EU energy and climate strategy: “20-20-20” target - part V - KEP energy Magazine - KEP energy

The report COM 2010 639 final “Energy 2020 – A strategy for competitive, sustainable and secure energy” is the background of the 2012/27/EU Directive publication. The report underlines that: 1) the energy interconnection among Member States must be managed through an overall EU action; 2) despite the aims of the EU energy-policy measures, there are many implementation problems. The report delineates five actions in order to converge towards an energy efficient use, such as it allows the energy efficiency increase set in 2020:

1) implementation of EU energy efficiency measures;

2) realization of an EU integrated energy market;

3) improvement of the end users responsibility and awareness;

4) widening of the EU leadership in energy technologies and innovations;

5) strengthening of the EU energy market over the extra-EU countries.

The “Energy Efficiency” Directive implements these five actions.

According to Eurostat data (available in 2015), during the 2001-2013 period the EU energy dependence has increased of 6%. That is, the annual growth rate has been equal to + 1,03%, and its trend foresights a further increase. At the same time, during this period the gross inland energy consumption has decreased of 60.522 MTOE. That is, the annual de-growth rate has been equal to – 0,24% and its trend foresight a further decrease. From these trends it results that, until now, the energy dependence increasing prevailed on the gross inland energy consumption decreasing, and therefore that the implemented energy efficiency measures have not been deep enough.

According to Eurostat data, in 2012 the fossil fuels represented the 74% of EU gross inland energy consumption, as shown in Figure 8. It is foresighted that they continue to be dominant in the medium and long term. The main worldwide confirmed reserves of fossil fuels are placed in extra-EU Countries, sometime involved from geo-political problems. Consequently, the supply security is not guarantee. The EU gross inland energy consumption of fossil fuels is basically unchanged, slightly decreasing, whilst the EU energy dependence increases.

Until now, the “fuel-switching” has affected almost exclusively the oil and its derivatives. The demand side is stable, whilst the supply side is moving from domestic production to import. This circumstance weighs down the EU economy competitiveness.

The EU strategy aimed to the energy dependence reduction and to the supply security guarantee can be synthesized in two “main concepts”, projected respectively the first one toward the short term and the second one toward the long term: the energy efficiency, in the 2020 perspective; the “fuel-switching” from fossil fuels to RES, in the 2050 perspective.

The energy efficiency concept is useful in order to decouple the energy demand from the economic growth. From this point of view, the main assessment parameters are the “energy intensity of economy” and the “economic productivity of energy”. The first one is the yearly ratio between the gross inland energy consumption and the GDP (Gross Domestic Product), and it is measured in TOE/€. So, it represents the energy consumed producing 1 € of GDP. The second one is the yearly ratio between the GDP and the gross inland energy consumption, and it is measured in €/TOE. So, it represents the GDP produced consuming 1 TOE of energy. During the 2002-2013 period the energy intensity of EU economy has decreased of 15,9%. At the same time, during this period, the economic productivity of EU energy has increased of 20,3%. This occurrence underlines the progressive achievement of the decoupling target.

Form an energy-policy point of view, the 2012/27/EU Directive is aimed to take the energy efficiency potential intrinsic to all economic macro-sectors, as outlined in the Energy Efficiency Plan published in 2011 from the European Commission. The “20-20-20” target should bring to a EU energy-mix reconfiguration. However, there are still some factors, as market and regulation drawbacks, that could hinder the effective achievement of the potential, because the market of products, building and services energetically efficient is not developing fast enough.

Main market drawbacks:

- the energy products costs not are representative of the overall societal costs due to environmental pollution, GHG emissions, resources consumption and geo-political problems;

- sometime the investor in energy efficiency is not the beneficiary of the investment;

- the market agents not push the end user toward the energy efficiency, in order to not curtail their trade volume.

Main regulation drawbacks:

 an overall energy-policy framework, integrated among Member States, lacks;

 the continuous variation of the regulation makes hazardous the energy efficiency investments;

 often the energy efficiency topic is considered only from a technical point of view, and not also from an economic point of view.

Furthermore, from the analysis of the current energy products market, and also of the configuration changes both on the demand side and on the supply side, it results that the “rebound effect” is widespread. This means that the products energy efficiency increases, but at the same time the overall energy consumption due to their use also increases, since their use intensity growths. The “rebound effect” is due to the raise of the comfort and living standard of the end users, and to the modification of their behaviour. Consequently, the energy efficiency potential of some products and/or some sectors could be annihilated from this effect.