Directorate general for Energy and Transport 1 Doing more with less as part of the Lisbon Strategy The Green Paper on Energy Efficiency

Directorate general for Energy and Transport 2 Background: The Green Paper on Energy security of supply (2000)  Gulliver in chains  Energy dependency in EU-25 is 50% and will reach 70% by 2030  Recognise the need to deal with the Demand side of Energy Policy  A wide debate with stakeholders with more than 300 meetings in 30 countries

Directorate general for Energy and Transport 3 What has been done since?  Energy Performance of Buildings Directive  Cogeneration Directive  Eco-design Directive  Proposal of a Directive on energy services and end-use efficiency  A new programme “Intelligent Energy – Europe”  Other measures including renewable energies

Directorate general for Energy and Transport 4 Why publishing a green paper on energy efficiency? (1)  An ever increasing energy consumption  1 to 2% a year increase of energy consumption  Energy consumption could still increase by about 10% by 2020  Broad discussion on how to curb rising energy use in EU and arrive at a reduction of 20% by 2020 The Priority dossier of the Commissioner

Directorate general for Energy and Transport 5 Why publishing a green paper on energy efficiency? (2)  Improve energy efficiency in EU to:  Use energy more rationally – stop wasting it  Stop wasting money on energy we don’t need to use (Lisbon - growth)  Mitigate climate change (Kyoto)  Limit avoidable pollution  Encourage research and development in promising sectors (Lisbon – jobs)  Increase our energy security position

Directorate general for Energy and Transport 6 The energy efficiency potential (1)  An ambitious goal of 20% by 2020 compared with today consumption  based on several scientific studies  cost-effective  Half of this potential can be realised with adopted legislations  Technical potential of around 40% reduction

Directorate general for Energy and Transport 7  EXAMPLES of possible savings The energy efficiency potential (2)

Directorate general for Energy and Transport 8  Savings representing 60 billions €  200 to 1000 €/year for an average household  Around a million jobs could be created  Reduce waste of scarce resources  Strengthen the security of supply  Strengthen our competitive position  Gives new push to RTD What are the benefits?

Directorate general for Energy and Transport 9  Quickest and most effective way to meet Kyoto Climate Change objective  By saving 20% of energy consumption, it would be possible to secure 50% of the necessary reductions of CO 2 emissions  Reduction of local pollution  Stopping wasting resources What are the benefits for environment?

Directorate general for Energy and Transport 10 Where energy can be saved? Estimated gross energy consumption (1 725 Mtoe) by sector in 2005 (EU-25)

Directorate general for Energy and Transport 11 What has been done? Where are we going? Long-term development of GDP, energy demand and energy intensity (baseline) for EU-25

Directorate general for Energy and Transport 12 The Negajoules concept Development of primary energy demand and of ‘negajoules’ (EU-25) (Energy savings calculated on the basis of 1971 energy intensity)

Directorate general for Energy and Transport 13  Financial obstacles  Insufficient regulatory action  Lack of market for energy efficiency  No transparent and cost-reflective prices  Lack of information and education Obstacles - Why is the potential not realised? In theory market will achieve the best result, but…

Directorate general for Energy and Transport 14  Lack of information on costs and profitability  Split-incentive  Risk aversion  Address with: better and more (targeted) information  Global loans and right intermediaries  Role of Energy Service Companies (ESCO’s) Obstacles – The financial obstacles

Directorate general for Energy and Transport 15  Reluctance to commit to targets  Sub-optimal use of tax and state aid  Address with: Better information towards decision makers To create the political will and awareness Better use of tax and state aid Rationalisation of subsidies Obstacles - The regulatory obstacles

Directorate general for Energy and Transport 16  Need to acknowledge that public authorities are necessary to address inadequacies of the market  Most obstacles can be removed by policy intervention  Influence change of behaviour by showing example Action is needed now!

Directorate general for Energy and Transport 17 Options to achieve the potential

Directorate general for Energy and Transport 18  European initiatives on all levels:  European  national  regional and local  industry  consumers (citizens)  International: Gleneagles conclusions (7/7/05)  Leading to Action Plan with concrete steps At what level energy efficiency should be addressed

Directorate general for Energy and Transport 19  Broad policy options  Streamlining EE in all policy  Research and Development EU is in the lead Need to strengthen its efforts  Benchmarking National Action Plans Good example in all Member states but not replicated elsewhere Commission can act as a catalyst Exchange of best practices: gathering information and pass it on What can be done at European level? (1)

Directorate general for Energy and Transport 20 What can be done at European level? (2) Financing options  Better use of taxation  Better targeted state aid  Public procurement  European co-financing  Coordination of policies with the EIB, EBRD, World Bank

Directorate general for Energy and Transport 21 What can be done at European level? (3) Specific option  Extension of the Buildings Directive  Domestic appliances (Minimum efficiency and labelling)  Increasing fuel efficiency of vehicles  Foster market transparency  Information and protection of consumers

Directorate general for Energy and Transport 22  White certificates : a market instrument for energy efficiency  Electricity industry  Regulation of electricity networks  Regulation of supply activities – metering What can be done at National level? (1)

Directorate general for Energy and Transport 23  Replacing power plants with 25% efficiency while best technology is 60%  Use of best technology  Promotion of distributed generation  Promotion of cogeneration  CHP in District heating  Improve efficiency coal fired plants over 50% asap What can be done at National level? (2) Improving electricity generation

Directorate general for Energy and Transport 24 What can be done at regional and local level?  Many measures can be taken at regional and local levels  Action will only produce all its potential gains if operations are reflected locally  Creation of regional and local energy agencies (networks)  Programme Intelligent Energy – Europe  Specific financing instruments: clearinghouse facilities  Information and communication

Directorate general for Energy and Transport 25  Promote best practices and exchange of information on results of various voluntary agreements  constructive contributions and commitment to efficiency goals, e.g. supporting voluntary agreements/code of conduct initiatives  Most regulation is directed at industry! What can be done by Industry?

Directorate general for Energy and Transport 26  Information  Protection What can be done at consumers/citizens level?

Directorate general for Energy and Transport 27  Integrating efficiency in international relations:  Neighbourhood policy  Development policy  International financing institutions  EU is better placed than Member State to initiate action at that level What can Europe do at International level?  World energy use rising steeply  Uneven division of access to energy  Security of energy supply

Directorate general for Energy and Transport 28  Optimise traffic management (including air)  Develop a market for clean vehicles  Infrastructure charging  Improvement in tyres  Promote public transport  Aviation Corner stones: Transports

Directorate general for Energy and Transport 29  Broad discussion till 31/03/05  With all stakeholders including citizens  All options are open, all contributions welcome  On basis of results of consultation --- Action Plan in 2006 The debate More information: efficiency/index_en.htm