Energy Efficiency in Europe - The levers to deliver the potential.
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Energy Efficiency in Europe The levers to deliver the potential.
Content
Executive summary...........................................................................................................6
1. Set appropriate indicators and targets.......................................................................8
2. Promote product standards and labels.....................................................................9
3. Unleash the energy efficiency potential of buildings......................................... 9
4. Mobilise retail consumers...........................................................................................10
5. Send the right price signals.........................................................................................11
6. Facilitate financing of energy efficiency measures...............................................12
Introduction..............................................................................................................14
Energy efficiency in Europe:
A fuel waiting to take off..........................................................................16
1. A key element of the EU’s energy strategy................................................17
Energy is at the heart of the European economy.......................................................17
Ambitious targets embedded in a complex regulatory environment...................19
2. Progress falls short of ambitions.....................................................................21
2020 goals likely to be missed..........................................................................................21
Transposition of EED behind schedule..........................................................................21
Significant variations among Member States...............................................................22
More challenges ahead.......................................................................................................23
3. Capturing more of energy efficiency’s potential....................................24
Proposals to capture the untapped
potential of energy efficiency.............................................................28
1. Set appropriate indicators and targets .......................................................29
1.1. Use simple targets to assess and communicate progress.......................30
Set national targets in PEC (Primary Energy Consumption) at EU level.....30
Use decomposition analysis to assess real energy savings......................30
1.2. Monitor progress with key indicators and prioritise
energy efficiency measure...................................................................................31
Impacts vary widely depending on the type
of energy efficiency measures...........................................................................31
Prioritise energy efficiency measures by piloting towards
an overarching target: avoided CO2 emissions ............................................34
2. Promote product standards and labels........................................................35
2.1. High potential of eco-design and energy labelling.......................................36
2.2. Overcoming the barriers to wider use of energy labels.............................37
3. Unleash the energy efficiency potential
of buildings...................................................................................................................40
3.1. Buildings are Europe’s worst energy-guzzlers..............................................41
3.2. Mixed success from regulatory action to date..............................................42
3.3. Energy standards for buildings: Energy Performance
Certificates (EPC)....................................................................................................43
3.4. Obtain the right assessment of potential EE project savings...................46
3.5. New approaches to financing energy efficiency in buildings....................47
4. Mobilise retail consumers...................................................................................50
4.1. Measure consumption and quantify realistic savings.................................51
4.2. Inform consumers through direct or indirect feedback............................54
4.3. Convince end-users to become pro-active....................................................58
5. Send the right price signals................................................................................60
5.1. ETS: current reform plans might not be enough.........................................61
Review the quota allocation system.................................................................61
Integrate diffuse emissions into the EU ETS..................................................62
5.2. Introduce a carbon tax........................................................................................62
5.3. White certificates as a specific market instrument
for energy efficiency..............................................................................................63
6. Facilitate financing of energy efficiency measures..............................66
6.1. Ramp up public funding......................................................................................67
Many European funding schemes exist, but it will not be enough.........67
National and local funds as a complement to European funds..............69
Public finance as a stimulus to private finance.............................................70
6.2. Promote innovative financing mechanisms...................................................71
Boosting ESCOs and EPCs..................................................................................71
Green Bonds need a better policy framework.............................................72
6.3. Ease access to energy efficiency funding for SMEs.....................................73
Bibliography.......................................................................................................................75
Contact list..........................................................................................................................79
Glossary Abbreviation Description 5E Efficacité Energétique et Empreinte Environnementale des Entreprises BAFA German Federal Office for Economic Affairs and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle) BAT Building Automation System BPIE Buildings Performance Institute Europe CBA Cost Benefit Analysis CDC Caisse des dépôts et consignations CEB Council of Europe Development Bank CEN European Committee for Standardization CENELEC European Committee for Electrotechnical Standardization CF Cohesion Fund CHP Combined Heat and Power CO2 Carbon dioxide COP21 21st session of the Conference Of the Parties CPS Carbon Price Support CUMAC Cumulé et actualisé (Cumulated and updated) DSO Distribution System Operators EACI Executive Agency for Competitiveness and Innovation EAFRD European Agricultural Fund for Rural Development EBRD European Bank for Reconstruction and Development EC European Commission EDD European Eco-Design Directive EDF Électricité de France EE Energy Efficiency EEA European Environment Agency EEC Energy Efficiency Certificate EED Energy Efficiency Directive EEEF European Energy Efficiency Fund EEFIG Energy Efficiency Financial Institutions Group EEG Energy Efficiency Group EIB European Investment Bank ELD Energy Labelling Directive ELENA European Local Energy Assistance EMFF European Maritime and Fisheries Fund EnMS Energy Management System EPBD Energy Performance of Buildings Directive EPC Energy Performance Contract EPC Energy Performance Certificate ERA European Research Area ERDF European Regional Development Fund ESCO Energy Service Company
Abbreviation Description ESF European Social Fund ESIF European Structural & Investment Fund ETS Emissions Trading System ETSI European Telecommunications Standards Institute EU European Union EUA European Emission Allowance FEC Final Energy Consumption GDP Gross Domestic Product GHG Greenhouse Gas GIB Green Investment Bank GWP100 Global Warming Potential over 100 years H2020 Horizon 2020 Programme ICT Information and Communications Technology IEA International Energy Agency IEEN Industrial Energy Efficiency Network IFC International Finance Corporation ISO International Organization for Standardization JESSICA Joint European Support for Sustainable Investment in City Areas JRC Joint Research Centre KfW Kreditanstalt für Wiederaufbau (German Development Bank ) MEPS Minimum Energy Performance Standard MLEI Mobilising Local Energy Investment MS Member States MURE Mesures d’Utilisation Rationnelle de l’Energie (Measures for rational use of energy) NEEAP National Energy Efficiency Action Plan nZEB Nearly Zero-Energy Building OECD Organisation for Economic Co-operation and Development PACE Property-Assessed Clean Energy PDA Project Development Assistance PEC Primary Energy Consumption PF4EE Private Financing for Energy Efficiency REN Renewable Energy SEFF Sustainable Energy Financing Facility SET plan Strategic Energy Technology Plan SME Small and Medium-sized Enterprise UK United Kingdom US United States WtW Well-to-Wheels YAECI Yearly Appliance Energy Costs Indication YEI Youth Employment Initiative
Energy Efficiency in Europe | The levers to deliver the potential.
