Curve Breaker Agreement (CBA)

In 1994, Denmark’s total gross electricity production had been at 144,708 TJ. Almost twenty years later this was reduced by 3.5% to 139,613 TJ. While the energy consumption of the public service was managed to remain constant between 1993 (25,909 TJ) and 2010 (26,053 TJ), figures increased for the private service sector from 30,340 TJ to 40,436 TJ. Rising electricity use affected both sectors negatively rising in the same period from 8,882 TJ to 9,247 TJ in the public service sector and, more dramatically, from 12,769 TJ to 17,071 TJ in the private service sector (DEA 2010).
Jarby et al. (2009, 846) traced this back to “increasing amounts of electrical equipment, including IT and office equipment, lighting, and ventilation and cooling equipment” having been purchased and used within both sectors.
Denmark had already introduced public sector programmes to increase the energy efficiency of appliances. A programme called A-Club had been implemented in 1999 to realise energy savings via voluntary procurement agreements for public purchasers and private investors. They had entered a four-year agreement with the DEST and had agreed to buy only products that meet high energy-efficiency criteria. The CBA replaced the A-Club in 2007, with the aim to reverse the then prevailing trend of rising electricity consumption – to break this rising curve.

The trend of rising electricity consumption was to be countered by various CBA measures which were free of charge for participating organisations. Basically, the CBA tool kit, including coaching, purchasing guidelines, training, etc., aimed at increasing the energy-related knowledge in such organisations. Rather indirectly, CBAs also increase the demand for energy-efficient electronic equipment.

It is a national policy.

Organisations from the public, industrial and commercial sector with an annual energy consumption above 1 GWh were allowed to participate (DEST 2011).

Relevant sectors

• Services: The sectoral focus is the public sector.

Lighting, PCs, server centres and other electronic office equipment, and ventilation were identified as priority areas (DEST 2010a). Circulation and other pumps, large residential appliances, and consumer electronics such as TVs were also covered (Jarby et al. 2009).

Together with the DEST’s coaches and with in-house staff, advisers, suppliers, and other specialists, the CBA participants needed to identify areas in which they could improve their energy performance. For example, the purchase of new IT equipment was one option to achieve valuable energy savings. Renovation or additional controls on lighting, ventilation or pumps could have been another way to decrease energy consumption. However, behavioural changes like switching a device completely off instead of using the standby mode were additionally used as a measures to improve energy efficiency – especially in larger offices.
Curve Breaker Agreements set binding electricity saving targets and provided training courses to the participants. With these measures the energy consumption of appliances and systems could also be reduced significantly.
According to the purchasing guidelines published by the DEST, CBA-energy-consuming products belonged to the top 20-25% of their product category (DEST 2009, 5).

Relevant target groups

• Non-governmental organisation
• Governmental actor The target groups were governmental organisations like municipalities, regions, ministries, and agencies. Foreign institutions (e.g. foreign embassies) and Danish embassies abroad could also enter CBAs.

CBA participants benefited directly as measures offered under the CBA were free of charge. Moreover, organisations also benefited financially as measures recommended by DEST staff must be cost effective. Additionally, by signing a CBA, an organisation’s reputation was likely to be enhanced.
At the other end of the spectrum, the public benefited due to enhanced transparency because, as stated earlier, CBA-parties must have publicised their electricity consumption.

Relevant barriers

• Knowledge and information barriers: DEST did not only offer a broad range of information on how to reduce electricity consumption, but also developed tailor-made information together with the partner organisations. So, CBAs overcame the lack of information within organisations.
• Economic and financial barriers: CBAs reduced transaction costs as energy-efficient solutions could be accessed relatively easily via CBA-related services. DEST’s work is financed by an extra-charge on the electricity. Therefore the CBA participation is completely free of charge

Relevant incentives

• Saved energy costs: Especially as the service of offering energy saving solutions to partner organisations by the DEST was free of charge, energy savings can more quickly turn into monetary savings.
• Improved reputation: By signing a CBA with a partner organisation the DEST was obliged to raise the public’s awareness towards the ambition of the partner institution.
• Contribution to protection of the environment: Depending on the amount of electricity that was contractually determined, CBA signatories contributed massively to lowering the country’s carbon footprint.

