Reducing Renovation Managers’ was also introduced to implement KfW

Reducing energy consumption by increasing energy efficiency
is a key pillar of the Energiewende – the energy policy document of Germany
alongside increasing the use of renewable and natural energies.

 The National Action
Plan on Energy Efficiency (NAPE) includes new, improved and developed policy
measures to increase energy efficiency in buildings, industry and the tertiary
sector. The highest contributions to energy efficiency targets and CO2 savings
are expected from a new scheme for energy efficiency based on tendering and the
establishing up to 500 networks of energy efficiency across industries.

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Energy efficiency policies in Germany were proposed sector
wise where three main branches/areas under which the policies were proposed are






The buildings sector is further sub-divided into household
and tertiary sector and the policies were prepared accordingly.

Household Sector – Some of the policies that were
introduced for energy efficiency in househod sector are as follows

            The KfW Energy?efficient Construction
Programme under which, support is provided for new buildings that surpass
the applicable standard. Under this, the new buildings are rated as KfW 70, 55,
40 or passive house and are funded through long term soft loans in a staggered
manner.         ‘Energy?Related Urban Renewal – Grants for Integrated District concepts
and Renovation Managers’ was also introduced to implement KfW for whole
district where renovation for buildings and infrastructure concepts are
prepared by managers for improving the energy efficiency of the whole

            National efficiency label for old heating
systems has been launched as a motivating factor for the building owners to
replace the old in-efficient heating systems and to improve the rate of
replacement of the old systems with the new and efficient systems. The policy
is in line with the EU ordinance i.e. it is mandatory to assign all the boilers
with above 15 years of work life completion require an energy label.

Tertiary Sector – Some of the policies that were
introduced for energy efficiency in tertiary sector are as follows

            The KfW – IKK – Programme for Energy
Efficient Urban Lighting is a policy measure that provides funding up to
100% of the investment costs that is pumped in per project. Repayment can be in
10 years with an extended period of 2 years grace.

            IKK – Energy?Related Urban Renewal –
Energy?Efficient Renovation and IKU
– Energy? Related Urban Renewal – Energy?Efficient Renovation are policies
that focus on increase the energy efficiency in municipalities. Here funding is
provided for activities of renovation work to achieve KfW Efficient House
Standard of 100 or 85 or 70 or 55 and for individual measures of energy
efficient practices. Loans or sub?loans are offered for this purpose.

the social infrastructure by investment pact between governments of central and
state and the municipalities, nearly half of buildings consisting of schools,
kindergartens and nurseries that need renovation but have budgetary constraints
are given grants which is only short term goal, whereas the long-term goal is
to bring effect through cost savings on energy.

            Market Incentive Programme for Renewable
Energies in Heat Market is a policy made to promote use of renewable energy
for heat purpose in existing buildings where use of natural renewable sources
like solar, biomass, geothermal system technologies is promoted to strengthen
the sales of these technologies making them profitable and also incentives from
KfW or federal government are given.

            CO2 Building Renovation Programme aims
to exploit potential savings that are present in the area of promoting
energy?related building renovation. This in conjunction with some of the above
mentioned policies can address the non-residential building sector that until
now was only partly addressed and never clearly focused on.



Germany aims to achieve a reduction target of around 10% of
the total consumption when compared to the year 2005. The energy consumption in
transport sector is predominantly from road transportation. In order to improve
utilization of resources in transport sector, some policies introduced by
Germany are as follows:

            Measures from the Climate Action Programme
2020 include several measures to make freight transport more efficient as
well as climate friendly. It includes efficient reorganisation of road
transportation with focus on freight, expansion of rail network and also to
strengthen the role of waterways and increase their presence as a mode of
transport to complement the other modal transports through proper linkage of
various mods with each other and to make transportation environmentally sound.

mobility management systems to improve the passenger transport and to make  them more environmentally friendly by
strengthening local public transport and long distance passenger transport. To
promote usage of bicycle and pedestrian transport as well to promote
alternative drive systems in local transport that is in line with the financial
programs that are supported by National Climate Initiative (NKI)

            Ecological tax reform was introduced as
a measure that aims at saving energy as well as promoting renewables where-in,
the tax consists of two components i.e. electricity and a premium on the energy
tax. Adaptation of tax on gas and heavy oil derivatives was added as reform.
The policy also incentivizes companies that use energy management systems or
have reduced their energy intensity below a certain percentage.

            Levy on air traffic for all flights
from airports of Germany is a levy that depends on the flight distance and is
to be paid by airlines.



Industry is a key area of consumption that is very energy
intensive and has a lot of scope for improvement in terms of energy efficiency
and resource utilization. Some of the policies introduced by Germany to promote
energy efficiency in Industry are

            KfW energy consultations for SME’s is a
combined initiative KfW and Federal Ministry of Economy and Energy where
advisory support to SME’s is provided to improve their efficiency. The advisory
has two components namely initial consultation with non-repayable consultancy
costs and detailed consultation component. Through consultation, specific
action plans are provided to the SME’s to save energy. The SME’s can then get
financial aid from KfW energy efficiency programme through the recommendation
from the consultation provided.

            Promotion of energy?efficient cross?cutting
technologies in SMEs and Promotion
of energy?efficient and climate?friendly production processes are two
programs introduced under the “Energy Efficiency Fund” initiative where funding
for energy efficient compressed air systems, pumps and other technologies are
provided to the SME’s as well as exchange of old technologies with the new
energy efficient technologies like systematic optimization is promoted where
reimbursement of cost is also one of the options available.

            Promotion of Energy Management Systems is
also a policy under Energy Efficiency Fund initiatives where SME’s can apply
for the purchase of measurement technology and software for energy management
systems through grants provided from the fund setup for the same.

            Energy Efficiency Networks Initiative is
a policy which promotes the Learning Energy Efficiency Networks (LEEN) which is
a relatively new concept that targets energy efficiency in companies from
different sectors where focus is on promoting crosscutting technologies across
various industries in a group through energy reviews and inputs from all the
member companies for the usage of a similar technology present in their systems