EU energy saving debate heading for new round of campaigning
It took months of political argument to secure a compromise EU deal on energy efficiency, but more months of campaigning are likely to follow to ensure consumers reap all the benefits they are entitled to and energy suppliers change their business models.
Negotiators from the European Parliament, Commission and Council reached a deal on the Energy Efficiency Directive on 13 June.
The deal managed to secure an assurance that EU countries will curb their dependence on costly imports of oil and gas and create jobs through energy efficiency measures, such as building renovation.
But it failed to achieve its initial purpose of reaching 20% energy savings by 2020, the Parliament's chief negotiator, Luxembourgish MEP Claude Turmes warned.
Endless haggling diluted the legislation's force.
"It's very difficult to say how much this directive is going to change our behaviour," Nicola Rega, adviser at industry body Eurelectric, said.
"The directive is full of phrases like 'where possible' or 'where feasible', which make it very difficult to make an upfront assessment. It will ultimately depend on how member states will, in practice, implement the directive."
On Thursday (12 July), the European Parliament's industry committee is set to sign off on the law and the full parliament should follow after EU institutions reconvene following the August break.
Once everyone has applied their rubber stamp, the directive will be published in the EU's Official Journal and member states will have to transpose it into national law.
As they shied away from steps associated with upfront spending, even for the sake of longer term gains, many EU nations pressed for opt-outs.
They greatly shortened a list of public buildings eligible for renovation and weakened a central article to make suppliers deliver savings of 1.5 percent of energy sales every year.
Campaigners say the reality is suppliers will have to show they have cut energy use by around 1 percent, rather than 1.5 percent, and there are ways to avoid the planned savings obligation schemes.
Brook Riley, climate and energy campaigner for Friends of the Earth, predicted companies and consumers would still notice a difference.
"They (member states) can use any other alternative measure as long as they can demonstrate it adds up. But in practice many will struggle to come up with viable alternatives," he said.
Over time, lower energy use should lower costs and that should be passed on to consumers.
"Energy regulators such as (British regulator) Ofgem will need to stand up for them," Riley said. "Consumer groups will need to mobilise and kick up a fuss."
For its champions, one strength of the Energy Efficiency Directive is its comprehensiveness. Before it, the bloc had little more than an aspiration to cut energy use by 20 percent in 2020 compared with projected levels.
"We had a political declaration," Claude Turmes, the Green politician who led the parliamentary debate on the directive, said. "Now what we have is very, very comprehensive."
"For the vast majority of electricity and gas companies and maybe oil companies in Europe, there will be a change in the business model away from just selling stuff towards getting active in the energy-saving market."
The efficiency goal was the only non-binding of three 2020 goals and officially the only one the EU is not expected to meet. The other two are to cut carbon emissions by 20 percent and to increase renewables in the energy mix to 20 percent.
Liberal Democrat Member of the European Parliament Fiona Hall, like Turmes, was involved in the negotiations both for the three 2020 targets set in 2007 and for the new directive.
"There were complacencies about it. There was a view that member states would do the efficiency anyway because it would make the other targets much easier," she said.
"This experience of what has happened with the difference between non-binding and binding requirements is that targets are what works."
Business as usual was expected to lead to savings of around 10 percent. Now the bloc should manage around 15 percent, analysts say, plus a further 2 percent from the transport sector provided EU plans to cut vehicle emissions are enforced.
Apart from the increase of a few percentage points, the lengthy debate produced a dense, detailed text, ranging from road maps on better buildings to smart meter requirements.
Consumer groups are worried about the roll-out of smart meters, which are meant to empower customers by giving them detail on their energy use.
"It will increasingly depend on national governments to make sure that costs are fairly shared between business and consumers and that households who will not benefit from a smart meter will not be obliged to get one," Monika Stajnarova, economic officer for the European Consumers' Organisation, said.
The Paris-based International Energy Agency (IEA), meanwhile, plans its own report on efficiency later this year.
"It's a very welcome step. It needs to be complemented by other policy," Fatih Birol, chief economist of the International Energy Agency said of the new EU law. "I would like to see more on a mandatory basis."
Europe aims to reduce its primary energy use by 20% by 2020, a target which is not legally binding.
The Energy Efficiency Directive was proposed by the European Commission in mid-2011 as part of its effort to reach this objective.
To achieve this, the EU needs to more than doubles its energy savings efforts, according to the Commission's estimates.
In its draft directive, the Commission proposed individual measures for each of the sectors that could play a role in reducing energy consumption, including a controversial obligation on energy companies to reduce their deliveries to customers by 1.5% each year.
- 12 July 2012: European Parliament's Industry, Research and Energy Committee (ITRE) scheduled to vote on the directive.
- Sept. 2012: Vote in Parliament plenary.
- 1 Jan. 2013: Ireland takes over the EU presidency from Cyprus.
- 2016: European Commission reviews the Energy Efficiency Directive.