Challenges and opportunities for implementation of art. 7 of the EED: an interview with Dominique Osso

Disclaimer: the information and opinions set out in this interview reflect the views of the interviewee and do not necessarily reflect the official opinion of his affiliation.

Question 1: What do you think are the main obstacles for the implementation of art. 7 of the EED? Has the guidance note provided enough clarity? Are there perhaps issues where more attention must be paid?

In my opinion, the main obstacle to the implementation of art. 7 is more a political issue, than a technical one. Still, administrative challenges exist at the level of the Member States’ national public authorities in charge of the implementation of the Energy Efficiency Obligation scheme, the complexity of which could be “frightening”.

The EU Energy Efficiency Directive sets out the main principles and, for reasons of subsidiarity, leaves the Member States with little or no tools or experience sharing (this is why ENSMOV is here!): even if some clarifications are provided in the recently published guidance note in my opinion still some issues remain. In fact, the 134-page guidance note is a document for experts and therefore support for public authorities to understand it and to put in place what is feasible and reasonable seems necessary.

The guidance note proposes interesting points to consider such as specifying that energy savings should be additional to those that would have been secured in any event without the activity of the obligated party, including certain factors like free-riders, market effects and impact of existing policies. As well as that the calculation of energy savings must take account of the lifetime of the measures and the rate at which savings decline over time.

From my own experience these points are difficult to deal with for a number of reasons: as far as I know there is a lack of study on the subject of energy savings decline, even if the guidance note provides in appendix VIII some methods to investigate lifetime and savings persistence. Moreover, there might be overlapping with other policies. In addition to free riders the Commission didn’t include possible spill-over effects.

The question of the lifetime of the measure remains for me an important point that should be improved, as the proposed lifetime in the appendix VIII may not be the appropriate one. A specific problem in the implementation of the measures is the accounting period of energy savings for long-lasting actions (post-2030, 2020-2030, 2014-2020, 2009-2014) in conjunction with how the life expectancy is calculated. This complicates the task of Member States, possibly at the expense of long-life actions.

Other issues that the guidance note leaves unresolved are the materiality and eligibility. Also, the double counting needs to be better explained and the examples provided in the guidance do not help framing the problem.

Question 2: Energy consumption has been rising for three years in a row, the energy efficiency policies seem to be lacking behind in some cases; what do you consider is the main problem here?

In my view, energy consumption is increasing because the energy efficiency actions do not make it possible to compensate for the increase in demand due to economic growth and population growth. Also, the choice of target sectors may play a role: mainly the building sector and only to a limited extent the transportation (starting with the possibility to exclude their consumption in the calculation of the art 7. obligation). The question is: are we reaching the limit of these policies in the current context, or is this the effect of poor coordinated among policies driven by different targets (final energy, primary energy, CO2, renewable and the five dimensions of the Energy Union Strategy)? Maybe the “energy efficiency first” principle should be reviewed and perhaps become “carbon mitigation first” followed by the other dimensions of the energy strategy. The “carbon neutrality” provides a new context for these reflections.

Beyond these general considerations, the implementation of energy efficiency policies in the field depends also on external factors (taxation and energy prices or measures implemented) that are not considered by the scheme itself. In addition, each Member State has its own arrangements in place depending on the current context to comply with the requirements of the EED Directive and to achieve the fixed objectives.

We can take the French EEOs as an example: the recent “coup de pouce 2019-2020” programme (“Helping hand” bonuses energy savings 2019-2020), has led to a market take-off. This because we are moving away from the reality of energy savings (multiplication of the energy savings as a bonus) to increase the coverage rate of the EEO incentive on the up-front cost. This also means moving away from the “golden rules” for calculating energy savings in the EED Directive by setting up double accounting inside the EEO scheme by public authorities (“euro-compatible” energy savings and non-real savings). This type mechanism was firstly rejected by the public bodies when discussing the revision of the existing EEO scheme in 2015 to be in line with the article 7 of the directive EED (valuing only energy savings beyond the MEPs of Ecodesign).

Question 3: The ENSMOV project will provide support to Member States in implementing art. 7 and setting up monitoring, reporting and verification (MRV); what kind of support do you think would be most useful for Member States?

The ENSMOV project can be very helpful in supporting Member States with experience sharing. It will be essential to have a very concrete approach, based on examples, to the elements covered in the guidance note, which is still too theoretical. Providing feedback on the experience of large-scale schemes set up in other Member States and show how other countries are dealing with this. The project can also help to set up evaluation studies and to unknit the complexity of the whole process.