Energy & Environment

No decarbonisation without an energy system based on energy efficiency

Hans Korteweg / Jul 2018

Miguel Arias Cañete, European Commissioner for Climate Action and Energy. Photo: European Union


The European Commissioner for Climate Action & Energy, Miguel Arias Cañete, stated on 11 July during the EU’s Long-Term Decarbonisation Strategy (LTDS) stakeholder consultation event that the European Union (EU) has to act now if we want to keep global temperature rise this century well below 2 degrees Celsius as stipulated in the Paris Agreement. The European Commission designed the Clean Energy Package, an upgrade of existing EU energy legislation, with the purpose of putting the EU on track towards its Paris commitments. As new electricity rules are currently being negotiated by EU institutions, an increased focus on energy efficiency together with renewable energy will be key to deliver the expected results.

Effective policies for energy efficiency, covering the entire value chain from production to consumption, must be the focal point of any LTDS. To do so, important steps are required. Firstly, energy consumption must be reduced, for instance through efficient buildings and use of smart home appliances. Secondly, the energy reaching buildings and homes needs to be efficient. For this, efficient generation,, transmission and distribution of energy is needed. For example, in conventional power plants, nearly 60% of the energy used to produce electricity is lost in the form of heat. In combined heat and power plants (CHP or cogeneration), up to 90% of the energy is used by recovering the heat to warm buildings and homes and for industrial activities. Relying on efficiency solutions at both supply and demand side will help tap all the potential for energy savings lying across the entire energy value chain, decarbonise the energy system and reduce our dependence on energy imports.

Applying energy efficiency to renewable energy is equally important. An energy system with an increasing share of renewables (solar, wind, biomass, green gas, hydrogen) needs to use these valuable resources efficiently. High efficiency generation and conversion technologies, connecting the different networks and sectors, will be key to provide cross-network flexibility and allow for substantial amounts of renewables to be used (e.g. via district heating, electricity grids as well as gas grids) in key sectors of the economy, helping them to decarbonise while maintaining their competitiveness.

Furthermore, electricity is expected to play an increasing role in homes, buildings and some industries. As new electricity market rules are currently being negotiated by EU institutions, it is essential policy makers apply energy efficiency both at system and local levels. Hospitals, public buildings or small and medium businesses which choose to produce and consume their own energy locally, often on site with high-efficiency decentralised low carbon energy solutions, are key drivers of a cost-effective European energy transition. It is the most optimal means to avoid significant grid losses, costly interconnections and grid reinforcement. Developing electricity policies that reward and empower these energy consumers will be key for effective climate change and energy policy, boosting local jobs and sustainable growth in the EU. There are two critical elements to building an effective and efficient solution. Firstly, priority of dispatch for existing and new small high-efficiency cogeneration and renewable installations is of paramount importance. Secondly, this needs to be complemented by grid tariffs which are reflective of real grid usage for all consumers, including those that are self-producing efficiently their own energy.

Applying energy efficiency across the entire energy value chain, all networks and energy sources appear to be the silver bullet to delivering the Paris Agreement. However, the debate in Europe has mainly concentrated on energy savings in buildings, with the enormous potential for energy efficiency in all stages before energy consumption being broadly ignored. Furthermore, renewable energy has often been considered an energy efficiency measure. Recent Oxford Energy Institute analysis shows that CO2 emissions are mostly reduced when primary energy consumption (e.g. energy used for generating electricity or heat) is decreased. The latest Eurostat data also confirm that Europe falls short of meeting the EU Energy Efficiency target, showing a 2% gap for final energy consumption but a 4% gap for primary energy consumption. This calls for immediate action to reduce primary energy consumption by strengthening emphasis on supply-side efficiency measures including high efficiency CHP and district heating.

Meeting the Paris Agreement means a radical acceleration in climate change and energy policy, consistently applying the energy efficiency first principle. The EU’s success will be measured by how well they manage to do more with less energy.



Hans Korteweg

Hans Korteweg

July 2018

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