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.
Hans Korteweg is Managing Director of COGEN Europe, the European association representing the simultaneous generation of electricity and heat (cogeneration).
Energy efficiency is a key objective of the Clean Energy Package. This is, however, not reflected in the policy debate. There is no definitive agreement on its importance and benefits. There is a risk that the Efficiency First principle will remain a political “slogan” if it is not applied consistently in EU and national legislation.
Energy efficiency should be applied across the entire energy system, from generation through transmission and distribution to consumption. We notice, however, that the debate in Europe has mainly concentrated on buildings. The enormous potential of energy efficiency in all segments before consumption has been broadly ignored.
The EU project Heat Roadmap Europe estimates that there is more heat wasted during electricity generation in Europe than is required to heat all buildings on our continent. Reducing energy demand in buildings will help us save energy to a certain extent.
Yet, we should not overlook other ways of making our energy system more efficient. Therefore, EU Member States should focus on the most cost-effective way of implementing energy efficiency measures and not only on building insulation. This is why we call on energy ministers to ensure the Efficiency First principle is applied across the entire Clean Energy Package. This will give Member States the possibility to maximise their energy efficiency potential in accordance with their renewable energy strategy.
A framework open to all options
The Energy Efficiency Directive (EED), adopted in 2012 and currently under review, has been a key milestone to help deliver energy savings in Europe, looking at using energy more efficiently at all levels of the energy chain. In line with its objectives, the EED should promote all energy savings both in energy generation and energy use.
But the reality is that we are not there yet in terms of primary energy savings. The latest Eurostat data confirm that Europe falls short of meeting the EU Energy Efficiency target, showing a 2% gap for final energy consumption but a 4% gap for primary energy consumption. This proves that reducing primary energy consumption should be prioritised, including via technologies like cogeneration and district heating.
Both efficiency gains and inefficiencies across the entire energy system should be clearly signalled to consumers. This will create a level playing field for all energy efficiency solutions. A good example of distorting the level playing field, is the currently proposed value of the EU Primary Energy Factor for Electricity (PEF) which underestimates the losses on the electricity grids, offering consumers an inaccurate picture of how efficient their energy consumption really is.
Unlocking benefits beyond the Energy Efficiency Directive
While ambitious targets and measures in the context of the EED are key, it is equally important to apply energy efficiency consistently across the entire Clean Energy Package. The Energy Governance, which takes an integrated approach, should be instrumental in doing so, by ensuring that the identified potential for energy efficiency is realised in synergy with the renewable energy and decarbonisation objectives.
Energy efficiency is equally important for the Renewable Energy Directive recast. An energy system with an increasing number of renewables (solar, wind, biomass or green gas), still needs to maximise the efficient use of these precious renewables.
In revising the EU’s Electricity Market Design, the efficiency gains of locally produced and (self)-consumed heat and electricity should also be better recognised. This can be achieved for example through fair grid tariffs acknowledging the reduced need for costly grid reinforcements.
Breaking the silos in energy policy
Moving to a decarbonised, secure and cost-effective energy system for European consumers requires a more integrated approach to energy. All available efficiency and renewable energy solutions across electricity, heat and gas networks have to be combined. Cogeneration, the simultaneous generation of electricity and heat, is a way to connect these networks and ensure their most efficient use.
As Europe is moving towards a more decentralised, efficient and integrated energy system, breaking the silos in energy policy and taking an integrated approach to the energy system is essential. The Clean Energy Package is an excellent opportunity to do this. It will allow us to design a cost-effective energy transition from which Europe’s citizens and industry can benefit. Let’s do more with less energy!