H&C strategy and Clean Energy package Energy Efficiency in heating and cooling for consumers H&C strategy and Clean Energy package Rados Horacek Team leader General Energy Efficiency Team, C3, DG ENER Varese, 18/10/2017

Heating & Cooling Strategy 2016 “Heating & cooling consume half of the EU's energy and much of it is wasted.” Framework for integrating efficient heating & cooling into EU energy policies Key issues: Linking with electricity system Linking efficiency and renewables Primary energy consumption for heating and cooling, 2012

Heating & Cooling Strategy 2016 Need for energy renovation of buildings Buildings (and people living in them) are the first consumers of heating and cooling. Space heating accounts for more than 80% of heating and cooling consumption in colder climates. In warmer climates, space cooling is the most important - and is growing. Barriers to energy renovation of residential buildings Why do owners often do not undertake renovations that pay off? lack of awareness of the benefits, lack of advice on the technical possibilities and economic aspects, split incentives (for instance in multi-apartment buildings) financing constraints.

Heating & Cooling Strategy 2016 Heating and cooling equipment Almost half of the EU's buildings have individual boilers installed before 1992, with efficiency of 60% or less 22% of individual gas boilers, 34% of direct electric heaters, 47% of oil boilers and 58% of coal boilers Decisions on replacing old appliances are typically made under pressure, when the heating system breaks down. Comparison between solutions is not easily available for most consumers. Way forwards: raise consumer awareness of household energy efficiency aspects, and especially with consumer associations, that can advise consumers about efficient and sustainable forms of heating, cooling and insulation are older than their technical lifetime

Heating & Cooling Strategy 2016 Efficiency rating of new space heating appliances Possible tool for consumers : first idea on the best adapted solution Clean Energy for all Consumers package Energy Efficiency Directive (EED) Energy Performance of Buildings Directive (EPBD) Smart Finance for Smart Buildings (SFSB) Ecodesign Working Plan Renewable Energy Directive (RED II) Electricity Directive and Electricity Regulation

GOALS OF THE CLEAN ENERGY FOR ALL EUROPEANS PACKAGE LEADING THE ENERGY TRANSITION - CREATING VALUE FOR CITIZENS AND BUSINESS Delivering a fair deal for consumers Putting energy efficiency first Overarching theme of hte package: ensure that the EU continues to LEAD in the energy transition AND CREATES VALUE! Speed up transition and growth and jobs Package should ensure 177 bn extra investment post 2021 – 1%incease GDP over next decade, 900.000 new jobs.RES up to 50% of our elec mix by 2030. + 5% in construction, 4 in engineering, iron and steel,. Need 379 bn investments annually 2020-30. Important background: Paris agreement October 2016 ratified, entered into force Nov 2016..  Transition to secure, clean and competitive energy beneficial for all.   Done a lot – Framework strat, SoS Gas, Em trading/effort sharing/land use and forestry (all CLIMA 2016), low em mob strat. Three main goals- EE first, global leadership in RES, fair deal for consumers. Plus a number of facilitating actions. Innovation and buildings, industry, initiatives, societal mitigation of impacts, multi-level involvement, maximise EU leadership to help other countries achieve goals. Demonstrating global leadership in renewables 6

A FAIR DEAL FOR CONSUMERS THROUGHOUT THE PACKAGE BETTER INFORMED EMPOWERED PROTECTED Clearer energy bills Consumption benchmarking on the bills Remotely readable heat meters Access to fit-for- purpose smart meters Certified price comparison tool Individuals and communities can generate electricity to consume, store or sell it back to the market Consumers can join up and invest in renewable energy projects jointly without disproportionate procedures and charges Easier switching conditions Reward demand- response Monitoring of energy poverty (governance) Information on alternatives to disconnection Secured electricity supplies Sound data management

