1. HowtoPromote Energy Efficiency?Kiev, 7 November 2013 Matteo Mazzoni Senior Market Analyst, NE Nomisma Energia

2. The emerging energy efficiency market “Energy efficiency: an important market that is gaining momentum” In 2011, the IEA estimates that for 11 IEA member countries, investments in energy efficiency resulted in cumulative avoided energy consumption of 570 Mtoe in the period 2005-2010. In monetary terms this is something like € 320 billion at a price of € 75 per barrel. Energy efficiency - the “hidden fuel” However, investment in energy efficiency is still less than two-thirds of the level of fossil fuel subsidies. Governments and istitutions still have to understand the full potential of energy efficiency.

3. The Energy Trilemma… Energy Independence How to promote a market that can simultaneously achieve 3 different goals? • Lower demand for energy = Higher system reliance + Improved security Sustainability TechnologicalInnovation • Lower public expenditures • Lower private expenditures • Lower CO2 and otherpollutants • Improvedhealth and well-being • Competitive advantages • Jobs’ creation

4. Barriers • Economic • Absence of dynamic pricing • High transaction costs • Relatively high capital investment • No guarantees Institutional • Changing regulatory framework • Lack of institutional capacity • Cultural • Limited rationality • Informational failures • Scarse perception of real discounted rates • “It’s always worked”

5. …though the mainbarrier The realproblemwith energy efficiency is that itdoesnot generate a directcash flow but it createssavings

6. Howtoovercome the cultural barrier The messageshouldchange -CO2ECO2 It makesenseeconomically and ecologically • ..…when we talk about energy efficiency we talk about: • High level of energy services • Economic growth • Keeping energy affordable • and reducing carbon dioxide emissions

7. The ItalianExperience Italy hasundertaken a sectoral approachtopromote and spurinvestments in energy efficiency: Italy hasdecidedtoreach a 24% reductionin energy consumptionby 2020, whichmeanssavearound20 Mtoe of primary energy per year.

8. NE’s Reccomendations DistrictHeating (CHP) Integrationbetweenexistingpowerplants and incoming renewables (SMART ENERGY) Street Ligthing (SMART CITY)

9. Thanksforyourattention • Matteo Mazzoni • NE Nomisma Energia • matteo.mazzoni@omismaenergia.it