When it comes to the Energy Union and the EU’s energy efficiency targets, the Commission needs to put consumers at the centre and create a regulatory environment that promotes behavioural energy efficiency, writes Giulia Gioffreda.
Giulia Gioffreda is head of European Union affairs at Opower.
On 25 February 2015, the European Commission’s Energy Union Package Communication stated, “Our vision is of an Energy Union with citizens at its core, where citizens take ownership of the energy transition, benefit from new technologies to reduce their bills, participate actively in the market. To reach our goal…. we have to empower consumers through providing them with information, choice and through creating flexibility to manage demand as well as supply.”
It’s now almost one year since the European Commission came forward with its Energy Union Strategy.
At Opower, we were delighted to hear Commission Vice-President Maroš Šef?ovi? speaking enthusiastically about the future of EU energy consumers and to read that the European Commission would develop the frameworks to provide individual energy users with information and the choice to manage their energy demand. The Commission agrees with us on this fundamental point: it’s the people who will lead the EU’s energy transition.
At present, the average consumer doesn’t care too much about energy. Accenture’s studies show that consumers only think about energy for 9 minutes a year. Very often consumers don’t care because they don’t know – yet their potential to engage is huge. It is for this reason that the Commission should act to unlock the potential of consumers.
We have calculated that our Behavioural Energy Efficiency programmes through the 95 utilities we work with across the world achieved more than 8 TeraWatt hours (TWh) of energy savings in 2015. Our programmes enable consumers to save energy by offering useful actionable insights, such as comparison with similar households, tailored reports on energy consumption and useful tips.
On 15 July 2015, the European Commission came forward with a ‘New Deal’ for energy consumers as part of its ‘Summer Package’ of proposals. The new deal “promises to give prominence to the ‘energy efficiency first’ principle and put households and consumers at the heart of the European energy market”.
Our request would be that this does not remain just a rhetorical promise and concrete proposals will actually follow through in the next months.
Energy efficiency in 2030, how to really put consumers first
Often described as the “low-hanging fruit”, energy efficiency is a central principle and one of the five pillars of the Energy Union. Looking ahead, the EU has set a target of cutting its energy consumption by 27% by 2030. While the target has been set (still to be confirmed by the co-legislators), the debate has already started on how to achieve these targets and most importantly, which particular sectors to focus on.
With consultations having taken place and impact assessments underway, it seems increasingly likely that EU policymakers will choose to place emphasis on the buildings sector and appliances, overlooking the potential of behavioural changes. If EU policymakers choose to go down this route, they will unfortunately overlook the big potential that lies in all European consumers.
The current Energy Efficiency Directive (EED) requires each member state to adopt a strategy that will enable it to achieve the EU Energy Efficiency goal of 20% savings by 2020. As part of this, member states must establish Energy Efficiency Obligation (EEO) Schemes or alternative measures to meet the Directive’s ambitious energy-savings target.
Unfortunately, the current EED, with its open obligation scheme, is a missed opportunity in this regard. Indeed, only three EU member states, Italy, Ireland, and Denmark have included behavioural energy efficiency into their obligation schemes.
Looking ahead, proposals to review the current Energy Efficiency Directive are expected in the second half of 2016. It is not too late for the Commission to concretely put consumers at the centre through promoting behavioural energy efficiency schemes.
In the meantime, the European Parliament, currently working on an own initiative report, Delivering a New Deal for Energy Consumers, has also a role to play. Its report should make clear references to the benefits of allowing consumers to manage their demand, thanks to behavioural energy efficiency instruments.
Today, it is already clear that the EU will fall short of its 2020 targets. However, in energy efficiency terms, 2020 was yesterday, 2030 is tomorrow. Focus should now be placed to ensure that this doesn’t happen for 2030. Ensuring that potential of behavioural energy efficiency is not overlooked in the 2030 review would be a good way to solidify this.