Executive summary
06
Energy Efficiency in Europe |
The levers to deliver the potential.
In December 2015, the COP21 meeting more than EUR 400 billion per year5 (~3% of
and the Paris Agreement stressed more EU GDP in 2015), making the EU the biggest
than ever how crucial it is for the future energy importer worldwide5.
of mankind to hold the increase in the
global average temperature to well below Numerous reports and studies have shown
2°C above pre-industrial levels (and even that the untapped economic potential
to pursue efforts to limit the temperature behind energy efficiency remains
increase to 1.5°C above pre-industrial considerable. The IEA, for examples, has
levels). According to the International been treating energy efficiency as the ’first
Energy Agency (IEA), energy efficiency fuel’ since 20133 and reckons that two
is central to any two-degree energy thirds of the economically profitable
scenario. The IEA considers that, by investments to improve energy
2035, investments in energy efficiency efficiency will remain untapped in the
1 CarbonBrief (2014): IEA: The marginal cost need to represent nearly half of all the period to 20354 . Most of these are in the
of two degrees, http://www.carbonbrief.org/ global energy investments required building sector.
iea-the-marginal-cost-of-two-degrees
to stay under the two degree limit1.
2 Eurostat © European Union, 1995-2004,
Accordingly, energy efficiency is one Hence, it is not surprising that energy
http://ec.europa.eu/eurostat/web/products-
datasets/-/nrg_100a of the key elements of the EU’s energy efficiency is one of the cornerstones
3 IEA (2013), Energy Efficiency Market Report policy. This is reflected in existing of EU Energy Policy5 , and closely linked
2013 – Market Trends and Medium-Term legislation and in targets to be reached by to its three main pillars: security (security
Prospects, page 3, available at: https://
www.iea.org/publications/freepublications/ 2020 and 2030. of supply, import independence, safe
publication/EEMR2013_free.pdf production), sustainability (reducing
4 IEA (2012), WEO 2012, available at: https:// While there is a broad consensus at the greenhouse gas (GHG) emissions) and
www.iea.org/publications/freepublications/
publication/English.pdf. Note on the IEA
international level that there is considerable competitiveness (affordable energy for
methodology: This estimate is based on the untapped economic and technical end-users). In 2015, the new Energy Union
IEA New Policies Scenario outlined in the
World Energy Outlook 2012. Investments
energy efficiency potential, the measures Strategy confirmed the energy efficiency
are classified as “economically viable” if the implemented with a view to an improvement targets of an improvement in energy
payback period for the up-front investment
is equal to or less than the amount of time
in energy efficiency have not made it efficiency by 20% by 2020 6 and by 27%
an investor might be reasonably willing to possible so far to stay on track to reach the by 2030. In this context, the European
wait to recover the cost, using the value of
undiscounted fuel savings as a metric. The
targets set by the European Union. This is Commission called for a fundamental
payback periods used were in some cases due in particular to various existing barriers, rethink of energy efficiency and advocated
longer than current averages, but they were
always shorter than the technical lifetime of
such as the diffuse nature of energy saving treating it as an own energy source,
individual assets. potential, the presence of many different representing the value of energy saved.
5 European Commission (2015) Energy market actors with partially conflicting However, despite the high ambitions
Union Package [COM(2015) 80 final], interests, volatile energy prices and the very and numerous actions taken, progress
available at: http://eur-lex.europa.eu/
resource.html?uri=cellar:1bd46c90- long payback period of energy efficiency has not matched expectations: the
bdd4-11e4-bbe1-01aa75ed71a1.0001.03/ investments, which make energy efficiency implementation of the Energy Efficiency
DOC_1&format=PDF
measures unattractive for investors. Directive (adopted in 2012) 7 is behind
6 T he 2020 target is less than 1086 Mtoe of
final energy consumption or less than 1483
schedule and the 2020 target of a
Mtoe of primary energy consumption. The present study aims to identify 20% saving is likely to be missed at the
7 Directive 2012/27/EU of 25 October the main levers for public authorities, European level (primary energy savings are
2012 on energy efficiency, amending
private companies and households, projected to reach only 17.6% by 2020 8).
Directives 2009/125/EC and 2010/30/
EU and repealing Directives 2004/8/ which could help to better unleash This failure to meet the target is particularly
EC and 2006/32/EC, available at: http://
the untapped technical and economic striking, since one third of the savings
eur-lex.europa.eu/legal-content/EN/
TXT/?uri=celex%3A32012L0027 potential of energy efficiency in Europe. achieved so far can be attributed to the
8 E
uropean Commission (2015), Report economic crisis9.
from the Commission to the European Despite high potential and
Parliament and the Council [COM(2015)
574 final], available at: http:// ambitions, progress falls below Clearly there is no silver bullet and the
eur-lex.europa.eu/legal-content/EN/ expectations solution will lie in a complex set of many
TXT/?uri=COM:2015:574:FIN
different measures.
9 E
uropean Commission (2015), Report
from the Commission to the European
Energy is a key element of the European
Parliament and the Council [COM(2015) Union’s economy. The EU consumes 11%
574 final], page 3, available at: http://
eur-lex.europa.eu/legal-content/EN/TXT/
of global energy (i.e. 1,606 Mtoe in 2014)2 .
PDF/?uri=CELEX:52015DC0574&rid=1 53% of this energy is imported at the cost of
07
Energy Efficiency in Europe | The levers to deliver the potential.
We have grouped the key findings of this At EU and national level, the main
study into six main lines of action that binding target for energy demand
need to be tackled to better unleash policies should be expressed in Primary
the untapped potential behind energy Energy Consumption (PEC), since a target
efficiency: expressed in PEC covers both the reduction
1. Set appropriate indicators and targets; of energy consumption and the move to
2.Promote product standards and labels; a more efficient and less carbon-emitting
3.Unleash the energy efficiency potential of energy mix. Targets in PEC should be
buildings; defined Member State by Member State,
4.Mobilise retail consumers; taking into account their economic growth,
5.Send the right price signals; their specific energy mix and the structure
6.Facilitate financing of energy efficiency of their economy.
measures.
