Results from a competitive tender mechanism to promote energy efficiency in Portugal

Abstract

The International Energy Agency believes that energy efficiency is the most cost-effective way to meet the environmental challenges. ERSE, the Portuguese Energy Services Regulatory Authority, established in 2006 a competitive tender mechanism to promote efficiency in electricity consumption called PPEC. PPEC first edition (PPEC 2007) sponsored 26 measures, implemented during 2007, 2008 and 2009. The benefits were estimated to be 4,6 times higher than the costs. However, the ex-post measurement and verification plans revealed that the benefit cost ratio went well above the expectations, mounting to 7,4. Clearly, competitive tender mechanisms are one of the means possible to ensure sufficient, affordable, reliable energy supply while meeting environmental goals. Regulators ensure the crucial balance between energy availability and energy affordability and thus have a central role in the transition to a low carbon energy sector.