On 18th July 2016, the Coalition for Energy Savings organised a workshop on the future of the Energy Efficiency Directive (EED) under the auspices of the Slovak EU Presidency and supported by the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety. The workshop focussed on Article 7 – the requirement for national governments to deliver 1.5% end-use energy savings every year. National experts and energy attaches from 10 Member States and EU energy efficiency stakeholders shared their experiences and perspectives.
Alexander Micovčin, Ambassador and Deputy Permanent Representative of Slovakia, welcomed participants, and emphasised that 2016 would be the year of delivery for the Energy Union and that we have a “legislative tsunami” ahead of us. He specifically mentioned that many areas related to Article 7 require more detailed guidance from the Commission. He welcomed the recent studies from the European Parliament on the progress with implementing Article 7. The informal Energy Council in December will discuss energy efficiency and particularly how to address the barriers in terms of costs.
Stefan Scheuer, Secretary General of the Coalition for Energy Savings, provided further context, explaining that reaching the 20% energy efficiency target for 2020 has the potential to deliver 3 million jobs and €202 billion worth of investment – and therefore is an important priority for the EU.
Two presentations followed, setting the scene. Jan Rosenow, Consultant and Researcher, assessed the implementation of Article 7 and provided ideas for improvements. Frances Bean, from the Coalition for Energy Savings, presented a recent study on the impact of a number of issues on the delivery of annual savings (such a lack of clarity, weak implementation and loopholes), as well as recommendations for Article 7 beyond 2020. The slides are available here.
A discussion followed on the main points:
· Exclusion of transport from the baseline - Many participants stated that they felt that the exclusion of energy used in the transport sectors from the baseline to calculate the target, while allowing measures in the sector to contribute to the target, is counterintuitive and should be ended. It is believed that this clause was introduced during the EED negotiations as the EED planned not to tackle the transport sector, and it was thought at the time that increasing the efficiency of the sector would be difficult. But in the mean time national measures have been put in place delivering results and future EU measures, like for heavy duty vehicles, could make a difference.
· Lowering the target by 25% - Participants questioned whether the exemptions, like allowing phasing in of measures and counting early savings, which can be used to reduce the target by up to 25%, should be maintained. The link to the ETS and supply side was seen as important as EU funds are used for delivering efficiency improvements in large companies which are covered by ETS and these savings should count towards Article 7.
· Data inconsistencies - National energy statistic used for Article 7 purposes often deviate from Eurostat data. While this deviation may be justified with a full explanation of the different methodologies between the data sets, the case was made for ensuring consistent data in future, for example by adapting Eurostat to the EED definitions.
· Additionality – The application of the principle that only savings which are achieved in addition to EU wide standards has not always been satisfactory. Participants acknowledged the issue and noted that further work is required to improve application of the principle. While application is clear regarding EU standards for products and cars, where only savings resulting from national measures, which increase replacements or average performance of purchases, can count, the situation is more complex for buildings, where EU standards are more of a procedural than a result oriented nature. A practicable solution, for example by improving guidance, would be required.
· The costs of Energy Efficiency Obligations (EEOs) - The impact of EEOs on costs for consumers was discussed, including the implications for energy poverty. Some participants voiced concern over the costs of EEOs and the coherence with market liberalisation. Data from the UK and US was quoted to show that, although unit price for energy may increase, EEOs reduce costs for consumers, if designed in a way to ensure all consumers benefits. Further benefits of EEOs were discussed, such as providing longer term certainty and historic findings that EEOs usually reach or even exceed targets.
In conclusion, participants generally agreed on the need to simplify and increase clarity of elements of Article 7. This requires tackling counterintuitive exclusions for calculating the target and questionable exemptions, which add to the administrative burden, and improving guidance regarding additionality and eligibility of measures. The workshop was seen as a useful kick off and a follow-up would be needed once proposals from the review of the EED are published.
Marian Husarik, Head of Energy Unit, Permanent Representation of Slovakia, closed the workshop, highlighting that the forthcoming proposals on reviewing the EED will be a perfect opportunity to provide the clarifications which are needed. A tough discussion on the proposals is expected in the Council, which will be kicked off with a policy debate on energy efficiency at Ministerial level in December.
Disclaimer: These notes are not intended to be a verbatim report from the event but to summarise our understanding of the discussion.