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Energy Efficiency

To meet the 2030 climate target, energy efficiency needs to be prioritised. To step up its efforts, the Commission put forward in July 2021 a proposal for a recast directive on energy efficiency as part of the package “Delivering on the European Green Deal”. The proposal promotes energy efficiency first’ as an overall principle of EU energy policy and marks its importance and relevance in both its practical applications in policy and investment decisions.

The recast proposal raises the level of ambition of the EU energy efficiency target and makes it binding by requiring EU countries to collectively ensure an additional reduction of energy consumption of 9% by 2030 compared to the 2020 reference scenario projections. This 9% additional effort is measured against updated baseline projections made in 2020 and corresponds to the 39% and 36% energy efficiency targets for primary and final energy consumption respectively.

In the REPowerEU plan, presented in May 2022, the Commission proposed to raise the ambition further to reduce the EU’s reliance on fossil fuel imports from Russia. Because saving and reducing energy is the cheapest, safest and cleanest way to do so, it proposed to increase the binding EU energy efficiency target from 9% to 13%, compared to the 2020 Reference Scenario.

The recast proposal:

  • nearly doubles the annual energy savings obligation, which is one of the key policy instruments of the Energy Efficiency Directive to meet the headline target. EU countries must achieve new savings each year of 1.5% of final energy consumption from 2024 to 2030, up from the current level of 0.8%.
  • introduces a specific requirement for the public sector to achieve an annual energy consumption reduction of 1.7% as part of the objective to enhance the exemplary role of public sector across wide range of activities like buildings, transport, water and street lighting.
  • requires to renovate each year at least 3% of the total floor area of buildings owned by all levels of public administration. Public bodies will also need to systematically take into account energy efficiency requirements in their public procurement of products, services, buildings and works.
  • stronger focus on alleviating energy poverty and empowering consumers, through strengthened requirements on awareness raising and information provision, including on creation of one-stop-shops, technical and financial advice or assistance, consumer protection via out-of-court mechanisms for the settlement of disputes are structures. Improved requirements to identify and lift barriers relevant to the split incentives between tenants and owners or among owners are also included.
  • focus on implementation of an energy management system as a default obligation for large energy consumers, and changing the scope of application of energy audits obligation from small and medium-sized enterprise (SME) definition to energy consumption.
  • Revised definitions of efficient district heating and cooling and efficient cogeneration to ensure fully decarbonised heat or cooling supply in efficient district heating or cooling systems by 2050.
  • In addition, clearer and stricter requirements to ensure the necessary technical competence for energy services providers, energy auditors, energy managers and installers (via regular assessment of the effectiveness of the schemes and ensuring that they correspond to the market needs). Improved interlinkage with Article 24 (on energy services) on ensuring quality of energy services.
  • Requirement for all large (above 1000m2) non-residential buildings subject to renovation to assess the feasibility to carry out renovation via energy performance contracts. Strengthening of the role of intermediaries (one-stop-shops and facilitators) to support the uptake of energy performance contracting.
  • Requirement for EU countries to report on energy efficiency investments including on energy performance contracts concluded (as part of Governance Regulation). EU countries will be required to set up project development assistance mechanisms at national, regional and local levels to promote energy efficiency investments to help reaching the higher energy efficiency targets.

In 2018, as part of the “Clean energy for all Europeans package”, the amending Directive on Energy Efficiency (2018/2002) was agreed to update the policy framework to 2030 and beyond. Its key element is a headline energy efficiency target for 2030 of at least 32.5%. The target, to be achieved collectively across the EU.

The amending directive also includes an extension to the energy savings obligation in end use, introduced in the 2012 directive. Under the amending directive, EU countries will have to achieve new energy savings of 0.8% each year of final energy consumption for the 2021-2030 period.

Other elements in the amended directive include:

  • stronger rules on metering and billing of thermal energy by giving consumers – especially those in multi-apartment building with collective heating systems – clearer rights to receive more frequent and more useful information on their energy consumption, also enabling them to better understand and control their heating bills
  • requiring EU countries to have in place transparent, publicly available national rules on the allocation of the cost of heating, cooling and hot water consumption in multi-apartment and multi-purpose buildings with collective systems for such services
  • monitoring efficiency levels in new energy generation capacities
  • updated primary energy factor (PEF) for electricity generation of 2.1 (down from the current 2.5)
  • a general review of the Energy Efficiency Directive (required by 2024)

Directive on Energy Efficiency 2012/27/EU established a set of binding measures to help the EU reach its 20% energy efficiency target by 2020. In the context of the Energy Efficiency Directive, a number of important measures have been adopted throughout the EU to improve energy efficiency in Europe, including

  • policy measures to achieve energy savings equivalent to annual reduction of 1.5% in national energy sales
  • EU countries making energy efficient renovations to at least 3% per year of buildings owned and occupied by central governments
  • national long-term renovation strategies for the building stock in each EU country
  • mandatory energy efficiency certificates accompanying the sale and rental of buildings
  • the preparation of national energy efficiency action plans (NEEAPs) every three years
  • minimum energy efficiency standards and labelling for a variety of products such as boilers, household appliances, lighting and televisions (energy label and ecodesign)
  • the planned rollout of close to 200 million smart meters for electricity and 45 million for gas by 2020
  • obligation schemes for energy companies to achieve yearly energy savings of 1.5% of annual sales to final consumers
  • large companies conducting energy audits at least every four years
  • protecting the rights of consumers to receive easy and free access to data on real-time and historical energy consumption.

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