Directive on energy end-use efficiency and energy services

The Bellona Foundation supports the initiative for a directive on energy end-use efficiency and energy services. Reduction in energy consumption is the cleanest way of making new energy available, since energy efficiency does not contribute to emissions of global warming gases, release of pollution to soil, water or air, area utilisation or disturbance of local biotopes. In addition, initiatives supporting energy efficiency will often be more cost-efficient than production of new fossil- or renewable energy, because energy efficiency does not demand investment in new infrastructure or the delivery net. Energy efficiency is an efficient measure to comply with the Kyoto protocol and to meet the challenges with regard to energy supply safety within Europe.

The Bellona Foundation recommends that targets for energy reduction, for instance one percent of total energy consumption, are made absolute, and not indicative as proposed in the newest draft presented by the Luxembourg presidency. This will also be in accordance with the proposition suggested by the Commission on the 10th of December 2003. If goal are made indicative, Bellona believes that it is necessary to instruct the Member States to investigate, develop and implement financial instruments, for instance a marked for White Certificates, in order to assure goal achievement. The Bellona Foundation disagree that energy efficiency improvement measures initiated in a previous year not earlier that 1995 may be taken into account in the calculations of the annual savings. This provision will cause less effort in promoting energy efficiency investments, and allow certain Member States to maintain a status quo in their effort towards sustainable use of energy.

There is a need for harmonisation throughout the Member States on what can be accounted for as energy saving actions. A list of technology that can result in accredited energy savings should be developed and specified in an Annex of the Directive. A methodology for calculation of energy savings should be developed in accordance with CEN-standards. Bellona supports the initiative to promote individual metering that accurately reflects the end-user’s need for delivered energy, andrecommends that this is linked to introduction of energy certificates on buildings as decided in EU- directive 2002/91/EC; Energy performance of buildings.

Targets for energy end-use reduction
The Bellona Foundation believes the target of one percent yearly energy reductions should be made absolute, instead of indicative as proposed by the Council. This is important to initiate actions for development of new political measures and new technical solutions necessary to exploit the full potential for energy savings in the Member states. Making the targets for energy savings indicative, might result in a scenario in which Member States continue to use already developed, however insufficient, measures for promoting energy efficiency, instead of developing new financial instruments or new technology contributing to energy savings. The Bellona Foundation believe that indicative targets will limit the Directive to promote continued economical support of specific energy saving investments, instead of developing of new financial instruments, for instance though implementing a marked for white certificates, tax rebates on investments of energy efficient equipment etc.

The Bellona Foundation also recommends the withdrawal of the last sentence in article 4 (1) that allows Member States to evaluate that the costs of the measures adopted to achieve the targets for energy reduction do not exceed their benefits. The evaluation of how to consider a future benefit, for instance reduction in energy end-use, in proportion to the present cost, might differ with different political and financial situations in the Member States. Bellona believes that this proposition might cause different interpretations of the Directive across the Member States.

Methodology for calculating targets for end-use efficiency
The draft for a Directive on Energy end-use efficiency and energy services proposes that energy efficiency improvement measures initiated in a previous year not earlier that 1995 may be accounted for in the calculation of the annual savings. The Bellona Foundation strongly disagrees on this provision. All Member States in Europe will have a large potential for energy efficiency, regardless of previous efforts. A proposition that allows previous efforts to be accounted for will cause less effort in promoting energy efficiency investments, and allow certain Member States to maintain a status quo in their effort towards sustainable use of energy. To ensure that energy efficiency is regarded as an important mean to comply with the Kyoto protocol and meeting the challenges with regard to energy supply safety within Europe, the Bellona Foundation believes that all Member States should be imposed with the same demands for future energy reductions.
Energy savings can be achieved in three different ways:
–     Additional investment in energy efficiency projects (which may not always result in energy savings),
–     Change in behaviour, for instance consumer habits as turning off light in unused rooms
–     Change in conditions, for instance outside- and indoor temperature, occupancy level, opening hours in stores, production level etc
The Bellona Foundation believes that only additional investments in energy efficiency projects that
are evaluated within the same system boundaries should count towards target achievement. Energy savings that would have taken place independently of the investment made should not be included in the calculations. Also, energy savings resulting from change in behaviour or in conditions should not be accounted when evaluating goal achievement. The Bellona Foundation recommends the inclusion of an Annex where accredited technology with regard to energy saving investments are listed, for instance instalments of solar panels on buildings, heat pumps, use of extra insulation etc.

