From an EU perspective, the path to a deal in Copenhagen is definitely rocky and getting rockier. From the back-slapping over the past two years and the self imposed 20% cut in GHG emissions by 2020, the EU negotiators are slowly lowering their sights. However, there will be a deal and whatever it is, one must see it as a way-point towards decarbonising the global economy. A number of points in the Copenhagen negotiations are worth looking at in this respect.

Firstly, all parties to the negotiations are agreed that something needs to be done and will therefore agree that in some form the emissions of GHGs must be limited or mitigated by a specific date. Secondly, as we are living with a changing climate anyway and one which is affecting all of us on this planet, there is gathering consensus that there should be a strong focus on adaptation. Thirdly, there is the issue of costs. Right now, in the teeth of a self-inflicted, over-consumption binge the world is in recession (though if you are a poor labourer or farmer in the developing world you might be saying: “recession? What recession?”), everybody is shuffling and whistling when the issue of money for climate change is mentioned. Finally, there is the issue of technology transfer. This has been the subject of stand-offs between the developing and developed countries for a variety of reasons, but now it seems to be heading towards a compromise. Let’s look in more detail at financing and technology issues as these are central to both the scale and speed with which one can respond to the climate change agenda.

Financing Climate Change –  There must be a Global Fund

Financing climate change actions is a genuine sticking point and it will not be resolved easily. The logical solution is to establish a global fund akin to that established for the Montreal Convention with the rich countries contributing the lion’s share. But there is disagreement on this with the US for instance talking about payments to the fund being voluntary. This approach we know does not work at a multi-lateral level. One only needs to look at the GEF or the POPs Convention to see why. Lots of pledges of money, but very little actually put into the kitty. No, if there is to be a global fund, then everybody pays according to an agreed formula.

The EU is broadly in favour of some sort of global fund based on “assessed contributions” for all but the poorest countries. That said, within the EU, many Member States are in deficit at the moment, so it is not a great time to be passing around the hat looking for more money. The EU Finance Ministers met this week in Luxembourg to discuss proposals but failed to agree on a formula for the EU’s overall contribution. It was apparently the second time that they dogged the issue. It will now go down to the wire so to speak and be decided (we hope) next week during the summit of European Heads of State on the 29 and 30 of October. In the end, there will have to agreement on a contribution otherwise there will be no deal at Copenhagen at all. A likely outcome is agreement on a general EU contribution with the detail of how that is to be met worked out later – probably after Copenhagen.

Low-carbon technologies – new innovation platforms for the 21st century

In the EU we know we have the technologies which can help us secure a diverse energy supply, reduce energy consumption and above all reduce GHG emissions. They are also technologies were the EU has a strong lead in terms of innovation and competitiveness. Of course, cost is a factor when it comes to deployment of the technologies and there is a need to ensure that take up of low carbon technologies are encouraged through appropriate financial or fiscal means which is happening already.  A high carbon price in the EU ETS system will also help here. We only need to look to China to see what a transformation is going on there in terms of progress to decarbonise.

In China, there is  a quiet energy revolution going on driven by the real need to protect human health from air emissions as well as to reduce its energy intensity. Indeed, China actually has a target to reduce its energy intensity which will have an important side effect in terms of reduced GHG emissions. Its investment in renewable energy is staggering. In 2008 it increased by 18% to 15.8 Bn Dollars compared with average global growth of only 5% that year. These investments cover photovoltaics, solar water heaters and wind (it is the fourth largest wind producer in the world). When it comes to biofuels China is pushing up production but importantly, because of food security concerns, is focusing on using residual plant material, jatropha and waste oils and fats. Lastly, China is also amongst the top producers of hybrid cars and energy efficient appliances.

What this tells us is that the largest GHG emitter on the planet is actually moving very rapidly to decarbonise its economy and to take competitive positions in low carbon technologies and renewables on a global level. Of course, it has a long way to go. But it is its ‘fleet of foot’ that is remarkable.