In parallel, each Member State can use
additional indicators, such as FEC or energy
intensity, depending on its specific national
situation, to monitor its progress and
analyse the success of policy measures
related to energy efficiency.
At the same time, it is important to ensure
that targets are consistent with other
objectives linked to energy and climate
policies, such as those related to renewable
energy and greenhouse gas emissions.
It is also important to prioritise those
energy efficiency measures that have the
1. Set appropriate indicators most significant impacts on all aspects of
and targets European energy strategy: reducing GHG
emissions, increasing security of supply
Using the right indicators and setting and maintaining competitiveness. Avoided
the right targets is key to monitoring GHG emissions should be promoted as
progress and communicating on an indicator in order to assess the wider
achievements. So far, under the impacts of energy efficiency policies on
Energy Efficiency Directive, Member overall energy and climate strategy and to
States can choose whether to set their prioritise energy efficiency measures
national target based on either primary based on their overall impacts. Avoided
energy consumption (PEC), final energy GHG emissions:
consumption (FEC), primary or final energy • encompass the broader picture (energy
savings, or energy intensity. efficiency, renewables, mitigation of climate
However, there are several concerns with change);
these targets: FEC covers only 66% of the • can be related to long-term global targets
EU-28’s gross inland consumption10 , as it (e.g. the COP 21 target);
does not take into account energy losses • are already widely in use (GWP100); and
from energy production, transport and • are well known to decision-makers and
distribution. Energy intensity (measured stakeholders.
as units of energy per unit of GDP) is
influenced by many non-energy related Moreover, an adequate decomposition
factors, such as standards of living, analysis method should be defined at
different weather conditions, the structure EU level and used in all Member States
of the economy, etc. to enable the actual progress of energy
10 Eurostat © European Union, 1995-2004,
http://ec.europa.eu/eurostat/web/products-
efficiency to be tracked independently of
datasets/-/nrg_100a structural and activity changes (such as
the impacts of an economic crisis).
08
Energy Efficiency in Europe |
The levers to deliver the potential.
are needed to develop relevant, up-to date
and easily understandable energy labels,
possibly integrating the full life cycle cost
of energy-using products.
11 Directive 2009/125/EC of 21 October
2009 establishing a framework for the
setting of ecodesign requirements for
energy-related products, available at:
http://eur-lex.europa.eu/legal-content/
en/ALL/?uri=CELEX:32009L0125, and 2. Promote product standards
Directive 2010/30/EU of 19 May 2010 on
the indication by labelling and standard
and labels
product information of the consumption Energy standards and labels enable better
of energy and other resources by energy-
communication and transparency for
related products, available at: http://
eur-lex.europa.eu/legal-content/EN/ customers and investors, and enhance
ALL/?uri=CELEX%3A32010L0030
competition and innovation for companies. 3. Unleash the energy efficiency
12 Deloitte (2014), Preparatory Study to The Ecodesign and Energy Labelling potential of the construction
establish the Ecodesign Working Plan 2015-
2017, draft report available at: http://www. Directives11 implemented key measures to sector
ecodesign-wp3.eu/ promote energy standards and labels for Buildings account for 39% of the EU’s
13 European Commission (2016), An EU energy-using products in Europe, with much total final energy consumption (2014),
Strategy on Heating and Cooling (COM
(2016) 15 final), available at: http://
success (175 Mtoe of savings per year by two thirds of which is in the residential
eur-lex.europa.eu/legal-content/EN/TXT/ 2020, or 11.6% of the EU-28’s PEC in 2014). sector. This is where the greatest potential
PDF/?uri=CELEX:52016DC0051&rid=1
Further progress is still possible through for energy savings lies: 75% of the EU’s
14 BPIE (2014), Investing in the European several actions: building stock is still energy inefficient and
buildings infrastructure – An opportunity
for the EU’s new investment package http:// • The list of product categories targeted the rate of building renovation remains
bpie.eu/wp-content/uploads/2015/11/ by these directives could be further very low at around 0.4% to 1.2% per
Investing_in_Europe_s_buildings_
infrastructure_BPIE_Discussion_Paper.pdf extended (potential additional savings year13 , while a rate of around 3% per year
15 Directive 2010/31/EU of 19 May 2010 on the
estimated at 6.2 Mtoe by 2020 for a would be needed14 .
energy performance of buildings, available selection of product groups (and at 8.9
at: http://eur-lex.europa.eu/legal-content/
EN/TXT/?uri=CELEX%3A32010L0031
Mtoe by 2030));12 European legislation on building sector
• Labels and ecodesign requirements energy efficiency is embedded in
16 Ricardo-AEA (2015), Study evaluating
the national policy measures and need to be updated regularly, taking different Directives, mainly in the Energy
methodologies to implement Article 7 of
into account technological progress and Performance of Buildings Directive (EPBD)15
the Energy Efficiency Directive, available
at: http://rekk.hu/downloads/projects/ ensuring that the level of ambition is and the Energy Efficiency Directive (EED).
Final%20Report%20on%20Article%20
adequate; According to a recent study16 , 48% of the
7%20EED.pdf, page vi
• The legislative process should be energy savings targeted under the EED’s17
17 A rticle 7 refers to ’Energy efficiency
obligation schemes’ and requires, inter optimised and shortened, particularly energy obligation schemes (Article 7) are
alia, that each MS ’shall set up an energy in relation to review studies designed likely to be achieved in the building sector.
efficiency obligation scheme that shall
ensure that distributors and/or retail to update requirements in line with
energy sales companies should achieve a technological developments; However, the implementation of
cumulative end-use energy savings target
by 31 December 2020, at least equivalent to • Last but not least, stronger market the Directives is lagging behind: a
achieving new savings each year of 1.5% of surveillance is needed to enforce recent study by BPIE showed that only
the annual energy sales to final customers’.
