Why the UK should champion EU action on energy efficiency
Today, EU member states are due to submit their National Energy Efficiency Action Plans (NEEAPs) to the European Commission. Over the next two months the numbers will be crunched to see whether the actions proposed add up to being on track to meet the EU’s 2020 20 per cent energy efficiency target. As the target is not legally binding, expectations aren’t high that member states are giving sufficient priority to achieving their energy efficiency potential.
So this review is the perfect opportunity for EU countries to consider how they can strengthen their energy efficiency policy, individually and using EU policy tools. Our briefing, published today, demonstrates how the UK has much to gain from co-ordinated European action and why it should champion stronger European action on energy efficiency.
Lower energy costs, great energy resilience, fewer carbon emissions
The latest IPCC report is a clear statement of the need to reduce carbon loading in the atmosphere. Using energy more efficiently, and using less overall, is an inexpensive solution to avoiding the costs – human, economic and environmental – of climate change impacts.
Fuel prices have been increasing and will continue to. There are 840,000 families already experiencing fuel poverty in the UK. Installing energy efficiency measures will help to insulate them from price hikes, while ensuring their homes are warm and lit. There are significant financial gains to be made by businesses too in reducing their energy costs.
Energy efficiency can help now
Gas supplies remain vulnerable to geopolitical events, as the current Ukraine crisis has shown. The European Commission has been asked by member states to come up with a plan for achieving greater energy security in time for the June Summit. Reducing energy demand will be important to meeting that goal and one that can be implemented expeditiously. While some look to shale gas for solutions, even Cuadrilla’s CEO has suggested that production in Britain would take around four years to begin; while Poyry estimates it will take eight years to start commercial production once a developer has a licence.
EU action is key
The International Energy Agency estimates that investment in key energy efficiency markets was $300 billion in 2011, and that the potential for energy efficiency is far from exhausted. Some of this action needs to happen via national policies, but decisions at EU level will be a vital signal for investors.
Using the internal market as a means to deploy more efficient products could yield large costs savings across the EU. The Ecodesign Directive alone could save European consumers and businesses over £78 billion per year (one per cent of the EU’s current GDP) in 2020, which amounts to average net savings of £243 per household per year.
EU policy has helped to spur many member states into taking greater action on energy efficiency than they might have done: even though the NEEAPs may not yet add up to the 2020 target, it’s hard to believe that many countries would have even formulated such plans without the EU impetus. For many nations, minimum EU requirements for buildings, transport and appliances have set the standard for national delivery policy.
Representing a quarter of the world’s economic activity, the EU is a large enough market to influence international industry standards, including efficiency standards for energy using products, such as boilers and tumble driers, and emissions standards for vehicles.
What should the UK be doing?
In response to the IPCC report on adaptation and vulnerability, Secretary of State Ed Davey stated that the government’s strategy includes the climate change targets and “investing in low carbon and energy efficiency technologies.” But, for this investment to happen, clear signals are needed for an industry recently shaken by announcements such as the cuts to ECO, a policy introduced to reduce energy consumption and support people living in fuel poverty.
As an influential EU member state, the UK has the opportunity to be a leader on energy efficiency action at the European level. To complement the 2030 EU renewables target, which it endorses, the UK should also support an energy efficiency target for 2030. The European Parliament has endorsed such a target, of 40 per cent, and this level of ambition would do much to give long term certainty to investors. The UK should be much more active and ambitious in working with other member states on policies to achieve, or even exceed, this goal. It’s just too big a prize to ignore any longer, for the economy, individuals, businesses and the environment.