Speedy follow-up to Copenhagen agreement is critical

Implementation of agreed policies (assuming we get agreement) in the EU is not easy at the best of times given the institutional apparatus and the need to accommodate 27 Member States institutional and cultural contexts. In other words the collective EU is not exactly ‘fleet of foot’.  The EU will no doubt play its part in cementing some sort of deal in Copenhagen. However it is what it collectively does in 2010 to put its money where its mouth is that will be the acid test.

The need for “speed” is highlighted recently by WWF in a report “Re-industrialising to a Low Carbon Economy” which, though based on a specific economic/climate model, does still focus the mind. Effectively WWF are saying we will need to begin the transition to the low carbon economy in 2014 – a very precise date just over four years away. The clear message is that we, especially in the EU, need to get real, organised and focused on this challenge if we don’t want to end up endlessly responding to global food, water and security crises ( some of which may directly threaten us). In other words, whatever about stumbling along the rocky road to Copenhagen, we need to accelerate our efforts across all sectors of economy and society to achieve a substantial decarbonisation and reduction of GHG emissions and we need to do this now.

Gadgets and Gigawatts

Back in May 2009 the International Energy Agency (IEA) published a study Gadgets and Gigawatts which looked at the impact of the explosive global growth in consumption of electronic devices from TVs to mobile phones. The IEA study found electronic devices currently account for 15% of household electricity consumption but their share is rapidly rising. Already there are nearly 2 billion television sets in use, with an average of over 1.3 sets in each home having access to electricity. Over half the global population subscribe to a mobile telephone service, and the number of external power supplies associated with many electronic devices now exceeds 5.5 billion.

Presenting that report IEA Executive Director Nobuo Tanaka said that “despite anticipated improvements in the efficiency of electronic devices, these savings are likely to be overshadowed by the rising demand for technology in OECD and non-OECD countries”. He called on governments to urgently implement policies to make electronic devices such as televisions, laptops and mobile phones more energy-efficient.

The IEA stated that without new policies, the energy consumed by information and communications technologies as well as consumer electronics will double by 2022 and increase threefold by 2030 to 1 700 Terawatt hours (TWh). The net effect of this will be to jeopardise efforts to increase energy security and reduce the emission of greenhouse gases.

However, the IEA report noted that opportunities for savings are considerable. Electricity consumption from residential information and communications technologies and consumer electronics devices could be cut by more than half through the use of the best available technology and processes which are currently available. This would slow growth in consumption to less than 1% per annum through 2030. This level of energy saving represents a reduction to consumer energy bills by over EUR 90 billion in 2030 and the avoidance of 260 GW in additional power generation capacity – more than the current electrical generating capacity of Japan the IEA noted.

Some of these savings can apparently be achieved through better equipment and components, but the largest improvement opportunity needs to come from making hardware and software work together more effectively to ensure that energy is only used when, and to the extent needed. To deliver these savings, strong public policies are needed. This is particularly the case given that new devices increasingly offer a variety of functions, each of which may have differing energy needs; policies are therefore needed that set maximum energy budgets for each function. The problem is getting the sector and governments to act in a concerted fashion to address these issues and aim to decouple further the growth in energy consumption associated with growing demand for electronic goods. Is this likely to happen?

The response of the ICT sector within the EU

In the last few days the European ICT sector and the Commission have concluded a voluntary agreement to monitor the sector’s contribution to energy efficiency and its contribution to moving towards a low carbon society. Details are set down in a Commission Recommendation which, although not binding, does carry some political weight. The Recommendation specifically calls on the ICT sector to produce a roadmap within three months setting out how it will define and implement common methods for assessing its own energy performance in 2011. Further the sector should adopt by 2011 energy efficiency targets that “aim to exceed the EU 2020 targets by 2015”. In 2007 the EU set itself a non-binding goal to reduce energy consumption by 20% by 2020.

The Commission intends to review progress made in implementing the Recommendation in 2012, at which point it may propose “possible follow-up intervention”. Member States meanwhile have been asked to adopt public procurement policies to drive demand for efficient ICTs, and develop pilot projects to demonstrate technologies such as smart grids and energy meters. These Member State obligations seem quite ambitious – even over-ambitious given the state of the public finances in most EU States.

