Energy Efficiency Directive: A success or a failure?
The EU ETS is the main European scheme in charge of the limitation of carbon emissions for over 11,000 installations accounting for almost half of the EU emissions, which has been seen, recently, poor in its actions as a result of the interaction of this policy tool with the complementary policies such as the ones addressing renewable energy deployment or energy efficiency. This is why when thinking about energy efficiency policies should we ask ourselves: Are we on the correct direction? What is interaction with the other policies?
During the 90s European countries decided to make a commitment towards global climate challenges under the UNFCCC, adopting the Kyoto Protocol, which targeted GHG emissions reductions, but it was quickly acknowledged that a transition towards an efficient and low-carbon energy system was needed. In 2005, the Emissions Trading System (ETS) was launched, setting a price to carbon emissions, as the main tool to achieve emissions reductions in the covered sectors towards meeting the Kyoto Protocol for the period 2008-2012. Early in 2009 the 2020 targets were set, aiming towards a economy-wide 20% reduction of GHG emissions relative to 1990 levels (setting most of the burden on the EU ETS covered sectors), an increase in the renewable energy supply of 20% and also an improvement of energy efficiency of 20%, i.e., the 20, 20, 20 goals for 2020. However, unlike the first two objectives, efficiency was not translated into binding legislation until 2012, which delayed action making it more difficult to reach the energy efficiency objectives.
source: managenergy.net
Energy efficiency is one of the most cost-effective ways to enhance security of energy supply by reducing its demand, and to reduce emissions of greenhouse gases and other pollutants. Despite all this positive characteristics it seems that the energy efficiency target will be hard to meet by 2020. EU Member States, failed on looking towards the great benefits from the correct implementation of this policy, which could be summarized in a reduction of the amount of energy imports of 200 billion € annually could be achieved by 2020, or the creation of new green collar jobs and business opportunities could arise.
In an attempt to address these problems, in 2012, a new framework with binding goals was established: the Energy Efficiency Directive, which ensures the achievement of the Union’s 20% target. However there was lack of agreement on targets at national levels and as a result the target is only binding at the EU level. On the bright side there was agreement upon binding sectoral measures, with, e.g., higher impact in the buildings sector (one of the highest emitting sectors, together with transport).
It was stated that all EU Members would be required to have a more efficient use of energy through all the stages of the energy chain (from transformation to consumption). As an example energy companies will be requested to reduce energy sales by 1.5% every year among their customers, compensated by an improvement in the technology used in the heating system, installing double glass windows or insulating roofs.
source: tallo.nl
Also with this new directive, each individual nation will have to draw an energy efficiency roadmap target to make the whole building sector more efficient by 2050. On the other hand they will have to achieve energy savings during the obligation period (January 2014- December 2020) assuring energy efficiency implementation in households, industries and transport sector.
Buildings owned by the public sector, to set the example, will have to renovate a 3% of the building owned by the government of each country, to promote energy efficiency in society.
In additions to this each Member State will have until the 30th April 2013 to present national target, running the risk that if the European Commission finds it insufficient to meet the 2020 goals they can ask the to redefine them.
This directive will have the aim to be revised during the first semester of 2014, but if the Commissions considers that the progress made are inexistent or too small, other further and harsher legislation will be implemented for the EU members.
Another big issue that impedes the correct implementation of Energy Efficiency is the barriers that it confronts. One of these barriers is the lack of awareness and access to information. Accessing this information is too expensive for the governments, what makes countries see that initial investment in energy efficiency, too costly for solutions at such a long term. Although as the main problem to achieve energy efficiency is the high financial restrictions, a correct time horizon should help to achieve this goal (area in which they are lacking to make the correct movements to move towards this path). Finally also the risks that investors face are extremely high, having uncertainty in when the payback periods will start and if it will start.
The main difficulty that energy efficiency is facing towards its effective implementation is the boundaries between the European Directive and the national laws applied by Member States, characterized by their heterogeneous positions with respect to energy efficiency, as some have a more proactive attitudes and others only comply with mandatory measures. If a degree of adjustment and integration could be achieved it would finally translate to a better situation of European Energy Efficiency policy.
Furthermore, as noted earlier, the Energy Efficiency Directive seems to be misaligned with the 20% emission reduction goal economy-wide relative to 1990, and notably when it comes to the EU ETS covering half of the total emissions and its 21% reduction goal relative to 2005. Currently the EU ETS has a surplus of allowances and the EC foresees that such surplus will continue beyond 2020. If fully implemented, the Energy Efficiency Directive would indirectly further increase the surplus of allowances under the EU ETS by 2020, further undermining the price signal which is already too low as a result of the economic crisis and the deployment of renewable energy to achieve the Renewable Energy goals. This would be the case unless the EU manages to create credibility on its cap and trade or, at least, puts forward the structural changes that would get the market on the right tack that shifts the short-term prevailing focus towards mid- to long-term horizons.
source: euractiv.com
Thus should we really in this new directive? Should we really on this alignment between the EU ETS and Energy Efficiency directive to stop the increase of the surplus of allowances? If we formed part of the EU ETS, maybe this should be some question that we should be asking ourselves when refereeing to energy efficiency. Because at the end of the match what do we want to reach? A victory from both sides (EU ETS and Energy Efficiency Directive) on their targets? Or loss because of shortage of coordinate steps?
Reference:
- European Commission, Energy Efficiency Directive. Available at: http://ec.europa.eu/energy/efficiency/eed/eed_en.htm
- Euractiv (2012), Parliament gives final green light to energy efficiency directive. Available at:http://www.euractiv.com/energy-efficiency/european-parliament-gives-final-news-514732
- Energy Efficiency Watch. Good practice ways out of energy debt. Available at:http: //www.energy-efficiency-watch.org/fileadmin/eew_documents/Documents/EEW2/Good_practice_ways_out_of_energy_debt_BROCHURE.pdf
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23 Apr 2014
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mariagutierrez
IMSD /
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