ACHIEVING THE EU BINDING 30% ENERGY EFFICIENCY TARGET BY 2030 Performance of Buildings Clear vision for a decarbonised building stock by 2050; Smart & Efficient buildings through use of Information and Communication Technologies and Smart Technologies; Smart Finance for Smart Buildings initiative: More effective use of public funding Aggregation of funds De-risking Ecodesign Working Plan 2016-2019 List of new product groups; Outline on how Ecodesign will contribute to circular economy objectives; Specific measures on air conditioning; Guidelines on voluntary agreements. Energy Efficiency Directive A binding 30% energy efficiency EU target for 2030 Extending existing energy savings obligations (1.5%/y) Empower consumers by granting access to information on their energy consumption. Energy Efficiency Directive We are proposing a binding EU-level target of 30% for 2030, up from the current target of at least 27%. A 30% target is the most cost-effective option that, compared with the current 27% target agreed in 2014, will, by 2030: Create about 400,000 new jobs; Reduce gas imports by 12%; Save €70 billion in fossil fuel imports. We will make Article 7 fit to continue delivering its energy savings in 2030 by removing the 2020 "sunset clause" and by simplifying various requirements. We also want to empower consumers. We encourage citizens, communities, and prosumers to take advantage of their new power (right to request a smart meter, electronic billing, electricity contract that contains a dynamic element, etc.) Energy Performance of Buildings Our aims: Keep the existing prudent scope. It ensures subsidiarity, proportionality and cost-effectiveness and leaving significant flexibility with Member States;   Preserve the main objectives, principles and overall architecture of the Directive; Only include targeted amendments that allow for continued implementation of key provisions in the current Directive that are already delivering and are cost-effective; Strike a balance between guidance and limited legal revisions to introduce new focussed provisions to address in particular existing building and the link to finance. For buildings – a sector which accounts for 40% of Europe's energy consumption – we propose new rules mainly in order to speed up the renovation rate. With them, we will promote the use of innovative and smart technologies to ensure that buildings operate efficiently. The review of the Energy Performance in Buildings Directive will create a clear vision for a decarbonised housing stock by 2050. We have proposed measures to encourage the use of electronic building controls. We also propose introducing a smartness indicator for buildings. Our buildings infrastructure is key to promote e-mobility: The new provisions in the Energy Performance in Building Directive will require the deployment of about 5 million electric vehicle recharging points. And we aim at encouraging greater use of renewable energy in buildings. We are putting forward a smart finance for smart buildings initiative to encourage public and private investment in energy efficiency and renewables in buildings. This initiative will help us finance renovation and retrofitting in our housing stock, and to reach out to every citizen who is willing to invest to make his or her house more energy efficient. These proposals have huge potential in terms of unlocking investment in the clean energy transition – potentially an additional 10 billion euros in public and private funds between now and 2020. And this is balanced with measures to protect consumers in general and specifically vulnerable groups who are more likely to be affected by energy poverty. Ecodesign: The Ecodesign working plan includes a list of new product groups (a number of which in 2017): air heating products, cooling products, high temperature process chillers and fan coil units; standardisation request to the European standardisation organisations as regards energy labelling of solid fuel boilers and packages of a solid fuel boiler, supplementary heaters, temperature controls and solar devices; standardisation request to the European standardisation organisations as regards energy labelling of local space heaters. It also outlines how Ecodesign will contribute to the objectives for a circular economy, specific measures on air conditioning, and guidelines for voluntary agreements. 8

ENERGY EFFICIENCY DIRECTIVE the target 9

ENERGY EFFICIENCY DIRECTIVE energy savings obligations (ARTICLE 7 EED) Extending existing energy saving obligations beyond 2020 (1.5%/year) Improving coherence with the EPBD Strengthening the social dimension Attracting private investment for energy efficiency renovations Lower energy bills for consumers and reduced energy demand Requiring MS to consider energy poverty in designing energy efficiency obligation schemes or alternative measures Renovation according to EPBD can be counted under energy savings obligations Increasing buildings renovation rate

ENERGY EFFICIENCY DIRECTIVE Metering and billing Clearer, more frequent information on consumption of thermal energy: Consumption of heating and cooling shall be climate corrected. Mandatory to provide comparisons: With consumption for same period in the previous year, in graphic form average normalised or benchmarked final user in same category Contribute to deliver a New Deal for Energy Consumers: "…providing consumers with frequent access, including in near real-time, to partially standardised, meaningful, accurate and understandable information on consumption and related costs as well as the types of energy sources" Clarification that the EED provisions will focus only on metering and billing will be centrally provided thermal energy (district heating/cooling, central supply of heat/cooling/hot water). Metering and billing for gas and electricity will be covered in the forthcoming Market Design Initiative. Clarification that that consumers includes households in multi-apartment buildings equipped with "sub-metering" – they should have access to clearer consumption information and more frequent feedback. New meters to be remotely readable by 2020, and existing meters to be adapted to be remotely readable by 2027 where this is cost effective. This will allow more frequent information to be provided to consumers and is a cheaper and less intrusive way of reading meters 11

Ecodesign and Energy Labelling - Results Achieved Products Policies Ecodesign and Energy Labelling - Results Achieved Delivers close to half of the 20% energy efficiency target for 2020 175 Mtoe primary energy savings per year by 2020, i.e. the annual primary energy consumption of Italy Savings of around € 500 per household per year € 56 billion extra revenue for industry, wholesale and retail sector 12