A contribution to curbing the growth in energy consumption from electronic gadgets?

While the Commission Recommendation for the ICT sector is a step – it is only a very small step. True, it is necessary to get a handle on what the current performance of the sector is and then monitor its trajectory. When you know this you can decide how to manage it. However, this does not go far enough towards addressing what the IEA is talking about. Perhaps the proposed road map to be developed within the coming months will reveal more on this – but this is doubtful. Equally, there must be some question mark over the sector’s ability to police let alone set an energy efficiency target for itself.

As to the Member State dimension in the Recommendation, this is really rather strange to say the least. In fact on a second reading of their “commitments” it seems that a lot of their activity is in reality linked to the expansion of broad band networks and use of ICT in public authorities! Clearly a case of riding a bandwagon to further your own policy – in this case EU communications policy.

This Recommendation is to be welcomed but with strong caveats attached. Don’t expect to see much real activity or measurable results soon. We need a joined up policy or policies to address energy consumption of products. The recent revision of the energy using products directive will help here. Going forward, the Commission (DG TREN), as part of its review of the EU Energy Efficiency Action Plan, has just indicated that it might move towards a mandatory energy efficiency target for the EU. Whether it does or not, clearly it is within this broader framework that the ICT ‘runaway train’ needs to be brought under control in the coming years.

Commission Recommendation on mobilising Information and Communications Technologies to facilitate the transition to an energy-efficient, low-carbon economy C(2009) 7604 final

The European Commission recently produced a communication entitled ‘GDP and beyond – measuring progress in a changing world’. The purpose of the communication was to identify a number of actions that could be taken in the short to medium term to improve data and indicators to complement GDP thereby making for an informed public debate and better policy making. The Commission further intends to cooperate with stakeholders and partners to develop indicators that are internationally recognised and applied.

As with a lot of recent Commission Communications of a general nature, this makes several large assumptions and then neatly dodges the question it poses, namely how to move beyond the simplistic measure of economic progress GDP. To some extent, this is only natural.  There is no significant political will at any level – Global, EU or national to move away from GDP. This is of course a pity – as GDP is an indicator that distorts the way we perceive our impact on global resources and is used as a kind of ‘tennis ranking’ where countries aspire to improve their GDPs – sometimes at all costs. We also see the almost daily disconnect  between the ‘holy grail’ of GDP growth and environmental and social realities as evidenced in Spain and Ireland now due to excessive housing and construction bubbles which drove on the GDP rate like a runaway train.

The Commission Communication instead looks at the wide range of environmental and other indicators that have been developed or are being developed and proposed in order to provide a more balanced view of man’s impact on the environment. One can summarise their review by saying that we have indicators and alternative indices initiatives coming out of our ears! That said, the Commission is itself proposing ‘a comprehensive environmental index’ to be used alongside GDP in the EU. The close candidates acting as models for such an index are the ecological and carbon footprints (why these models is not elaborated upon).

The Commission intends to present a ‘pilot version’ of its index in 2010. It boldly states that the index will ‘reflect pollution and other environmental harm within the EU territory to assess the results of environmental protection efforts. A fall in the value of the index will show that progress on environmental protection is being made’. In other words the index goes in the opposite direction to GDP. So it is conceivable that a Member State which is seeing its GDP rise could see its environmental index fall – meaning it was decoupling or rise with GDP – meaning it is adding to environmental pressure. So citizens enjoying a booming economy GDP-wise would be able to take stock and say – hold it, we are producing too much CO2 and waste, we must do something about it!

Frankly, it is hard to see how this approach will have any practical value. If our goal is to improve policy making and to move our economic development model towards a more sustainable pathway, we need more than just indicators. We need bold and coordinated decision making – something which the EU, despite its current global environmental leadership role, cannot provide for its citizens under its present institutional arrangements.

If we want to go down the road of measuring and reporting our impacts on the environment we don’t actually have to do too much or start from scratch. There is an Agency – the European Environmental Agency based in Copenhagen – which spends all its time collecting information on the state of the environment within the EU and its bordering neighbours. However, one never sees all of this wonderful data broken down by Member State by environmental parameter. Why? After nearly 20 years in existence one would have expected to see such a development from the Agency – but for some reason not yet.

