Energy Efficiency in the EU Randall Bowie DG Energy and Transport ECCP II Stakeholders` Meeting 24 October 2005 Energy Efficiency in the EU Randall Bowie DG Energy and Transport

I Background II Present: Current policies and measures III Future: The Best Way Forward?

Key background factors The energy sector produces 94% of EU CO2 & 78% of GHG emissions. EU energy import share 50% and rising. Security of supply important. Improving energy efficiency is the most cost-effective and expedient way to combat climate change and to improve security of supply. Energy efficiency improvements have significant positive effects on other important policy areas.

Positive synergy effects of improving energy efficiency On the environment (local, EU, global) On security of supply On competitiveness, economic development and employment On regional & urban policy and on cohesion On foreign trade balance: energy imports ↓↓ energy technology exports ↑↑ On health and safety policies: “The best kWh is the one not produced.” On income & wealth (environment fights back; fuel poverty & development) Energy efficiency objectives go hand-in-hand with other policy objectives if integrated, co-ordinated and knowledge-based .

Contribution of energy efficiency to final energy consumption

Energy intensity in the EU Member States

Energy intensities in EU 15; average percentage change/year 1990-2001

Potentials for energy efficiency improvement Estimated real average cost-effective energy efficiency improvement potential ~2% /year for at least 9 consecutive years (final). Energy Services Directive: 1%/year (final); Green Paper: 20% by 2020 ( primary). There are many examples of individual investments (e.g. lighting) that provide energy savings of >50%

Proposals from ECCP I (2000): WG I 1. Buildings Directive √ 2 Proposals from ECCP I (2000): WG I 1.Buildings Directive √ 2.Public Procurement Directive (integrated 2 ) 3.Energy Services/DSM Directive √ 4.CHP Directive √ 5.Sustainable Energy Europe Campaign √ 6.Best Practices Initiative (partially) 7.Amended Directive 93/76 (integrated) There is today an urgent need to make new commitments both at Community and Member State level to promote energy efficiency more actively. This is partly, although not entirely, a consequence of the Kyoto Agreement to reduce CO2 emissions. Further improvement of energy efficiency will lead to a more sustainable energy policy, improved local and global environments, enhanced security of supply, improved competitiveness and to numerous other benefits. The efficient use of electricity is of special importance in this context, due to the fact that electricity plays such a vital role in our economic and social activities. Electricity has, in fact, transformed our lives. It will continue to do so as the number of uses of electricity continues to multiply and as the remaining 40% of the world’s population not having electricity gain access to it. Electricity generation accounts today for about 35% of total primary energy consumption in the EU and for 30% of man-made CO2 emissions. You are specialists in electric motors. Therefore, I hardly need to remind you of the importance of this use of electricity or of the large share of total electricity consumption which motors have in the industrialized world. Therefore, even the smallest cost-effective efficiency gains made in motors will have a far-reaching impact on our environment and economy, today and in coming years.

Proposals (cont. ): 8. Energy Audit Scheme (integrated) 9 Proposals (cont.): 8. Energy Audit Scheme (integrated) 9.Technology Procurement (not applied) 10. Education and Training (integrated) 11.Cross-cutting & horizontal measures √ WG II: Min. eff. stds., labelling, vol. agreements. √ There is today an urgent need to make new commitments both at Community and Member State level to promote energy efficiency more actively. This is partly, although not entirely, a consequence of the Kyoto Agreement to reduce CO2 emissions. Further improvement of energy efficiency will lead to a more sustainable energy policy, improved local and global environments, enhanced security of supply, improved competitiveness and to numerous other benefits. The efficient use of electricity is of special importance in this context, due to the fact that electricity plays such a vital role in our economic and social activities. Electricity has, in fact, transformed our lives. It will continue to do so as the number of uses of electricity continues to multiply and as the remaining 40% of the world’s population not having electricity gain access to it. Electricity generation accounts today for about 35% of total primary energy consumption in the EU and for 30% of man-made CO2 emissions. You are specialists in electric motors. Therefore, I hardly need to remind you of the importance of this use of electricity or of the large share of total electricity consumption which motors have in the industrialized world. Therefore, even the smallest cost-effective efficiency gains made in motors will have a far-reaching impact on our environment and economy, today and in coming years.

Instruments for EU energy efficiency policy: Directives & Communications Strategy for Energy Efficiency (1998)  Action Plan (2000) ECCP I (2000) Labelling of appliances Directive & Implementing Directives (7) Minimum efficiency requirements (3 Directives) Energy performance of buildings Directive (EPBD) Cogeneration Directive (CHP) Directive on Eco-design Proposed Directive on End-use efficiency & energy services Proposed Directive on Clean & energy efficient vehicles Green Paper on Energy Efficiency(2005)  Action Plan(2006) ECCP II (Oct.2005 - March2006) Support programmes (RTD FWP demo & IE-E) and SEE State aid, structural funds, taxation, RTD, SME, agriculture…

Key areas for policy instruments & measures to further improve energy efficiency and energy intensity 1. Actions to improve technical efficiency in energy supply and in energy end use (through further development of standards(HorzMERs), regulations, voluntary agreements…). 2. Actions to increase demand & lower costs for energy-efficient products & services (information, certification, labelling, procurmt guidelines, EPC).critical mass 3. Actions to increase competition on markets for energy, energy services & energy-efficiency 4. Actions to provide correct and predictable energy price signals (& include external costs). 5. Actions to lower transactions costs by providing information (labelling, certification). 6. Actions to increase public awareness of benefits of energy efficiency  change life styles. 7. Actions to develop the market for real energy services. 8. Improved monitoring & reporting of implementation in M.S. (National E.E. Action Plans). 9. Harmonisation of measurements of savings potentials, benchmarks & E. E. improvements. 10. Co-ordination of ECCP I I & EU EEAP II (Mar 2006) test new ideas.