In general, public institutions had already been committed to energy-efficient purchasing and to making their energy consumption visible to the public because of regulation that is set out by the Danish government. Thus, CBAs helped to achieve these goals but added the absolute electricity savings target (Jarby et al. 2009, 848).
The mandatory EU energy label and the voluntary Energy Star label were helpful to immediately identify energy-efficient technologies (see our good practice policy files on these two labels).
From time to time, DEST launched subsidy campaigns for electronic equipment. For example in 2004, the DEST subsidised the purchase of A+ and A++ labelled refrigerators, freezers and their combinations. Purchases were subsidised with around €67 (or DKK500) (and €133 on dryers) and governmental institutions were eligible for funding, as well (Harris 2005, 890). Together, both measures, the subsidy campaigns and CBAs, worked as complements.
With regard to energy savings in lighting, ventilation or other building-installed systems, public institutions could also benefit from the advice offered by or with financial support from the Danish energy companies (see good practice policy file on the Danish energy saving obligations of energy companies). Increasingly, these companies also offered financial incentives for investment to implement solutions identified through the advice.

CBAs included innovative elements.
The most innovative elements were the targets for absolute reduction in electricity consumption.
Agreements also demanded that electricity consumption of every CBA participant was made public on the internet on Se Elforbrug’ (engl.: View electricity consumption).
Moreover, mutual learning was facilitated as participants were “required to be open about how the organisation reduces its electricity consumption” (Jarby et al. 2009, 848) and signatories were also encouraged to propose additional tools that may help them achieve their targets, to the DEST .

A competition including an award for every CBA participant could have incentivised the authority or the facility management staff to really achieve its goals or to even target more ambitious goals.
An awareness raising campaign for employees of public institutions (similar to the Mission E in Germany) could have had a complementary energy-saving effect by changing the energy-consuming behaviour of the staff of public authorities.
The policy package could have been improved.
For example, it should have become a requirement for every public actor to publish energy consumption data on the “Se Elforbrug” platform, or to have an independent energy audit once a year publishing audit reports – including energy efficiency recommendations – online.

The following pre-conditions were necessary to implement Curve Breaker Agreement

Agencies or other actors responsible for implementation
The Danish Energy Saving Trust, formerly known as Danish Electricity Saving Trust until 2010, is a strong institutional and independent actor. Established in 1997 it was been working to promote energy efficiency in households as well as in the public and private sector. Since then it has gained expertise in energy-efficient appliances and is responsible for providing information on energy efficiency, for concluding voluntary agreements with public and private organisations to promote energy savings and for the procurement of low-energy consuming technology. The fact that it is financed by an extra levy (0.06 Eurocent/kWh) on electricity bills of households and public institutions guarantees its independence. Its board is appointed by the Danish Ministry of Climate and Energy (DEST 2012).

Funding
The extra levy of 0.06 Eurocent/kWh on electricity bills that funding the DEST also ensured the funding of CBA staff and activities such as training courses etc.

Test procedures
Test procedures for measuring energy efficiency were a very relevant basis for the Danish purchasing guide for energy-efficient appliances and equipment. Indirectly, they were thus also important to the CBAs.

The implementation process of CBAs was straightforward. If organisations were interested in participation they could call a service number. A CBA coach approached the organisation conveying energy efficiency information in general and identifying problem areas (e.g. the use inefficient IT equipment) of that particular organisation.
Subsequently, the electricity saving target (in %), which had to be achieved within a given period of time, was laid down in a CBA, signed ideally by senior management (e.g. the mayor of a municipality).
After that, the organisation had to register at “View Electricity Consumption” while also preparing an action plan. Measures had to be carried out as stipulated in the plan. Contact with the coach was required every three months. Every year, the participant had to state whether goals were still achievable.
The programme was very successful in attracting signatories: the participants of the Curve Breaker Agreement increased constantly. The next figure illustrates the development of the programme.

Quantified target
The programme as such did not have any specific targets. Rather, it was necessary to demonstrate good progress regarding the number of agreements and by showing successes in energy savings.

International co-operations
In 2009, the DEST and the Malaysian government began to co-operate in order to implement the CBA programme in the Southeast Asian country (DEST 2009a).

