktoe) 0 98 199 304 412 525 642

Avoided CO2 emissions 0 0.34 0.68 1.04 1.41 1.80 2.20

Source: MENR (2015), pp. 58; 221 Period that the policy instrument is or was active in The Voluntary Agreements were launched in 2009, based on the 2007 Energy Efficiency Law. The scheme is still active. An additional announcement was published with the official gazette from July 3rd 2012.


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Figure 2: Status of the voluntary agreement scheme

Source: MENR (2015), p. 164 Note: This figure was taken from the draft NEEAP report3. However, the total number of voluntary agreements concluded between 2010 and 2013 should be 14 Target groups The program was designed for more than 1,400 enterprises having a minimum of 1,000 tep energy consumption (or average of last three years should be at least 1,000 tep). However due to this high energy consumption requirement, only a limited number of SMEs can apply for the program. As of March 2015, 41 enterprises applied for the program but only 25 applications were accepted. No complete analysis of the proposals rejected was undertaken. However, there is some evidence that some companies were rejected because of a baseline developed with non-calibrated measuring equipment and other such technical errors. Energy Service Companies can support companies to implement energy efficiency projects and are therefore another target group. Furthermore, it is mandatory to appoint an energy manager to organize the energy efficiency efforts. They are responsible for calculation of the data and reporting. Actions, specific technologies and/or energy efficiency measures In order to enter a voluntary agreement, a company must implement an energy management system. The purpose of the energy manager is to ensure that energy savings are achieved in daily operations and can be maintained, that intervention takes place in case of inefficient operations and that new possibilities for energy efficiency are continuously evaluated. An application to ISO 50001 is required. Furthermore, energy efficiency investment projects have to be carried out. The Voluntary Agreement takes as a reference the energy intensity, which is the average of the past five years and aims at a minimum of 10% decrease of energy intensity for the next three years.

3 Only preliminary NEEAP results since the plan was not published yet


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Market failures to overcome The Voluntary Agreement addresses company-level barriers such as a lack of information and awareness and the lack of motivation for energy efficiency improvement. The Agreements raise awareness of energy efficiency by putting energy issues on the agenda. The financial incentive offered aims to overcome barriers to implementation of energy management and energy efficiency investment projects. Organizations, which are responsible for implementation and execution The VA is implemented by the General Directorate of Renewable Energy (GDRE), a institution of the Ministry of Energy and Natural Resources. Available budget 5 million TL are available for the Voluntary Agreements and for the VAP program (cf. chapter 3) together for the period from 2009-2014. The total payment between 2009 and 2014 for the Voluntary Agreements was 700,000 TL. Expected effectiveness and cost-effectiveness For 17 participating companies, data about total investments (in TL) and expected total energy cost savings during the agreement period (in TL) exist. Data about the actual total or per company energy savings (in ktoe) are not available. For the period 2009-2011, investment costs and total cost savings for all participating companies (successful and unsuccessful) are presented in Table 2. The source of this calculation is the Assessment Table for VA Application. The data of successful and unsuccessful companies were taken into account. Companies that terminated the contract were not included. The data regarding total investments and expected annual savings (both in TL) were added. Physical data on expected and achieved energy savings was not available. Table 2: Investment costs and total savings for participating companies (2009-2010)

Program phase

Total investment (in TL) Expected total cost savings during agreement period (TL)

2009 5,879,681.52 15,715,945.56

2010 29,248,070.00 61,851,927.00

Program Evaluation 2.2The evaluation of the Voluntary Agreements program addresses both process and impact evaluation. It is based on a program theory approach (step 1). The formula for impact evaluation (step 2) and the key performance indicators (KPIs) are based on the specific program theory to be developed for this program. In step 3, the methods to develop the necessary data and information for the KPIs, other questions regarding the process evaluation, and the input data for the impact evaluation will be developed. The actual process and impact evaluation are presented in Chapters 2.3 and 2.4.


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Step 1: Developing a program theory The program theory explains how policy programs are expected to bring the desired results. The analysis is not only to understand if but especially why targeted impacts are achieved. Cause-impact relations of the instrument are determined, as well as per cause-impact relation indicators. Also success and failure factors to the indicators are defined. The next figure illustrates a simplified relation process from the application for a voluntary agreement to the approval to get a financial incentive.

Figure 3: Voluntary Agreements: Application – Evaluation – Support

Source: Based on Energy Efficiency Law Based on this figure and the information above, we conclude that the program theory for the Voluntary Agreements program – having implicitly or explicitly underlain its design, and guiding its evaluation – is as presented in the next figure.


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Figure 4: Program theory of the Voluntary Agreements Program


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Step 2: Creating the basic formula for impact evaluation The basic formula for calculating energy savings in our case of voluntary agreements is the following: total net annual energy savings due to the policy or program = sum (over all participants) of individual unitary gross annual energy savings per participant * (1 - double-counting factor/fraction (average or individual)) * (1 - free-rider fraction + multiplier fraction) Equation 1

Using this formula for bottom-up evaluation, we start from data at the level of a specific energy efficiency improvement measure (e.g. energy savings per participant and number of participants) and then aggregate results from all the measures. Provided data are available as needed, we will use the following three steps:

1. Unitary gross annual energy savings (in kWh/year per participant or unit, average or individual) vs. the baseline

2. Total gross annual energy savings (taking into account the number of participants or units, in kWh/year)

3. Total net annual energy savings in the first year of the energy efficiency measures (taking into account double counting, free-rider effect, multiplier effect4, and other gross-to-net correction factors, in kWh/year)

This formula will be adapted more specifically to the program below. Step 3: Evaluation method a) Methods and required data for the key performance indicators and other issues related to process evaluation The following key performance indicators (KPI) not only help to frame specific and objective evaluation questions but – based on the quality of the data – provide objective information on program performance and impact. Table 3: Key performance indicators – Voluntary agreements

The key performance indicators are formulated to measure whether the steps in the program theory took place and assess the impact of the policy. You can also find these indicators in the program theory (see figure 4). The second column presents the key performance indicators, the third column describes how the required data could be collected.

Key performance information to explain success or failure

Required data/ method

1 • Familiarity of the VA scheme in industry • Level of awareness: number of companies

4 Double-counting may occur if more than one policy instrument has influenced an investment or other energy efficiency action by a company, e.g. the company participates both in VA and VAP program. Savings should then only count for one of the programs. Free riders are those companies that received financial incentives or subsidized advice but would have implemented the energy savings also without program support. Their savings are therefore not induced by the program and should not be counted as a program impact. On the other hand, a company may replicate successful energy efficiency investments (e.g., in motor controls or lighting) in other factories without program support, or other companies in the sector may adopt them, also because equipment suppliers start to recommend them. These and similar effects are called multiplier effects, because they lead to indirect additional savings induced by the program.


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aware of the program compared to all eligible companies; data sources: all eligible companies: GDRE; number of companies aware of the program: survey of a sample (e.g., 100 companies)

•

2 • Rate of applications • Number of applications compared to all eligible companies; data source: from program records / GDRE

3 • Number/share of companies in the sector that signed the agreement

• Number of successful applicants / signed agreements; data source: from program records

• Total number of eligible companies; data source: from GDRE

4 • Share of total sectoral energy consumption accounted for by the participants in the scheme

• Energy consumption of participants; data source: from industry database / program records

• Total sectoral energy consumption; data source: national statistics / industry database

5 • Number of VA compliance plans • How many compliance plans were implemented? Data source: program records

6 • Number, variety and (additional) costs of energy saving measures implemented

• Number, variety and (additional) costs of energy saving measures implemented; Data source: program records

7 • Number of companies achieving their target and receiving payment

• Total energy savings of the program (successful and unsuccessful participants)

• CO2 reductions • Cost-efficiency • The extent of compliance

• Projected energy consumption and escalated costs of the companies if the project had not been implemented; Data source: program records for energy consumption; official energy price projection

• Energy consumption and escalated costs after project implementation; Data source: program records for energy consumption; official energy price projection

• What savings were achieved so far compared to BAU? Calculation from:

• Energy consumption of participants/ non-participants (cf. b) methods and data for impact evaluation)

Besides the data collected through the overall Activity 1 Questionnaire, GDRE asked the MWH-WUPPERTAL JV to interview some of the EVDs. These questions are listed in Table 4. They partly relate to the KPIs from the program theory, partly also to success and failure factors, such as attractiveness of the program or easy of participation, and other questions of relevance for the process and impact evaluation (such as free-ridership).


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Table 4: Questions for VA beneficiaries and those unsuccessful

Successful applicant Unsuccessful applicant

• What was the reason/ motivation for the application?

• Which concrete project(s) was/ were implemented?

• For how many projects did you apply? • How much was granted in total? • What is the duration of the project? Would

an extension to more than two years be more useful?

• What will happen after the completion of the project? Will you continue with the project even without the financial aid?

• What savings were achieved so far compared to BAU?

• How could the VA program be improved in your opinion?

• What tasks are in the responsibility of the energy manager?

• What is your experience with the EE portal? Do you upload your data regularly? Is the portal helpful as a monitoring tool for your company?

• Did you make use of ESCO services even though they were not required? If yes, which services exactly?

• Currently cogeneration projects are not being supported; would these kind of projects be of interest?

• How were you informed about VA? • Would you start this project even if you were

not aware of VAP? • What was the share of VA in the total

investment amount? • How did you finance the investment since

the VA only provides a small proportion of the total cost?

• At which stage of the investment did you receive the payment?


• What are the reasons for the rejection? • Would you apply again with another project

idea? • Did you employ an energy manager

anyway? • Did you implement the project although you

did not receive the financial aid? • How were you informed about VA? • Would you start this project even if you were

not aware of VA? • If you implemented the project how did you

finance it?


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Results of the questionnaire While interviews were planned, because of scheduling problems with GDRE during the summer, it was not possible to undertake them. To analyze the design and the impact of policies and measures, a broad sample of interviews or surveys is needed. This should be considered for the future monitoring and evaluation process. The results of the survey can be used to adapt the policy design, to overcome existing barriers and to achieve higher energy savings. b) Methods and data for impact evaluation There are two possible ways to evaluate the energy savings due to the program based on Equation 1: either by using company-level data and a control group approach, or by using project-level data and a questionnaire on free-ridership/influence of other policies. b1) evaluation using company-level data In case of the voluntary agreement program, the baseline is the “without program” situation of the respective industry companies: The target of the voluntary agreements program is a reduction of the average energy intensity by 10% within three years. Energy intensity is calculated as units of energy per unit of GDP (value added). The voluntary agreement program takes the last five years energy intensity as a reference and aims at a minimum 10% decrease in energy intensity / unit in average within the next three years. Multiplying this difference in energy intensity with the number of units produced per year will yield the unitary gross annual energy savings per each participant, but not the net savings. However, even without policy and the particular program, the energy intensity of companies is likely to change (and usually improve on average over time). Therefore, it would be important to know the change in energy intensity of non-participating companies of the same industrial subsector, to define a reference trend from individual company data or national statistics (the latter would, however, include the participating companies and could be used only if the share of the participants in the overall sectoral consumption is only a few percent). Correcting the energy intensity change and hence the energy savings of the participants for the change in energy intensity of non-participants in the same time period will yield net savings due to the program. It will automatically correct for all effects such as free-riders and multiplier effects. To the extent that the other companies also are benefitting from energy audits and energy manager obligations, it will also correct for double-counting from these policies. Therefore, this approach will simplify equation 1 to: total net annual energy savings due to the policy or program = sum (over all participants) of individual gross annual energy savings per participant - sum (over all participants) of individual reference trend annual energy savings per participant Equation 1b

It would be even better to also know the (change in) energy intensity of both participants and non-participants during the five-year reference period. It would then be possible to perform a difference-in-differences analysis for both groups and the pre-program and program periods, which normally will yield more exact results. However, all those statistical analyses at company level may suffer from stochastic influences on individual companies’ energy intensities, such as individual grade of capacity use. This carries a danger of inconclusive results.


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b2) evaluation using project-level data A second way to assess program-induced energy savings is therefore to look at the projects implemented by the companies and the energy managers to achieve the target and receive the subsidy. This will feed into a detailed evaluation of Equation 1. Table 5 presents the data needed and data sources for both types of evaluation. Table 5: Input data and data sources for impact evaluation

Input data Data source

b1) Energy intensity of participating and non-participating companies during program period

Participants: Individual company data; Non-participants: Individual company data or national statistics

b1) Energy intensity of participating and non-participating companies during reference period

Participants: Individual company data; Non-participants: Individual company data or national statistics

b2) Energy savings from each project implemented by the energy manager in participating companies vs. “before project” baseline

Individual company data

b2) Net energy savings (percentage of gross energy impact attributable to the program); assessing free ridership and spillover-effect, rebound-effect and snapback effect as well as influence of other policies to avoid double-counting

Questionnaire/survey to participants (cf. Table 4)

Avoided emissions; emissions associated with achieved net energy savings

For GHG emissions: Individual company data on fuels saved; national official emission coefficients by fuel

Co-benefits (like job creation, energy security) Qualitative assessment only, based on net energy savings

For calculating cost-effectiveness, the following data will be needed in addition to the amount of subsidy paid:

- Investment costs/Implementation costs - Costs for the administration (company but also GDRE) - Costs for the energy manager - Energy cost savings of the companies (annually and over lifetime of energy-efficient

equipment installed) These would need to be retrieved directly from the companies and GDRE. Calculation for cost effectiveness and cost efficiency: Cost = Investment costs + additional implementation/administration and energy manager costs for the companies + additional costs for the authorities; benefit: energy savings x price.


