Energy efficiency: time for greater cost-efficiency

The European Commission today published a Communication on energy efficiency.

The European electricity industry remains committed to doing our bit to deliver energy efficiency. Energy efficiency is key to increase EU competitiveness, help electricity customers take charge of their consumption and costs, and contribute to the decarbonisation of society at large. In addition, energy efficiency can be a viable business opportunity for hundreds of supply and distribution companies across Europe. Our industry is therefore already promoting measures that help customers optimise their energy use and save energy.

Developing such new business models, including energy efficiency services and decentralised generation, requires energy legislation that is properly implemented and future-oriented. It also requires a focus on cost-effectiveness: energy efficiency should be implemented at the least possible cost to our customers and to society at large. This means that:

• In the run-up to 2020, EU energy efficiency policy should focus on two main issues: implementing existing legislation and strengthening the EU Emissions Trading Scheme (ETS) so that it can drive low-carbon investments, including energy efficiency on the supply side. As recognised in today's Communication, structural reform of the ETS will lead to energy efficiency investments in a market-based and thus cost-effective manner for those sectors covered by the ETS, including the electricity sector.
• For 2030: The approach taken in the 2020 framework includes a multitude of overlapping instruments - some command-and-control some market-based - in order to reach the agreed targets. This has undermined overall cost-effectiveness. EURELECTRIC has therefore repeatedly called for the Commission and the EU member states to draw on the lessons learnt and adopt a more streamlined approach after 2020. For the supply side, this means focusing on the ETS as key driver for energy efficiency investments, based on an ambitious greenhouse gas reduction target of at least 40%. For certain demand side sectors, which might not always be susceptible to price signals, bottom-up regulation focused on specific actions for specific sectors may be necessary. Finally, electrification of the heating/cooling and transport sectors - as envisioned by the Commission in its 2050 Roadmap - will also ensure a more efficient use of energy and allow the decarbonisation of these sectors.