Electricity as a Means to Promote Energy Efficiency in the EU

Published on Wednesday, 20 January 2016

The adoption of energy efficiency measures in member countries of the European Union has contributed to a 23 percent reduction in CO2 emissions since 1999, leading to a positive effect on the economy. According to a recent study by Cambridge Econometrics on the impact of energy efficiency on employment, in 2010 about 900 thousand people in Europe were employed in work related to the manufacturing or installation of energy efficient products.

The potential of this segment of the energy sector are numerous: after two years since the entry into force of the Directive 2012/27/EU, the European Commission has launched a review of the legislation, a necessary task given the commitments made in December at the COP 21 in Paris.

The first step toward updating the directive was to launch a public consultation – which will close on January 29 – open to all stakeholders, including utilities. In recent days, MEP Markus Pieper, rapporteur for the European Parliament, proposed a public hearing on the review, involving 150 experts from across the EU.

“The Energy Efficiency Directive needs to be revised – Pieper explained – in order to ensure the most cost-effective approach and avoid unnecessary costs.” The review is also essential to optimise and align various related directives (including the Energy Performance of Buildings, Eco-Design, Energy Labelling and Ecolabel Directives).

Among the speakers who participated in the debate were Giuseppe Montesano, head of Enel's European Energy Policy and Chair of the Environment and Sustainable Development Policies Committee at Eurelectric.Representing the viewpoint of the same, Montesano spoke during the event on a key issue related to the challenges of reducing emissions and the fight against climate change.

One of our objectives is to make sure that electrical power is increasingly recognised as a vehicle for energy efficiency: using equipment and technologies that run on electricity makes us all more efficient. For example, electric vehicles, heat pumps or even induction cookers. Nevertheless, this leads to an overall increased efficiency and an increase in electricity consumption, leading to repercussions that are in contrast with the directive.”

Article 7 of the Directive has introduced some obligations for energy providers, establishing that utilities must reduce the amount of energy delivered to customers by 1.5 per cent each year. However, the same article allows Member States to adopt a series of alternative or equivalent measures, thus allowing them to compensate for all or part of the 1.5 percent reduction.

“As part of the public consultation and in view of the directive’s review – Montesano explained – our commitment it is to encourage serious thought on whether to simplify the implementation mechanisms of these obligations, in order to make them more effective and sustainable from an economic standpoint as well.”

How should this be done? Enel believes that the first major intervention should contribute to balancing the weight of the obligations, thereby encouraging the adoption of alternative measures, which are often more effective in terms of promoting energy-saving technologies and energy efficiency.

“The best way to promote energy efficiency development, also from an economic standpoint, is to focus on less prescriptive and more market-oriented approaches, by working both on policies and on making better financing tools available than those that have been adopted so far,” Montesano concluded.

To ensure that energy efficiency projects are eligible for financing in Europe, according to the European Energy Union Building document, developed by Enel in collaboration with The European House Ambrosetti, the EU should promote transparency, scalability, the standardisation of loans in the private sector to create a secondary market for financial products for energy efficiency.

In other words, promoting subsidised credit ecosystem, not only for consumers but also for service and product providers, would further the benefits of economies of scale and contribute to reaching the objective of a 20 percent increase in energy efficiency by 2020 and a 27 percent increase by 2030: goals for which Europe needs significant investments, particularly in the construction and mobility sectors.