EU energy efficiency debate skewed by bad maths, says study

EU Climate Commissioner Miguel Arias Cañete arrives in Sofia on 19 April for what could be a "fundamental" meeting. Pictured with Bulgarian energy minister Temenuzhka Petkova. [EU2018BG]

Ongoing talks about the EU’s energy efficiency target for 2030 are deadlocked and the debate could have been skewed by the way initial cost estimates were calculated, according to a new study.

EU negotiators are set to resume trilateral talks in May but the member states, European Commission and Parliament disagree on an overall target for 2030, as well as an important annual savings mechanism.

That is partly the reason why national ambassadors have convened in Sofia on Thursday (19 April) for an informal energy council. The aim is to reach an agreement that could possibly unlock the talks and pave the way for the file to be closed before the Bulgarian Presidency ends in June.

MEPs spent the best part of last year trying to justify among themselves that a 35% overall target would be feasible. Their final agreement secured that figure as the Parliament’s position but cost the lead rapporteur, Adam Gierek, his job.

Controversial MEP replaced as lead on energy savings file

Socialists and Democrats (S&D group) MEP Adam Gierek has been replaced as the lead rapporteur on the recast of the energy efficiency directive, barely a week after his report was narrowly adopted by his fellow lawmakers.

But member states are more sceptical and still support a 30% target, although countries like Sweden, France, Luxembourg and Denmark have indicated that they will push for a target that exceeds that.

Today’s informal council could grant the Bulgarian Presidency a mandate to put compromises on the table that go beyond the member states’ current entrenched positions.

Arriving in Sofia this morning, EU climate boss Miguel Arias Cañete told reporters that he expected ministers to “show the political will to go ahead with ambitious policies” and suggested the meeting could “be fundamental in paving the way for a final agreement under the Bulgarian Presidency”.

Discount rates

A new study by the European Council for an Energy Efficient Economy (ECEEE) has cast doubt on the way in which the Commission initially came up with its binding target of 30% as part of the Clean Energy Package, claiming that the calculation method was flawed.

In order to assess a target’s cost-effectiveness, a discount rate has to be used. The ECEEE study claims that the discount rate used by the EU executive was too high, as it was 10% compared to a member state average of 5.7% for buildings.

The study added that if the member state average had been used by the Commission then costs would have been lower and negotiators could have been freer to push for even higher targets and annual savings.

Fresh EU analysis makes case for higher renewables, energy saving goals

A new analysis by the European Commission’s energy directorate, seen by EURACTIV, updates existing scenarios for renewables and energy efficiency, taking into account the rapidly falling costs of solar and wind power.

Contacted by EURACTIV, a Commission spokesperson acknowledged that there is a debate going on about the “level and role of discount rates” and explained that its energy analysts “keep this issue under review”.

Although not commenting directly on the ECEEE study, the EU executive insisted that “the approach the Commission currently follows is robust and analytically sound”.

The Institutional Investors Group on Climate Change (IIGCC), a platform that is worth €21 trillion, called on member states to get on board with the Parliament’s 35% proposal, based on their belief that the Commission assumed “unrealistically high investment costs”.

In a letter to ambassadors, IIGCC said the debate lacked a “more realistic, nuanced cost and benefit analysis” and urged negotiators to ensure the final agreement is binding and non-adjustable. The investors also called for a renewable energy target of at least 30%, talks on which are also ongoing.

Without ambitious energy efficiency goals, the EU will fail Paris targets

The Paris Climate Agreement’s entry into force has clearly not yet spurred policymakers to charge toward the goal of limiting climate change to “well below 2°C” and targeting 1.5°C, warn Dr Jan Rosenow and Stefan Scheuer. Energy efficiency remains the key to success.

 

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Danfoss top five priorities for a successful DWD revision:

  1. Unlock investments in energy efficiency and digitalization
  2. Increase transparency about energy use and water losses in the European water sector
  3. Enforce reduction of water leaks to de-risk contamination through leaky pipes
  4. Make information easy to understand by the public and comparable between member states
  5. Think circular economy

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