The European Commission’s revamped energy efficiency plan, launched on 8 March, has confirmed its aim to require member states to impose an obligation on energy utilities to promote energy efficiency. Tradable ‘white certificates’ would be issued for units of energy saved.1
In the UK, the carbon emission reduction target (CERT) scheme (ENDS Report 430, p 17) already imposes obligations on utilities. But there is no formal trading of certificates, and the new action plan suggests the scheme – or its successors – may have to extend beyond the residential sector to areas such as transport.
The plan proposes to bring forward regulatory measures tackling ‘split incentives’, where landlords and tenants in housing and commercial buildings hold back on investment because the costs and benefits of energy efficiency measures are not shared fairly between them.
The plan aims to double the refurbishment rate for public buildings in the EU to 3% of buildings by floor area a year, raising energy efficiency to the level of the best 10% of national building stock and setting an example to the private sector. Public bodies buying or renting buildings must opt for the best available energy performance class and favour higher energy efficiency levels in buying goods and services.
The commission will also consider requiring power plants to have in place a certain level of best available technology (BAT) before authorisation for new capacity can be granted by member states. Power plants would have to upgrade BAT levels as part of their permit updates as well.
Permitting would be prioritised for power plants able to supply district heating, where this is viable. Network access would be prioritised for combined heat and power plant.
It says it will “strengthen the basis for national grid regulators to take energy efficiency into account in their decisions and in monitoring the management and operation of gas and electricity grids and markets”. It adds these arrangements would need to reflect energy efficiency priorities in network regulations and tariffs, network and technical codes.
The new plan also proposes regular independent energy audits for big firms, which they must organise themselves, and that member states develop incentives for companies to introduce energy management systems. It says there should be information sharing on best practices in energy efficiency for small firms.
Binding measures within the new energy efficiency plan will be implemented through the recast End-use Efficiency and Energy Services Directive, launched in 2006 and due out at the end of this summer, and an updated Combined Heat and Power Directive. The 2006 directive called for a minimum 9% gain in energy efficiency by 2016, and a range of other measures including public sector procurement. However, its implementation has been patchy.
Other measures will be covered through new ecodesign and energy labelling requirements. But crucial funding for projects and programmes awaits agreement on the EU’s next, 2013-2020 budget.
Pedro Guertler, head of research at the Association for the Conservation of Energy, told ENDS that energy efficiency policy has been hampered by lack of comparable performance data between member states, one reason for opposition to a mandatory 20% EU target.
He welcomed the forthcoming recast directive and new energy efficiency plan, but said many of these measures would not be needed had there been compliance with clauses in the original directive: “The commission is losing its credibility on this.”
Weak price signals
But the plan does not ask that the EU’s 20% energy efficiency improvement goal for 2020 relative to business as usual be made binding, as called for by NGOs and businesses (ENDS Report 433, p 50). Even so, the plan threatens that mandatory national targets may be proposed in 2013 if the voluntary approach has not worked.
There has also been concern that cuts in CO2 emissions achieved through energy efficiency improvements could cause carbon prices to fall in phase III of the EU emissions trading scheme from 2013-2020. This would reduce already weak price signals in favour of low-carbon technology investment. The commission’s low-carbon roadmap to 2050 (see pp 61-62), attempts to compensate by proposing set-aside of EU emission allowances to boost price levels.
The roadmap says the EU is unlikely to meet its emission reduction goals without meeting the 20% energy efficiency target. But member states are not on track to meet this goal. At the current rate the EU will only improve its energy efficiency by 9% by 2020. Therefore, measures such as those in the new plan are becoming crucial to the success of the EU’s overall energy and climate package, and to meeting long-term targets up to 2050.