Proposal for a Directive on Energy Efficiency

July 2011

Topic The European Commission adopted on 22 June 2011 a Proposal for a Directive on Energy Efficiency. Announced in the frame of the European Energy Efficiency Action Plan (EEAP) adopted on 8 March 2011 by the European executive body, this Directive is designed to transform some aspects of the EEAP into binding measures, in order to ensure that the EU will reach its target of saving 20% of primary energy consumption by 2020. Challenges Setting a common framework to promote energy efficiency The proposal for a Directive repeals and merges two Directives on Energy Services and Cogeneration, and broadens their scope to energy supply and distribution. It establishes a common framework to promote energy efficiency and covers the whole energy chain from generation to enduse, including transmission and distribution. Reaching a target of saving 20% of primary energy consumption by 2020 at EU level The proposal for a Directive is designed to ensure the achievement of the target of 20% primary energy savings by 2020 through a range of sectoral measures. It does not set binding objectives, but leaves the Member States free to set national schemes and to make them binding or indicative. The progress made on the implementation of the Directive shall be assessed each year; by 30 June 2014,

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the European Commission shall assess whether the Union is likely to achieve its targets and examine if legally binding targets are deemed necessary. Giving a leading role to the public sector in energy efficiency The public sector should lead by example in different ways : - Public bodies are encouraged to purchase specific products, services and buildings meeting high energy efficiency standards ; - 3% of the total floor area over 250m owned by public bodies shall be renovated each year and meet at least the minimum energy performance requirements ; - Public bodies are encouraged to adopt energy efficiency plans and to put in place energy management systems ; - A more systematic use of energy performance contracting shall be encouraged. Ensuring that consumers benefit from energy savings Consumers should benefit from energy savings through tailored energy services and information. - Each Member State shall set up an energy efficiency obligation scheme for all energy distributors and retail energy sales companies ; - The Directive foresees the roll-out of individual smart meters that provide consumers realtime information on their energy consumption ; - The final consumer shall be assured that billing is accurate and based on actual consumption. Improving energy efficiency in industry and in transformation and distribution of energy Member States shall create incentives for SMES to undergo energy audits and to exchange best practices ; these audits shall be mandatory for large companies and combined with the introduction of energy management systems ; Member States shall adopt national heating and cooling plans to ensure the transparency and predictability which is required for investments ; Network tariffs and regulations shall provide incentives for grid operators to offer system services to network users allowing them to control their consumption ; Efficient district heating and cooling infrastructures to accomodate the development of high-efficiency cogeneration shall be developed.

Key points of the debate The opportunity of national binding targets for energy efficiency is one of the key points of future debates on the Directive. Members of the European Parliament have already made a critical appraisal of the Directive, considering that it will not ensure the achievement of the targets by 2020 and calling for binding targets from today. On the contrary, Member States reaffirmed last June 2011 their preference for national indicative targets, taking into account their starting points, their national specificities and their potential.

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The proposal for a Directive triggered reactions from the actors of the sector not only because of the nature of the objectives set for Member States, but also because of the limited scope of some of the measures proposed, compared to what was announced by the EEAP. The postponement of the deadline for the review of the Directive until 2014, the threshold set for the renovation target for public authorities, or the impact of the measures proposed on the European ETS system have particularly given rise to debate.

Next steps The proposal for a Directive of the European Commission will be considered in the next months by the Council of Ministers and the EP committee on Industry, Research and Energy under the codecision procedure. The negotiations should be tough, as both institutions have diverging views on some key elements of the proposal and are on an equal footing under the codecision procedure. The purpose of the negotiations is to reach an agreement between the Council and Parliament in 2012 to enable the entry into force of the Directive end 2012. The Member States would then implement the Directive into their national law, i.e. bring into force the laws, regulations and administrative provisions necessary to comply with the Directive, by December 2013. The implementation of the Directive would be evaluated in June 2014; the opportunity of setting national binding targets will be reassessed at this occasion.

Useful Links Website of Directorate-General for Energy (European Commission) http://ec.europa.eu/energy/efficiency/eed/eed_en.htm

You will find all the International Review about Regulations in Electrical Efficiency on the web site:

http://www.electrical-efficiency.com/category/regulation/rexel-international-review/

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