-82% ~ -7W -45% ~ -0.7W 12 lm/W ~ 8.3W 65 lm/W ~ 1.5W 120 lm/W ~ 0.83W incandescent lamps Halogen CFL – Compact Fluorecent Lamp LED 65 lm/W ~ 1.5W 120 lm/W ~ 0.83W

ENERGY PERFORMANCE OF BUILDINGS DIRECTIVE Long-term renovation strategies Smartness indicator Electro mobility aims at: the ability of a building to manage itself, to interact with its occupants, to take part in demand response and to contribute to smooth, safe and optimal operation of connected energy assets. Vision of a decarbonised building stock by 2050 Smart Finance for Smart Buildings approach to mobilisation of investment Recharging points in commercial buildings Precabeling in residential buildings

Financing of Energy Efficiency European Structural Investment Fund National Funds Horizon 2020 LIFE + (PF4EE) European Fund for Strategic Investment Recovery funding (EEE F) Private capital Banks Challenges: Lack of knowledge and information Lack of performance data High upfront investments Fragmentation/transaction costs Complexity of financing Sometimes long payback periods The market is not "readable" Financing products do not reflect the EE fundamentals

More effective use of public funds Assistance and aggregation Smart Finance for Smart Buildings: 3 pillars More effective use of public funds Assistance and aggregation De-risking Understanding the risks and benefits for financiers and investors Deploying Financial Instruments and innovative business models to attract private finance Supporting the project pipeline at EU and local level Contribute to deliver a New Deal for Energy Consumers: "…providing consumers with frequent access, including in near real-time, to partially standardised, meaningful, accurate and understandable information on consumption and related costs as well as the types of energy sources" Clarification that the EED provisions will focus only on metering and billing will be centrally provided thermal energy (district heating/cooling, central supply of heat/cooling/hot water). Metering and billing for gas and electricity will be covered in the forthcoming Market Design Initiative. Clarification that that consumers includes households in multi-apartment buildings equipped with "sub-metering" – they should have access to clearer consumption information and more frequent feedback. New meters to be remotely readable by 2020, and existing meters to be adapted to be remotely readable by 2027 where this is cost effective. This will allow more frequent information to be provided to consumers and is a cheaper and less intrusive way of reading meters 16

RENEWABLE ENERGY SOURCES DIRECTIVE Increased access for RES energy, fuel, technology suppliers, installers and services suppliers, such as ESCOs Creating access rights to local H&C networks Requirement to designate authorities and reinforce regulatory oversight Opening local H&C markets to competition and integration of RES Increased access for RES energy, fuel, technology suppliers, installers and services suppliers, such as ESCOs Creating access rights to local H&C networks Requirement to designate authorities and reinforce regulatory oversight Mainstreaming RES in heating and cooling supply Contribute to deliver a New Deal for Energy Consumers: "…providing consumers with frequent access, including in near real-time, to partially standardised, meaningful, accurate and understandable information on consumption and related costs as well as the types of energy sources" Clarification that the EED provisions will focus only on metering and billing will be centrally provided thermal energy (district heating/cooling, central supply of heat/cooling/hot water). Metering and billing for gas and electricity will be covered in the forthcoming Market Design Initiative. Clarification that that consumers includes households in multi-apartment buildings equipped with "sub-metering" – they should have access to clearer consumption information and more frequent feedback. New meters to be remotely readable by 2020, and existing meters to be adapted to be remotely readable by 2027 where this is cost effective. This will allow more frequent information to be provided to consumers and is a cheaper and less intrusive way of reading meters Enable consumers to generate & store RES-E Establish EU guidance on self-consumption schemes Enable consumers to self-consume and store renewable electricity Distance self-consumption for municipalities 17

Main new H&C provisions in the Clean Energy Package Energy efficiency accelerate cost-effective renovation of buildings prolong the energy savings obligation schemes to 2030 strengthen feedback to consumers through advanced metering and billing, especially for multi-apartment buildings Renewable energy increase uptake of renewable energy in heat production speed up the deployment of renewable energy in district heating

District H&C in the Renewable Energy Directive proposal Make energy performance transparent Providing info to consumers on energy performance and renewable energy share Ensure high energy performance for consumers & "nudge" operators to improve their systems Right to disconnect if not efficient

Where do I seek advice as a consumer?

Heating & Cooling Strategy 2016 Efficiency rating of new space heating appliances Possible tool for consumers : first idea on the best adapted solution Questions?