ecodesign and labelling regulation. five countries were fully compliant with
18 It scores the strategies against the five
component sections of Article 4 on a scale
European requirements: the Czech Republic,
of 0-5 where 0=Missing, 1=Unsatisfactory, Additionally, there is a need to ensure that Finland, Romania, Spain and the UK18 . In
2=Inadequate, 3=Adequate, 4=Good,
5=Excellent. A strategy is considered
consumers are informed about both the practice, most Member States had not
as being compliant with the minimum absolute and relative performance of their set a consistent path for the renovation
requirements of Article 4 if it achieves a
rating of 70% and each of the individual
products and that the meaning of labels is of their national building stocks, but
sections scores at least 3. fully understood. Hence, continuous efforts were following a rather short-sighted
09
Energy Efficiency in Europe | The levers to deliver the potential.
strategy. Various measures have proven energy efficiency measure, but to amortise
successful in encouraging the improvement the investment on a regular basis and in
of energy efficiency in buildings and these line with the energy savings generated.
should be promoted more widely in the EU. Examples are on-bill or on-tax financing
schemes, such as Property-Assessed Clean
One example, already promoted in the Energy (PACE) programmes in the US. More
EPBD, are Energy Performance Certificates than 47,000 residential PACE assessments
(EPCs), an application of energy labels worth almost $960 million have been
for buildings. EPCs have been shown to implemented so far across California21.
have a positive effect on energy efficiency Such mechanisms need to be promoted
improvements and to contribute to higher by public authorities and put in place by
sale or rental prices (up to 6%)19. However, private companies.
EPCs have not yet achieved their full
potential, due to poor implementation, lack
of enforcement and the variety of existing
methods. Comparable buildings in different
countries, or even regions within a country,
can obtain different classifications. This
weakens the reliability of the certificates.
Public authorities should therefore strive
for better homogenisation of EPCs and
promote them more extensively. The
calculation and verification methodology
for EPCs should be harmonised
throughout the EU.
At project level, a better anticipation of
benefits resulting from energy efficiency
19 Deloitte / a.k.a. Bio Intelligence Service measures is necessary to justify their 4. Mobilise retail consumers
(2013), Energy performance certificates in
buildings and their impact on transaction implementation on solid grounds: ex ante
prices and rents in selected EU countries, assessment of energy savings should Raising the awareness of the end-users,
https://ec.europa.eu/energy/sites/ener/
files/documents/20130619-energy_ be based on real ex post evaluations of and gathering and communicating the
performance_certificates_in_buildings.pdf similar projects and be tailored to each relevant data, will play an important role in
20 The “landlord-tenant problem” is a typical specific measure. The analysis should also reaching the EU energy efficiency targets.
case of split incentives, i.e. a situation
where economic actors participating
take into account potential co-benefits End-users need to be mobilised to adapt
in an exchange do not share the same (impact on individual comfort, on the their everyday habits and become more
objectives. In the case of energy efficiency,
split incentives occur between tenants and
market value of buildings, etc.). These aware of their energy consumption, and of
landlords. While tenants want to minimise can be more significant than pure energy the potential savings they could generate.
their energy bill, landlords want to minimise
their investment costs. Since the landlord
savings in certain cases. France’s pilot Several interrelated actions are required:
will not get any return from investment in energy renovation passport is one example
a more efficient energy system, and the
tenant is not certain to cover the cost of of such specific analysis. This passport Measure precisely what end-users
an investment through cost savings on the is an in-depth energy audit of a dwelling, consume and quantify what they could
energy bill, the energy efficiency potential
often remains unrealised. with at least three detailed scenarios realistically save. Rolling out smart meters,
for the renovation work. It includes a for electricity and/or gas, can work as an
21 Berkelay LAB (2016), Residential Property
Assessed Clean Energy in California, https:// detailed analysis, a cost estimation, and enabler for such measurement actions. In
emp.lbl.gov/sites/all/files/lbnl-1003964.pdf
an assessment of expected savings and 2012, most Member States performed a
22 European Commission (2014), Cost-benefit potential subsidies. cost-benefit analysis to decide whether they
analyses & state of play of smart metering
deployment in the EU-27, [COM(2014) should introduce smart meters or not 22 . The
356 final, SWD(2014) 188 final], http:// One key barrier to energy efficiency in average cost of a smart metering system
eur-lex.europa.eu/legal-content/EN/TXT/
PDF/?uri=CELEX:52014SC0189&rid=1 the building sector is the landlord-tenant is estimated at between EUR 200 and EUR
23 European Commission (2014), Cost-benefit
problem20. Solutions to this problem can 250 per customer, as opposed to average
analyses & state of play of smart metering be found in specific and innovative financing benefits per metering point (including the
deployment in the EU-27, available at http://
eur-lex.europa.eu/legal-content/EN/TXT/
mechanisms that enable the tenant not cost reduction permitted by average energy
PDF/?uri=CELEX:52014SC0189&from=EN to pay upfront for the investment in an savings of around 3%23 and other benefits,
10Energy Efficiency in Europe |
The levers to deliver the potential.
such as lower metering costs) of EUR 160 taken up either by incumbent operators
for gas and EUR 309 for electricity. As a (power utilities, energy providers) or
consequence, 16 Member States24 started by innovative, often IT-focused, new
a wide-scale roll-out programme (80% or companies.
more) for electricity, while seven countries25
opted for a selective roll-out or a limited roll-
out (i.e. less than 80%). Only a few countries
(Austria, France, Ireland, Italy, Netherlands
and UK) 26 have so far chosen to roll out gas
smart metering.
