Energy efficiency, a real economic and societal challenge for Europe

We are currently living in an age of transition: considerable and dangerous alterations in climate and weather leading towards increased global warming and extreme events have already modified our planet’s environment, general biodiversity and peoples’ lives.

To face the challenge of Climate Change, the Paris Agreement has been signed by more than 190 states. The energy sector, which is responsible for the bulk of climate change related greenhouse gas emissions, has the key role in achieving the Paris goals and the electricity sector alone needs to be decarbonised by 2050.

 This requires a true energy revolution:

We need to fundamentally change the way we produce and consume energy, while respecting environmental, economic and social considerations and, furthermore, establish a new system that is living up to the very notion a democratic society.

As the worldwide demand for energy keeps growing and that the cheapest energy is the one we do not consume, Energy Efficiency (EE) is the best tool to deliver results.

Increased EE is cost-efficient and necessary to meet the climate targets and thanks to its demonstrated multiple benefits has the potential to serve as an economic and social instrument to solve the ever more pressing problems of our modern society.

First, EE brings along great economic opportunities: Ambitious energy efficiency policies lead to public budget signals that are resulting in GDP and employment rate increases, as well as higher industrial competitiveness of products and production processes.

SMEs and local enterprises are also favoured and can create new jobs. In short, EE serves as a boost for both national and local economies.

Secondly, EE brings about social benefits: Energy poverty, a real affliction in many EU countries, can be alleviated by increased EE with positive impacts on human dignity, social inclusion and health: It has been shown that living in leaky or dump houses is causing diseases such as asthma.

People in hospitals and schools take more time to get well or learn if the building is inefficient. In renovated homes, our citizens have to spend less on their energy bills and can live in a healthy and comfortable environment.

In addition, increased EE is also lowering our energy dependency on Russia and other fossil fuel exporting countries.

Lastly, EE helps creating a fully democratic and well-balanced society, where the consumer is empowered to engage with energy providers, can contribute to so-called load or peak shifting through remunerated demand response schemes and where communities are less dependent on governmental subsidies.

In fact, EE helps reshuffling the existing power structure between consumers, (big) energy companies and public authorities, with the citizen becoming an active stakeholder.

The EED’s (Energy Efficiency Directive) legislative journey has not been an easy one: The ongoing inter-institutional dialogue is facing several hurdles.

A first important element is the level and the nature of the EE headline target.

The European Parliament’s position advocates a binding energy efficiency target of minimum 35% in 2030, which can be achieved cost-effectively and would provide the necessary long-term policy framework that will unlock investments and unfold the multiple benefits of EE. The Council sets a mere 30% target.

In addition, Article 7, which deals with yearly energy savings achieved among final consumers, is also the object of heavy discussions, as the positions of the Commission, of the Council and of the EP differ largely.

The European Parliament is critical of the current “flexibilities” which have de facto lead to halving yearly efficiency efforts. The Council proposal would introduce even more flexibilities and lead to even less yearly ambition. 

Additionally, we should not miss the chance achieve efficiency gains in the transport sector, which is responsible for more than a third of EU final energy consumption.

With the upcoming mid-century strategy that, according to European Commission sources, will be published as early as November this year, Member States will realise that EE is their best ally to implement their CO2 reduction commitments under the Paris Agreement.

Only a strong EED will allow us reaping the economic, social and environmental benefits and enables us to cut our emissions in line with EU climate ambition.

Industry and investors stand ready to embrace ambitious strategies; citizens have tasked the European Parliament to take a solid position, not at least to reduce their energy bills.

The ball is now in the Member States’ court to embrace a strong and stable long-term framework, to show that Europe is delivering on the goals of the Energy Union and the Paris Agreement, while leading the way towards a sustainable economy providing adequate jobs, homes and products to its citizens in a healthy environment.