Sweden

SW-1:Programme for Improving Energy Efficiency in Energy-Intensive Industries (PFE)

Policy Description

 

The Programme for Improving Energy Efficiency in Energy Intensive Industries (PFE) was introduced on January 1 2005 under the Energy Efficiency Act (2004:1996). The PFE is a voluntary programme which aims to increase energy efficiency in energy-intensive industries with a focus on electricity consumption.

Description

 

The Programme for Improving Energy Efficiency in Energy Intensive Industries (PFE) was introduced on January 1 2005 under the Energy Efficiency Act (2004:1996). The PFE is a voluntary programme which aims to increase energy efficiency in energy-intensive industries with a focus on electricity consumption.

In line with the EU Energy Tax Directive, the tax on industrial process-related electricity was raised from 0 to 5 SEK (0,55 €) per MWh in Sweden on 1st July  2004. Energy-intensive companies in the manufacturing industry can be granted exemption from this tax if they take action to improve their energy efficiency through participation in the PFE. The PFE is a program by the Swedish government specifically aimed at improving energy efficiency in these energy-intensive companies [1].

Companies that wish to participate in the PFE have to meet certain criteria:

  • Electricity is used in the manufacturing process,
  • Companies must be able to implement actions required by the programme
  • The company must be energy-intensive, which is defined as: 1) The cost of energy (purchased and generated) in the company amounts to at least 3% of the value of the company’s production; or 2) The company’s energy, carbon dioxide and sulphur taxes amount to at least 0,5% of the company’s added value.

The Swedish Energy Agency decides, based on the criteria above, whether a company may participate in the PFE. A company can participate as a whole or only with those parts of the company that are energy-intensive, as long as these parts are run independently and have their own funds.

The duration of a company’s participation in the PFE is five years. In the first two years the company must obtain certification for the international standard for energy management systems (EnMS) ISO 50001, conduct an energy review, and introduce procedures for the purchasing of high-consumption electrical equipment. In the following three years, the company must implement measures to improve energy efficiency. A list of measures is generated by a mandatory energy review carried out by the company.

After the initial two years, the company is required to submit a report to the Swedish Energy Agency on the energy management system, energy review and the list of measures. After five years another report is to be submitted, which should describe and summarize the actual result of the implemented measures. Upon the re-certification of the energy management system companies must implement the ISO 50001 EnMS. Prior to the release of ISO 50001, the programme required implementation of the European EnMS standard EN16001 and the Swedish standard SS637750 [2].

Because of a conflict with European Commission rules on State Aid, the Swedish parliament is currently discussing the future of the program (*1).

Policy Information Expand this section for information on the key features of the policy, such as its date of introduction, categorization, main objective(s) and linkages with other policies.

Policy Categorisation

Policy Instrument Type: Administrative

Position in the Pyramid

About Us

Participation: Voluntary

Period

Start Date: 2005

Agencies Responsible

Swedish Energy Agency

Primary Objective: Energy

Objective

Increasing the efficiency of electricity consumption in industry

Target Group

Energy-intensive industries (either energy costs at least 3% of the value of the company’s production; or the company’s energy, carbon dioxide and sulphur taxes amount to at least 0,5% of the company’s added value).

Driver of energy consumption or emissions affected by policy: Energy management, technology implementation rate, knowledge levels

Implementation Information Expand this section for information on targets, monitoring, verification and enforcement regimes, and implementation requirements and tools.

Coverage

Voluntary Participation, 100 companies (240 sites, about 55% of industrial electricity use) participating in 2012 [6]

Quantitative Target? no

Time Period: Companies enter into five-year agreements

Progress Monitored? yes

Verification Required? yes

Enforced? yes

Sanctions: Companies are no longer exempt from regular energy taxation in line with the EU Energy Tax Directive

Requirements on the Target Group

  • Companies must introduce a standardized energy management system (EnMS). New applications and re-certifications require ISO 50001. Previously EN 160001 (EU) or SS637750 (Swedish) were required.
  • The introduced energy management system must be certified by an accredited certification body
  • Companies must carry out an energy review according to requirements provided by the Swedish Energy Agency and that are more detailed than those outlined in the standardized EnMS
  • Companies must create a list of measures, and implement measures with a  pay-back time of less than 3 years during the five years of PFE participations, based on the energy review.
  • Companies must introduce procedures for purchasing high-consumption electrical equipment leading to a greater preference to energy-efficient products
  • Companies must introduce procedures for project planning and renovation leading to the analysis and evaluation of different solutions’ energy impact on the company’s energy use.
  • Companies must demonstrate the effect of the purchasing procedures and assess the effects of the project planning procedures.

