‘Primary’ energy efficiency in focus as EU talks near finishing line

Greenpeace activists project a slogan onto the cooling tower of the brown coal fired Belchatow power plant, in Belchatow, Poland, 09 November 2013. [EPA/GRZEGORZ MICHALOWSKI]

Public debate on energy efficiency has tended to focus on savings made by the end-user – whether in buildings or in consumer products like TV sets, light bulbs and vacuum cleaners, which have all grabbed headlines.

But clean energy campaigners have struggled to draw attention to so-called “primary” efficiency, where savings are made at the source, when electricity is first produced.

As EU energy ministers prepare for potentially decisive talks on the energy efficiency directive Monday (11 June), campaigners have launched a last-minute call on policymakers not to cast aside primary efficiency.

Otherwise, the EU risks ignoring a whole part of the problem, they warned.

“The reality is that we are not there yet in terms of primary energy savings,” said Hans Korteweg, managing director of COGEN Europe, the association representing the simultaneous generation of electricity and heat, or cogeneration.

The numbers are staggering. According to COGEN Europe, the amount of energy lost in the production and distribution of electricity reaches an average of 60%, a figure which can reach 75% for power plants running on biomass (sun and wind power are considered to generate no losses). The lost energy is usually released as steam, which is typically seen coming off from the giant cooling towers of electricity plants.

“As long as the electricity sector is not 100% efficient, measuring energy efficiency in primary energy should be considered first,” COGEN Europe argues, saying this the only way of capturing losses across the entire electricity value chain.

Put simply, you could have the most energy-efficient house in the world, fitted with the best insulation and state-of-the-art lightbulbs, you would still be behaving wastefully if 60% of the energy is lost before it even reaches your home.

Energy efficiency: Getting the full picture

The Energy Efficiency Directive (EED), adopted in 2012 and currently under review, has been a key milestone to help deliver energy savings in Europe. But the reality is that we are not there yet in terms of primary energy savings, writes Hans Korteweg.

“And/or”: What a difference a word makes

The point is well understood by the European Commission, which has backed a comprehensive definition of energy efficiency covering all stages of the energy chain, from production, transmission, distribution to final consumption.

In its proposed recast of the Energy Efficiency Directive, the EU executive said energy consumption “has to be no more than 1,321 Mtoe of primary energy” by 2030 “and no more than 987 Mtoe of final energy,” a wording backed by the European Parliament.

But EU member states see it differently. In their general approach to the revised directive, they suggested rephrasing the Commission proposal in a way that allows them to ignore primary savings altogether. By 2030, they wrote, energy consumption “has to be no more than 1,321 Mtoe of primary energy and/or no more than 987 Mtoe of final energy”.

According to COGEN Europe, the “primary and/or final energy” formulation would essentially let EU countries off the hook on primary efficiency, allowing them to focus on “final energy” only.

“Reducing final energy by better insulating buildings is important,” said COGEN Europe. “But it has limits and costs, and needs to be complemented by making energy supplied to buildings efficient too.”

“Only focusing on final energy will reduce the potential to realise energy savings, so undermine ambition in energy efficiency, because the (huge) losses in the upper stages of the energy supply chain, before consumption, would be ignored,” the trade association told EURACTIV in emailed comments.

Deadlocked energy savings talks restart as Bulgarians eye final deal

Bulgaria’s EU presidency wants the European Parliament to put a compromise on the table during fresh talks on energy efficiency tonight (16 May) in order to unlock negotiations and close the file before July. But MEPs and member states still seem far apart on crucial aspects of energy savings.

Commission and Parliament united behind primary efficiency target

The Commission is aware of the issue and has worked behind the scenes to convince EU member states to stick to the initial wording.

Paul Hodson, head of unit for energy efficiency at the European Commission, said keeping with the original “and” formulation “could be 1% different in ambition from having a target that is expressed as being so much in primary or so much in final.”

“That’s really quite important and not at all obvious. And that issue is still open,” Hodson told delegates at the annual conference of COGEN Europe on Tuesday (5 June). “I hope very much that there will be an understanding” on the issue, Hodson continued, suggesting the matter could be “closed” during the ministerial meeting on Monday.

Should energy ministers fail to close that loophole, the European Parliament is likely to pick up the fight during potentially final “trilogue” talks with the Commission and the EU Council of Ministers, scheduled for Wednesday (13 June).

“This is an important issue in the negotiations and Parliament has a clear position on that,” said Benedek Jávor, a Hungarian MEP who is shadow rapporteur on the energy efficiency directive for the Greens group in the European Parliament.

“The discussion is about achieving the energy efficiency target in both primary and final energy terms. Member states should not focus their efforts only on one side,” Jávor told EURACTIV in emailed comments. “We have the Commission clearly on our side on this point and both our institutions are insisting towards Council on the ‘and’. This was made clear from the very beginning of the negotiations and it’s considered of high importance.”

“This is really a crucial one and I hope we can make the Council understand that this is something where we really need an ambitious and strong outcome,” Jávor earlier told the COGEN Europe annual conference.

Energy efficiency is good for climate, consumers and industry – so why undermine it?

The EU Council of Ministers wants to slow down annual obligations on energy savings by quietly introducing a whole new range of “flexibilities” after 2020, some of which are well-hidden in an Annex of the proposed Energy Efficiency Directive, writes Benedek Jávor.

Bargaining chip

However, there are indications that the “and/or” formulation might remain on the table as a bargaining chip during the negotiation between Parliament and reluctant EU member states.

“Linked to that is the question of the efficiency first principle,” where all options – including primary energy savings – have to be systematically assessed when making investment decisions, said Quentin Genard, an analyst at the E3G climate and energy think tank in Brussels.

“We could imagine a compromise where it ends up with ‘and/or’ for the expression of the target but with the energy efficiency first principle reinstated as compensation,” Genard told journalists on Friday (8 June).

Even if the “and/or” formulation is eventually kept, MEPs won’t let the member states off the hook so easily. “This only concerns the EU target,” a parliamentary source told EURACTIV. “Member states can still set their own national target in primary or final energy terms, as they please,” the source said.

“However, the monitoring on the EU level to check if the EU target is being met should be done in both, final and primary energy,” the source stressed.

Why the Paris Agreement requires an ambitious Energy Efficiency Directive

An energy efficiency target of around 35%, combined with a parallel increase in ambition for renewable energies, would allow the EU to halve its emissions by 2030, write Fiona Hall and Brook Riley.

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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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