Flexibility is the key to continue the EU’s energy efficiency efforts post-2020. Improvements in energy efficiency can be achieved cost-efficiently by voluntary energy efficiency agreements, like in Finland.
Energy efficiency has taken its important role on the agenda of the EU. The Energy Efficiency Directive (EED) has formed a major part of the implementation of the EU energy efficiency target 2020.
Implementation of the EED has increased demand of energy services, energy efficient products and auditing services in Member States. However, many well-functioning schemes and measures were in place even before implementing EED among Member States.
Important decisions ahead in the EU
A single CO2 reduction target for 2030 is the most cost-efficient way to the low-carbon economy. Energy efficiency is a measure to deliver for that target as its part. The EU should keep the target of 27% energy efficiency for 2030, as the European Council decided on 2014.
All the elements of legislation under Energy Union framework needs to form a coherent whole. The most important ones, like directives for Energy Efficiency, Renewables, Emissions Trading Scheme and decision of non-ETS effort sharing, are on the EU agenda this year. Thus, there is a good opportunity to analyse overlaps and synergies and to apply the better regulation principles.
The EU’s energy efficiency target for 2030 is expressed as absolute primary energy consumption. This is not the ideal solution, since the absolute figure doesn’t actually measure energy efficiency or its improvement. Energy efficiency refers to the comparison of “energy input” to the “product output”. Furthermore, for industry, it is essential to allow economic growth, which might mean growth of absolute energy consumption in these sectors. Therefore, energy consumption should not be capped by energy efficient target.
National indicative target should focus on sectors outside Emissions Trading Scheme
According to the energy efficiency directive, each member state is to set indicative national target for energy efficiency. On top of that, all member states also face a binding annual energy saving target of 1.5% for all energy sales. Since this overlapping target is identical for all member states, it ignores the differences in starting levels and cost-efficient potentials in different countries and sectors. The target overlaps also the Emissions Trading Scheme (ETS), which undermines the functionality of ETS and reduces cost-efficiency. There is no reason to continue with this approach post-2020.
The national indicative target set by every member states gives the flexibility needed to analyse, choose and realize the economically viable measures in the co-operation with energy users (industry, households), energy producers and energy service providers.
Voluntary agreements bring substantial results
Finland has a long history of using long-term voluntary agreements to improve energy efficiency in different sectors of society. In addition to this, these agreements have been used to fulfil requirements of the EU legislation. The present agreements 2008–2016 form a key element in implementing energy efficiency directive (EED) in Finland. A wide commitment has been made to continue Energy Efficiency Agreements for years 2017–2025.
Measures implemented in 2008–2014 in the industrial, municipal and property and building sectors reduce Finland’s annual energy consumption by a total of 12 TWh.
These savings equal 3.2 per cent of Finland’s total energy consumption. They reduce annual carbon dioxide emissions (CO2) by approx. 3.6 million tonnes and energy costs by a total of approx. €440 million. Over quarter of the saved energy is electricity.
Read more about the voluntary energy efficiency agreements in Finland.