A suggestion therefore, if we want to complement GDP, we want to improve policy making and also inform our citizens on the trends with regard to environmental impacts, would be to get the EEA to provide annual environmental performance scorecard for the EU Member States. It would highlight which Member States have got it together and which ones have not.  But of course this may be the very reason that this is not being done. It would cause too much public debate and embarrass Member State governments and we can’t have that, can we?

Communication from the Commission to the Council and the European Parliament (COM (2009) 433 final). GDP and beyond – measuring progress in a changing world

The European Commission quietly slipped out its 2009 review of the EU’s Strategy for Sustainable Development (EU SDS) in late July with an interesting strap line “mainstreaming sustainable into EU policies”. The strap line harked back to the 90s policy goal of integrating the environmental dimension into other EU policies – remember the 5^th Action Programme and the “Cardiff Process”? All long passed under the bridge but with some successes under their respective belts. But what kind of outcome is expected from “mainstreaming sustainable development into EU policies”? There is something not quite right about this as an approach – a cart before the horse type feeling. It raises a broader question of what exactly we trying to do with this strategy. Are we expecting to achieve the Treaty goal of balanced and sustainable development? A cursory look at the Treaty suggests otherwise. Indeed, it could be argued we are far from correctly interpreting the Treaty goal as it is stated.

Sustainable Development in the EU Treaties

The 1997 Amsterdam Treaty set out the goal of European Union as being:

to promote economic and social progress and a high level of employment and to achieve balanced and sustainable development, in particular through the creation of an area without internal frontiers, through the strengthening of economic and social cohesion and through the establishment of economic and monetary union, ultimately including a single currency in accordance with the provisions of this Treaty.

In Article 2 of the same treaty there was a further elaboration of this broad goal in terms of the specific strategic direction for the Community:

The Community shall have as its task, …..to promote throughout the Community a harmonious, balanced and sustainable development of economic activities, a high level of employment and of social protection, equality between men and women, sustainable and non-inflationary growth, a high degree of competitiveness and convergence of economic performance, a high level of protection and improvement of the quality of the environment, the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States.

The sections underlined highlight a particular dichotomy of purpose with respect to sustainable development and economic growth which is at the root of the current ad hoc nature of the EU’s political approach to sustainable development. We want to be sustainable, but we want growth too. While some might argue that these goals are not mutually exclusive, as a biologist and a scientist I have to disagree. We need to drop the growth phrase from our interpretation because it is obscuring our view of where we need to be if we want to put the Community on a sustainable development path. Some will agree or disagree with this suggestion. But perhaps we need a debate to resolve our views and come to some consensus on interpretation of what we want.

The 2009 Review of the EU SDS

The 2009 review of the EU SDS is really a collection of actions and activities being undertaken by the EU and the Member States (though there are not too many actions reported from any of them). It is verbose, long on qualitative descriptions of what is happening but no idea is given of how we are doing relative to our point of departure – wherever that was. We know from the Lisbon Process that there are sustainable development indicators out there – but they not in this report – why?

To some extent the answer lies in the muddled way we continue to approach sustainable development. Despite the Treaty goals mentioned above, the Commission and Member States failed to make good the commitment on balanced and sustainable economic activities etc. when they launched the Lisbon Strategy for Growth and Development in 2000. Sustainable development was “left at the post” so to speak in horse-racing parlance. The EU SDS was launched in 2001 during the Swedish Presidency – almost a full year later following extensive criticism from many quarters. It has been attempting to catch up ever since. It suffers first and foremost from the fact that it is an “add-on” and not the central driver. It also has no “rider” no helmsman no leadership. Instead it drifts along within the overall “Lisbon Process” with occasional rhetorical flourishes from the Commission or this or that Presidency. In short it is being treated as some form of “political jewellery” – good to have around your neck for people to look at but really rather useless.

