The proposed EU Energy Efficiency Directive: headed for institutional struggle?

On June 22, 2011, the European Commission published its proposed Energy Efficiency Directive. This proposal would repeal two directives already in effect: the Cogeneration Directive (2004/8/EC) and the Energy Services Directive (2006/32/EC). Negotiations in the European Parliament and European Council will begin in fall 2011.

The proposed directive follows the March 2011 release of the 2011 Energy Efficiency Plan (EEP), which lists the European Commission’s ideas for significantly contributing to the realization of its indicative energy savings goal of 20% by 2020. The plan covers all sectors except for transportation and includes measures related to reducing energy demand, while taking into consideration the efficiency of energy generation.

The proposed directive is directly inspired by the 2011 EEP and by the accompanying impact assessment. It takes into account the European Council’s position, made public on June 10, 2011, and that of the European Parliament, expressed in December 2010 through the Bendtsen report, which received large support from European legislators.

Principal elements of the Commission’s proposal

The European Commission considers energy savings as the weapon of choice to increase Europe’s energy independence and to improve the competitiveness and sustainability of the European economy. However, energy savings fall well below the targets set in the framework of the 20-20-20 strategy, as shown in the graph below.

According to its latest estimates, the Commission predicts that Europe will only achieve half of its energy savings objective by 2020. The proposed directive therefore intends to make a significant contribution towards reaching the full 20% goal.

The general approach chosen by the Commission favors “binding measures” in lieu of binding targets. The European Council opposes binding targets while the Parliament voted for them in the Bendt Bendtsen report. In the proposed Energy Efficiency Directive, the Commission recommends that the question of  legally binding targets be reevaluated, if necessary, in 2014.

As for the binding measures proposed by the Commission, they focus mainly on improving the efficiency of Member States’ building stock.

Reinforce the role of energy companies

Each Member State will have to put in place energy savings obligations for companies that produce, distribute or sell energy. Companies would also have to save 1.5% of their annual energy sales, by offering their clients energy efficiency measures like improved heating systems, double glazed windows and insulated roofs. The basic objective is to move the business model of energy companies towards an “energy services” logic.

On the other hand, the European Commission granted Member States the option of adopting alternative measures instead of the obligation, as long as they achieve the 1.5% annual energy savings target on production for final consumers.

The public sector must set the example

Insofar as the European public sector occupies or owns 12% of the entire building stock, the text offered by the Commission maintains one of the flagship propositions of the 2011 EEP, that the public sector must refurbish 3% of its building stock each year. Nevertheless, a certain number of caveats were introduced that weaken the system:

  • The level of renovations no longer has to meet or exceed the standards of the 10% best performing buildings in the public building stock. The proposition contents itself with renovations attaining “optimal levels” (defined in Article 5 of the Directive 2010/31/EU on the Energy Performance of Buildings or EPBD).
  • The obligation concerns buildings owned by public authorities with a useful surface area of more than 250 square meters. Rented buildings are excluded. The Commission’s proposal does not include an obligation on the private sector, either.

The proposal also contains elements concerning consumer information, encouraging the use of smart metering. In addition it takes a stand in favor of incentives and the better sharing of best practices for small and medium sized enterprises (SMEs) and the generalization of energy audits.

A lively debate to come

The debate on the proposed Energy Efficiency Directive, to begin in September, will be built around an exchange between the Polish presidency of the Council –whose reservations towards energy efficiency are well-known- and the representatives Claude Turmes (rapporteur) and Fiona Hall (shadow rapporteur) who are notorious supporters of an ambitious agenda.

It did not take stakeholders a long time to react to the European Commission’s proposal, which appeared weakened by internal disputes between the two main directorate-generals (DG CLIMA and DG ENERGY in charge of the dossier.  As a matter of fact, Climate commissioner Connie Hedegaard’s head of cabinet stepped out of line on 16 June, criticizing the Commission’s proposal before it was even made public. He argued that the proposal would dangerously undermine DG CLIMA’s landmark initiative, the European carbon trading scheme.

The fall promises to be animated on the energy efficiency front in Brussels as discussion on the directive will kickstart. The text is expected to pass under the Danish presidency in the first part of 2012.

To learn more about the Energy Efficiency Directive, check out these links on Electrical Efficiency Magazine’s site:

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