I nform consumers through direct or
indirect feedback. Potential gains have to
be presented in a clear, transparent and
easily understandable way. Achievable
targets should be forecasted and progress
monitored. Several companies are
developing home automation systems
(domotics) to provide end-users with
relevant, transparent and incentivising
feedback. Many new companies are 5. Send the right price signals
emerging on this market (Nest, founded in
2010 and acquired by Google for EUR 3.2 Higher carbon prices would contribute
billion in 2014), Evohome (United States), towards making energy efficiency measures
Tado (Germany), Hive, Heatmiser, Heat economically more attractive. A structural
Genius and Connect (United Kingdom) or reform of the EU emissions trading system
Istabai (Latvia), claim that they can help (EU ETS) is being undertaken, but will most
their clients cut their bills by up to 15%-50%. probably not be sufficient to solve all the
Gamification techniques, such as customer- current difficulties of the system (surplus
feedback programmes comparing the of allowances, sensitivity to shocks, etc.).
energy performance of neighbours, can be Further action is needed to set carbon price
used to make this feedback more attractive. signals at a level that really induces actors to
invest in energy efficiency, i.e.:
Convince end-users to become proactive. • Make sure that the long-term reform
While more and more large companies are of the ETS currently under discussion
conducting energy audits and implementing is ambitious enough and does not
Energy Management Systems (EnMS), lead to any over-allocation of CO2
specific measures are needed to encourage allowances; this implies, inter alia, that
SMEs, and also households. A recent the calculation of future allocation of EU
study found a tendency for countries to allowances should take into account all
pay more attention to energy audits than the energy and climate policy measures
specific instruments dedicated to EnMS27. implemented at EU and national levels
24 Austria, Denmark, Estonia, Finland, France, An example of a mechanism to incentivise (especially those in favour of low-carbon
Greece, Ireland, Italy, Luxembourg, Malta, Energy Management Systems can be energies and energy efficiency, since they
Netherlands, Poland, Romania, Spain,
Sweden and the United Kingdom found in Germany, where energy intensive have a significant impact on future GHG
industries (> 1GWh) with a certified Energy emissions);
25 Belgium, Czech Republic, Germany, Latvia,
Lithuania, Portugal, Slovakia Management System are exempt from • As long as the CO2 price set by the EU
26 http://ses.jrc.ec.europa.eu/smart-metering- the renewable energy surcharge (EEG ETS is not high enough, complement the
deployment-european-union surcharge). ETS by implementing carbon taxes,
27 European Commission (2016), A Study on similar to the UK’s carbon floor price,
Energy Efficiency in Enterprises: Energy
Audits and Energy Management Systems,
These measures provide opportunities which has increased the cost of carbon
available at: https://ec.europa.eu/energy/ to develop new business models (smart for UK power plants to £23/CO2eq., as
sites/ener/files/documents/EED-Art8-
Implementation-Study_Task12_Report_
metering, smart home appliances, compared to EUR 5/tCO2eq. through the
FINAL-approved.pdf consumer-friendly bills, etc.), which can be EU ETS alone.
11Energy Efficiency in Europe |The levers to deliver the potential.
Revenues from carbon taxes could be uncertain energy prices, lack of relevant and
used, for instance, to reduce other taxes understandable information for investors,
or be channelled into energy-efficient etc.), an efficient financing framework needs
investments. to be developed to ensure an optimal
• Integrate diffuse emissions into these interplay between public and private actors.
price-setting mechanisms as much as
possible (55% of overall GHG emissions The European Commission estimates
are not covered by the EU ETS); this that EUR 100 billion need to be invested
can be done either by integrating more annually to achieve Europe’s 2020 energy
sectors into the ETS (buildings, road efficiency targets28 . Yet, the total annual
transport, etc.) as is currently being done investment by public banks is currently
in California’s ETS, or by implementing estimated at only EUR 15-20 billion29.
ambitious carbon taxes targeting diffuse Ramping up funds and facilitating the
emissions. access to energy efficiency financing needs
to become a key priority at the EU and at
While the EU ETS and carbon taxes aim to Member State level.
reduce GHG emissions, other market-based
mechanisms, such as white certificates, Public funds alone cannot finance all the
target energy savings directly. However, necessary energy efficiency measures. The
these schemes still have a long way to go public sector needs to act as a catalyst,
before reaching full efficiency and credibility. boosting private financing to close the
Quantification standards need to be investment gap.
implemented to avoid unrealistic energy • Tailor-made solutions provided by
saving calculations and a harmonisation closer public-private collaboration
of existing schemes is necessary to need to be developed to drive broader
create a larger and more efficient investments in energy efficiency;
market. • SMEs deserve particular attention.
SMEs represent 99% of all companies
in the EU, but only 64% of all SMEs are
taking action to save energy, compared
to 82% of large companies30. Therefore,
specific support needs to be offered to
SMEs, among others, through intelligent
project pooling structures and bundling
mechanisms.
Innovative financing mechanisms
need to be put in place and promoted
in order to overcome existing market
failures and to unlock the significant
energy efficiency potential, in particular
in the building sector. Such innovative
6. Facilitate financing of energy mechanisms include energy performance
28 European Commission, Financing energy
efficiency, available at: https://ec.europa.
efficiency measures contracting schemes (EPCs) offered by
eu/energy/en/topics/energy-efficiency/ Energy Service Companies (ESCO), green
financing-energy-efficiency
Facilitating access to energy efficiency bonds, etc. The latter constitute promising
29 DIW (2013), Financing of Energy Efficiency: financing needs to become a key priority at investment products for companies: green
Influences on European Public Banks’
Actions and Ways Forward, page 1, the EU and Member State level, and a set bond issuance increased 16-fold between
available at: http://www.diw.de/documents/ of key actions needs to be taken to get on 2012 and 2015 from USD 2.6 billion to USD
publikationen/73/diw_01.c.422405.de/
hudson_financing.pdf track to meet the EU’s long-term targets. 41.8 billion worldwide.
30 European Commission, Eurobarometer
Since various barriers are limiting the
survey: SMEs are important for a smooth attractiveness to traditional private
transition to a greener economy, http://
europa.eu/rapid/press-release_MEMO-12-
investors of financing energy efficiency
218_en.htm measures (such as long payback periods,
12Energy Efficiency in Europe |
The levers to deliver the potential.
13Energy Efficiency in Europe | The levers to deliver the potential.
Introduction
14Energy Efficiency in Europe |
The levers to deliver the potential.
