Barriers to energy efficiency: Common sense needs common aspiration

Brussels, 23 September 2015 – New analysis from the Coalition for Energy Savings of implementation of the EU Energy Efficiency Directive shows that the European Union is still only beginning to remove regulatory and non-regulatory barriers to deploying energy efficiency measures that could save vast amounts of energy. The removal of these barriers, such as the inappropriate Eurostat rules on public debt and deficit for investments in energy efficiency improvements, will help tap Europe’s huge potential for energy savings at no cost to the public purse.

By 2030, the European Union could cost-effectively reach a 40% energy efficiency target, bringing numerous environmental, economic and social benefits. Achieving these benefits would require lifting structural and institutional barriers to energy efficiency investments, such as split incentives between property owners and tenants and accounting rules and annual budgeting for public bodies. The Energy Efficiency Directive (2012/27/EU), the EU’s flagship instrument to tackle inefficiency in energy use, requires Member States to screen these barriers and report on the measures they are taking to remove them.

New analysis by the Coalition for Energy Savings of reports on the implementation of the Directive reveals that tackling these identified barriers is still at the initial stage – a sign that much more energy could be saved at little or no cost to the public purse.

Unfortunately, the European Commission recently confirmed rules on public debt and deficit for energy efficiency investments through Energy Performance Contracts (EPCs). These rules do not take into account that such investments generate monetary savings that can refund all or part of the cost or that EPCs can provide a performance guarantee. This has led to the suspension of energy efficiency contracts in several Member States, with further risk of reducing appetite for such solutions.

"Evaluating and removing barriers to energy efficiency at both Member State and EU level is a clear requirement of the Energy Efficiency Directive and the first step to putting the ’energy efficiency first’ principle into practice", said Katarzyna Wardal from the European Federation of Intelligent Energy Efficiency Services (EFIEES). “Solutions exist, and have been flagged by Member States: most of them do not involve extra financial burdens for public budgets”.

“Removing barriers to energy efficiency is a lot smarter and cheaper than trying to get millions of individuals over these barriers”, said Stefan Scheuer, Secretary General of the Coalition for Energy Savings. “The European Commission should provide direction, and if necessary, legislation, starting by ensuring that Eurostat rules are applied in support of energy-efficiency investments rather than stopping them”.  

As a multi-stakeholder Coalition, uniting 29 European business, civil society, consumer, professional, trade union and local government organisations, the Coalition for Energy Savings calls on Member States and on the EU to achieve its full cost-effective energy savings potentials as part of its effort to create a coherent Energy Union, and to deliver its benefits to citizens and businesses.

Contact: Marion Santini | +32 2 235 20 13 | press[at]energycoalition.eu | @EUenergysavings

The Coalition for Energy Savings brings together business, professionals, local authorities, trade unions and civil society associations. The Coalition’s purpose is to make the case for a European energy policy that places a much greater, more meaningful emphasis on energy efficiency and savings. Coalition members represent more than 400 associations, 150 companies, 15 million supporters, more than 2 million employees, 1,000 cities and towns in 30 countries in Europe. energycoalition.eu

Notes for editors

- The full study from the Coalition for Energy Savings is available here.

- In July, the Coalition for Energy Savings sent a letter to the Commission on the rules on public debt and deficit. The updated Eurostat guidance note is available here.

- According to the Coalition for Energy Savings, “Energy efficiency first” is the principle of considering the potential for energy efficiency first in all decision-making related to energy. Where energy efficiency improvements are shown to be most cost-effective, considering also their role in driving jobs and economic growth, increasing energy security and reducing climate change, these should be prioritised. Applying the principle will start to redress the historic bias towards prioritising increasing supply over saving energy – a bias which still persists.

- A split incentive dilemma between a landlord and a tenant is a common barrier to energy efficiency - a landlord pays for energy efficiency improvements, but it is the tenant who benefits from energy savings, unless legal provision is made for sharing the savings.

- In several Member States obstacles to energy efficiency in public sector are created by interpretations of EUROSTAT rules on public debt and deficit on the statistical recording of investments paid by third parties (typically ESCOs) in energy efficiency.  Another related barrier is that public bodies have to count investments in energy efficiency as “capital expenses”, whereas reduced costs will be registered under “operational expenses”. Concerning public budgeting, there is generally no incentive to invest funds in one fiscal year to save money in future ones, despite the benefit to the government as a whole.

- The Coalition for Energy Savings undertakes regular assessments to keep track of progress of implementation of the Energy Efficiency Directive (EED) at Member State level. More information is available here.

- Coalition for Energy Savings Guidebook for a Strong Implementation of the EED.

- European Commission’s website on the Directive 2012/27/EU on energy efficiency.  

- Fraunhofer ISI et al, 2014, Study for the European Commission evaluating the current energy efficiency policy framework in the EU and providing orientation on policy options for realising the cost-effective energy efficiency/saving potential until 2020 and beyond.

Wednesday, 23 September, 2015