• Energy Research

However simple the concept is, implementing the Energy Efficiency First (EE1st) principle has proved to be a difficult task for European Union (EU) Member States. The National Energy and Climate Plans (NECPs) provide extremely limited information on how the various Member States understand and intend to implement this principle: “they set out limited details on the application of this principle [EE1st principle]”, highlighting that “co-benefits and possible trade-offs between energy efficiency measures and climate adaptation remain unrecognised and untapped” (European Commission, 2020). The European Commission is preparing guidance to aid Member States in devising their EE1st implementation strategy across various policy areas. This report provides input to this discussion. This report identifies promising policy approaches in several EU policy areas: buildings, power markets/networks, gas markets/networks, district heating, energy efficiency, climate, and EU funds. The aims are to facilitate the implementation process in Member States and guide the next steps of the project to enable more detailed analyses about barriers and success factors in implementing EE1st, and then the development of policy guidelines. We screen the policy areas and approaches by reviewing the EU policy context for each policy area; conducting interviews and using the examples of existing implementation of the EE1st principle we found earlier for each policy area. The reviews for each policy area screen the most important strategic and legislative documents where EE1st is relevant, regardless whether the principle is integrated already or not. For each policy area, we discuss a selection of policy approaches where EE1st is or could be implemented. These policy approaches have the potential to be fully implemented across the EU, bringing considerable benefits to consumers. Full and effective implementation most often requires the concerted action of various public and private actors. In each case we can identify the key actors needed for the successful Europe-wide implementation of the policy approach. In some cases, these approaches already have a legislative and regulatory basis, in others it is still to be established.

AbstractThe Energy Efficiency First (EE1st) principle has recently been placed onto the political agenda in the European Union (EU). While the general rationale for EE1st is described in EU legislation and supporting literature, a common understanding of the principle’s implications for energy-related planning, investment, and policymaking is still missing. Based on an exploratory review of the literature, the objective of this article is to improve the theoretical understanding of EE1st. First, it develops a conceptual framework, describing EE1st as a decision-making principle that prioritises demand-side resources over supply-side alternatives whenever these provide greater value to society in meeting decision objectives. Second, it highlights the unique aspects of EE1st by systematically comparing the principle with associated concepts, such as Integrated Resource Planning. Third, it provides theoretical justification for EE1st by describing the economic rationale behind the principle. Fourth, it outlines policy considerations for its practical implementation. In sum, the EE1st principle is shown to have a compelling theoretical background that can help inform the design of effective policy interventions in order to move from principle to practice.

Efficiency First (E1st) is now an established principle of EU energy policy. It has been embedded in various legislative pieces of the Clean Energy for All package in 2018-2019. This report reviews the background of this concept and existing definitions in order to draw a definition that can serve as a basis for the ENEFIRST project and its specific objectives, that is, making E1st operational for the building sector and related energy systems. Similar concepts such as ‘Integrated Resource Planning’ (IRP) and ‘Energy Efficiency as a Resource’ have been developed in the U.S. and sometimes tried in some European countries. The well-documented U.S. experience shows how this type of approach can be implemented in the electricity sector. The European approach of E1st aims at a broader scope encompassing the entire energy system. Another difference is that the time horizon considered in the implementation of IRP, or similar concepts, in the U.S. is often in line with the cycles of utilities’ energy planning, that is, five to ten years, whilst E1st in Europe is thought to be applied in multiple timeframes, from short-term investment planning to medium-term targets (for 2030) and long-term goals (for 2050). The background analysis also highlights the importance of the scope of costs and benefits considered when comparing supply-side and demand-side resources. The general trend is to expand this scope to take into account multiple impacts, along with the experience gained in assessing them. Based on these analyses, the definition of E1st adopted for ENEFIRST is as follows: "Efficiency First gives priority to demand-side resources whenever they are more cost effective from a societal perspective than investments in energy infrastructure in meeting policy objectives. It is a decision principle that is applied systematically at any level to energy-related investment planning and enabled by an ‘equal opportunity’ policy design." This report then discusses the application of the principle in six policy areas (renewable policy, energy efficiency policy, climate policy, power market rules, building policy and energy security) with reference to the main EU legislations in these areas. The analysis does not claim to be comprehensive, but highlights the major decision points where E1st should be applied. It is the new power market design where the E1st principle is made operational most consistently from network planning to network company regulation. It is yet to be seen, however, to what extent it will be reflected in the European and national implementation. The report also analyses the process and the methodological issues when comparing demand-side resources with supply investments and identifies those typical investments — both at the system and at the household level — where its application should be considered. These decision points are illustrated by comparing business-as-usual decision paths with ones that would integrate the E1st principle.