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Process Evaluation 2.3An incentive for companies to participate in the program is to obtain financial benefits and to benefit from an improved public image. Voluntary Agreements offer companies a flexibility to define a company-specific project and to choose the optimal time for the project implementation. However, even though the program was designed for more than 1,400 enterprises, only 25 companies participated in the program until now. Likely reasons for this low participation rate are the lack of information and motivation. The companies are not sufficiently informed about the benefits of the program. In addition, the program may not be attractive enough to induce companies to participate. A major reason for this low attractiveness may be the fact that success in meeting the 10% improvement target and receiving a payment is difficult to predict for companies. There are many factors influencing energy intensity. A most important of these factors is the production and hence the usage ratio of the capacity. If production increases, energy intensity will go down, and vice versa. The reason for this are base loads in a factory or process plant or equipment that are not linked to the volume of production. When production decreases, some base load remains, so energy consumption does not decrease by the same percentage, and hence, energy intensity will increase. This effect may counterbalance efforts to improve energy efficiency made at the same time. The impact evaluation (cf. next step) shows that this may have been the case in a number of the participating companies that even had higher energy intensities after the program. Another factor here may have been a change in production to products needing more energy per unit. In 2009, only 11 companies participated in the program. Three contracts were terminated within the program period and five companies did not reach their specific targets. In 2010, 11 companies participated in the program but only four of them reached their targets and received financial support from the government. It seems that the 10% target is too high for some companies. The government already discusses the possibility to renegotiate the targets of the agreement if the original estimates “change considerably” (MENR 2015, p. 57). The findings from the qualitative SWOT analysis from activity 1 underline this assessment. The program is in place since 2009 and Turkey has good experience in the program implementation. The program addresses the lack of awareness and the lack of technical know-how. However, as mentioned earlier, the target groups were not sufficiently informed about the program and the implementation was rated as very complex. Another result of the SWOT analysis was a lack of incentives to address the financial barriers and the limited scope to increase the impact. It is not clear how much was granted to each company. Due to a lack of data, a detailed analysis cannot be carried out here. Table 6 summarizes the findings from activity 1. Table 6: Summary of Findings from SWOT Analysis

Program Barriers Addressed

SWOT Analysis Summary

Overall Assessment

Voluntary Agreements

Awareness Lack of technical know how

Provided good experience in program implementation Very complex Does not address financial barriers

Reasonable program but small impact Little scope to increase impact

Source: Results from Activity 1


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Impact Evaluation 2.4To evaluate the impact of the Voluntary Agreements, a full set of data is required as listed in Table 5. Due to the fact that only a limited data set is available, the simplified formula is used to analyze the impact of the program. It needs to be considered that the available data are not sufficient to conduct a full analysis of the program and an analysis of the achieved energy savings. Therefore, the following calculations only provide a very rough estimate. In 2009, eleven companies participated in the program. However, three companies terminated the contract during the project phase. Therefore the eight remaining companies were taken into account for the impact evaluation. The following table illustrates the energy consumption of the eight companies in 2009 (in toe), the energy intensity reduction target (in %), the actual change in energy intensity in 2012 (in %) and the calculated energy consumption in 2012 (in toe). We did not receive the actual energy consumption in 2012. Using this and the actual change in energy intensity, it would have been possible to calculate energy savings achieved by each company compared to the 2009 energy intensity baseline. This would give the gross annual energy savings. However, energy intensity would have changed between 2009 and 2012 also without the VA. Savings would need to be corrected for this baseline effect to yield the net savings. All of this is not possible due to lack of data provided to us. Therefore, the only approach feasible to obtain a very rough estimate is to take the 2009 energy consumption, assume production was the same in 2012 as was in 2009, and calculate the 2012 energy consumption by the formula: Energy2012 = Energy2009 * (1 + change in energy intensity) Equation 2

We are aware that this is not a correct calculation of energy savings based on energy intensity improvement. The following results should therefore only be taken to indicate the direction of the size of energy savings the program may have achieved.


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Table 7: Energy Consumption of companies before (actual) and after (calculated) implementation of VA (period 2010-2012)

Company Energy consumption in 2009 (in toe)

Committed to reduce energy intensity (in %)

Achieved decreasing (-) / increasing (+) ratio of energy intensity (in %)

Calculated energy consumption in 2013 (toe)

1 38,070.00 10.00 -10.39 34,114.53

2 15,735.00 10.00 -9.08 14,306.26

3 9,570.69 17.50 -13.10 8,316.93

4 58,527.27 11.00 +15.84 67,797.99

5 7,080.00 10.00 -45.10 3,886.92

6 3,786.20 10.00 +11.36 4,216.31

7 11,671.15 10.40 +7.95 12,599.01

8 18,239.10 10.00 -22.80 14,080.59

Total 162,679.41 159,318.54

All together, the companies implemented 59 actions to increase their energy efficiency. However, only a limited number of companies actually achieved their energy intensity targets. The aim of the program is to reduce the company’s energy intensity by a minimum of 10%. At the beginning of the program, the companies defined their individual targets, but only three participants achieved these specific targets (marked in green in Table 7). The other six companies missed the target and consequently did not receive the financial incentive from the government. Summing up the change between 2009 energy consumption and calculated 2012 consumption, a very rough estimate of energy savings of all companies (successful and unsuccessful) between 2009 and 2012 is 3,360.88 toe, which is an energy consumption reduction of 2.07%. When taking into account only the successful applicants, the energy consumption was reduced by a quantitative result of 11,307.07 toe, which is a reduction of 17.84% in 2012 compared to 2009. It is not clear how much of the total costs was granted per company but the three successful signers were subsidized with a total of USD 134,000 (MENR 2015, p. 164). Summarizing, it can be assessed, that the first phase of the program was very successful for three companies. They could exceed their own targets and achieve significant energy savings. However, the remaining eight companies did not reach their targets and did not receive the funding from the government. Three companies have even increased their energy intensity during the project phase. In 2010, a second phase started and another eleven companies participated in the program. One company terminated the contract within the project phase. Therefore, the results of ten companies are illustrated here.


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Table 8: Energy Consumption of companies before (actual) and after (calculated) implementation of VA (period 2011-2013)

Company Energy consumption in 2010 (in toe)

Committed to reduce energy intensity (in %)

Achieved decreasing (-) / increasing (+) ratio of energy intensity (in %)

Calculated energy consumption in 2014 (toe)

1 9,060.00 10.00 +13.50 10,283.10

2 14,611.50 10.00 -16.40 12,215.21

3 8,101.85 13.00 +7.26 8,690.04

4 5,166.80 10.15 -28.69 3,684.44

5 435,524.70 10.00 +5.18 458,084.88

6 154,903.50 10.00 -3.95 148,784.81

7 90,027.90 10.00 -1.71 88,488.42

8 4,644.00 10.00 -11.86 4,093.22

9 23,638.75 12.00 -4.78 22,508.82

10 33,564.00 15.00 -19.48 27,025.73

Total 779,242.99 783,858.68

Between 2011 and 2013 the participating companies implemented 84 actions but only four companies actually achieved their energy intensity improvement targets. The calculatory 2013 energy consumption of all companies even increased compared to the actual 2010 consumption by 4,615.69 toe respectively 0.59%. When taking into account only the successful participants, calculated energy savings of 10,967.69 toe respectively 18.91% could be achieved. No detailed economic evaluation was possible here given the data. However, the data presented in the table 2 suggest that expected benefits (energy cost savings) of the projects implemented are two-to threefold higher than costs (investment) already during the three-year implementation period, indicating a clear cost-effectiveness of the investments for the companies. The subsidies received are only a fraction of the overall savings.

Meet the 2023 targets and opportunities 2.5According to the National Energy Efficiency Action Plan, there are plans to realize yearly energy savings of 642 ktoe in 2023. This is a reduction of 0.5% per year for the main subsectors iron and steel, cement and textile between 2018 and 2023 (see table 1). So far, the effect of the program is very limited – our very rough estimate for the successful companies is a saving of ca. 22 ktoe – and much more needs to be done to reach the 2023 target. Out of eleven companies, which participated in the first program phase between 2010 and 2012, three contracts were terminated and five companies did not meet their specific energy intensity targets. Only three companies were successful and received funding from the government. All other participants did not reach their targets or even increased the energy intensity instead of reducing the energy intensity.


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In the second program phase (2010 until 2013, another eleven companies participated; one contract was terminated during the time. Among the remaining ten companies, only four reached their targets to reduce the energy intensity by a minimum of 10%. All other companies (6) did not receive any funding for the project implementation. The third and fourth program phases of the program are ongoing and in the monitoring process, no concrete data are available yet. In 2011 no company participated in the program. In 2012, two companies signed the contract and in 2013 one company participated in the program. The government has already recognized the difficulties of the policy design and has placed the topic on the political agenda. It has defined milestones to recalibrate the program. The draft National Energy Efficiency Action Plan5 proposes a new voluntary agreement scheme based on an economic incentive. Three essential elements of this new scheme are described in the NEEAP:

- Energy Management - Special investigations focusing on improving energy efficiency of the primary

production - Supporting process in projects improving the energy efficiency

In addition, facility audits, assessments, benchmarking, monitoring, dissemination and financial incentives shall be improved (MENR 2015, p. 57). Furthermore, the company must submit annual reports on their compliance including the development of the energy management system, the implementation of special saving measures, and the implementation of investment projects with a payback time of less than four years. The verification shall be carried out by accredited institutions through savings certificates. The new requirements and the adapted design of the voluntary agreements in combination with some further improvements (cf. 2.6 on recommendations) can make a significant contribution to meet the 2023 targets.

Recommendations 2.6Recommendations in a nutshell

• The program should be continued and extended. Companies show interest in the program and appreciate the flexibility in implementing energy efficiency actions

• Some funding should be provided at the beginning of the project phase. This makes it more attractive for companies and reduces free-rider effects (cf. detail on this recommendation below)

• The target should no longer be an energy intensity improvement, but an energy savings target achieved through projects of investment and optimized plant operation

• The role of the energy management system and audits should be extended: o Audits should be performed to take note of the past efforts and to define

future energy efficiency projects o Energy management should assess whether the project is suitable for the

VAP program or not. If not, the project idea could be submitted under the Voluntary Agreement program

• Different options to adapt the program should be considered: Voluntary Agreements could be a prerequisite for the VAP funding. Another option could be to make the voluntary agreements mandatory for all industry companies with an annual energy consumption of more than 1,000 toe



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• Participation and impact of the program could also be increased by embedding individual agreements in a set of sector-wide framework agreements

• Monitoring and evaluation activities should be increased (governmental actors as external reviewer and energy manager as internal reviewer)

• The visibility of the program should be improved by information campaigns. Recommendations in detail The Turkish government has already recognized the difficulties in the program implementation and published a milestone in the preliminary NEEAP6 to recalibrate the program. This is a good starting point to discuss the design of the program and to support the government with experiences from other countries. In general, the program should be continued and extended. Benefits of voluntary agreements are the willingness of the company to participate in the program and the flexibility in phasing in energy efficiency actions. So far, only a limited number of companies reached their specific targets and received funding from the government. The majority of companies were not successful despite the project implementations. The reason may not only be insufficient project implementation but also other factors influencing energy intensity (cf. chapter 2.3 on process evaluation). To address these aspects, we therefore recommend that the policy design be adapted. Most importantly, the target should no longer be an energy intensity improvement, but an amount of energy saving achieved through projects of investment in higher energy efficiency of plants and equipment, or through measureable improvement in operation (settings, operation hours, etc.). Furthermore, some funding should be provided at the beginning or in early stages of the project. The companies need the funding to invest in energy efficiency and to implement the project. It could be a grant paying part of the costs of an energy audit that helped prepare the VA (if the audit is not mandatory for the company). It could also be financial support for successfully completed investment projects that contribute to achieving the targets. This could be a special grant or loan facility for the VA participants, or it could be priority access to VAP program funds for projects. The current grant provided at target achievement should stay there in addition to the new early grant component, to honor the target achievement just as now. It is too late to provide the funding only at the end of the project as it is done now. This increases the number of free riders, because only those companies that would have implemented investments and other actions anyway will wait beyond the three-year period to receive the very limited funding in reward of target achievement. Early funding could be provided to reward the preparation of the implementation plan, which may need an external EVD company to prepare, which costs money; and by giving priority access to VAP program grants for investments.



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To facilitate the proposed change in targets to energy savings, we further recommend to extend the role of the energy management system and energy audits. An example for a successful implementation of voluntary agreements in combination with an energy management system, energy audits, and a financial incentive is Denmark (the program was terminated by the end of 2013 after many years of operation). In Denmark, energy intensive companies receive energy audits from their energy companies. The reports are entered into a database. The government negotiated with the companies to implement projects identified in the audits. Companies that entered into such a voluntary agreement received a tax rebate in exchange for the project implementation. The companies had to obtain an energy management certification, determine the possible improvement actions and invest in energy efficiency measures. A payback period of less than four years was required for the projects7. Since 2014, the financial incentive for project implementation is no longer provided from tax money but by the energy companies, which still start with an energy audit. Turkey could learn from these experiences (similar VA programs are or were in place in the UK and Sweden) and implement a similar program. As a first step, energy audits should be performed to take note of the past efforts of the company and to define possible future energy efficiency projects. For larger companies, such audits are now mandatory every four years anyway. Smaller companies in the target group of the VA program (i.e., between 1,000 and 4,000 toe of annual energy consumption) could receive a grant for the energy audit. The project proposals identified in the audits or by the companies’ energy managers should then be analyzed and checked for feasibility. If they together can achieve a minimum of 10 % energy savings, the project ideas could be submitted under the Voluntary Agreement program, together with other small-scale actions or actions to improve energy efficiency in operation. As a next step, an assessment should be conducted whether the investment project(s) is/are suitable for the VAP program or not. The companies could then be encouraged to apply for a VAP grant. Companies could get a final incentive payment if the projects together can prove to reach the defined energy savings targets. Another option that would aim at higher participation rates is to even make Voluntary Agreements a prerequisite for larger companies to apply for the VAP funding scheme, or other existing and new financial incentive schemes for energy efficiency investments that may be introduced following the draft NEEAP8. To make this even more attractive, additional funding could be distributed to the company, if the company applies for a number of projects with specific energy reduction targets (the targets should be significantly higher than a single VAP project) and reaches these targets. A third option to achieve even higher participation may be to make concluding an agreement mandatory for all industry companies with an annual energy consumption of more than 1,000 toe. The companies could then still get a financial incentive from the VAP program for projects and/or from the VA program if they meet their agreed energy savings targets. The monitoring process should also be adapted to the new policy design to support and assist the participating companies. This would mean to monitor the implementation of projects with project-specific energy consumption before and after implementation, investment, and other costs or savings. This would also allow a more precise impact evaluation using formula 1 in the future. The combination of governmental actors as an external reviewer and energy managers as internal reviewer makes a cooperation between the company and the government even more relevant. Sufficient staff should be available to assess the projects, to support the energy manager and to monitor the energy savings.