An example of how this might be done, can be found in Italian legislation in the «Energy Efficiency
Decrees» of 20/7-04.

A methodology for calculating energy savings needs to be developed and harmonised across the Member States. Development of a harmonised methodology is necessary to agree on which targets for energy efficiency that should apply, because the methodology for calculating energy end-use effects the ambitiousness of the goals for energy reduction. EU-Directive 2002/91/EC «Energy performance of buildings» demands that Member States shall ensure that an energy performance certificate is made available when buildings are constructed sold or rented out. The European Committee for Standardisation (CEN) is developing a methodology for calculating energy use in buildings. The Bellona Foundation recommends a close link between the methodology for calculation of energy use in the two Directives. The methodology should be based on the need for delivered energy, as this will promote utilisation of building integrated energy production.

Obligations on the different actors
Member States must be instructed to assign to new or existing independent public sector authorities the overall control and responsibility for overseeing the framework for reaching the targets for energy savings, verification of the results and reporting the results to the Commission. Bellona believes that a development of a common methodology for calculating energy savings is essential to be able to compare the results obtained to the national targets. The most common way of reporting energy savings today is though guarantee of savings contracts. Therefore, energy savings can be obtained and reported for instance by calculating future effects of purchasing energy efficient equipment, instalment of solar collectors or heating controls etc. This means that energy savings can be reported before the actual energy consumption is reduced, and that double counting might result in a higher value for energy savings than what has actually taken place. The Bellona Foundation recommends that Member States which report guarantee of savings contracts to the Commission are obligated to follow up with documentation of actual savings, processing from the investments made, no longer than a year after having reported on target achievement the first time.

The public sector should fulfil an exemplary role in meeting or surpassing the indicative targets. However the Bellona Foundation does not see the need for quantification of specific targets for the public sector with regard to energy savings. Instead Bellona supports the proposition’s article 5 (3) that instructs Member States to ensure that the public sector purchase various energy efficient equipment.

White Certificates and additional financial instruments for energy savings
In principle, the directive on energy end-use efficiency and energy services should not instruct the Member States on implementing certain financial instruments promoting energy efficiency. However, this implies that the targets for energy savings are made absolute and not indicative as proposed. This is important because absolute targets clearly instructs Member States to perform the necessary actions, for instance implementations of new political instruments promoting energy efficiency, if the goals for energy savings are not achieved. If the national targets for energy savings are made indicative, the Bellona Foundation believes that it will be necessary to instruct Member States the development and introduction of specific means and financial instruments promoting energy efficiency. This might be done though the development of new directives promoting energy savings, for instance national funding programs, tax rebates, promotion of third-party financing or introduction of a marked for white certificates.

Further need for measures might result is specific obligations on energy distributors and retail energy sales companies to commit to energy efficiency investments, participating in a marked for white certificates etc. Measures that promote long-term market effects should in any case be encouraged in the Directive.

Bellona supports the principle that end-users of energy shall be provided with competitively priced individual meters that reflect the user’s actual energy combustion. A link the obligation to provide individual metering and the implementation of an energy certificate on buildings will make is possible for the end-user to compare the actual energy use with the normalised value from the certificate. This link might trigger the interest for using less energy and investment in energy efficiency equipment. The Bellona Foundation strongly supports the proposition’s article 13 (3), which states which information that should be made available to end-user by energy distributors or retail energy sales companies.