The COP21 meeting and the in energy efficiency is not particularly
Paris Agreement, agreed upon attractive from a purely financial
in December 2015, highlighted perspective, because of long payback
more than ever how crucial it is periods and uncertain returns on
for the future of mankind to hold investments; the economic crisis
the increase in the global average and the dwindling energy prices are
temperature to well below 2°C not favourable contexts for energy
above pre-industrial levels (and savings, etc.
even to pursue efforts to limit the
temperature increase to 1.5°C above This study aims to identify the
pre-industrial levels). According to main levers for public authorities,
the International Energy Agency private companies and households,
(IEA), energy efficiency is central to which could better unleash energy
any energy scenario that matches efficiency’s technical and economic
this two degree limit. In fact, by 2035, potential. Obviously, there is no
investments in energy efficiency silver bullet and the solution lies
need to represent nearly half of all in a complex set of many different
global energy investment in order to measures.
stay within this figure31. Accordingly,
energy efficiency is a key element of After an introductory section
EU’s energy policy. designed to present the context and
key elements of European Union
Many studies have stressed energy and energy efficiency policies,
that the economic and technical we group our key findings into six
potential behind energy efficiency groups of proposals:
is considerable, demonstrating that 1. S
et appropriate indicators
many readily available measures and targets;
could yield significant savings, both in 2. Promote product standards
terms of energy consumption and in and labelling;
terms of costs. 3. U
nleash the energy efficiency
potential of buildings;
Despite this emphasis on energy 4. M
obilise retail consumers;
efficiency, both from international 5. S
end the right price signals;
experts and policy-makers, there 6. F
acilitate financing of energy
is a consensus that the measures efficiency measures.
targeting an increase in energy
efficiency implemented so far have This study is based on Deloitte’s
not enabled the EU to reach its in-house expertise, bibliographical
targets. Different reasons for having analyses and consultation of several
fallen short of expectations have key European companies and
been put forward: energy savings industry associations. The views are
potential is diffuse, with many Deloitte’s own.
different players involved; investment
31 CarbonBrief (2014): IEA: The marginal cost
of two degrees, http://www.carbonbrief.org/
iea-the-marginal-cost-of-two-degrees
15Energy Efficiency in Europe | The levers to deliver the potential.
Energy efficiency in
Europe: A fuel waiting
to take off
16Energy Efficiency in Europe |
The levers to deliver the potential.
1. A key element of
the EU’s energy strategy
Energy is at the heart of the renewables 13%.
European economy Transport is the largest source of final
The EU consumes 11% of global energy demand (32%), followed by
energy32 and is the third largest energy the residential sector (28%) and by
consumer after China (23% of global industry (26%). 94% of transport energy
energy consumption) and the United States consumption is based on oil products, of
(17%) 33 . Fossil fuels represent 72% of EU’s which 90% are imported.
energy consumption, nuclear 14% and
14 - 1%
201 269 153
13% 17% 14% 377
32 Eurostat © European Union, 1995-2004,
http://ec.europa.eu/eurostat/web/products- 226 26%
datasets/-/nrg_100a
14%
33 Enerdata, Total energy consumption,
296
https://yearbook.enerdata.net/energy- 344 553 28%
consumption-data.html
21% 34% 349
34 Gross inland energy consumption is equal 32%
to primary energy consumption plus the
consumption of fossil fuels for non-energy
purposes.
35 Calculations based on Eurostat data, Solid Fuels Oil Gaz Industry Transport
Eurostat © European Union, 1995-2004,
Nuclear RES Other Residential Services
http://ec.europa.eu/eurostat/web/products-
datasets/-/nrg_100a
Figure 1: EU-28 Gross Inland Consumption34 Figure 2: EU-28 Final Energy Consumption, by
36 Eurostat © European Union, 1995-2004, by energy source in 201435 (Mtoe, %) sector in 2014 (Mtoe, %)36
http://ec.europa.eu/eurostat/web/products-
datasets/-/nrg_100a
37 European Commission (2015), Energy Union The EU meets 53% of its total primary year (2013) 37, or around 3% of EU GDP. This
Package [COM(2015) 80 final], available at:
http://eur-lex.europa.eu/legal-content/EN/
energy needs from imports. makes the EU the world’s biggest energy
TXT/?uri=COM%3A2015%3A80%3AFIN This costs more than EUR 400 billion per importer.
17Energy Efficiency in Europe | The levers to deliver the potential.
600 558
520
500
400
300 278
231
200
112 123
100
0
Solid fuels Total petroleum Gas
products
2010 2014
Figure 3: Net imports of solid fuels, petroleum products and gas in EU-28 (Mtoe). 38
On average, EU household and industrial In every EU Member State, the electricity
consumers currently pay more for their price to industrial consumers is higher than
electricity than consumers in most in the US, India or Canada. This relative
major world economies. The exceptions price difference as compared to other
are Japan (due to reactor shutdowns in economies can have a strong impact on the
the aftermath of the nuclear accidents in competitiveness of European companies, in
Fukushima), and Australian households. particular for energy-intensive industries.
Current prices for electricity - Household Consumers Current prices for electricity - Industrial Consumers
300 highest 300
250 250
highest
EU 28
200 average 200
EU 28
150 150
average
100 100
lowest
lowest
50 50
0 0
n
ay
y
a
il
a
a
ia
S
da
lia
n
Tu y
ey
S
da
a
a
a
U
ke
in
di
si
az
pa
a
U
in
di
si
pa
ss
w
na
rk
w
ra
na
ne
In
ne
Ch
In
Ch
Br
r
Ja
Ru
Ja
or
or
Tu
st
Ca
Ca
do
do
N
N
Au
In
In
Figure 4: Current prices for electricity in EU-28 and other major economies for household
and industrial consumers (EUR/MWh)39 , reference year 2012.
38 Calculations based on Eurostat data, Acknowledging that energy is at the heart competitiveness and affordability, and
Eurostat © European Union, 1995-2004,
http://ec.europa.eu/eurostat/web/products- of the European economy, the EU has been security of supply. Energy efficiency is a
datasets/-/nrg_100a defining ambitious energy strategies major component of these strategies and
39 European Commission (2014), Presentation and targets for years. These strategies has a key role in reducing greenhouse
« Energy Union and Climate Change Policy »,
https://ec.europa.eu/priorities/sites/beta-
aim at achieving energy sustainability (inter gas emissions, increasing the EU’s
political/files/energy-union-1-year_en.pdf alia reducing greenhouse gas emissions), competitiveness and security of supply.
18Energy Efficiency in Europe |
The levers to deliver the potential.