7 For further information please refer to http://www.ens.dk/node/2060 8 Only preliminary NEEAP results since the plan was not been approved yet


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A last recommendation is to further address the lack of motivation and information. This barrier should be addressed by additional policy (such as information campaigns, networking, advertisement etc., e.g., under an extended awareness program, cf. chapter 5).

VAP program 3

Characterization of the instrument 3.1Since 2009, the VAP program was implemented to support projects and actual investments for enhancing energy efficiency in industrial plants. The target group are industry companies with a minimum of 1,000 toe of annual energy consumption (which means that the program was designed for more than 1,400 enterprises). A company can apply and receive grants for the VAP implementation and the Voluntary Agreements at the same time. The government provides grants to minimize energy waste, losses and inefficiencies at enterprises operating in industry sector. It provides 20 to 30% of the costs as a grant – after the installation and after a commitment to meet a certain level of savings. The maximum amount of investment should be less than 1 million TL. The Ministry of Energy and Natural Resources receives project applications in January each year for projects with a maximum duration of two years. A VAP observation commission checks the eligibility with an initial audit that establishes the potential. After the Energy Efficiency Coordination Board approval, an agreement is signed between a company and Directorate General of Renewable Energy. In the two year implementation period, the commission monitors the project to check if the investments are in accordance with the agreement, the budget is within the scope and the required saving is met The industry enterprise prepares a project closure report to be approved by the Directorate General of Renewable Energy in case the savings are met. If a report is approved, it is sent to the relevant financial unit to process the payment. Until now, a total of 332 applications were received; for 219 projects a financial support was decided. As some applicants chose to give up on the investment or gave up their projects during the application period, only 209 projects made an agreement. So far 35 projects received payment. 139 project are in the implementation period. In addition to these, in April 2015 the Directorate General of Renewable Energy accepted additional applications. In this period 26 applications were received and it was decided to support 23 projects, which are currently at the contract signing stage. In 2009, 87 industrial companies had applied for VAP, however only 17 projects were approved. In 2010, 50% of the applications were approved (15 projects signed a contract among 33 applications). In 2012, 11 projects signed a contract out of 19 project applications; in 2013, 56 projects signed a contract out of 70 project applications, in 2014, 65 projects signed a contract out of 69 project applications, and in January 2015, 45 projects signed contract out of 55 project applications. Aim and target Energy efficiency is a main component to reduce GHG emissions in Turkey while increasing competitiveness of the economy. A target has been set to improve the level of energy efficiency by 20% for the year 2023 (Official Gazette No 28215 “Energy Efficiency Strategy Paper 2012-2023”). The VAP program was introduced to realize significant energy savings to reach this target. The National Energy Efficiency Action Plan, published in December 2015 illustrates concrete numbers on energy savings. The calculation method is the following:


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The average energy savings ratio for industry measures is 0.15 kWh per US$ of inversion in the lifespan. The fund will increase to US$ 6 million9, it subsidizes up to 30% in the total costs of energy efficiency projects. For 2016, the extension of the budget is proposed (MENR 2015a). According to the preliminary Turkish NEEAP10, expected energy savings are: Table 9: Projected energy savings of the VAP program

2016 2017 2018 2019 2020 2021 2022 2023

Yearly energy savings (ktoe) 2.3 4.6 6.9 9.2 11.5 13.8 16.0 18.3

Economic effort (US$ million11) 6 6 6 6 6 6 6 6

Source: MENR 2015, p. 165 Period that the policy instrument is or was active in The VAP program was launched in 2009, based on the Energy Efficiency law that was passed in 2007. The scheme is still active. Target groups The program was designed for more than 1,400 enterprises having a minimum of 1,000 toe energy consumption (or average of last three years should be at least 1,000 toe). Although primarily the program targets large energy-intensive industries, there are about 300 SMEs with an energy consumption of more than 1,000 toe that qualify for the program. Actions, specific technologies and/or energy efficiency measures In order to qualify for the VAP program, the company must have an ISO 50001 Energy Management Standard Certificate, an energy manager and must be registered to the Energy Efficiency Portal. The Company shall also be submitting energy consumption values regularly and without any interruption. After the implementation of the projects and after a commitment to meet a certain level of savings, the government provides a 20-30% grant provided this rate does not exceed the limit of 1 million TL excluding VAT. Market failures to overcome The VAP program addresses company-level barriers such as a lack of information and awareness. The financial incentives raise awareness of energy efficiency by putting benefits of energy efficiency projects on the agenda. The financial incentive offered aims to incentivize energy efficiency investments and helps to overcome barriers to implementation of energy management and energy efficiency investment projects. Organizations, which are responsible for implementation and execution The VAP program is implemented by the General Directorate of Renewable Energy (GDRE), a department of the Ministry of Energy and Natural Resources.

9 To convert the currency: The report was published on December 21st, 2015 10 Only preliminary NEEAP results since the plan was not been approved yet 11 To convert the currency: The report was published on December 21st, 2015


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Available budget 5 million TL are available for the Voluntary Agreements and for the VAP program. According to the National Energy Efficiency Action Plan, in 2009 and 2010, 22 projects were financially supported with 1,200,000 TL (ca. 500,000 USD)12 (MENR 2015, p. 160).

Program Evaluation 3.2The evaluation of the VAP program addresses both process and impact evaluation. It is based on a program theory approach (step 1). The formula for impact evaluation (step 2) and the key performance indicators (KPIs) are based on the specific program theory to be developed for this program. In step 3, the methods to develop the necessary data and information for the KPIs, other questions regarding the process evaluation, and the input data for the impact evaluation will be developed. Chapters 3.2 and 3.3 present the actual process and impact evaluation. Step 1: Developing a program theory The program theory explains how policy programs are expected to bring the desired results. The analysis is not only to understand if but especially why targeted impacts are achieved. Cause-impact relations of the instrument are determined, as well as per cause-impact relation indicators. Also success and failure factors to the indicators are defined. Based on the information in chapter 2 above, we conclude that the program theory for the VAP program – having implicitly or explicitly underlain its design, and guiding its evaluation – is as presented in the next figure.

12 To convert the currency: The report was published on December 21st, 2015


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Figure 5: Program theory of the VAP program


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Step 2: Creating the basic formula for impact evaluation The basic formula for calculating energy savings in our case of the VAP program is the following: total net annual energy savings due to the policy or program = sum (over all participants) of individual unitary gross annual energy savings per participant from the projects implemented * (1 - double-counting factor/fraction (average or individual)) * (1 - free-rider fraction + multiplier fraction) Equation 1

Using this formula for bottom-up evaluation, we start from data at the level of a specific energy efficiency improvement project, aggregate results from all the projects, and then make corrections needed to calculate net annual energy savings. We will thus use the following three steps:

1. Unitary gross annual energy savings (in kWh/year per project) vs. the baseline 2. Total gross annual energy savings (adding up the unitary gross annual energy

savings of all projects, in kWh/year) 3. Total net annual energy savings in the first year of the energy efficiency projects

(taking into account double counting, free-rider effect, multiplier effect13, and other gross-to-net correction factors, in kWh/year)

Step 3: Evaluation method a) Methods and required data for the key performance indicators and other issues related to process evaluation The following key performance indicators (KPI) not only help to frame specific and objective evaluation questions but – based on the quality of the data – provide objective information on program performance and impact. Table 10: Key performance indicators - VAP program The key performance indicators are formulated to measure whether the steps in the program theory took place and assess the impact of the policy. You can also find these indicators in the program theory (see figure 5). The second column presents the names of the key performance indicators, the third column describes how the required data could be collected.

13 Double-counting may occur if more than one policy instrument has influenced an investment or other energy efficiency action by a company, e.g. the company participates both in VA and VAP program. Savings should then only count for one of the programs. Free riders are those companies that received financial incentives or subsidized advice but would have implemented the energy savings also without program support. Their savings are therefore not induced by the program and should not be counted as a program impact. On the other hand, a company may replicate successful energy efficiency investments (e.g., in motor controls or lighting) in other factories without program support, or other companies in the sector may adopt them, also because equipment suppliers start to recommend them. These and similar effects are called multiplier effects, because they lead to indirect additional savings induced by the program.


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1 • Familiarity of the VAP scheme in industry • Level of awareness: number of companies aware of the program compared to all eligible companies; data sources: all eligible companies: GDRE; number of companies aware of the program: survey of a sample (e.g., 100 companies)

2 • Rate of applications • Number of applications compared to all eligible companies; data source: from program records / GDRE

3 • Number/share of companies in the sector that signed the agreement

• Number of successful applicants / signed agreements; data source: from program records

• Total number of eligible companies; data source: from GDRE

4 • Share of total sectoral energy consumption accounted for by the participants in the scheme

• Energy consumption of participants; data source: from industry database / program records

• Total sectoral energy consumption; data source: national statistics / industry database

5 • Number of VAP program compliance plans • How many compliance plans were implemented? Data source: program records

6 • Number, variety and (additional) costs of energy saving measures implemented

• Number, variety and (additional) costs of energy saving measures implemented; Data source: program records

7 • Energy savings achieved with successfully implemented projects (i.e., grants were paid)

• Baseline: Projected energy consumption and escalated costs if the project had not been implemented; Data source: program records for energy consumption; official energy price projection

• Energy consumption and escalated costs after project implementation; Data source: program records for energy consumption; official energy price projection

• What savings were achieved so far compared to BAU? Calculation from difference between energy consumption baseline and consumption after project implementation, corrected for free-rider and other effects

Already in Activity 1, some data were collected through the overall Activity 1 Questionnaire. The questions from this questionnaire are listed in Table 11. They are still relevant and partly relate to the KPIs from the program theory, partly also to success and failure factors, such as attractiveness of the program or easy of participation, and other questions of relevance for the process and impact evaluation (such as free-ridership).


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Table 11: Questions for VAP beneficiaries and those unsuccessful

Successful applicant Unsuccessful applicant


• Which concrete project(s) was/ were implemented?

• For how many projects did you apply? • How much was granted in total? • What is the duration of the project? Would an

extension to more than two years be more useful?

• What will happen after the completion of the project? Will you continue with the project even without the financial aid?

• What savings were achieved so far compared to BAU (the baseline)?

• How could the VAP program be improved in your opinion?

• What tasks are in the responsibility of the energy manager?

• What is your experience with the EE portal? Do you upload your data regularly? Is the portal helpful as a monitoring tool for your company?

• Did you make use of EVD services? If yes, which services exactly?

• How were you informed about VAP? • Would you start this project even if you were

not aware of VAP? • What was the share of VAP in the total

investment amount? • How did you finance the investment since the

VAP only provides a small proportion of the total cost?


• What are the reasons for the rejection? • Would you apply again with another project

idea? • Did you employ an energy manager

anyway? • Did you implement the project although you

did not receive the financial aid? • How were you informed about VAP? • Would you start this project even if you

were not aware of VAP? • If you implemented the project how did you

finance it?

Results of the questionnaire During the project phase, three interviews were realized. MWH WUPPERTAL JV was recommended to attend sight visits with MENR staff. However, as the focus of two visits are different from each other (while the MENR staff were supposed meet technical staff; the MWH WUPPERTAL JV needed to meet management team) the JV preferred to conduct separate visits. As the questionnaires contain confidential information, although all companies nominated by MENR were contacted through an e-mail or phone only 3 companies accepted the meeting requests. Some companies even refused to provide information through an e-mail as they stated that they have a kind of confidentiality agreement with MENR. The results are presented in the table below:


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Table 12: Answers to the questionnaire

Questions Interview 1 Interview 2 Interview 3 What was the reason/ motivation for the application?

Replication purpose, to obtain financial benefit

Corporate image

Reputation purpose, make the project process more formal to receive investment budget approval from the top management

Which concrete project(s) was/ were implemented?

Economizer project Economizer project

Pump system change, replacement of motors

For how many projects did you apply?

1 2 1

How much was granted in total?

20,1% of 448.000 TL equivalent to 90.048 TL

18% of 142,000 equivalent to 6,111 TL

Company applied for 300,000 USD project, no decision made until now

What is the duration of the project? Would an extension to more than two years be more useful?

N/A N/A N/A

What will happen after the completion of the project? Will you continue with the project even without the financial aid?

N/A N/A N/A

What savings were achieved so far compared to BAU?

N/A N/A N/A

How could the VAP program be improved in your opinion?

Requirement to use EVDs increases the budget. The significant grant is paid to EVD company

To get VAP fund, the company has to wait 1-1.5 years. Within such a duration, the project could repay itself

Many bureaucratic barriers, tax incentive support could replace the VAP program, all companies having waste heat should be supported to produce energy and factories should have certificates

What tasks are in the responsibility of the energy manager?

Monitors energy consumption, identifies saving potentials and develops new projects

N/A Reduce energy and costs, setting targets, apply projects

What is your experience with the EE portal? Do you upload your data regularly? Is the portal helpful as a monitoring tool for your company?

Very limited questions asked, company already monitors itself more detailed

Very limited questions asked, company already monitors itself more detailed

Only 2 questions are asked, company has an own monitoring system, not useful for the company


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Did you make use of EVD services? If yes, which services exactly?

ESCON conducts regular audits

N/A Regular audits in every 3 years

How were you informed about VAP?

ESCON informed the company

Energy managers heard it from the market

The energy manager knew it

Would you start this project even if you were not aware of VAP?

Yes yes yes

What was the share of VAP in the total investment amount?

20.1% 4.3% N/A

How did you finance the investment since the VAP only provides a small proportion of the total cost?

N/A N/A N/A

b) Methods and data for impact evaluation Data were available to evaluate the energy savings due to the program based on Equation 1 by using project-level data and an analysis plus three interviews on free-ridership/influence of other policies. The adequate way to assess program-induced energy savings for the VAP program is thus to look at the projects implemented by the companies and their energy managers to save energy and in addition receive the subsidy. This will feed into a detailed evaluation of Equation 1. In case of the VAP program, the baseline is the “without program” situation of the plants/equipment the projects were addressing in the respective industry companies. Table 13 presents the data needed and data sources for the evaluation approach chosen here.

