Energy Efficiency - A Winning Argument for Europe

By Dominique Ristori, Director-General for Energy, European Commission
Winter 2014

The energy that is not consumed does not pollute and does not need to be imported - simple! Therefore, energy efficiency constitutes a priority action in the EU's 2030 energy and climate framework where EU leaders just committed to at least 27% energy savings by 2030, to be reviewed by 2020, having in mind a 30% target. But that's not all. Moderating energy demand, including through energy efficiency, is also central for all efforts to increase energy security and improve competitiveness, two other objectives that underpin the project of building a resilient Energy Union with a forward-looking climate change policy.

The EU's energy intensity has been steadily improving, making the EU one of the least energy intensive economies in the world, e.g. the energy intensity in EU industry has decreased by almost 19% between 2001 and 2011. At the same time there remains a considerable cost-effective energy savings potential. Recognising this, the European Union has developed a comprehensive legislative framework in order to drive progress.

The Ecodesign and Energy Labelling directives ensure minimum energy efficiency standards, while contributing to transparency and informed choices by consumers. This legislation is having a positive effect: Recognition rates by European consumers are up to between 80 and 95%, and more importantly, surveys show that consumers mostly trust the label with a large majority using it in their purchasing decisions. Just to give one example: the share of refrigerators in the EU in the highest energy efficiency labelling classes (A and above) increased from less than 5% in 1995 to more than 90% in 2010.

Buildings are the largest contributor to energy use in the EU, and account for 40% of EU final energy demand, and 36% of CO2 emissions; they offer significant savings potential with 80% of the economic potential of energy efficiency in buildings still untapped. Addressing this potential can act as a boost to the EU's construction sector that represents around 9% of GDP and more than 3 million enterprises, mainly SMEs. Analysis shows that €1 of public investment in energy efficiency of buildings can bring up to €5 in additional budget revenue and that €1 million invested in energy efficiency measures can lead to the creation of 19 jobs.

European legislation will, if implemented properly as a whole, contribute to the goals of competitiveness and sustainability. The current framework for buildings sets, among other things, requirements for the standard of renovations when they have been decided as well as requires the Member States to produce long term building renovation plans. New private buildings in Europe have to be "nearly zero-energy buildings" by 2021, and two years later the same requirements will apply to public buildings. These ambitious targets will require a shift in skills in the building sector.

The future energy system will see great changes to the way the households consume energy. This applies to the buildings that people occupy, but also to how people will control their energy use. Technology and consumer awareness are key terms in this respect. Increasingly consumers will be given the means and the technology to reduce energy consumption in the household while maintaining and even increasing comfort and utility. They will be able to steer energy consumption over time, respond to price signals and act as an energy producer.

To achieve these ambitions, we need to ensure that the consumer has the tools such as smart meters and technologies for different forms of visualisation of consumption data in the home - which also ensure data protection. EU Member States have committed to rolling out close to 200 million smart meters for electricity and 45 million for gas by 2020. Increasingly we will move toward a future with smart homes including smart appliances that help monitoring and managing energy consumption. In the long term the markets for electricity and heating will need to be designed in a way that allows more active and informed consumer participation than today, and the entry into the market of new actors. The optimization of the energy system via the demand side will bring benefits to security of supply, will contribute towards Europe's climate objectives and will improve competitiveness.