The Energy Efficiency Directive (2012/27/EU)
The 2012 Energy Efficiency Directive established a set of binding measures to help the EU reach its 20% energy efficiency target by 2020. Under the directive, all EU countries are required to use energy more efficiently at all stages of the energy chain, including energy generation, transmission, distribution and end-use consumption.
In the context of the 2012 directive, a number of important measures have been adopted throughout the EU to improve energy efficiency in Europe, including:
- an annual reduction of 1.5% in national energy sales
- EU countries making energy efficient renovations to at least 3% per year of buildings owned and occupied by central governments
- national long-term renovation strategies for the building stock in each EU country
- mandatory energy efficiency certificates accompanying the sale and rental of buildings
- the preparation of national energy efficiency action plans (NEEAPs) every three years
- minimum energy efficiency standards and labelling for a variety of products such as boilers, household appliances, lighting and televisions (energy label and ecodesign)
- the planned rollout of close to 200 million smart meters for electricity and 45 million for gas by 2020
- obligation schemes for energy companies to achieve yearly energy savings of 1.5% of annual sales to final consumers
- large companies conducting energy audits at least every four years
- protecting the rights of consumers to receive easy and free access to data on real-time and historical energy consumption
The Commission also published guidelines on good practice in the field of energy efficiency.
The amending directive (2018/2002)
In 2018, as part of the ‘Clean energy for all Europeans package‘, the new amending Directive on Energy Efficiency (2018/2002) was agreed to update the policy framework to 2030 and beyond.
The key element of the amended directive is a headline energy efficiency target for 2030 of at least 32.5%. The binding target, to be achieved collectively across the EU, is set relative to the 2007 modelling projections for 2030.
In absolute terms, this means that EU energy consumption should be no more than 1273 Mtoe of primary energy and/or no more than 956 Mtoe of final energy.
The directive allows for a possible upward revision in the target in 2023, in case of substantial cost reductions due to economic or technological developments. It also includes an extension to the energy savings obligation in end use, introduced in the 2012 directive. Under the amending directive, EU countries will have to achieve new energy savings of 0.8% each year of final energy consumption for the 2021-2030 period.
The directive entered into force in December 2018 and needs to be transposed into national law by Member States by 25 June 2020, except for metering and billing provisions which has a different deadline (25 October 2020). Under the Governance Regulation 2018/1999 , Member States are required to draw up integrated 10-year national energy & climate plans (NECPs) outlining how they intend to meet the energy efficiency and other targets for 2030.
Article 7 EED
To support the achievement of these goals, Article 7 EED requires Member States to achieve yearly energy savings through an energy efficiency obligation scheme (EEOS) or alternative measures.
Article 7 of the 2012 EED (2012/27/EU) requires each Member State to achieve an annual reduction of 1.5% in national energy sales in each of the years from 2014 to 2020 inclusive. Annex V of the EED sets out methodological options for the calculation of energy savings; principles to apply to the calculation of additionality to European Union law and the materiality of the activities of obligated, participating or entrusted parties; a requirement to ensure that quality standards for energy efficiency measures are introduced and maintained; and a methodology for the notification of energy efficiency measures to the European Commission.
In order to reach this target, companies have to carry out measures which help final consumers improve energy efficiency. This may include improving the heating system in consumers’ homes, installing double glazed windows, or better insulating roofs to reduce energy consumption.
EU countries may also implement alternative policy measures which reduce final energy consumption. These measures could include:
- Energy or CO2 taxes
- Financial incentives that lead to an increased use of energy efficient technology
- Regulations or voluntary agreements that lead to the increased use of energy efficient technology
- Energy labelling schemes beyond those that are already mandatory under EU law
- Training and education, including energy advisory programmes
Changes to the Energy Efficiency Directive
The amending Directive on Energy Efficiency (2018/2002) extends the Article 7EED energy savings obligation beyond 2020 to 2030 but impacts on both the 2014–2020 and the 2021–2030 obligation periods, with the bulk of the changes affecting the later period. Amongst the changes agreed, the EED as amended :
- changes the definition of energy savingsand the rate at which they must be achieved: for the period 2021 to 2030, Member States must achieve new savings each year equivalent to 0.8% annual final energy consumption averaged over the most recent three-year period prior to 1 January 2019;
- treats energy efficiency obligations schemes and alternative measures equally in terms of their ability to generate energy savings, for example there are no additional benefits to taking action early using a particular type of policy measure;
- elevates the issue of energy poverty by requiring Member States to implement some energy efficiency policy measures as a priority amongst vulnerable households;
- clarifies the requirements regarding the lifetimes of measures and additionality when calculating energy savings; and
- emphasises the importance of monitoring and verification in ensuring that policy measures achieve their objectives.
The European Commission guidelines on transposing the energy savings obligations under the Energy Efficiency Directive provide support to Member States in setting up eligible policy measures and correctly reporting energy savings, dealing in detail with the issues set out above and providing examples of how to implement them(European Commission, 2019b).
Guidance on Article 7 EED
The European Commission published a guidance note on Article 7 EED. It outlines the steps Member States need to take when implementing Article 7 and provides guidance on:
- How to calculate energy savings
- Policy instruments and criteria
- Which sectors and individual actions are to be targeted
- How to calculate energy savings from individual actions
- Measurement, control, quality and monitoring and verification requirements
- Reporting requirements
- References to relevant studies and papers
The Coalition for Energy Savings has also produced detailed guidance on the Energy Efficiency Directive in the form of its “Online Guide for strong implementation of the Energy Efficiency Directive” with a number of chapters dedicated to Article 7 as follows:
- Binding end-use energy saving targets (Article 7)
- Eligibility of measures and savings (Article 7 Annex V)
- EEOs and alternative measures (Article 7)
Sources: ENSPOL IEE and European Commission