Table 13: Input data and data sources for impact evaluation

Input data Data source

b1) Energy savings from each project implemented by the energy manager in participating companies vs. “before project” baseline

Individual company data

b1) Net energy savings (percentage of gross energy impact attributable to the program); assessing free ridership and spillover-effect, rebound-effect and snapback effect as well as influence of other policies to avoid double-counting

Questionnaire/survey to participants (cf. Table 2)

Avoided emissions; emissions associated with achieved net energy savings

For GHG emissions: Individual company data on fuels saved; national official emission coefficients by fuel

Co-benefits (like job creation, energy security) Qualitative assessment only, based on net energy savings


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For calculating cost-effectiveness, the following data will be needed in addition to the amount of subsidy paid:

• Investment costs/Implementation costs • Costs for the administration (company but also GDRE) • Energy cost savings of the companies (annually and over lifetime of energy-

efficient equipment installed) These would need to be retrieved directly from the companies and GDRE. Calculation for cost effectiveness and cost efficiency: Cost = Investment costs + additional implementation/administration costs for the companies + additional costs for the authorities; benefit: energy savings x price.

Process Evaluation 3.3The following table shows how many companies applied for the VAP program and how many projects have been granted for the program implementation. The numbers of applicants illustrate that the program is well accepted by the companies and that the popularity has not changed significantly over the years. In addition, the table shows that in the first year, 86 projects applied for the funding but only 17 projects actually received the incentives. This imbalance improved a lot over time. In 2014, 69 projects applied for the funding and 65 projects were approved by the government. This may be taken as a sign that participation rules were made easier to comply with and / or were better understood by the companies that applied. Another result depicted by the table is that not every accepted project was actually implemented by the company. There seems to be some barriers to implement the project although the financial incentive was promised. Table 14: VAP participants

Year Number of applicants (companies)

Number of proposed projects

Number of accepted companies

Number of accepted projects

Agreements signed (companies)

Projects approved

2009 68 86 12 17 12 17

2010 31 33 13 15 13 15

2011 VAP applications were not received in 2011

2012 6 19 2 11 2 11

2013 34 70 27 59 25 56

2014 39 69 38 68 36 65

2015 34 55 28 49 27 45

Total 212 332 120 219 115 209


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The results of the survey with three participants show that the main reason for the applications were reputation purposes in addition to the financial benefits. The energy manager is responsible for the monitoring of the energy consumption and the application of projects. The energy manager is also the person who received information about the VAP program. One interviewee said that ESCON informed the company. Out of three participants, all interview partners agreed that they would have started the project even if the VAP funding were not available. However, this may not be taken for granted, as at least one interview partner also stated the grant had been instrumental in convincing top management of the firm to get approval for the investment project (cf. table 12). Weaknesses of the program, according to the three interviews, include:

• The requirement to use EVDs increases the budget for the company. A significant part of the grant is paid to the EVD company.

• To get the VAP fund, one company had to wait 1-1.5 years. Within such a duration, the project could repay itself.

• Another company also stated that there are “many bureaucratic barriers” in program implementation, however, we don’t know which exactly.

A preliminary qualitative assessment of the design and effectiveness of the program is also included in the SWOT analysis from activity 1. The program addresses the lack of awareness and the lack of technical know-how. Some strengths of the program are the good experience in program implementation (six years of experience) and the interest of companies to participate in the VAP program. However, a barrier is the complex design of the program. Furthermore, the program does not sufficiently address financial barriers. Therefore the result of the SWOT analysis is that VAP is a reasonable program but only with a small impact. Table 15 summarizes the findings. Table 15: Summary of findings from SWOT analysis



Overall Assessment

VAP Awareness Lack of technical know how

Provided good experience in program implementation Great interest in participating Very complex Does not address financial barriers

Reasonable program but small impact Little scope to increase impact

Impact Evaluation 3.4The data listed in table 9 and 10 illustrate the data that are needed to evaluate the VAP program. Three applicants were asked to answer these questions. Furthermore data about actual energy savings, actual costs and financial support are available for the evaluation. However, this is only a limited number of data and therefore only a very rough impact evaluation can be conducted. An official source for energy saving calculations is the strategic plan 2015-2019 (MENR 2015a). Within this plan overall energy savings (toe) for the years 2009-2012 were published. In 2011, VAP applications were not received.


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Figure 6: Energy Saving (toe) by VAP program

Source: MENR 2015a Furthermore, the draft NEEAP14 published data about projects that were successfully implemented, which differ from the numbers mentioned in the introduction of this program. In 2009 and 2010, 22 projects were financially supported with 1,200,000 TL (ca. USD 500,000) (MENR 2015, p. 160)15. In 2011 no applications were received. In 2012 and 2013, 67 projects have applied for the subsidy. Two of them have been completed, one has resigned and 64 projects are still being implemented. In September 2014, 69 new projects have been presented and were in the pre-assessment stage. According to information that was provided to the project team, 35 companies already received funding from the government and implemented energy efficiency projects. 139 projects are still ongoing. The already implemented 35 energy efficiency measures achieved annual energy savings of 25.701,80 toe/yr or 22.057.552,59 TL/yr respectively. Actual project costs for the companies are 13.087.569,62 TL. The financial support from the government is 2.275.963,10 TL. The results are summarized in the following table. Table 16: Energy and cost savings of the VAP program

Annual energy savings (heat and electricity, in toe)

Annual energy cost savings (heat and electricity, in TL)

Actual project costs (in TL)

Financial support amount (in TL)

35 projects 25,701.80 22,057,552.59 13,087,569.62 2,275,963.10

All three interviewed participants agreed that they would also have implemented the project without financial support from the government. That can’t be directly interpreted as a free-rider effect, but it is why possible free-rider effects will be analyzed here.

14 Only preliminary NEEAP results since the plan was not published yet 15 To convert the currency: The report was published on December 21st, 2015


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We assume that a company would have implemented an energy efficiency improvement action anyway when the pack back period is less than one to two years long. The next table analyses the pack back periods of the analyzed 35 projects. Table 17: Analysis of pack back times

Payback time Number of projects

Annual energy savings (in toe/yr)

Annual cost savings (in TL/yr)

Between 0 and 1 year

15 18,936.31 17,837,108.48

Between 1 and 2 years

10 3,935.13 3,029,102.91

Between 2 and 3 years

4 371.13 694,716.47

More than 3 years 6 2,459.24 496,606.72

The projects with a payback time of more than one year achieved energy savings of 6,765.5 toe/year or 4,220,426.1 TL/year respectively. By taking into account only the projects with a payback time of more than two years, the achieved energy saving is reduced significantly. In this case, only 2,830.37 toe energy (heat and electricity) or 1,191,323.19 TL respectively would have been achieved due to the implementation of the program. Assuming that all projects with less than one or two years payback would have been implemented anyway will reduce the energy savings attributable to the program a lot. However, the projects are still all cost-effective for the companies, and the program is still cost-effective also from the government perspective: The program costs (for the government) for the 25 projects, which have a payback time of less than one year are 929,175.71 TL. The program costs for projects with a payback time of less than two years are 1,613,767.01 TL. This shows that the project is also cost-effective from the policy operator point of view even when excluding the likely free riders. Even the projects with at least a two year payback achieve cost savings higher than the total government subsidies of 2,275,963.10 TL within just two years.

Meet the 2023 targets and opportunities 3.5To meet its 2023 targets, Turkey has implemented the VAP project to support industry companies to invest in energy efficiency measures. More than 200 projects were approved until now. Some of them were already finalized; most of them are ongoing. It can be concluded that the program is accepted by the companies and should be continued and extended. The Turkey government is currently working on the design of the program. New targets were published for the period 2016 – 2023 (in toe and US$, see table 9). The target given there is to achieve energy savings of 2,300 toe/year with each program year. The findings from our impact evaluation above indicate that it will be very likely to achieve this target even when limiting the grants to projects with at least one or two years of payback time: just 10 projects with a payback of at least two years achieved energy savings of 2,830.37 toe/year. This number of projects is much smaller than what has been achieved in most years of program operation.


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To increase the effectiveness of the program, the VAP program shall focus on innovation measures and activities to achieve energy savings like “R&D, boosting research and development activities in industrial subsectors with a high consumption of energy (MENR 2015a, p. 122). Examples of such projects are mentioned in the draft NEEAP16:

- Waste heat recovery for electric arc furnace, in the iron and steel subsector - Conversion to high-efficiency grate coolers, in the cement subsector - Reduction of fuel gas quantities (boiler energy consumption) in the paper and pulp

subsector To recalibrate the program, an extension of the budget is proposed from 500,000 TL to 1,000,000 TL (MENR 2015a, p. 123). Furthermore, the grant was extended from maximum 20% to maximum 30%. The preliminary NEEAP also describes plans to increase the control and verification activities. According to the NEEAP, the MENR will review in advance the energy efficiency projects to verify the fulfillment of the loan criteria. After the finalization of the project, the Ministry will review that the project development is in line with the established criteria (MENR 2015, p. 160). Other recommendations to improve the effectiveness of the program and to increase the energy savings are listed in the next chapter.


• The program is well known and should be continued and extended. The budget for the program should increase significantly

• Payback periods are often less than one year and it is likely that free-rider effects occur. Therefore, the program should be limited to projects with a payback time of more than one or two years, which are less likely to be free riders

• Some funding should be provided at the beginning of the project phase, e.g. to honor the effort for preparing a successful proposal, cf. detail below

• A direct link to the Voluntary Agreements should be established • An option to make the program better accessible for SMEs is to reduce the lower

limit for participation to e.g. 250 toe/year. • The role of the energy manager and the energy audit should be extended • Bureaucratic barriers should be removed

Recommendations in detail The program is well known in the industry sector and should be continued and extended. The government provides a grant of up to 30% of the total costs of the energy efficiency projects. This is a strong incentive for companies to participate. Furthermore, the image of the company can be improved. However, as already mentioned in chapter 3.4, the payback periods are often less than one or two years. Therefore, it is likely that free-rider effects occur, as was also displayed in the interviews: All three interviewees agreed that they would have also implemented the project without financial support from the government; however, at least one interview partner also stated the grant had been instrumental in convincing top management of the firm to get approval for the investment project. To address this effect, the program should be limited to projects with a payback time of more than one or two years.



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Furthermore, some funding should be provided at the beginning of the project. The companies need the funding to invest in energy efficiency and to implement the project. It is too late to provide all the funding at the end of the project. This increases the number of free-riders, because it does not overcome the initial financing barrier for those who would need it to implement the project. A loan component, as has been proposed in the draft NEEAP17, could be one solution. Another possible solution could be to honor the effort for preparing a successful proposal through an early payment. This would also honor energy audits and the work of energy managers, improving their standing within the companies. The participation rate of the program should be increased and SMEs should be better integrated into the VAP program. One option to make the program better accessible for SMEs is to reduce the lower limit for participation to e.g. 250 toe/year. We also recommend extending the role of the energy management system and the energy audits. The government could negotiate the results of the energy audit with the company and especially with the energy manager to decide, which of the proposed measures should be supported. As already mentioned in the recommendations for the Voluntary Agreements, a direct link to this program should be established. The programs should benefit from each other. The Voluntary Agreements could be a prerequisite for participating in the VAP funding scheme, or could give priority access to VAP. Other options are listed in chapter 2.6. Two interview partners mentioned another barrier of the current VAP program. One of them stated there are many bureaucratic barriers and another company had to wait one to one and a half years to receive its funding. This is too long and discourages companies to participate in the program. One reason seems to be that some application forms include errors, which must be detected and eliminated by the government. In some cases, this is very time-consuming and causes delays. The companies should be trained to fill in the respective documents in a satisfying way. Furthermore, sufficient staff should be available to support and advise the companies. Another reason for delays seems to be the bundling of projects for decision by the Energy Efficiency Coordination Board. More frequent decision points would reduce this waiting time. Overall, the aim should be that the period from the application to the approval should be no longer than three months, and the same for the period between implementation and payment. Ways to make approval and final payment processes easier and quicker could include standard technology requirements regarding minimum energy performance levels for receiving the grant, or more standardized templates to reduce errors.

Licensing of Energy Audit Companies 4

Characterization of the instrument 4.1ESCOs are becoming more and more common all over the world. In Turkey, Energy Audit Companies (EVDs) or “Energy Efficiency Consulting Companies” (as in Part I of the EE Law) perform some of the tasks of an ESCO, namely the energy audits preparing energy efficiency investment projects. The companies need an authorization certificate by the GDRE or the authorized institutions to carry out their activities in the industry and/or building sectors.18 Any company that delivers an EE service can become an EVD, if it fulfills the requirements of the EE Law and its communiqué. The following figure illustrates the place of EVDs in the organizational structure of Turkey’s EE Law.

17 Only preliminary NEEAP results since the plan was not approved yet 18 According to By-law Regulation regarding the increase of efficiency in the use of energy resources and energy #28097 - Article 6: “Legal Entities”


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Figure 7: ESCOs / EVDs in the organizational structure of Turkey’s EE Law

Source: Akman et al. 2013, p. 109 The audit training for EVDs contains the following aspects:

1. Theoretical: 1 week 40 hours 2. On job (laboratory): min 35 hours 3. Energy audit in building or industry (40 hours) 4. Need to prepare a VAP and an energy audit example in less than three months

Companies, which are certified as EVDs are regularly listed on the GDRE website19. These EVDs can carry out the compulsory energy audits for the industrial enterprises20 every four years for at least five companies representative of the sector, training for energy managers certification program, preparation and implementation of EE projects, and also consultancy services (MENR 2015, p. 71).

19 Link: http://www.eie.gov.tr/verimlilik/y_yetki_b_a_d_sirketler.aspx 20 According to By-law Regulation regarding the increase of efficiency in the use of energy resources and energy #28097 - Article 8: “[…] the companies must carry out an energy audit if the energy consumption is 5,000 toe and above and/or with a surface of 20,000 m2 and above. These energy audits must be renewed every four years.”