How can we resolve this? Well here the 2009 review is tentatively signalling in its conclusions the need for a more thorough review and debate on EU policy for sustainable development. This is needed for sure but we need to really get to grips with what the overall goal is. Is it to promote economic and social progress? Is it balanced and sustainable development of economic activities etc., along with sustainable, non-inflationary growth? Besides seeking answers to these questions, we need to see the entire economic and social policies of the EU aligned towards the goal of sustainable development (whatever we decide that to be). This means no more Lisbon Process in its present form.

A need to realign the Lisbon Process

The Commission and the Member States have a chance next year to effectively realign the development path of the Union when they review the Lisbon Process ten years on. It is an opportune time to recast Lisbon in the true spirit of sustainable development as required by the Treaty. Further, given the tremendous impetus and support for shifting our economic model to a more energy efficient and low carbon one, this is surely the moment to realise the integration of economic, social and environmental goals. But will they seize this opportunity?

Unfortunately with the global economic crisis at the top of every political agenda at present and the need to achieve a positive outcome from the Copenhagen Climate Change negotiations by the end of 2009, there is not too much time being spent on getting our approach to sustainable development correctly focused. We are also still a little bit overawed by the task of turning a concept and an aspiration such as sustainable development into practical economic and social policies which work with the environment and not against it. In reality, we prefer the comfort of sectoralism where we can break down the problem into manageable chunks. Martin Holdgate, the former Director of the IUCN once said in the late 1980s that “sectoralism is the enemy of sustainable development”. Not much has changed since but there is always hope for the future. So do we need a major review of the EU’s approach to sustainable development? The answer is a definite yes and it should begin in earnest.

Setting policy goals and targets has become an essential part of the EU’s approach to just about everything. No more so than in the climate change and energy policy areas where we have the famous triple 20 by 2020 to be achieved in the areas of greenhouse gas emission reductions, energy efficiency and renewables. As we approach 2010, all of them are facing there own particular challenges. None more so than renewables.

In the last three weeks, we have seen news articles focusing on the tough realities facing the various parts of the renewables industry as they press forward to try to meet the ambitious EU target of 20% overall with a 10% share for renewables in transport included. The photovoltaic sector has been hit by overcapacity which is expected to last until 2012 – probably due to the economic downturn. ENDS Daily reported (19 August 2009) that the German solar panel industry was cutting jobs due to declining sales and tough competition from China (surprise surprise). Indeed, ENDS also quoted a report published in May 2009 by consultants Frost and Sullivan which warned that Europe’s dominant position in this field was being threatened.

Wind power is facing its own issues. Chief amongst these is the lack of a joined up European grid and how to resolve the problem of storage when you generate too much power. Grid stability has also been recently highlighted as a potential problem in some countries where wind power capacity has being growing rapidly.

The biofuels target (10% share in transport fuels by 2020) has been the subject of a lot of debate even before it was adopted primarily because of fears it would lead to displacement of food crop production and damage to global biodiversity. Whilst these issues appear to have been addressed – for the moment, the market realities of a low oil price and subsidised imports into Europe of biodiesel are keeping European production lower than expected. The Commission and Member States are moving to tackle these problems but the pace is, to say the least, somewhat slow.

The above points not to a failure in policy or an overly ambitious target, but rather a need to focus more efforts on policy implementation and coordination within the EU. The issues mentioned above have been seen and described before by other commentators. But for some reason they never get addressed until we are at “ten minutes to midnight”. Unfortunately, this leads to the conclusion that for politicians and regulators, target setting has become the goal and not achieving the desired outcome. This is compounded by an over simplified view of the dynamics of the market as well as ignoring the realities of trying to get 27 diverse Member State energy structures and markets to work together.

Last week we reviewed the Commission’s plans to update its 2006 EU Energy Efficiency Plan (EEAP) noting that while this review process is welcome, the reality is that energy efficiency is not going to make a significant contribution to energy security and rational use of energy without reinforcing the overall energy efficiency planning function at Member State and EU levels. Assuming the adoption of the Lisbon Treaty by the end of this year, we will see eventually the emergence of more and better coordination of energy policy at EU level. At Member State level as we know, we have a different story.