Actors responsible for design
The Danish Electricity Saving Trust (Energy Agency) was responsible for the design of the policy

Actors responsible for implementation
The Danish Electricity Saving Trust (Energy Agency) was responsible for the implementation of the policy.

Monitoring
The website Se-Elforbrug (www.bigee.net/s/e24wtd) lists all organisations that signed a CBA. It states floor area (in m²), annual electricity consumption in kWh, kWh/person and kWh/m² of every participating body. More detailed information can also be accessed (please refer to the website).

Evaluation
No formal evaluation has been made available. However, the monitoring of the electricity consumption of all participants easily allows calculation of overall and average results. There seems to be no evaluation of economic benefits and costs.

• Dynamic market transformation and/or innovation: Those having signed a CBA were required to fulfil their energy saving target. One way to do that was to purchase only energy-efficient equipment. As CBA coaches and training courses emphasised green procurement, the programme in general also aimed at transforming the market.
• Avoiding lost opportunities: CBA coaches at the DEST consulted every participating organisation individually. In close co-operation, the coach and the responsible staff of the organisation figured out ideal solutions to really decrease energy consumption. Energy-wasting appliances would be a lost opportunity for saving energy.
• Minimising rebound effects: Coaches as well as mutual and constant learning processes from other organisations, individual training courses, campaign material on energy-efficient use and operation of appliances and buildings and other information channels were also reducing the risk of a rebound effect within organisations.
• Minimising snap-back effects: Snap-back effects were unlikely. Especially, as CBAs rather worked as a facilitator of other regulations or commitments.
• Minimising free-rider effects: Free-rider effects were likely to be small, as motivation and knowledge barriers would have prevented the participants and their staff from achieving the savings on their own.
• Creating Spill-over effects: Purchasing guidelines could also be accesses by non-signatories. However, these people could not make use of other tools (e.g. coaching, training courses) creating an incentive for CBA participation.

The following barriers have been experienced during the implementation of the policy
Some municipalities were reluctant to sign CBAs as DEST’s focus shifted from public institutions towards SMEs.

Concrete figures in energy savings/year
Each CBA participant worked out different targets during different timeframes. Targets typically ranged between three and 15 per cent of demand reduction over a period of three to five years but the range also extended more widely. For example, there are actors that aimed at a 30% reduction between 2009 and 2012 (GE Money Bank; commercial sector) while others bound themselves only to a 1% reduction from 2007 to 2008 (Ministry of Foreign Affairs of Denmark; public sector).

Expected additional, yearly energy savings in kWh/year
Individual agreements of 177 institutions and their respective target values / commitments can be accessed via DEST 2010. The average amount of savings was around 6.5%.

Concrete figures in energy savings/year
An overall average reduction in electricity consumption of 7.5% was monitored by 2011 for CBA signatories. For example, from 2007 to 2008, CBA participants reduced their electricity consumption by 2 %, while consumption for all other public institutions grew by 0.3 % (Jarby et al. 2009).

Potential electricity savings in the Danish public sector were estimated to be 23% over a repayment horizon of up to 4 years, and 27% over a repayment period of up to six years (Jarby et al. 2009). Taking this as a reference, the CBAs have already achieved around 30 % of the potential (i.e., 7.5 % out of 23 to 27%) for their signatories after only four years.

There is no concrete information about the financial resources DEST contributed to the CBA programme. The total budget of DEST for all of its programmes and campaigns used to be €12 million per year (Jarby et al. 2009).
The costs for the implementation of tailor-made solutions (investment in energy-efficient technology and building energy management) formulated with the assistance of the DEST, varied depending on the size, experience and level of ambition of the respective partner organisation.

Based on DEST data, collective energy-efficient purchasing of only public sector organisations, which was a core element of CBAs, would add up to 95 million Euro of annual electricity cost savings (Jarby et al. 2009, 849). If all public sector actors had signed a CBA, Denmark would have been able to generate enormous investments in other areas (e.g. education, social security institutions).

The tailor-made solutions (investment in energy-efficient technology and building energy management) formulated with the assistance of the DEST and implemented by the CBA signatories would have normally been cost-effective. The programme as such can therefore be expected to be cost-effective as well, since the DEST’s programme costs are quite small.