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Every January, EVDs prepare annual activity reports and send them to GDRE. The audit reports and the projects prepared by the company are submitted as an annex of the activity reports. 15 EVDs reported to GDRE totally 245 audits (59 in industry, 186 for buildings) in 2014. Recently, an energy audit became mandatory every four years for industrial enterprises (cf. footnote 5). However, it is too early to evaluate the process or even impact of this new obligation. Aim and target The aim of the EE Law is to increase the number of energy audit companies (EVDs) which are expertized in the industrial sector to up to fifty companies by the end of the year 2015 (in September 2015, 37 EVDs companies were available in Turkey21). This will be a precondition too for the successful implementation of the mandatory energy audits now required by law for companies with a larger energy consumption. While we did not find any information on energy savings targets for the EVD certification, there is information on savings expected from the mandatory energy audits. In the draft NEEAP22, compulsory energy audits are proposed not only for companies with an energy consumption of 5,000 toe or above, but for all companies, which consume 1,000 toe of energy annually. With an assumed energy saving of 0.5% per energy audit and based on 500 audits with an average consumption of 1,750 toe/year, the following energy savings can be achieved with the respective costs for the Turkish Government: Table 18: Projected annual energy savings and economics of the measure

2016 2017 2018 2019 2020 2021 2022 2023 Yearly energy savings (cumulated ktoe/yr)

4 9 13 18 22 26 31 35

Costs of the Turkish government ($ US million)23

3 3 3 3 3 3 3 2.5

Source: MENR 2015, pp. 72 Period that the policy instrument is or was active in The licensing of EVDs are part of the EE Law, enacted in 2007, but the communiqué of the EE Law related to EVDs was released afterwards (MENR 2011). Nevertheless, since 1995 ESCO-like business, especially for the industrial sector, was conducted by several private energy companies (Akman et al. 2013, pp. 108-110).

21 It is important to consider that 8 companies have lost their accreditation in 2015 22 Only preliminary NEEAP results since the plan was not published yet 23 To convert the currency: The report was published on September 1st, 2015


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Target groups The licensing of EVDs has been in place since 2007. Its primary target group are the potential EVD companies, but the final target group are any industry companies or building owners commissioning and receiving an energy audit, particularly companies participating in the VA and VAP programs. In 2015, the mandatory requirement for larger companies to perform energy audits came in force. This program is designed for companies with an energy consumption of 5,000 toe and above and/or with a surface of 20,000 m2 and above. These companies have to carry out energy audits every four years. The program overall targets the development of energy audit companies. However, the requirements for the accreditation are very weak. Only a few energy audit companies actually perform satisfying energy audits. Market failures to overcome With the licensing of EVDs, the lack of resources specialized in the energy efficiency field is addressed. Organizations, which are responsible for implementation and execution The authorization certificate is issued by the GDRE upon the approval by the EECB.

Program Evaluation – Methodology 4.2The evaluation of the EVD program addresses a process evaluation only. An impact evaluation is not deemed useful for the certification as such, and it is too early for the mandatory energy audits. The process evaluation is based on a program theory approach (step 1). The key performance indicators (KPIs) are based on the specific program theory to be developed for this program. In step 3, the methods to develop the necessary data and information for the KPIs and other questions regarding the process evaluation will be developed. Chapter 4.3 presents the actual process evaluation. Step 1: Developing a program theory The program theory explains how policy programs are expected to bring the desired results. The analysis is not only to understand if but especially why targeted impacts are achieved. Cause-impact relations of the instrument are determined, as well as per cause-impact relation indicators. Also success and failure factors to the indicators are defined. Based on the information in the chapter above, we conclude that the program theory for the EVD program – having implicitly or explicitly underlain its design, and guiding its evaluation – is as presented in the next figure.


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Figure 8: Program theory of the EVD program

Step 2: Process evaluation method a) Methods and required data for the key performance indicators and other issues related to process evaluation The following key performance indicators (KPI) not only help to frame specific and objective evaluation questions but – based on the quality of the data – provide objective information on program performance and impact. Table 19: Key performance indicators – Licensing of Energy Audit Companies The key performance indicators are formulated to measure whether the steps in the program theory took place and assess the impact of the policy. You can also find these indicators in the program theory (see figure 6). The second column presents the names of the key performance indicators, the third column describes how the required data could be collected



1 • Number and quality of assigned energy auditors/ EVDs

• Certified EVDs on GDRE website

2 • Number of audits carried out • Number of accomplished energy audits; data source: from program records (mandatory audits)


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3 • Number of advised projects and improvements with acceptable payback times

• Number of all projects/ improvements with reasonable payback times: from EVDs / program records (should be) / special survey for EVD program; future: monitoring of mandatory audits

4 • Number of recipients that implement the recommended improvements

• How many recommended improvements were implemented? Data source: special survey, back-up through VAP and VA program records; future: monitoring of mandatory audits

5 • Number, variety and (additional) costs of energy saving projects implemented

• Number, variety and (additional) costs of energy saving projects implemented; Data source: special survey, back-up through VAP and VA program records; future: monitoring of mandatory audits

6 • Energy savings achieved with implemented projects

• Projected energy consumption and escalated costs if the project had not been implemented; Data source: special survey, back-up through VAP and VA program records for energy consumption; future: monitoring of mandatory audits; official energy price projection

• Energy consumption and escalated costs after project implementation; Data source: special survey, back-up through VAP and VA program records for energy consumption; future: monitoring of mandatory audits; official energy price projection

Process Evaluation 4.3A preliminary qualitative assessment of the design and effectiveness of the program and the mandatory energy audits is included in the SWOT analysis from activity 1 summarizes the findings.

Table 20: Summary of Findings from SWOT Analysis



Overall Assessment

Licensing of Energy Audit Companies

Technical Capacity

Not a large number of companies given the need Many companies did not get recertified

Overall results are good. Needs to increase number of companies being certified

Mandatory audits once every four years for business enterprises consuming five thousand (5.000) toe annually

Regulatory Concept is good. There is no database of audits completed.

To date, there is little information. Once the audits are recorded, there will be a good database for policy analysis.


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Meet the 2023 target and opportunities 4.4Energy audits serve as an inspection, survey and analysis of energy flows in a building, process or system and help to reduce the amount of energy input into the system. They can be described as a first step in identifying opportunities to reduce energy and resources consumption (MENR 2015, p. 71). EVDs guarantee and deliver energy improvements for their clients; the remuneration of an EVD is tied to the achieved energy savings (Akman et al. 2013, p.108). Energy audit companies and their energy audit services are therefore cost-effective ways to contribute to meeting the overall energy efficiency targets of Turkey. However, to achieve the targets, the energy audit companies in Turkey should be further developed. Only a few companies actually conduct energy audits in an adequate way. The responsibilities of EVDs are not sufficient in comparison to an Energy Service Company (ESCO). Requirements for the certification, qualification and accreditation of ESCOs are illustrated in the EED, Article 16. These requirements should be adapted to the Turkish situation. Some examples provided by the World Bank on international experience may serve to guide improvements for the Turkish energy audit scheme: In Vietnam, the government provided 50% of the audit costs upfront and the rest only if the measures were implemented. This gave the audit a big incentive to pick clients wisely. In Thailand, after paying for some 10,000 audits with almost no implementation, the government changed the criteria to require (i) a request letter from the client, (ii) an MOU indicating that the client would implement measures with paybacks below a certain number of years, and (iii) a credit assessment was done to ensure the client could finance investments – all before the audit was done. The result was much fewer audits per year but significantly higher implementation percentage. Furthermore, there is no monitoring system to verify that the investments, which were proposed by the EVD, were actually implemented. A monitoring and evaluation system is missing to examine the energy efficiency projects and to estimate the energy savings.


• There is a need to increase the number of energy audit companies in order to provide such services to a wider range of enterprises

• A uniform national regulation regarding qualification, accreditation and certification should be introduced to have clear guidelines and to define Energy Service Companies that also implement and possibly finance projects on behalf of the clients

• The monitoring system should be improved - not only to make sure, that the mandatory energy audits are undertaken, but also to verify that the proposed actions were implemented

• Sufficient budget should be provided to establish a functioning ESCO market • SMEs should be included to the energy audit system.


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Recommendations in detail Turkey needs a well-functioning ESCO market due to the mandatory requirement to perform energy audits and to implement energy management systems. The first efforts of the government to establish an ESCO market are promising and should continue. However, at the moment only a few EVDs dominate the market and there is a considerable number of EVDs that lost their accreditation in 2015. Furthermore, only a few EVD can actually be defined as Energy Service Companies (ESCOs) that also implement and possibly finance projects on behalf of the clients. That is why the situation of the Turkish ESCO market needs to be improved. On the one hand, there is a need to increase the number of energy audit companies. This could be done by making the job of an EVD more attractive, e.g., by improving the link to VAP and VA programs, energy audit requirements for companies with more than 1,000 toe/year of energy consumption (instead of 5,000 toe/year as now), or grants for SMEs to have an energy audit (as e.g., in Germany). On the other hand, the aim should be to further develop the EVDs to become real ESCOs. This also includes the development of the certification system. Although there is a training and authorization scheme installed, there are only private initiative as the Energy Manager Certification program (MENR, 2015, p. 91). There is currently no uniform national regulations regarding qualification, accreditation and certification for energy audits in companies. That is why the certification system should be revised. Clear guidance and comprehensive training sessions are needed to improve the work of the energy audit companies. Another evaluation result is the weak monitoring system of EVDs. Once a company has conducted an energy audit, there is no system to monitor the energy efficiency investments of the company and there is no reliable tracking of proposed energy efficiency projects. Therefore it is advisable to strengthen the monitoring process – not only to make sure, that the mandatory energy audits are undertaken, but to verify the implementation of the recommended measures. The auditor should collect information, support the company and closely follow the next steps. Without a comprehensive monitoring system it is difficult to estimate the amount of energy savings and to calculate the impacts. The existing mandatory reporting web portal could be used for this purpose too. The monitoring of mandatory energy audits should therefore include the following data (cp. Table 19 of KPIs):

• Number of energy audits carried out

• All advised projects or other improvements with acceptable payback times, with type of project/improvement, end use and energy type addressed, expected cost, expected energy savings (toe and %), GHG emissions reductions, and energy cost savings

• At least for a sample: implemented projects or other improvements, with type of project/improvement, end use and energy type addressed, actual cost, actual energy savings (toe and %), GHG emissions reductions, and energy cost savings.

As the ESCO market in Turkey is characterized as a risk-based capital system, foreign capital is crucial to establish a functioning ESCO market – as capital inadequacy is one of the main obstacles that local companies face (Akman et al 2013, p. 112-113). Therefore, financing of large or long-term energy projects and their related risk-management issues


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may be problematic. Otherwise, technical issues seem not to be a problem for the Turkish EVDs, as the required know-how and expertise are available. If not approached sufficiently, the financial problem will leave most of the EVDs insufficient as market makers (Akman et al 2013, p. 114). Engagement in the ‘real’ ESCO business could be enhanced, e.g., by allowing ESCOs to be beneficiaries of VAP grants instead of the industrial companies for which they implement projects. Regarding SMEs, which are currently not targeted, specially designed energy audit programs and technical and especially financial assistance, could help to include SMEs as well. Currently, ESCOs may show a lesser interest in SMEs because of the small-scale projects, financial risks and management issues (Akman et al 2013, p. 114-115).

In this context it might be expedient to increase the number of mandatory energy audits, for instance by decreasing the criteria from 5,000 to 1,000.

Awareness program 5

Characterization of the instrument 5.1Annually GDRE runs several awareness activities according to their annual budget in order to increase the level of awareness about energy efficiency for end users. These activities include above-the-line advertising (TV and radio) and below-the-line advertising (press, leaflets, guides, etc.). The main activity organized by GDRE under this program is the Energy Efficiency Week (EE Week). The EE Week is “the most important awareness-raising activity [...]“ and “organized every year in the second week of January since the beginning of the 1980s. Based on EE Law, the week includes the national EE forum with national and international experts participating. The 5th National EE Forum was organized in Istanbul between 8 and 11 January 2014.“ (Energy Charter Secretariat 2014, p. 79); the 6th national energy-efficiency forum was organized in Istanbul between 14 and 17 January 2015 (YEGM Website 2015). Furthermore, in cooperation with the Ministry of National Education (MoED) and The Scientific and Technological Research Council of Turkey (TÜBİTAK), energy efficiency competitions are held among primary and high school students annually. The students are rewarded during EE Week. Similarly, competitions and annual contests on energy efficiency among industrial enterprises are also organized, as well as successful industrial energy efficiency projects, enterprises and products are communicated. Various national and international seminars, conferences, and workshops have been organized, such as the ISO 50001 Energy Management Standard Workshop and TAIEX Workshop, also mainly under the coordination of YEGM (Energy Charter Secretariat 2014, pp. 79-80). Aim and target The aim of the awareness program is to raise awareness about energy efficiency at all levels of society. Furthermore, with the Energy Efficiency Forum and Fair the efficient use of energy shall be encouraged, successful energy efficiency projects are introduced and it helps to share experiences. Period that the policy instrument is or was active in The awareness program is effective since 2009, although early awareness activities reach back to the beginning of the 1980s.


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Target groups The awareness activities address all levels of society. Actions, specific technologies and/or energy efficiency measures In principle, the awareness program aims to promote all kinds of energy efficiency actions. Market failures to overcome The main aim of the awareness program is to overcome the lack of information and awareness. Organizations, which are responsible for implementation and execution The awareness program is implemented by the General Directorate of Renewable Energy (GDRE), a department of the Ministry of Energy and Natural Resources. Furthermore, there are collaborations with the Ministry of National Education (MoED) and The Scientific and Technological Research Council of Turkey (TÜBİTAK).

Program evaluation 5.2

Methodology 5.2.1The evaluation of the awareness program is conducted through a process evaluation. It is based on a program theory approach (step 1). The key performance indicators (KPIs) are based on the specific program theory to be developed for this program. In step 2, the methods to develop the necessary data and information for the KPIs as well as other questions regarding the process evaluation will be developed. Chapter 5.3 presents the actual process evaluation; in chapter 5.4 we summarize the conclusions that entail an assessment of the program with view to the 2023 targets, lists opportunities and good practice examples, and chapter 5.5 infers recommendations. Step 1: Developing a program theory The program theory explains how policy programs are expected to bring the desired results. The analysis is not only to understand if but especially why targeted impacts are achieved. Cause-impact relations of the instrument are determined, as well as per cause-impact relation indicators. Also success and failure factors to the indicators are defined. Based on the information in chapter 5.1 above, we conclude that the program theory for the awareness program – having implicitly or explicitly underlain its design, and guiding its evaluation – is as presented in the next figure.


