23/06/2017 - Briefing: 26 June Energy Council, what is at stake for energy efficiency policies?

On the 26 June Energy Council, Energy Ministers will discuss the EU energy efficiency files currently under revision. The Maltese Presidency of the Council circulated a proposal for a general approach to be examined by ministers.

What does the text contain?

  • The text makes the binding 30% target proposed by the Commission ‘indicative’. This misses out on the potential to create certainty for investors and for the energy transition. Indicative targets have been so far ignored when planning for the energy system. The EU therefore runs the risk of driving investments into costly and redundant infrastructure.
  • Member States setting their national contributions would have the choice, under this new text, to only consider one of the two EU targets: the primary energy or the final energy target. This would allow them to have a partial look at their energy system.
  • The text removes the 2050 perspective for Article 7, which is not aligned with long-term climate and energy imperatives and destroys the long term visibility for investors.
  • While the Commission’s proposals had already proposed to maintain existing loopholes – which means that only half of the 1.5% annual savings is secured, the new text proposes to slow down energy efficiency markets with the creation of additional loopholes in Article 7. More specifically, it proposes the following:

- Continuing the current Article 7 set-up but lowering it to 1% annual savings from 2026, unless the Commission proposes to maintain 1.5%, as proposed by the Italian negotiators. Impact: 17% reduction of savings compared to Commission's proposals.

- Allowing carryover of excess savings from first period to second period, which creates a risk of stop-and-go policies. Impact: 28% reduction of savings compared to Commission's proposals(*).

- The text also introduces retroactive changes about the eligibility of measures in the first period (new buildings), to legitimise a practice from some Member States. Impact: Unkown, but could be important: retroactive change in the first period of Art 7 could also affect the second period through the carryover provision.

- Misleadingly counting up to 15% of the “renewable energy generated in or on buildings for own use” as energy savings. This last provision lacks legal clarity, but the text would suggest that each year, parts of the renewable energy generated in or on buildings would count as if it would be new savings. Considering that around 40% of energy is consumed in buildings, this could mean that if for example 5% of the energy used in buildings would be supplied with on site RES, the requirement to save energy under Article 7 would be reduced to zero. Impact: in our example, this would mean 40% reduction of savings compared to Commission's proposals.

Overall impact: 85% reduction of savings compared to Commission's proposals.

  • The text also weakens the requirement for Member States to demonstrate that the savings achieved in Article 7 are additional to what would have happened without the Member State’s intervention, and to disclose how they have calculated the lifetime of the actions taken. 

 

Recommendations from stakeholders

More information:

 

* The impact of carryover (allowing carryover of excess savings from the period 2014-2020 into the period 2021-2030) has been assessed by looking at Member States national progress reports, where most Member States overachieve the minimum savings requirement in 2014-2020.

Friday, 23 June, 2017