EURELECTRIC welcomes Primary Energy Factor review, calls for improved methodology

EURELECTRIC has strongly welcomed the European Commission’s decision to review the methodology for the calculation of a Primary Energy Factor (PEF). This revision will take place in the context of the preparations of the upcoming legislative proposals on the 2030 Climate and Energy Framework. The European power industry has repeatedly called for an in depth analysis and an improved approach to this important policy instrument.

In comments submitted to the European Commission in reaction to its Discussion Paper on the review of the default Primary Energy Factor (PEF), EURELECTRIC states that the PEF has proved itself to be an instrument that has a major impact on technology competitiveness and the energy carrier choice of final customers. It is therefore essential for the Commission’s recognition that decarbonised electricity will have a growing role to play in decarbonising the energy demand side sectors of the European economy to be appropriately recognised and taken into account in the PEF review process.

“Despite the fact that the PEF is only a footnote in current energy efficiency legislation, it has a tremendous impact on customer decision making and represents a major barrier to the decarbonisation and electrification of the downstream sectors,” said EURELECTRIC Secretary Hans ten Berge.

EURELECTRIC has said that it will be crucial to avoid a fossil fuel lock-in effect by not adequately recognising the impact of the PEF on the achievement of the EU’s climate change targets. This would not only hinder the decarbonisation agenda, but would also prolong the EU’s import dependence on fossil fuels.

In this regard, EURELECTRIC believes that the future PEF methodology should adequately reflect the strong decarbonisation of the European power sector and the increasing share of renewable energy in the power generation mix. It should also provide an incentive to invest in energy using products based on carbon neutral electricity rather than continued reliance on fossil fuels. Regular reviews of the PEF to reflect the fast changes in the power mixes are needed, and in order to ensure long term consistency, these reviews should be aligned with the processes agreed under the Paris Agreement on climate change.

Last year, EURELECTRIC published a paper on the application of the Primary Energy Factor in EU legislation. The paper highlighted that the current application and calculation of this policy tool is in strong need of revision since, in its current form, the PEF undermines the EU’s climate and energy goals and slows down the process for the EU’s transition to a sustainable economy & society. EURELECTRIC therefore called for the adoption of a forward-looking PEF conversion factor.