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Figure 9: Program theory of the Awareness Program

Step 2: Evaluation method a) methods and required data for the key performance indicators and other issues related to process evaluation The following key performance indicators (KPI) not only help to frame specific and objective evaluation questions but – based on the quality of the data – provide objective information on program performance and impact. Table 21: Key performance indicators – Awareness program The key performance indicators are formulated to measure whether the steps in the program theory took place and assess the impact of the policy. You can also find these indicators in the program theory (see figure 7). The second column presents the names of the key performance indicators, the third column describes how the required data could be collected.


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1 • Results of a pre-survey (baseline for comparison and evaluation with the post-survey)

• Survey among sample of target group(s): Helps to design the awareness program; questions regarding current energy-use practices and energy-efficient actions that are undertaken; asks about opinions on communication channels, contests or possible incentives; Data source: GDRE (if survey was performed)

2 • Familiarity of the awareness program as well as knowledge about the aim of the program

• Level of awareness: number of companies aware of the program compared to all companies in the target group / all companies eligible for the contests; data sources: all (eligible) companies: GDRE; number of companies aware of the program: survey of a sample (e.g., 100 companies)

3 • Number of attendants at EE week • Monitoring by organizers = data source; • compared to all companies in the target

group (source: GDRE)

4 • Number of participants in competitions and contests

• Monitoring by organizers = data source • compared to all companies eligible for the

contests (source: GDRE)

5 • Behavioral change (investment and O&M – What is done differently because of the awareness program and contest? Numbers and types of actions)

• Need for qualitative information; Data source: Phone or personal interviews with the target group; group discussions

• Number and types of actions: ex-post-survey

6 • Number of similar investments taken by followers

• Ex-post survey

7 • Energy savings achieved with awareness program (no full impact evaluation, i.e. no correction for free-riders or double-counting)

• Projected energy consumption and escalated costs if the behavioral and investment projects had not been implemented; Data source: ex-post survey; official energy price projection

• Energy consumption and escalated costs after project implementation; Data source: ex-post survey; official energy price projection

• Comparison of these before-and-after energy-use data by project


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Process evaluation 5.3A preliminary qualitative assessment of the design and effectiveness of the program is included in the SWOT analysis from activity 1. Table 22 summarizes the findings. Table 22: Summary of Findings from SWOT Analysis



Overall Assessment

Awareness Program

Awareness Reasonable program but needs more variety and larger scale

Some good results but needs to expand to help explain to general and targeted audiences about the benefits of energy efficiency. This is needed for Turkey to meet 2023 objectives.

Meet the 2023 target and opportunities 5.4A widespread energy efficiency awareness program that defines its specific goals and objectives helps saving energy effectively. With an evaluation mechanism for gathering data and program results the effects of a – preliminary defined – budget can be assessed. Such a detailed budget helps to document the return on investment – the cost of the program compared to the amount of reduced energy costs the program aims to achieve. In the following paragraphs several aspects of a successful awareness program design are listed and compared to the already implemented (MENR 2011): Training courses for awareness: Following a guidebook of the US Federal Energy Management Program (FEMP) personal communication is one of the most effective motivators in energy education, as the participation compared to a more indirect approach (e.g. information material) rises significantly (FEMP 2007, p. 9). The 2011 enacted By Law on Energy Efficiency (MENR 2011), lists beside course and training programs in military high schools, course programs of formal and non-formal training institutions and internal service trainings of public authorities and institutions, “Internal training seminars […] for awareness raising in employees for reduction of energy consumption. The employees are informed about the energy consumption of the places that they work in” (MENR 2011, Article 24). Social interaction: According to the FEMP guidebook, public events help to foster exchanges of information. „Workshops, kids’ events, fairs, and other activities can be the means to promote energy- efficient behaviors“ (FEMP 2007, p. 10). As presented in chapter 5.1 and described in the By-law on Energy Efficiency (MENR 2011, Article 24) enacted in 2011, there are several aspects of the awareness program that support a social interaction, like “conferences, exhibitions, fairs and competitions in coordination with General Directorate” or the “Energy efficiency club […] established in primary, secondary and non-formal education institutions and measures […] in order to include the issues regarding energy efficiency in the home works and projects that the students will prepare within the academic year with club activities”.


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Competition: “Competition among similar groups has been shown to motivate behavior changes” (FEMP 2007, p. 10). Therefore competitions and contests are important aspects of an awareness program The Turkish “General Directorate organizes competitions with or without prizes for awareness raising and promotion” (MENR 2011, Article 24) and therefore addresses this important issue. Generally, although it is usually difficult to quantify the energy savings achieved by awareness programs and award competitions and to separate them from energy savings caused by other instruments, there will be positive effects from awareness programs and award competitions, making them useful instruments.


• A feedback system should be established to motivate companies to achieve significant energy savings

• The awareness programs should be combined with other measures to increase the visibility of the program

• More annual awarding ceremonies with higher visibility than now, with certificates and awards, at the EE Week would underline the relevance of energy efficiency

Recommendations in detail As awareness programs often aim at a behavioral change, the most challenging aspect of such a program is to sustain the effort. With the constant training courses, the annually EE Week as well as the educational aspects of the energy efficiency awareness program the basis for the recommended sustainability of the program is established. Nevertheless, there are some aspects that can be improved. Provision of feedback and benchmarking “Feedback provides people with results and successes, and actually shows how much energy they have saved over certain periods of time. Feedback also helps people visualize the results of their actions, which is important because energy-saving results are often invisible or difficult for building occupants to evaluate“ (FEMP 2007, p. 10). Such feedback could be provided in an effective way with the use of a database resp. web portal (see chapter 6). This will also allow benchmarking energy intensity and improvement of one company with that of its competitors in the same industrial sector, which is a strong motivation to engage in energy efficiency action.


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Link to other policy instruments The awareness program should not only promote energy efficiency actions per se but also other policy instruments, most importantly financial incentive programs such as VAP, voluntary agreements, but also the exemptions for licensing for micro-cogeneration of waste heat recovery systems, or the energy audits, and inform about obligations and certifications. A well-known program could increase the number of participants and overcome some actor-specific barriers. For example, if the benefits of the VAP program are known due to the long-lasting information campaign, more companies would participate and benefit from the financial incentive. Furthermore, these companies could improve their public image and increase their competitiveness. Wide communication of prize-winning examples of good practice Furthermore, an annual high-level awarding ceremony with certificates and awards at the EE Week, possibly even with the involvement of the minister or high-level politicians, would underline the importance of the energy efficiency issue. If the benefits of the good practice example are presented in a convincing way, this can be a strong motivation to follow up with the same type of investment or other action, or with other energy efficiency action to be able to participate in the next award competition.

Energy Management Obligation, Certification of Energy 6Managers, and Mandatory Reporting (Web Portal)

Characterization of the instrument 6.1Article 7 of the Turkish Energy Efficiency Law obliges industrial establishments with an energy consumption of more than 1,000 toe to nominate one of their employees as an energy manager and to fulfill the requirements of the ISO 50001 Energy Management System Standard24. Other requirements were defined for organized industrial zones, electricity generation facilities and industrial companies with an energy consumption of more than 50,000 toe. For the following industrial units, an energy management system is mandatory with the following specific requirements:

• Industry: Nomination of an energy manager if the energy consumption is 1,000 toe and above

• Organized industrial zones: If energy consumption is less than 1,000 toe the company has to set up a management unit to serve the industrial enterprises. Energy efficiency consultancy companies (EVD) carry out this management work (until now 13 licenses)

• Electricity generation facilities: Energy management is mandatory if the installed capacity is 100 megawatts or above

• Industry: If the energy consumption is 50,000 toe or above the industry has to set up an energy management unit.

24 The ISO 50001 Standard came into effect in Turkey on December 2011 (MENR 2015, p. 48)


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The law defines energy management as “training, audit, measurement, monitoring, planning and implementation activities in order to ensure efficient use of energy sources and energy” (Article 3). The related by-law underlines these requirements and stipulates that “energy manager means the person that holds energy manager certificate who is responsible in industrial enterprises or buildings with the scope of the Law who is responsible on behalf of management from activities related to energy management” (Article 4). Certification programs for energy managers are organized by GDRE and by authorized institutions and firms. To receive a full certification as energy manager, the nominated person has to complete a specific seminar. The content of the courses is a theoretical module (1 week, 40 hours) and an on job (laboratory) module (min. 35 hours). Over 7,000 certified energy managers already exist in Turkey. This means that the target to certify more than 5,000 managers by the end of 2015 was exceeded (MENR 2012, p. 17). The GDRE also organizes energy management courses every year, which are based on the ISO 50001 standard. The already mentioned laws also specify that “an energy manager shall submit the required information to the General Directorate […] containing information and own assessments by the end of every March” (EIE 2007). For this purpose, GDRE developed the database enVER portal25 to collect data from the enterprises (CO2 emissions, fuel use, energy intensity) (Energy Charter Secretariat 2014). According to the IEA (2013) the energy efficiency portal “provides effective information flow, produces reliable projections, provides education and creates awareness in order to disseminate and increase the effectiveness of energy efficiency studies”. The mandatory reporting of data has a long tradition and has already been undertaken in the 1980s. Therefore, Turkey has lots of experience with data collection. Aim and target The aim of the energy management system is to reduce energy intensity and energy losses in industry. Energy management is an instrument which enables an organization to follow a systematic approach in achieving continual improvements of energy performance. The objective is to certify 5,000 energy managers by the end of 2015 and to increase the number of energy efficiency consultancy companies (EVD) expertized in industry up to 50 companies. The aim of the reporting is to collect and store data about large energy consumers. Period that the policy instrument is or was active in The Certification Program for energy managers has been organized since 2002 by GDRE (Energy Charter Secretariat 2014, p. 77). The energy efficiency portal was established in 2007 (Çalikoğlu 2010). Target groups The target groups are large industries (2,964 are registered to the database although 1,324 have annual energy consumption greater than 1000 toe), large public buildings and large commercial buildings. Approximately 1,264 large industries are reporting every year.

25 http://enver.eie.gov.tr/ENVER.portal


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Actions, specific technologies and/or energy efficiency measures At first, the action required is energy management as defined above. In terms of concrete actions to improve energy efficiency, these may include an optimization of operations (e.g. reducing hours in use, avoiding idle running of equipment and losses, optimizing settings of controls), low-cost investments (thermostats, timers, additional controls etc.) but also projects of all kinds to improve efficiency with higher investment. Market failures to overcome In some companies it is difficult to convince top managers to nominate an energy manager and to focus on energy efficiency issues such as energy saving actions and reporting requirements. The obligation to introduce an energy management system and the mandatory reporting requirements addresses this problem. Organization, which is responsible for implementation and execution The Ministry of Energy and Natural Resources chooses randomly 1% of the total Energy Management Systems in order to monitor and verify the real achievements. These assessments will be carried out in term of energy consumption and energy intensity of the activities. According to the preliminary NEEAP26 it is planned to publish the results of the energy audit scheme, which is part of the energy management system by the Ministry of Energy and Natural Resources (MENR 2015, p. 72).


Methodology 6.2.1The evaluation of the energy management and data collection program is conducted through a process evaluation. It is based on a program theory approach (step 1). The key performance indicators (KPIs) are based on the specific program theory to be developed for this program. In step 2, the methods to develop the necessary data and information for the KPIs as well as other questions regarding the process evaluation will be developed. Chapter 6.3 presents the actual process evaluation; in chapter 6.4 we summarize the conclusions that entail an assessment of the program with view to the 2023 targets, lists opportunities and good practice examples, and chapter 6.5 infers recommendations. Step 1: Developing a program theory The program theory explains how policy programs are expected to bring the desired results. The analysis is not only made to understand if but especially why targeted impacts are achieved. Cause-impact relations of the instrument are determined, as well as per cause-impact relation indicators. Also success and failure factors to the indicators are defined. Based on the information in chapter 6.1 above, we conclude that the program theory for the energy manager program and the mandatory reporting – having implicitly or explicitly underlain its design, and guiding its evaluation – is as presented in the next figure.



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Figure 10: Program theory of the energy manager program

Step 2: Evaluation method Methods and required data for the key performance indicators and other issues related to process evaluation The following key performance indicators (KPI) not only help to frame specific and objective evaluation questions but – based on the quality of the data – provide objective information on program performance and impact.


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Table 23: Key performance indicators - Energy manager program and mandatory data reporting

The key performance indicators are formulated to measure whether the steps in the program theory took place and assess the impact of the policy. You can also find these indicators in the program theory (see figure 8). The second column presents the names of the key performance indicators, the third column describes how the required data could be collected.



1 • Number of appointed Energy Managers • Number of registered energy managers. Data source: GDRE?

2 • Number of companies that introduced an energy manager

• Number of companies that nominated an energy manager compared to all companies with an energy consumption of more than 1,000 toe

Data source: GDRE?

3 • Number of completed training sessions • Number of realized training courses and number of participants Data source: Monitoring by training companies/universities, via GDRE?

4 • Number and quality of energy management activities in O&M, and energy savings achieved

• Data on implemented energy efficiency actions in O&M and on energy savings; Data source: either monitoring database; or, if no monitoring database, a survey of a sample of companies

5 • Number, variety, and cost of investment projects implemented, and achieved energy savings

• Data on implemented energy efficiency projects including impact data, plus costs of the program; Data source: either monitoring database; or, if no monitoring database, a survey of a sample of companies

6 • Number of submitted data with sufficient quality

• Number of companies that submitted data to the database and quality of the data Data source: GDRE

Process evaluation 6.3A preliminary qualitative SWOT analysis of the design and effectiveness of the program was included in activity 1. Furthermore, an interview was conducted with three companies (cf. table 12); one question referred to the web portal and one referred to energy managers. The SWOT analysis comes to the result that the web portal is a good concept, easy to use and provides good information. However, some negative aspects were also analyzed. The database is not up to date, the quality is sometimes poor and the hardware and software need revision. Furthermore, a better enforcement mechanism and a better data quality control system are needed. The interviewees underline this analysis. All three interview partners agreed that only very limited questions are asked and that the companies monitor themselves in a more detailed way.