Support by Government

  • The Swedish Energy Agency provides guides, templates and manuals (see implementation toolbox)
  • Technical assistance: the Swedish Energy Agency in cooperation with other partners has initiated a training course for practitioners in “LEAN production/energy management”
  • Training: Training on life-cycle costing calculations and routines for EE procurement 
  • Networking and workshops: Seminars for program participants and best practice dissemination [3] [4] [5].

Implementation Toolbox

  • Case studies 
  • Manual for energy audit, analysis and review 
  • Manual for energy management systems 
  • Informative document on certification by independent certification bodies 
  • Template for Life Cycle Costing (LCC) calculations 
  • Guide to procedures on purchasing energy-intensive equipment and project planning [5]

Complexity of Implementation

Government

The Swedish Energy Agency has to review the energy review, list of measures, and the two year and five year reports.

Target Group

Companies have to introduce and obtain certification for a standardized energy management system, draft and implement procedures, as well as report on results.

Impacts, Costs & Benefits Expand this section to find information on policy effectiveness and efficiency.

Impact Quantitative Estimate Qualitative Estimate
Estimated effect on energy consumption or emissions Annual gross electricity savings have been estimated at ±1,45 TWh during the first five year period (2004-2009) [7] Annual Net electricity savings have been estimated at 689 – 1015 GWh during the first five year period (2004-2009) [5] [6]. The PFE program has, in addition to the electricity savings, caused a potential multiplier effect on heat and fuel savings of up to 950GWh/year [6]. Target of 1% increased efficiency often used by participating companies [5]
Estimated costs/benefits for industry Estimated investments in first five year period (2004-2009): € 70 million (> 1200 measures). Estimated savings € 15 million a year for tax exemption and savings by increased efficiency estimated at € 70 million a year. [5] N/A
Estimated cost for government N/A N/A

References & Footnotes

References

[1] Swedish Energy Agency (2012). Programme for Improving Energy Efficiency in Energy-Intensive Industries (PFE). Available at http://energimyndigheten.se/en/Sustainability/Companies-and-businesses/Programme-for-improving-energy-efficiency-in-energy-intensive-industries-PFE/

[2] Goldberg and Reinaud (2012). Promoting Energy Management Systems through Energy Efficiency Programmes, Incentives and Support – Lessons Learnt from Evaluations in Denmark, Ireland and Sweden. Paper presented to IEPEC, June 2012. Available at http://www.iipnetwork.org/sites/iipnetwork.org/files/file_attachments/resources/2012-IEPEC-Session19IndustryEnMPs.pdf

[3] Swedish Energy Agency (2012). Implementation Toolbox. Available at http://energimyndigheten.se/sv/Foretag/Energieffektivisering-i-foretag/PFE/For-deltagande-foretag/Verktyg-och-stod/

[4] Petersson, Björkman, Moberg & Albäck (2011). A Swedish Success Story: How to get astonishing results in energy efficiency due to implementation of a Long Term Agreement with energy intensive industry, paper presented at the ECEE summer study, June 2011.

[5] Reinaud, J., A. Goldberg and V. Rozite (2012). Policy Pathways: Energy Management Programmes for Industry – Gaining though saving. Available at http://iipnetwork.org/sites/iipnetwork.org/files/file_attachments/resources/PolicyPathway_IEAIIP.pdf

[6] Stenqvist & Nilsson (2012). Energy Efficiency in energy intensive industries – an evaluation of the Swedish voluntary agreement PFE.

Footnotes

(*1) Sweden is currently negotiating the future of the PFE with the European Commission (DG Competition) as the carbon tax exemption was found to non-compliant with EU State Aid Guidelines. Enterprises willing to take part into five-year agreements under the PFE can do so throughout 2012 and are allowed to complete the full five-year program. However, conditions for new entrants in 2013 remain unclear. There is a bill on ending the PFE but a decision has not been made yet: http://www.regeringen.se/sb/d/16531/a/200126

Other Useful Resources

Programme for Improving Energy Efficiency (PDF | 0.62mb)

Swedish Energy Agency Brochure on the PFE programme

Energy Management System - a tool for the continuous improvement. of energy performance (PDF | 1.63mb)

Swedish Energy Agency Brochure on the implementation of energy management systems.