Ambitious targets embedded in a energy efficiency targets. Some of the
complex regulatory environment regulatory texts, such as the EED48 and
Irrespective of other considerations, the Energy Performance of Buildings
such as carbon emission reduction Directive (EPBD) 49 , will undergo a review
requirements or import dependence, there in the second half of 2016. The complex
40 Council of the European Union 7224/1/07,
REV 1., available at: http://register.consilium.
is a clear case on efficiency grounds alone regulatory environment is illustrated in the
europa.eu/doc/srv?l=EN&f=ST%207224%20 for the EU to use less energy. As part of an Figure 5 next page.
2007%20REV%201
initial set of targets, the EU set in 2007 an
41 Directive 2012/27/EU of the European
energy efficiency target of 20% by 202040 . In 2014, the EU agreed on a new energy
Parliament and of the Council of 25 October
2012 on energy efficiency, amending Four years later, the European Council efficiency target of 27%, or greater, by
Directives 2009/125/EC and 2010/30/
acknowledged that the EU was off track to 2030 (i.e. 27% energy savings compared
EU and repealing Directives 2004/8/
EC and 2006/32/EC, available at: http:// reach this target and as a result, the Energy with the business-as-usual scenario 50) 51.
eur-lex.europa.eu/LexUriServ/LexUriServ.
Efficiency Directive (EED) was adopted in The intention is to integrate the 2030 target
do?uri=OJ:L:2012:315:0001:0056:EN:PDF
2012 to help close the gap, amending and in the EED as part of the review foreseen
42 European Commission (2012), EED (2012/27/
EU), Article 1.1 repealing older Directives 41. for the second half of 2016.
43 European Commission (2012), EED (2012/27/
EU), Article 3.1(a) The EED is grounded in three major cross- On 25 February 2015 the EC adopted a
44 European Commission (2012), EED (2012/27/ sectoral targets: “Framework Strategy for a Resilient Energy
EU), Article 3.1 • The Union’s 2020 20% headline target. Union with a Forward-Looking Climate
45 European Commission (2012), EED (2012/27/ The main objective of the Directive Change Policy” (also known as the Energy
EU), Article 24.7
is “to ensure the achievement of the Union Package or the Energy Union
46 European Commission (2012), EED (2012/27/ Union’s 2020 20% headline target on Framework Strategy), with an overarching
EU), Article 7.1
energy efficiency and to pave the way for goal of paving the way for the transition
47 Averaged over the most recent three-year
period prior to 1 January 2013. For this further energy efficiency improvements to a low-carbon, secure and competitive
calculation, the sales of energy used in beyond that date”42 . It provides a legal economy. That transition is to be grounded
transport may be partially or fully excluded.
basis for the target for 2020 of limiting in the three main pillars of EU energy
48 The review will focus on Articles 1, 3, 6, 7,
primary energy consumption (PEC) to not policy: security (security of supply,
9-11, 20 and 24, in view of the introduction
of a new energy efficiency target for more than 1,483 Mtoe or 1,086 Mtoe of import independence, safe production),
2030: https://ec.europa.eu/energy/en/
final energy consumption (FEC) 43 . This sustainability (reducing greenhouse gas
consultations/consultation-review-directive-
201227eu-energy-efficiency equates to a 20% saving compared to (GHG) emissions) and competitiveness
49 Directive 2010/31/EU of the European projections made in 2007, prior to the (keeping energy prices reasonable for end-
Parliament and of the Council of 19 financial crisis. users). Within this framework strategy, the
May 2010 on the energy performance
of buildings, available at: http://eur-lex. • Indicative national efficiency targets. Commission defined five dimensions52 , of
europa.eu/legal-content/EN/TXT/ The Directive requires Member States which one is “Energy efficiency contributing
PDF/?uri=CELEX:32010L0031&rid=1
to set their own individual indicative to moderation of demand”53 .
50 This target will be reviewed by 2020, having
in mind a target of 30% instead.
national energy efficiency targets 44 .
These are subject to an evaluation by In this context, the EC called for a
51 The European Commission had initially
proposed 30% in its Energy Efficiency the Commission, assessing whether they fundamental rethink of energy efficiency
Communication; available at: http:// will be sufficient to reach the overall EU and advocated treating it as an own
eur-lex.europa.eu/legal-content/EN/
TXT/?uri=COM:2014:0520:FIN. target 45 . energy source, representing the value
52 The four others are: energy security,
• Binding national targets for end-use of energy saved. This approach is new in
solidarity and trust; a fully integrated savings. The Directive46 requires Member the European energy strategy, but in line
European energy market; decarbonising
the economy; research, innovation and States to have an energy efficiency with the vision of the International Energy
competitiveness. obligation scheme; this scheme should Agency (IEA) which - until a few years’ ago
53 European Commission (2015), Energy Union allow them to reach a general binding - described energy efficiency as a “hidden
Package [COM(2015) 80 final], available at:
target from 1 January 2014 to 31 fuel”, but changed the notion to “first fuel”
http://eur-lex.europa.eu/legal-content/EN/
TXT/?uri=COM%3A2015%3A80%3AFIN December 2020. This is new savings each in its Energy Efficiency Market Report
54 IEA (2013), Energy Efficiency Market Report year of 1.5% of annual energy sales to final 201354 .
2013 – Market Trends and Medium-Term customers 47.
Prospects, page 3, available at: https://
www.iea.org/publications/freepublications/ In the aftermath of COP21, the EC did
publication/EEMR2013_free.pdf In addition to the EED, several Directives not change its strategy, stating that
55 Speech by Miguel Arias Cañete on EU’s and other regulatory texts or financial measures already taken or initiated were
climate and energy policies after COP21
- http://europa.eu/rapid/press-release_
instruments were put in place to considered to be sufficient to deliver on the
SPEECH-16-264_en.htm contribute to reaching the overall commitments55 .
19Energy Efficiency in Europe | The levers to deliver the potential.