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Regarding the certification of energy managers, the SWOT analyses concluded a good result of the program and an excellent number of certified experts. However, it is a one-time event and further training sessions are not foreseen. Table 24: Summary of Findings from SWOT Analysis



Overall Assessment

Web portal Awareness Reasonable easy to use. Provides good information. Needs updating

Good concept that needs updated software and hardware

Mandatory data reporting for large industry

Awareness Database needs revision to allow for better access to data and for development of time series Needs better enforcement Needs better data quality control

Database has excellent time series but difficult to access data to undertake policy analysis and M&E Enforcement needs strengthening Data quality is a concern For commercial buildings, there is a need to know the full number of buildings to be included

Certification of Energy Managers

Technical capacity

Good training Excellent number of experts certified No follow up to see if further training needed

Good results over many years.

Additional results to evaluate the process of the program are taken from a survey that was conducted in 2012 by Ates & Durakbasa: The target group of the survey was the Turkish iron, steel, cement, paper, ceramics and textile industry. 40 organizations participated in the questionnaire. All interviewed companies were large companies with an energy consumption of 1,000 toe or more. One result of the survey is that 18% of these companies do not have an energy manager on-site (Ates & Durakbasa 2012, p. 85). The survey also exposed that a considerable number of energy managers were not able to explain the elements of the company’s energy strategy and the means of energy policy in general (Ates & Durakbasa 2012, p. 87). According to the survey results the nominated person is in administrative positions instead of facing energy issues. That is one reason why the authors of the study came to the result that “the energy manager position in the Turkish industrial sector is non-functional” (Ates & Durakbasa 2012, p. 88). The majority of the interviewees stated that their company has set an energy consumption reduction target of 2-5% annually (Ates & Durakbasa, p. 88). However, 27% of the interviewed energy managers did not set an annual energy reduction target at all. Due to the fact that a clear definition and work field of an energy manager was not defined, Ates & Durakbasa (2012) used a list of criteria to measure whether an energy management system was implemented or not. The list includes:

• Metering the energy consumption of main production processes (such as motor systems, pump systems, steam and process heat systems)

• Having a written energy policy


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• Having an official energy manager • Setting an energy saving target • Having implemented energy efficiency projects.

The result of the comparison between the list of criteria and the actual implementation is that only 24% of the companies have implemented these minimum requirements and therefore actually practice energy management.

Figure 11: Share of sectors among the total 24% of companies that implemented energy management

Source: Ates & Durakbasa (2012) However, in the interviews performed as part of this evaluation project, two out of three interviewed energy managers stated that they develop and implement energy efficiency projects for their companies.

Meet the 2023 target and opportunities 6.4Energy management programs are an important policy because they encourage energy reduction and productivity benefits in companies. They achieve this by reducing the knowledge gap and improving the capacity to implement actions (cf. program theory above). Energy managers support companies to overcome barriers like the lack of information and motivation, and even the lack of financing through the capacity to apply for financial incentives. Energy efficiency measures are one of the most cost-effective options to reduce greenhouse gas emissions and to achieve energy security and to create jobs. Consequently, Turkey has published targets for 2023. An energy saving of 0.05% per year was assumed in industrial energy consumption due to the Energy Management system. This is a good starting point but the effectiveness of the program could be further improved. That is why it is essential to adapt the design of the policy. A guideline to design ideal energy management programs was published by the IEA.


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Figure 12: Policy Pathway: Energy Management Programs for Industry

Source: IEA (2012 p. 21) Plan: Governments planning to introduce an energy management system need to conduct a pre-study to determine the needs for energy efficiency efforts in the industry sector. A transparent planning and involvement of relevant actors is essential to be successful. Inter-linkages with other policies should be analyzed and a clear process should be defined. Key elements are the definition of the target group and the specific objectives and the role of the energy manager. The responsible body and the level of assistance should be clarified (IEA 2012, p. 22). In Turkey the Energy Efficiency Law was developed to define the role of the energy manager. The target group was defined and divided according to the yearly energy consumption. Clear objectives were agreed for the period 2016-2023. The responsible body are the GDRE and authorized firms and organizations. All employees and relevant people shall be informed about the energy management activities. Implement: Within this phase it is important to provide clear guidance on program requirements and to establish a certification or verification scheme. Furthermore, a support program should be introduced to support the companies. A promotion of the program and its benefits is also essential to reach the target groups (IEA 2012, p. 31). Turkey has introduced training courses, which are in accordance with international standards. According to the By law no. 28097 on energy efficiency an energy manager needs to hold an energy manager certificate. A list of priority measures, which shall be implemented by energy managers and other actors, was published in Article 10 of the law. Examples of these priority measures are heating, cooling, air conditioning, heat insulation, waste and heat recovery, and combustion control and optimization.


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Monitor The essential part is the collection of data to measure compliance and to verify the progress. Data collection is also relevant for the evaluation of the policy. Therefore it should be defined what data should be collected and how this information should be used. Penalties should be established to address non-compliance. The analysis of the data collection should be communicated (IEA 2012, p. 40). Turkey developed the energy efficiency portal enVER to collect data from companies. Every year, companies are obliged to report the data to the portal. However, these data are not used sufficiently to monitor the energy management system. Evaluate Evaluations aim to determine whether the energy management system was successful and met the goals or not. To evaluate a policy, a plan should be established to determine what to evaluate and how. An evaluation approach and key indicators should be defined. Evaluations can have multiple objectives like energy savings, cost savings, participants, implemented projects, health benefits etc. An evaluation approach should be selected. The results can provide recommendations for further policy improvements (IEA 2012, p. 41). The energy management and mandatory reporting program was not yet evaluated before this evaluation.


• The mandatory requirement to nominate an energy manager should continue but be made more effective. The training courses and certification according to ISO standard are positive developments but could be further improved

• A list of minimum requirements should be established to assess whether a company has actually implemented an energy manager:

• Establish an enforcement mechanism for effective energy management • Information campaigns should be realized to make the program visible and

attractive for companies à Link to the awareness program • Educate and inform energy managers regularly • Support energy managers e.g. through an early payment in the VAP program for

the effort to prepare a successful project proposal • The valuable experience with data reporting should be used to further develop

the monitoring and evaluation of energy efficiency measures: e.g., include information on VAP and VA projects funded for each company participating

• At the moment there is a lack of systematic data analysis and benchmarking: enforcement and compliance could be strengthened, and the data used for feedback and benchmarking (cf. chapter 5.5)

• Information must also be shared among government agencies using integrated portals. Each ministry having its own database is duplicative and inefficient.

Recommendations in detail In Turkey it is mandatory for energy intensive companies to nominate an energy manager and to implement energy efficiency actions. The energy manager is specially trained and certified according to ISO standard. These are some very positive developments, but some barriers still exist, which are presented in this chapter. Recommendations to address these barriers will also be described.


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According to survey results from Ates & Durakbasa, the energy management in companies has only a limited effect to increase the energy efficiency of the company. Some companies even have not nominated an energy manager or did not set an annual energy reduction target. The enforcement is still not well-established in Turkey. To establish a standard procedure for the energy management activities, the government should develop a list of minimum requirements to assess whether a company has implemented an energy management system or not. The study by Ates & Durakbasa (2012) recommends to use the following minimum criteria:

• Metering the energy consumption of main production processes (such as motor systems, pump systems, steam and process heat systems)

• Having a written energy policy • Having an official energy manager • Setting an energy saving target • Having implemented energy efficiency projects

The government can use this list and ask the companies to answer these questions. Furthermore the criteria can be used to evaluate the projects. An enforcement mechanism should be established to guarantee an effective energy management. To convince the companies, it is necessary to raise awareness of the benefits of energy management systems by e.g. organizing road shows, information handouts, seminars and other activities (Ates & Durakbasa, p. 90). These are activities that could be performed by the awareness program (cf. Awareness program). There is a large untapped potential. It also needs improved financial incentive programs to tap the potential. These would assist energy managers in convincing their top management of the cost-effectiveness of investment projects. Energy managers could also be supported through an early payment in the VAP program for the effort to prepare a successful project proposal. Regarding the certification and training of energy managers it is a one-time event. This could be strengthened to educate and inform the energy managers regularly and to keep them up to date. There should be an obligation for energy managers to participate in the training programs and to pass a test. The training activities should include, e.g. metering of energy consumption, regulation and standards, energy auditing, energy costs, monitoring and evaluation, energy management solutions, project development, energy efficiency in combination with renewable energies, technical know-how, and awareness campaigns for employees. Regarding the reporting to a web portal, Turkey has a long lasting experience with mandatory reporting of industrial companies. Turkey has a comprehensive database with acceptable information on energy consumption and other criteria. The data collection could be a great opportunity for the country to monitor the developments in the industry sector, to evaluate single policies and policy packages and to re-calibrate the existing policies and measures. Data reporting could also be an interesting opportunity for the VAP program and the voluntary agreements. These programs could also include information for each funded project. However, there is a lack of systematic data analysis and benchmarking. According to UNEP/UNIDO (2013), there has been no decision made on the nature of the energy information to be posted on the website and it is not clear what specific data should be collected and how the information will be used. It is not clear who has access to this data and how they use the data. The experts, who were interviewed within this project on policy gap analysis and energy efficiency program evaluation, agreed that only limited questions are asked.


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Furthermore, enforcement and compliance could be strengthened, and the data used for feedback and benchmarking (cf. chapter 5.5). At the moment it is not clear who monitors the data and whether the data is used to control the companies. The database could also be extended to other areas like for SMEs and for other sectors like the public sector or even multi-family buildings or large developments in the residential sector. Information must also be shared among government agencies using integrated portals. Each ministry having its own database is duplicative and inefficient.

Exemptions for Licensing for micro-cogeneration and waste 7heat recovery systems

Characterization of the instrument 7.1Due to the lack and poor quality of primary resources, Turkey is highly dependent on imported energy; the import dependency was above 75% in 2014. For electricity production, natural gas power plants had been promoted and especially utilized by private market actors in 1990s due to a number of such significant advantages as having low operation cost, quick response to increase in demand, ease of control and relatively low carbon emission rate. In addition, according to the 2015 sector analysis report of EMRA (Energy Market Regulatory Authority), 60% of the power plants utilizing natural gas produce only electricity and not benefiting from waste heat released. Although the rate of simultaneous heat and electricity production reached 40%, most cogeneration systems are working inefficiently. Therefore, Energy Efficiency Legislation led to officially promoting waste heat utilization and cogeneration systems. Ensuring energy supply to a fast growing economy remains the government’s main energy policy concern, which seems to be very difficult to create a solution in the short-term. At the end of the first period of 2013, the total capacity of CHP plants has reached 8.300 MW (or a share of 14% in the total capacity) (see next figure). Figure 13: Installed capacity (MW) in Turkey 1992-2013

Source: Turkoted 2013, p. 3


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Figure 14: Changes of Natural Gas and Electricity Prices

Source: Turkoted 2013, p. 3 In 2013, the Turkish Parliament developed the License Exemption for Production of Electricity Legislation to support micro-CHP power plants for providing heat and electricity. Every person or legal entity is now allowed to build micro cogeneration plants and waste heat recovery systems without license provided that the person is subscriber of the energy. The legislation supports power plants with a maximum installed capacity of 1 MW, but there is no limit of 1 MW installed power for cogeneration. The following generation plants have an exemption from the obligation to obtain a license (EMRA – Notice on Regulation on the Unlicensed Electricity Generation):

• Emergency generator sets and generation facility which does not install connection with the transmission or distribution system;

• Generation facilities, the nameplate capacity of which is based on renewable energy sources of maximum one megawatt;

• Electricity generation facilities established for purposes of use in the disposal of mud of solid waste facilities and treatment facilities of municipalities;

• Micro-generation facilities and the cogeneration facilities, among those which meet such productivity level as will be determined by the Ministry, which fall under such category as will be determined by the Board; and

• Generation facilities based on renewable energy sources which use all of the energy it generated without giving to transmission or distribution system, the generation and consumption amount of which is at the same measurement point

Micro-CHP users are exempt to get license from the Energy Market Regulatory Authority EMRA. Surplus energy, produced by the micro-cogeneration units, is supplied to the system within the scope of the tariff evaluated by distribution companies. The owner of the micro cogeneration system has to apply to its network operator to be connected to the distribution or transmission network in accordance with Article 7 of the Regulation “Application for Connection”.


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Today, the tariff is applied as the lowest price of feed in tariffs (7.3US$-Cent/kWh27) for renewable energy sources. The high price of the CHP and the lack of technical knowledge for the connection between the building and the grid are the main remaining barriers for a successful implementation. Project approval is made by the TEDAS. 25 projects have been approved until 1st July 2015. Aim and target The aim of the project is to contribute to the energy security of Turkey, to minimize energy imports and to reduce losses in electrical energy by construction of micro cogeneration systems and waste-to-energy facilities. Furthermore, small production plans shall be supported. Period that the policy instrument is or was active in The start year of the program was 2013. Completion process has not yet been determined. Target groups The target audience are companies, which produce micro cogeneration systems/waste-to-power facilities and investors, who purchase these plants. The program is of special interest for universities, building complexes, and big shopping centers (Uysal 2013). Market failures to overcome The big effort to get a license to build a cogeneration plant is a main barrier for investors to invest in this measure. With the introduction of the program, the licensing was exempted for specific product groups like micro CHP. Furthermore, the distribution company or wholesale company was not obliged to connect the micro CHP and buy the surplus energy before 2013. This was also addressed by the policy. Surplus energy is supplied to the system within scope of the tariff evaluated by distribution companies holding retail licenses. Organizations, which are responsible for implementation and execution EMRA, the Energy Market Regulatory Authority is responsible for the licensing of power plants.


Methodology 7.2.1The evaluation of the Exemption for Licensing for cogeneration and waste heat recovery systems is conducted through a process evaluation. It is based on a program theory approach (step 1). The key performance indicators (KPIs) are based on the specific program theory to be developed for this program. In step 2, the methods to develop the necessary data and information for the KPIs as well as other questions regarding the process evaluation will be developed. Chapter 7.3 presents the actual process evaluation; in chapter 7.4 we summarize the conclusions that entail an assessment of the program with view to the

27 To convert the currency: The report was published in 2013.


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2023 targets, lists opportunities and good practice examples, and chapter 7.5 infers recommendations. Step 1: Developing a program theory The program theory explains how policy programs are expected to bring the desired results. The analysis is not only to understand if but especially why targeted impacts are achieved. Cause-impact relations of the instrument are determined, as well as per cause-impact relation indicators. Also success and failure factors to the indicators are defined. Based on the information in chapter 7.1 above, we conclude that the program theory for the cogeneration and waste recovery system program – having implicitly or explicitly underlain its design, and guiding its evaluation – is as presented in the next figure.

