EU efforts to increase energy efficiency are now entering the sharp end of the legislative process, as trilateral talks ramp up. Nadezda Kokotovic explains what role industry should play in energy saving.
Nadezda Kokotovic is Brussels representative of NIS, an energy company of Serbian origin, which is 56% owned by Russia’s Gazprom.
The EU is now well engaged in the revision of the Energy Efficiency directive, part of the so-called Clean Energy for All package: the Council and the European Parliament have both found an internal agreement on the complex file in December and January respectively.
Tough negotiations in the ongoing trilogues can be expected and while the focus often lies on what member states will have to do and change in order to achieve what the European Commission has described as “a source of energy for itself”, it is society as a whole, who needs to think about new solutions in areas that affect day-today life. Industry has a special role to fulfil in this process.
Embracing the change
An ambitious, European move towards enhanced energy efficiency does not mean a decrease in economic performance and it is essential for the industry to understand it. Instead, it should lead to more innovation that eventually fosters an increasingly sustainable economic model.
Why is energy efficiency crucial?
Because resources are limited and they should be used in as the most efficient and consistent way as possible. It does not only allow to do the same (if not more) with less energy used, but it also contributes to mitigating climate change and prevents adverse effects that might occur due to inconsiderate consumption.
How can industry make Energy Efficiency happen?
Over the past years, Member States’ governments have showed some ambition towards energy efficiency. However, it might have seemed insufficient to send the right signals to stakeholders. And still now, the European Parliament supports a consistent increase of the targets proposed by the Commission, while the Council held back from making too high commitments.
The term energy efficiency always looks good on paper, but it is not necessarily evident to identify what measures can be undertaken to achieve it, especially for industry or even the citizens. Yet, these actors’ commitment is instrumental to make a real change not only to companies’ sustainable footprints and cost effectiveness, but to society as a whole.
Essentially, short-term thinking should switch to long term visions while being mirrored in concrete actions. Indeed, energy efficiency starts at efficient light bulbs that use less electricity and reaches as far as the modernization of heating systems and ways of transport, allowing to reap the benefits of using lesser amounts of energy intake.
But while consumers rely on innovative products and practices that come from the industry, the latter relies heavily on signals sent by governments. There are always frontrunners, who will engage in future oriented practices independent from what their existing legal frameworks prescribe.
However, countries must also acknowledge that other companies will not act if they are not motivated in a certain direction and this is where national policies and targets towards energy efficiency come into play.
The role of the oil & gas industry is particularly important due to its energy intensity and the high potential to save energy. It requires permanent thinking on how to introduce changes and innovate at all levels of the value chain. A wide variety of concrete measures can contribute to achieving this:
- Modernisation of the fleets to more sustainable vehicles that produce less emissions and decrease overall fuel consumption;
- Investment in the on-site generation of gas and its processing, as well as CCS;
- Reconstruction of power facilities, redesign and replacement of inefficient pumps in
exploration and production;
- Raising awareness at all management levels in order to support the operational management of energy systems.
This is only a small sample of actions, which companies in the oil & gas industry like NIS can take to initiate changes in extraction, refining or production practices. Investments might not immediately show benefits, making it ever more strategic to set up far-reaching and ambitious action plans that the companies refer to and overhaul every year.
The energy policy that NIS consistently implements primarily relies on energy management, a conceptual development and investment concept that, in addition to improving energy efficiency in all production processes, plants and facilities, includes the reduction of greenhouse gas emissions as well as the preservation of natural resources.
When looking at one such frontrunner and looking at its actions and performance, one can find an impressive overall increase of energy efficiency of 27% between 2012 and 2016 delivered by the NIS 2016 Action Plan alone.
This proves in practice that consistent energy efficiency gains are possible, applying top-notch emerging technologies, such as C02 capture from natural gas with a high C02 content.
The benefits are multifold: the C02 content is reduced from over 20% to below 3% and can be injected into the grid, while the C02 is injected into a nearby well increasing the level of production and aiming to permanently capture the C02 in the geological formation once the well is depleted; a win-win for the company and the environment.
Companies across Europe, within or outside the EU should display a high moral commitment and underline that the climate action objectives are embedded within their own strategies and daily conduct. The investments are sizeable, but the results are worth it.
Targets should not be seen as trapped within short term plans and time-limited pieces of legislation, but rather as overarching aims that all parties concerned see as a sustainable long-term goal. It is not only a business case for the oil & gas sector as well as for Europe and its citizens, it is a vision about a more efficient, bright future. One that has no alternative.