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Energy efficiency: what is the European Union waiting for?

28 Feb 2014 - 15:04
Bron: Flickr / UNDP

On March 20-21, the European Council's spring meeting will take place. EU government leaders will discuss Europe's energy and climate targets for 2030. The stakes are high. Clingendael is hosting an online debate on the significance of EU climate policy for the Netherlands. Today, guestblog #4 by Kornelis Blok, Director at Ecofys.

 

There is something odd about energy efficiency

Many studies have shown that there is big potential for energy efficiency improvement, and it is widely acknowledged that energy efficiency improvement is the number one option to tackle climate change and improve the security of our energy supply.  Energy efficiency improvement saves us money in two ways. First of all, there is a direct saving: we buy less energy. Secondly, if we buy less energy then energy prices should decrease, which creates an extra saving. At Ecofys , we estimate that in 2020 for every Euro of direct saving, there is also one Euro of indirect saving [1]. No surprise then that the economic impact of energy efficiency improvement is very positive. The International Energy Agency (IEA) in its World Energy Outlook 2012 , calculated that the GDP in the EU in 2035 would be 1% higher in a scenario focussing on energy efficiency than in a scenario without such extra energy efficiency efforts [2]. So, what are we waiting for?
 

Limited progress

The reality is that the progress in energy efficiency is limited. To quote the IEA , again: progress in energy efficiency in industry and transport is moderate, and in buildings plainly poor [3]. In the European Union, we have clear and binding targets for greenhouse gas emissions and for renewable energy, but less so for energy efficiency.  This applies both in the 2020 energy and climate package and in the proposals for the 2030 package.

But we cannot say that nothing is happening in the area of energy efficiency. Progress can be seen in three areas. First, measures taken within the framework of the Ecodesign Directive for Energy Using Products have led to major improvements in the energy performance of new appliances. The time taken for the standards to be set was often long, and standards could have been tighter, but there is clear progress. Second, CO2 performance standards for passenger cars force the automotive industry to bring cars to the market with substantially improved fuel economy. It seems that by 2015 cars will be even more efficient than the targets require and tighter standards for around 2020 have been agreed. Third, the Energy Performance of Buildings directive has triggered new building codes around the EU and is leading to nearly zero-energy buildings around 2020. So, there are at least three areas where progress is being achieved.

But it is also widely acknowledged that the ambition of an extra 20% energy saving in 2020 will not be achieved. Unfortunately, this has not convinced the policy makers in the European Union to pursue a more effective energy efficiency policy. In its recent proposals for 2030 energy efficiency gets little attention based on an excuse that we have to await the formal evaluation of the current policy framework.
 

How do we create demand for energy efficiency?

All three examples of successful policies quoted above bring progress for new cars, new appliances, and new buildings. The big challenge is to make progress in energy efficiency in existing buildings, existing industrial companies and existing SMEs. We know that a lot of barriers exist, such as limited trust in technology, lack of knowledge, the landlord-tenant problem, lack of capital, etc. We can remove all these barriers one by one, but then – will anything happen? I once was at a meeting where Christiana Figueres, the Executive Secretary of the UN Framework Convention on Climate Change said: “we need to create demand for energy efficiency”. How do we do that? Several options seem to be available. We may go the regulatory way: efficiency standards for existing buildings (some countries are pursuing this) or for existing industrial processes.

Another option is to introduce energy efficiency obligations for energy companies, also often described  as white certificate schemes.  A third possibility is to buy energy efficiency from a fund that is made up from a small levy on energy prices. Not only policy makers can play a role here, the private sector could also take the lead by making sectoral energy efficiency agreements, or ensuring energy efficiency procurement. All this will require creativity to build effective schemes. But to come back to the beginning of this blog – it is worth pursuing as the benefits are big. So, what are we waiting for?
 

References
1. E. Molenbroek and K. Blok: Saving energy - bringing down Europe’s energy prices for 2020 and beyond, Ecofys, Utrecht, The Netherlands, 2013.
2. World Energy Outlook 2012, International Energy Agency, Paris, France, 2012.
3. Tracking Clean Energy Progress 2013, International Energy Agency, Paris, 2013.

 

Kornelis Blok is Director of Science at Ecofys and Professor Sustainable Energy at Utrecht University.

 

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Interested in European sustainability policy? On April 24, Clingendael and partners will organize a real European election debate. Sustainability is one the topics of the debate. More information will follow shortly.