Figure 15: Program theory of the exemptions for licensing for cogeneration program

Step 2: Evaluation method Methods and required data for the key performance indicators and other issues related to process evaluation The following key performance indicators (KPI) not only help to frame specific and objective evaluation questions but – based on the quality of the data – provide objective information on program performance and impact.


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Table 25: Key Performance Indicators – Exemptions for Licensing for

The key performance indicators are formulated to measure whether the steps in the program theory took place and assess the impact of the policy. You can also find these indicators in the program theory (see figure 13). The second column presents the names of the key performance indicators, the third column describes how the required data could be collected.



1 • Number of persons/legal entities applying for construction of generation facilities

• Monitoring by EMRA

2 • Number of cogeneration/microcogeneration plants and waste-to-energy facilities


3 • Total installed capacity • Monitoring by EMRA

4 • Amount of energy purchased by supplier company


Process evaluation 7.3A preliminary qualitative assessment of the design and effectiveness of the program is included in the SWOT analysis from activity 1. Table 4 summarizes the findings.

Table 26: Summary of Findings from SWOT Analysis



Overall Assessment

Exemptions for Licensing for cogeneration/micro-cogeneration and waste heat recover systems

Awareness Program is good but slowly improving

Meet the 2023 target and opportunities 7.4In Turkey, most of the electricity production is realized by low efficient and ancient technology. In this perspective, the primary opportunity for reaching 2023 targets should be working on legislation that will provide efficient and high technology in electricity production process. At the end of 2013, Turkey has already installed a total capacity of CHP plants of 8.300 MW, which is a share of 14% in the total capacity. In the global energy market, only 9% of total electricity generation comes from cogeneration plants (IEA 2014, p. 14). There is no clear target for 2023 but the target for new on-site production in 2019 is 1,000 MW.


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Creating high efficient systems and improving current technology are key factors for implementing successful and sustainable policy to compensate increasing energy demand due to growing economy. The policies to be implemented in this respect must be both comprehensive enough to include all electricity production and detailed enough to consider current and future electricity production facilities separately and create criteria and tools according to the production type. The key factors are illustrated in the next figure. Figure 16: Key factors in development and operation of co-generation and DHC projects

Technology selection justification Several factors are relevant to select the right technology. These are inter alia the location of the plant and the quantity and quality of heat and electricity demand loads. Policy should support the benefits of cogeneration technologies and ensure a transparent and fair fuel price. Cross-subsidies between heat and electricity markets should be avoided. To streamline a good interconnection between the plant and the distribution grid, a strategic heating and cooling planning is needed to implement a cost-effective solution.


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Financial mechanisms Cogeneration projects typically need greater upfront investments. To guarantee a greater penetration of these technologies, a market study is essential to “reflect the environmental and flexibility benefits of these technologies in economic terms (IEA 2009, p. 19). Possibilities to support cogeneration projects are loan financing, third-party financing (typically ESCOs), financing through joint ventures and public financing. Policy can not only address the higher upfront investments but also help to reduce the associated operation and maintenance costs of systems. For instance (as it is done in Turkey) a licensing exemption could be implemented to allow CHP operators to generate without a generator license (and to reduce costs) or a fuel tax exemption system for cogeneration units. A feed-in tariff can ensure that the electricity or heat can be sold at a higher rate (IEA 2009, p. 21). Business structure The decentralization efforts increase the complexity of the energy system. Therefore flexible technologies are needed that “can rapidly adapt to operating loads, absorb or release energy when needed, or convert a specific final energy into another form of energy (IEA 2009, p. 22). Smart business models are required to organize multiple technologies and balance the interactions. Policies to support these needs are research activities, pilot projects, and international cooperation (IEA 2009, p. 26).


• The changes in licensing of power plants are an important step to promote micro CHP and renewable energies in Turkey; the application process is simplified significantly

• Most new power plants do not have a tri/cogeneration system. One of the main criteria for licensing a new facility must state that the facility to be designed with a system to utilize its waste heat (tri/cogeneration systems). Such statement as “The power plant must be designed to utilize its waste heat. A plant that is not designed to have a waste heat utilization system will not be licensed.” might be included in the corresponding legislation in order to promote/increase tri/cogeneration systems in Turkey.

• Current thermal plants should go under technical review for deciding how efficient it would be to install a tri/cogeneration system; and, the ones approved should indeed install a system under a plan until the year of 2023.

• A financial incentive should be introduced in combination with the existing measures. This could be another stimulus for companies to invest in renewable energies

• The feed-in-tariffs should increase to offer an appropriate incentive to invest in micro-cogeneration power plants

• Education and information of relevant actors should be a priority Recommendations in detail The changes in regulation regarding the licensing of electricity generation plants is a small (because it only removes a legal barrier) but very important step to take advantage of Turkey’s potential in renewable energy sources and cogeneration. However, a tax incentive or another financial support program would be another strong additional incentive to invest in micro-cogeneration power plants.


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The application process and procedures of the unlicensed electricity generation are quite simplified when compared to the licensed electricity generation. The person who wants to establish an electricity generation facility has to apply to his or her network operator in order to be connected to the distribution or the transmission network. Then this person can establish the facility and meet the own electricity needs (Özeke 2014). Delays in the implementation and financial losses were the main problems with the licensing system. These problems could be solved by the policy. Another advantage is the fact that the feed-in-tariffs are indexed to US Dollars, which provides an additional comfort for investors. However, the challenge is to require the electricity distribution system to connect private owners to the grid. It might be easier to deal with big customers (Turkoted 2013, p. 6). Another barrier is the long time period to create an enterprise. This enterprise is needed to build a power plant but it can take a while until the enterprise is established. Furthermore the tariff is applied as the lowest price of feed-in-tariffs for renewable energy sources. The prices should be increased to offer an appropriate incentive for investors to build a power plant. Another recommendation is the education and information of relevant actors. The investors, manufacturers and network operators should be sufficiently skilled to build a fully functional system and to connect the facility to the grid. Policies are usually most effective when implemented by an agency or central department (in combination with capacity building).

Conclusion and overall recommendations 8Turkey has shown very decent and serious signs of developing an overall policy package to increase the energy efficiency in the industry sector. Regulatory measures, financial incentives, education campaigns as well as information and awareness programs were already implemented to encourage industrial actors (e.g. SMEs) to invest in energy efficiency. Already implemented policies and measures are e.g. financial incentives like VAP and voluntary agreements (VA), energy audits, information and awareness campaigns, mandatory reporting of energy data and energy management obligation schemes. All these measures in combination are a good starting point to achieve the energy targets, but their impact to date is far from harnessing the potential of cost-effective energy efficiency improvements in Turkish industry and SMEs. That is why the programs should be continued and extended. All the programs have implementation gaps, which should be addressed, for example the limited budget of single programs, the likely free-rider effects, the low participation rate, the lack of resources and the missing monitoring and evaluation scheme. One way to address these barriers is to more closely combine the single programs to create synergies. The impact of well-combined policies is often larger than the sum of the individual expected impact. Examples of such combinations are:

• Instead of its own low budget grant scheme, the government should cooperate with international funds and combine its budget with those funds with suitable interest rates in order to create a fund under the subject of energy efficiency in Turkey. The fund should be distributed via banks to the projects approved by feasibility studies with favorable cost structures. Such a system would attract more energy efficiency investments as well as contributing to the creation of the ESCO market in Turkey.


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• The VAP program and the voluntary agreements should be combined with energy audits and energy management activities. One option is to reward VAP and VA activities with some payment early on if they are proposed and implemented through the energy manager/energy audit. This could support energy managers in convincing the top management to apply for VAP and/or VA.

• The financial incentives should be made better known to the target groups to increase the participation rate. The information program and the awareness campaigns could be used to highlight the benefits of the financial incentive programs and to reach a large number of companies.

• An option to improve the impact of the energy audits is to make them mandatory for smaller companies with an energy consumption of less than 5,000 toe. Alternatively, the government could provide grants for these smaller companies. Such grants and the resulting higher demand for energy audits could also make the certification of EVDs more attractive.

Another overall recommendation is to improve the monitoring and evaluation activities. Policies and measures should be constantly monitored and thoroughly evaluated on a regular basis. A necessary mechanism such as reporting requirements should be available. The enVER portal provides a good basis for collecting relevant data. The companies are already obliged to report their energy data. This data collection should be in coordination with monitoring activities. The portal could also be used for feedback and benchmarking. In addition to the data reporting, an approach needs to be developed for the future program monitoring and evaluation. This report already provides a basis for this procedure:

• Draft program theories were developed for every program in this report. MENR is advised to assess the drafts and modify them if needed to reflect ist priorities and objectives. This includes all aspects how the policy should reach its targeted impact. During the future implementation phase of each policy or program, more detailed process evaluations should provide insights in whether the policy/program performs as described in the program theory.

• This report derived key performance indicators from the draft program theories that can be used by YEGM to assess each cause-impact relation and to measure whether the single steps took place. The definition of indicators also includes formulae to calculate the impact of the financial incentive programs and their (cost-) effectiveness.

• Data sources (inter alia the enVER portal) should be defined before a policy or program is active. Suggestions for potential data sources vis-a-vis the key performance indicators are also provided in this report.

YEGM can use these tools to build up a well-working monitoring system for future evaluations.


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References 9Akman, Ugur; Okay, Esin; Okay, Nesrin (2013): Current Snapshot of the Turkish ESCO market. In: Energy Policy 60 (2013), pp. 106-115 Ates, Seyithan Ahmed; Durakbasa, Numan M. (2012): Evaluation of corporate energy management practices of energy intensive industries in Turkey. Energy 45 (2012) pp. 81-91 BMWi; AHK (2011): Marktanalyse Italien. Erneuerbare Energien und Energieeffizienz für die Baubranche 2011. https://www.export-erneuerbare.de/EEE/Redaktion/DE/Downloads/Publikationen/AHK_Zielmarktanalysen/zma_italien_2011_alle.pdf?__blob=publicationFile&v=3 Çalikoğlu, Erdal (2010): Energy Efficiency Indicators and Metrics in Turkey. Presentation at the International Roundtable on Energy Efficiency Metrics and National Energy Efficiency Assessment in Developing Countries. https://www.esmap.org/sites/esmap.org/files/Turkey.pdf Energy Charter Secretariat (2014): In-Depth Energy Efficiency Poliy Review of the Republic of Turkey. http://www.energycharter.org/fileadmin/DocumentsMedia/IDEER/IDEER-Turkey_2014_en.pdf Federal Energy Management Program (FEMP) (2007): Creating an Energy Awareness Program. A Handbook for Federal Energy Managers. https://www1.eere.energy.gov/femp/pdfs/yhtp_ceap_hndbk.pdf General Directorate of the Electric Power Resources Survey and Development Administration (EIE) (2007): Energy Efficiency Law. 2. May 2007. Official Gazette, Issue 26510. Law No. 5627. http://www.eie.gov.tr/eie-web/english/announcements/ev_kanunu/enver_kanunu_tercume_revize2707.doc General Directorate of the Electric Power Resources Survey and Development Administration (EIE) (2008): Regulation on Increasing Efficiency in the Use of Energy Resources and Energy. 25. October 2008. Official Gazette No. 27035. http://www.eie.gov.tr/eie-web/english/announcements/By_Law_on_EE.doc Gümüsderelioglu, Süheda (2013): Energy Efficiency in Turkey. I. Turkish-German Innovation Forum, 20. November 2013. http://bmwi.de/BMWi/Redaktion/PDF/P-R/praesentation-deutsch-tuerkisches-innovationsforum-guemuesderelioglu,property=pdf,bereich=bmwi2012,sprache=de,rwb=true.pdf International Energy Agency (IEA) (2009): Cogeneration and District Electricity. Sustainable energy technologies for today … and tomorrow International Energy Agency (IEA) (2012): Energy Management Programmes for Industry. Gaining through saving. Policy Pathway


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International Energy Agency (IEA) (2013): Monitoring Energy Efficiency in Sectors. Policies and Measures Database International Energy Agency (IEA) (2014): Linking Heat and Electricity Systems. Co-generation and District Heating and Cooling Solutions for a Clean Energy Future Ministry of Energy and Natural Resources (MENR) (2011): Regulation Regarding the Increase of Efficiency in the Use of Energy Resources and Energy. 27. October 2011. Official Gazette No. 28097. Ministry of Energy and Natural Resources (MENR) (2012): Energy Efficiency Strategy Paper 2012-2023. 25. February 2012. http://www.eie.gov.tr/verimlilik/document/Energy_Efficiency_Strategy_Paper.pdf Ministry of Energy and Natural Resources (MENR) (2015): National Energy Efficiency Action Plan for Turkey. Ministry of Energy and Natural Resources (2015a): MENR Strategic Plan 2015-2019 Naci Işıklı, A. (2014): Energy efficiency in Turkey (Industry). Presentation in Nurnberg, 21. October 2014. http://www.eyoder.org.tr/EYODER-Naci-isikli-sunum.pdf Turkish Cogeneration and Clean Energy Technologies Association (TURKOTED) (2013): Country Report Turkey 2013. The European Cogeneration Review UNDP/UNIDO (2013): Evaluation of GEF Project: Improving Energy Efficiency in Industry in Turkey (IEEI). Mid-Term Evaluation Report http://www.unido.org/fileadmin/user_media_upgrade/Resources/Evaluation/TUR_GFTUR10002_IEEI_MTE_Final-131216.pdf Uysal, Zuhal (2013): New Advantages in Energy with the New Regulation: Unlicensed Electrical Energy Production – Turkey. http://www.hg.org/article.asp?id=31316 Özeke, Hergüner Bilgen (2014): Unlicensed Electricity Generation: New System For Use of Renewable Energy Resources. http://www.mondaq.com/turkey/x/356832/Oil+Gas+Electricity/Unlicensed+Electricity+Generation YEGM Website (2015): Energy Efficiency Forums and Fairs. URL: http://www.enerji.gov.tr/en-US/Pages/Energy-Efficiency-Forums-and-Fairs


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