This is very clearly demonstrated in the recently published assessment[1] of the 27 Member State National Energy Efficiency Action Plans (NEEAPs) which were required under the end use energy efficiency Directive (Directive 2006/32/EC). Highlights from the review include:

• Non-respect of the deadline for the notification of the first report (end June 2007) by 25 of the 27 Member States;
• Completion of only a partial assessment of the NEEAPs by the Commission at the end of 2008 due to unavailability of all of the NEEAPs (the final NEEAP was only received in June 2008 – a full year after it was due!);
• The evaluation proper was hampered by the lack of a common template and guidelines for drawing up the NEEAPS (an omission I drew attention to in my last blog). This makes the work of any evaluator extremely difficult and also any meaningful evaluation necessarily constrained to what the individual Member States say they are doing.

Despite the constraints above, the evaluation does reveal that all Member States are engaged in supporting a variety of energy efficiency actions mostly in the residential sector. They have all set targets to meet the goal of 9% savings based on annual final inland energy consumption by 2016. Indeed many of them have set intermediate targets for 2010 and some have targets to 2020. The problem is tracking and measuring performance versus the targets set is all but impossible at this point in time due to the variation in target setting and periods of time chosen.

The concentration on the residential sector is interesting despite the exhortation of the Directive to focus on proactively engaging the public sector. Sure, the residential sector does deserve some attention and measures such as tax breaks and grant incentives can be of benefit to individual householders and consumers. But in the great scheme of things if you want bang for your buck and also to grab more energy savings potential it is in the tertiary buildings sector you should focus on. This sector is often dominated by publically owned buildings (the more so in the old east European Member States). So why was this not focused on?

A lack of a planning process for energy efficiency

While the end use energy efficiency Directive set out a requirement for the drawing up of the NEEAPs it does not elaborate any formal process for their development. As important as any plan is, the process by which it is developed is equally important. In these days of greater transparency in policy and decision making it is striking how often we forget the rhetoric and simply respond to administrative and political expediency. This is clearly the case with the NEEAPs and another reason why they fail to meet the mark and will continue to fail to meet the mark.

We need to see the NEEAPs, as they are hopefully revised going forward, subjected to a process where the principal stakeholders and actors in the energy efficiency game can be brought into the priority setting and measure definition exercise. We should also understand the relative environmental, cost and CO2 savings that will arise from the plans.

Maybe this is going too far in the framework of the current end use energy efficiency Directive, but given its goals, the answer is it is not going too far.  It is perfectly logical to have joined up thinking like this.

By analogy, if one looks at the regional planning process established within the context of the EU structural Funds one sees precisely the sort of logical planning framework that is missing within the NEEAP process. The structural Funds planning and programming process has been honed over almost two decades now and most Member States even the new Member States are familiar with its process dimension – setting objective, defining priorities, drawing up implementing measures and putting in place evaluation frameworks including indicators to monitor progress against targets or outcomes. Why not transfer some of this know-how into developing a systematic energy efficiency planning process?

Where to now?

It is always easy to pick holes in the way we do things. That is natural and in fact it is part of the way we try to improve the way we do things. Often too, there are political forces at play which make for inefficiencies in processes or poorly crafted plans which we can not address easily.

In the case of the NEEAPs under the end use energy efficiency Directive there are some clear improvements that need to be made. Firstly, get a standardised template and guidelines for drawing up the NEEAPs in place as quickly as possible. From the Commission review it seems that a process to do exactly that is under way but whatever is developed has to be approved by the technical committee for the Directive (made up of experts from the Member States). One hopes that this committee does not make a political football out of this. But something in the back of my mind tells me that getting it approved in the first go will not be easy.

If the template and guidelines can be quickly adopted say in early 2010, then it will be in time to influence the process for developing the 2011 NEEAPs. A further bonus here is that for the new Member States, where the lion’s share of the structural and Cohesion Funds are being spent, there will be an opportunity to re-align and fine tune regional development aid towards energy efficiency priorities and measures as the current aid frameworks and programmes (2007 – 2013) will be going through a mid-term review exercise.