The Energy End-use Efficiency and Energy Services Directive (ESD) of the European Union requires the member states to define and attain an overall target of at least 9% annual energy savings between 2008 and 2016. Even if this target is indicative, this is the first international framework mandating countries to report on their energy savings results and prove achievement of their targets. The directive thus also required the development of harmonised calculation methods that can be used by member states for this proof and reporting. Existing literature covers most of the usual issues related to energy savings evaluation, but mostly looking at single, given energy efficiency programmes or policies. The evaluation objective for the ESD implementation is different, as it aims at accounting for the whole energy savings achieved in a country. Moreover, one of the main difficulties is the diversity in history and experience on this topic among the member states. In this context, the European project EMEEES has worked out an integrated system of bottom-up and top-down methods for the measurement of energy savings. The paper presents the overview of its final results. The proposals, inter alia, include 20 bottom-up and 14 top-down case applications of general evaluation methods. They enable more than 90% of the potential energy savings to be measured and reported. They were used as a starting point by the European Commission to develop the methods recently recommended to the member states. Furthermore, the paper briefly discusses the importance of the quantity to be measured—all or additional energy savings—and the effect of measures implemented before the entering into force of the ESD (‘early action’), and what this meant for the methods to be developed. It compares the main elements of calculation needed to ensure consistent results between bottom-up and top-down methods at the overall national level. Finally, general conclusions are drawn about what could be the next steps in developing an evaluation system that enables a high degree of comparability of results between different countries.

This short communication introduces the special issue based on a selection of papers first presented at the International Energy Policy and Programme Evaluation Conference in Berlin on 9 to 11 September 2014.

According to the directive on energy end-use efficiency and energy services (ESD), the European Member States shall adopt a national indicative energy savings target of 9% (or beyond) in 2016. The issue of the energy savings evaluation is crucial for its implementation. The French White Certificates (FWC) scheme is one of the important measures for France to fulfill its ESD target. However, the accountings of energy savings in the FWC scheme and in the ESD are different. Therefore, an analysis of the consistency of the two systems is needed. A concrete example of actions on residential buildings is used to illustrate the challenges for policy marker and stakeholders to set harmonized evaluation rules. The FWC and ESD calculations appear to be consistent from a physics point of view, as long as calculations are well-documented. But due to differences in the policy objectives, calculation routines may be necessary to convert national energy savings unit (e.g., kWh cumac) into supranational energy savings unit (e.g., ESD kWh). Finally, the work done to establish a transparent evaluation system brings additional benefits (e.g., increased visibility and quality of the actions), which will improve the results of the energy efficiency policies on long term.

Energy efficiency programmes (EEPs) are schemes operated by utilities or other bodies in order to incentivize energy efficiency improvement, in particular by adoption of energy-efficient products and typically by means of an economic reward. Ample experience has been gained, especially in the U.S., where EEPs have been in use for decades, with the rationale of avoiding additional energy supply by improving energy efficiency. More recently, EEPs have been implemented in Europe and in Switzerland. This review paper presents insights from the U.S., the EU and especially from Switzerland, with a focus on levelised programme cost of saved energy (LPC) as a key performance indicator. These LPC values, which take the perspective of the programme operator, are typically low to very low compared to the cost of electricity supply, thereby representing an important argument in favour of their use. The country examples show that EEPs are being effectively and successfully put into practice, for example, in Switzerland both as (i) a national tender-based scheme (called ProKilowatt) and in the form of a (ii) utility-operated obligation-based scheme (in Geneva). EEPs not only call for diligent implementation but also for suitable legal settings, e.g., in the form of mandatory energy efficiency savings targets (as realised for energy efficiency obligations, EEOs) in combination with programme cost recovery. The main criticism of EEPs is the free-rider effect, which needs to be minimised. On the other hand, EEPs are accompanied by significant co-benefits (environmental, health-related and social) and spillover effects. In their currently prevalent form, EEPs allow one to effectively save energy at a (very) low cost (“low-hanging fruit”). They can hence play an important role in fostering the energy transition; however, they should be implemented as part of a policy portfolio, in combination with other policy instruments.