Overarching policies The way forward
The energy Efficiency Directive Action Plan for Energy 2030 framework for climate Roadmap for moving to a low-
(EED) (20/12/27/EU) Efficiency (2007-12) and energy policies carbon economy in 2050
Rules and obligations to help Aims to achieve a 20% Sets a target of at least 27% Establishes energy
the EU reach its 2020 energy reduction in energy for renewable energy and efficiency as central
efficiency target consumption by 2020 energy savings by 2030 to EU energy policies
Processes Emissions Products
The Energy Performance of Emissions Trading System Ecodesign of Energy-related The Tyre Labelling Regulation
Buildings Directive (2010/31/EU) (2003/87/EC) Products Directive (2009/125/EU) (1222/2009)
Mandatory energy efficiency Provides an incentive to the Minimum energy efficiency Defines tyre label standards
certificates accompanying the sale industries covered to increase standards for a variety to amongst others help
and rental of buildings. Alle new energy efficiency by setting of products consumers choose a product
buildings to be nearly zero-energy a price on GHG emissions that more fuel efficient
by the end of 2020
The Energy Labelling Directive
(2020/30/EU) Construction Products Regulation
The Combined Heat and Power Effort Sharing Decision (305/2011)
Directive (2004/08/EC) (406/2009/EC) Minimum energy labelling
standards for a variety Sets energy efficiency
of products requirements in construction
Requirements on setting Supports energy efficiency works
comprehensive assessment measures through the adoption of
on the national potential mandatory targets The Energy Star Regulation
of congeneration and ditrict for GHG reduction in (106/2008) Directive on the Promotion
heating and cooling the non-ETS sector. of Clean and Energy Efficient Road
Transport Vehicles (2009/33/EC)
Voluntary energy labelling
Strategic Energy Technology Plan Industrial Emissions Directive scheme for office equipment Stimulates demand for lower
(SET Plan) (2010/75/EU)
carbon technologies alternative
fuels and clean and energy-efficient
Enables Member States to vehicles
Supports technologies with
set limit values for GHS
the greatest impact on the EU’s
emissions from installations
transformation to a low-carbon
that are excludes from
energy system.
the ETS
Financial Instruments
Private Financing for Energy European Energy Efficiency Fund
Horizon 2020
Efficiency instrument (PF4EE) (EEEF)
Provides support for energy- Provides support to projects
related research, including for the implementation of national Offers funding for energy
energy-efficiency, low carbon Energy Efficiency Action Plans efficiency and small scale
technologies and Smart Cities or other national energy renewable energy projects
& Communities efficiency programs
Project development Assistance European Structural & Investment Energy Efficiency Financial
(PDA) Funds (ESIF) institutions Group (EEFIG)
Bridge the gap between
Provides support to overcome
sustainable energy plans and EUR 27 billion is ring-fenced
challenges to obtaining
real investment by mobilizing to support the shift toward
long-term financing for
investment in sustainable energy a low-carbon economy
energy efficiency.
projects
Figure 5: Legal and Financial Energy Efficiency Framework in the EU
20Energy Efficiency in Europe |
The levers to deliver the potential.
56 Under the Energy Efficiency Directive (EED),
2. Progress falls short
of ambitions
each EU country must draw up a National
Energy Efficiency Action Plan (NEEAP) every
three years. This plan sets out estimated
energy consumption, planned energy
efficiency measures and the improvements
each country expects to achieve. In addition,
EU countries must report the progress 2020 goals likely to be missed • Member States need to take additional
achieved towards their national energy
efficiency targets on an annual basis.
In 2014, calculations published by the measures and fully implement EU
European Commission showed that, based legislation;
57 European Commission (2015), Report
from the Commission to the European on the indicative energy efficiency • the greatest potential lies in the building
Parliament and the Council [COM(2015) targets fixed in Member States’ National sector;61
574 final], page 3, available at: http://
eur-lex.europa.eu/legal-content/EN/TXT/ Energy Efficiency Action Plans (NEEAP) 56 , • financing energy efficiency measures
PDF/?uri=CELEX:52015DC0574&rid=1 the sum of those targets would lead to remains an important barrier;
58 European Commission (2015), State only 17.6% primary energy savings in • information failures need to be
of Energy Union, http://eur-lex.
europa.eu/legal-content/EN/TXT/ 2020 when compared to projections57, overcome.
PDF/?uri=CELEX:52015DC0572&from=EN below the target of 20%. So far, the EED
59 European Commission (2015), Report has therefore not fully delivered what it was Transposition of EED behind schedule
from the Commission to the European
created for. EU Member States were required to
Parliament and the Council [COM(2015)
574 final], page 13, available at: http:// transpose the EED’s provisions into
eur-lex.europa.eu/legal-content/EN/TXT/
On 18 November 2015, the EC published their national laws by 5 June 2014 62 ,
PDF/?uri=CELEX:52015DC0574&rid=1
the first State of the Energy Union58 , an but nearly all of them failed to do so
60 Decarbonisation of the economy; energy
efficiency; a fully-integrated internal energy assessment of the progress made since the on time. In the second half of 2014, the
market; energy security, solidarity and trust; inception of the Energy Union Framework EC launched infringement procedures 63
research, innovation and competitiveness.
Strategy in February 2015. A key conclusion against 27 EU Member States (all except
61 At that time, a dedicated EU-wide strategy for
heating and cooling was missing; since then,
was that “Member States should accelerate Malta) for non-transposition of the
in February 2016, the Commission proposed their efforts in order to achieve their Directive. Until 2015, the Commission had
an EU heating and cooling strategy, available
at: http://eur-lex.europa.eu/legal-content/en/
national energy efficiency targets for 2020 issued 22 reasoned opinions to Member
TXT/?uri=CELEX%3A52016DC0051 or to go beyond them.”59 This assessment States where transposition was still not
62 European Commission (2012), EED (2012/27/ analysed the progress in the EU from completely achieved and had referred
EU), Article 28(1) several perspectives 60 and the diagnosis is two Member States to Court (Hungary
63 Infringement procedures take several steps particularly clear when it comes to energy in March 2015 64 and Greece in June
to encourage countries to comply with a
legislation before ultimately leading to the
efficiency: 2015). In October 2015, the EC requested
European Court of Justice and possible fines: • the 2020 target is likely to be missed if eleven Member States (Belgium, Bulgaria,
a letter of formal notice, a reasoned opinion,
and finally the referral to the European Court
ambitions remain at the current level; Cyprus, the Czech Republic, Spain, Finland,
of Justice.
21You can also read