Secondly, get the priority shifted to tertiary public sector buildings where the considerable procurement power of that sector married with creative use of financial instruments such as energy savings performance contracting (ESPC) will have a bigger and more visible impact than dispersed measures focused on individual households and properties. That is not to say forget about residential energy efficiency – no. It means acknowledging that we can get bigger savings faster in the public sector. The residential sector is well catered for through building codes, insulation grants, alternative energy grants, new boiler system grants, etc;

The focus on transport and energy appliances needs to continue – and thankfully there are emerging regulations and Directives which will reinforce energy saving here.

Finally, if we want to get the public on board with energy efficiency, then we should let them participate in the development and adoption of the NEEAPs. Why not? Does the EU Directive on strategic assessment of plans and programmes not provide a legal basis for this? The intention is not to make the process any more bureaucratic than it needs to be. But planning should be about a process and a partnership between citizens and policy makers. Let’s try to move towards this model in promoting energy efficiency – it might actually help people to become engaged.

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[1] European Commission, 2006. Synthesis of the complete assessment of all 27 National Energy Efficiency Action Plans as required by Directive 2006/32/EC on energy end-use efficiency and energy services. Moving forward together on saving energy, Commission Staff Working Document.

The deadline for submission of comments by parties interested in putting their views across on the upcoming review of the EU’s Energy Efficiency Action Plan (EEAP) has now passed. The review of the action plan (COM (2006) 545) arises from a European Council request to the Commission to update the plan in the light of progress (or lack of it) in its implementation. The Council is also concerned that the agreed targets for renewable and low/zero carbon technologies for energy supply by 2020 will not be met without focusing on reducing demand for energy – hence a need to redouble efforts to improve energy efficiency. Moreover, the EEAP has been criticised by other stakeholders and the European Parliament for not being embedded in a mandatory EU energy efficiency target in the same way as for renewable energy and GHG emission reductions by 2020.

The original plan

The original EEAP outlined a framework for intensifying EU energy efficiency so as to reach a goal of over 20% improvement in energy efficiency by 2020. The plan listed a range of measures including a number of priority actions which were to be implemented immediately.

Optimistically, the plan noted the importance of individual decisions with respect to energy efficiency and highlighted the need to engage consumers through information campaigns etc. The six key areas identified as having the highest potential for energy savings were:

• Energy performance requirements for products, buildings and services
• Energy transformation
• Transport
• Financing and pricing
• Energy behaviour
• International partnerships

Within these areas some 85 actions and measures were identified which were to be taken at EU and national level. At EU level, this effectively meant taking actions in the areas of:

• Appliance and equipment labelling
• Adoption of building performance requirements and promotion of low energy buildings
• Making power generation more efficient
• Achieving fuel efficiency in cars
• Facilitating appropriate finance of energy investments for SME’s and Energy Services Companies
• Coherent use of taxation
• Energy efficiency in built up areas
• Raising energy efficiency awareness
• Fostering energy efficiency worldwide
• Spurring energy efficiency in the new Member States

Progress so far

The background paper produced by the Commission for the public consultation on the EEAP and its revision clearly acknowledges up front that the 20% target is not likely to be achieved – 13% is the best estimate by 2020. The reasons why the target is unlikely to be reached are noted; the principal one being the fact that day to day responsibility for achieving energy efficiency lies with the 27 Member States. Their diversity of energy contexts and climates means it is difficult to put forward a common approach or common measures. Allied to this the current economic and fiscal state of a number of them means that financial support to encourage energy efficiency are not exactly top of the agenda – despite all the rhetoric about re-casting their economies as “green” with a focus reducing their carbon footprints.

That said there has been some progress on the legislative front which will help the situation. This is particularly the case when it comes to buildings (the revision of the energy performance in buildings Directive), appliances (energy using products Directive revision) and of course the setting of new emission limits for CO2 from cars. So the building blocks are there.

