June 29, 2011
The EU is the most advanced part of the world in terms of energy efficiency. But there remains a substantial potential for improving its record beyond past achievements.
Following the guidelines established by the European Council in February 2011 and the Commission policy paper of March 2011 the Commission has submitted a draft directive on June 22nd with detailed proposals on how to reduce EU energy consumption by 368 Mtoe until 2020 through improved energy efficiency.
The draft directive calls upon member states to take action in four main areas:
- accelerate the renovation of public buildings;
- oblige utilities to encourage their clients to reduce energy consumption;
- oblige energy companies to provide all new power plants with co-generation equipment;
- oblige energy companies to enhance energy efficiency of existing networks.
The rate of energetic renovation of public buildings must be stepped up from 1.5 per cent per year at present to at least 3 per cent by 2014.
Public buildings accounting for 12 per cent of the building stock and heating public and private buildings accounting for almost 40 per cent of EU energy consumption, this action will have a dual impact. It will help reduce overall energy consumption, especially in cooler regions and trigger a big employment and training programme in the construction sector. Presently 1.1 million workers are employed with modernising buildings; until 2015 that demand is expected to rise to 2. 5 million.
Member states will have to introduce so-called “energy saving obligations” (ESO) under which utilities will help their clients reducing their energy consumption, e.g. by installing smart tariffs, more effective heating or better thermal insulation. Such energy saving obligations have been successfully tested in UK, France, Italy and Poland, producing energy savings of up to 6 per cent. The Commission expects energy savings up to 100 Mtoe until 2020 from ESOs.
Co-generation is a proven technology for using waste heat generated in electric power plants. It is therefore logical that the Commission wants to make it mandatory for all newly built thermal power plants in densely populated areas that lend themselves to district heating and cooling systems.
Many of the existing transmission systems for electricity and gas are no longer up to optimal technical standards concerning efficiency. The Commission therefore invites member states to have them re-assessed and oblige their owners to make the necessary improvements wherever required.
The Commission proposals do not deal with private housing, the single major energy consumption sector, or transport, for which the Commission will present a White paper before the end of the year.
Nor do they address the issue of financing, which is extremely important for municipalities that will have to bear the brunt of the multi-billion investment effort necessary to raise their buildings to low emission standards.
To lure member states into such a big investment programme during the next eight years it will be necessary to redirect a bigger share of the cohesion funds to energy investments. The € 0.6 billion p.a. available during 2007-13 are totally inadequate for meeting the challenge. The EU should at least double that amount to make a difference. In addition, the EIB should substantially increase its lending for energy efficiency programmes., especially in central European member countries.
The Commission proposals have been well received by EPP and Green members of the European Parliament, though the latter consider them as inadequate. Member states` reactions have been mixed so far. Environment ministers tend to back them, subject to adjustments, while Economic ministers appear to be more prudent because of the extra administrative burden they will have to shoulder.
Whatever its shortcomings, the EU should adopt the directive before the next climate conference in Durban in December 2011, in order to demonstrate to the international community its determination to live up to its ambitious energy and climate objectives for 2050.
Author : Eberhard Rhein