But legislation no matter how good in this area will not get the job done without effective implementation. The background document recognises this and goes on to propose further flanking measures to place energy efficiency much more to the front in terms of energy policy. Alas, while a lot of laudable suggestions are made, the reality is that energy efficiency is not as sexy as promoting renewables. There are too many bits to it; too many actors and factors to consider. It is very hard for politicians to get kudos for promoting energy saving – much easier to be seen promoting and opening wind farms.

How can we practically improve energy efficiency within the EU?

Amongst the many possible measures to be considered for the revision of the EEAP, is the possibility of setting a mandatory target for energy efficiency – at EU level presumably or to be achieved overall. But would a mandatory target help? For some stakeholders and governments in love with targets, the answer is yes. It would provide focus and impetus. However, the reality is it would be difficult to monitor and verify. One only has to look at the target set in the end use energy efficiency Directive (1% per annum to 2015) to see how difficult it is to measure energy efficiency. Rather than a lengthy discussion on mandatory or not, it seems more useful to focus on practical tools, implementing more effectively existing legisation as well as targeting specific sectors for energy efficiency improvements.

In 2008, the European Policy Centre (EPC) produced a working paper outlining how the EU could move to a more energy efficient paradigm within the broader context of a rational approach to energy use. The paper was based on the outcome of an EPC Task Force on rational use of energy chaired by Jorgen Henningsen, a former Commission official who worked for the Energy Directorate General.

The EPC paper clearly noted that the rational use of energy on its own is not a magic bullet for dealing with our growing dependence on foreign energy supplies. Equally, though the targets for renewables and climate change will not be met without a concerted focus on energy efficiency.

They proposed five tools to drive the rational use of energy and energy efficiency:

• Pricing – to ensure that energy costs reflect all of the costs involved in its production and distribution;
• Incentives and standards – to encourage take up of energy-efficient technologies;
• Mechanisms to promote long term energy efficiency gains into upfront benefits – essentially the wider use of energy savings performance contracting (ESPC) a financial engineering device developed in the US which has had a big impact on energy efficiency improvements in the Federal buildings sector;
• Leveraging the public sector – clearly a big win here as they own or manage millions of square meters of building space and are in a position to be directed to achieve specific targets;
• Provision of information – at the individual and company level to encourage rational use of energy.

A number of the tools mentioned by the EPC are likely to appear in the eventual proposal from the Commission to revise the EEAP along with other measures. However, if the EEAP is to be really effective going forward it needs to focus on a clear mechanism and process for ensuring and reporting progress with respect to achieving the target (mandatory or otherwise).

Such a mechanism is not too far from hand. Within the framework of the end-use energy efficiency Directive (2006/32/EC) there is already a requirement for drawing up national energy efficiency action plans. However, for some reason, the Directive did not set out a standard format or requirement for such plans. Member States have submitted their first plans required under the Directive (with the majority missing the submission deadline!). However, the lack of a standard format makes it very difficult to judge the efficiency and effectiveness of a plan much less to judge one against another. This blog will review these next week. However as a practical suggestion to the Commission right now – please provide harmonised guidance for the drawing up of national EEAPs.

Improving energy efficiency is going to be hard work. The Commission has worked hard to cajole Member States to implement existing legislation and to report on what they are doing to achieve or try to achieve the 20% target. But if we are to seriously get value out of the investments being made in renewable energy and other low-carbon energy technologies then we have got to redouble our efforts with respect to energy efficiency and to ensure that the efforts being made can be more transparently reported.  In this regard, the Commission should use more effectively, with amendments if necessary, the end use energy efficiency Directive and its reporting framework. Let’s see if this is reflected in the eventual proposal on the revised EU EEAP.

I am an environmental scientist with more than 25 years experience in a variety of environment related positions with a range of public and private organizations at EU and national level. I am currently a consultant on EU environmental policy and regulatory affairs working on assignments in the environment, energy, sustainable development and regional policy areas. I have an intimate knowledge of EU institutional processes and an excellent network of contacts built up over 20 years in both working for and in dealing with the institutions and the evolving policy issues.

This blog will concern itself with offering an assessment of EU policy initiatives and legislative proposals as they arise. It will provide analysis and ask some questions to try to assess the relative merits, efficiency and effectiveness of the policy or measures being proposed.