Stefan Scheuer Consulting is supporting DENEFF, the voice of German business for energy efficiency, to ensure the EU’s legislators walk the talk and make energy savings the bedrock for a fair, fast and attractive energy transition. The Energy Efficiency and Energy Performance of Buildings Directive are under revision in order to align them with the EU’s climate targets and to respond to the energy crisis casued by Putin’s war. The legislative results are expected later this year.
Eurostat displays the data as “outperforming” the 2020 energy efficiency target of the EU. This presentation is a superficial and misleading reading.
Covid response measures resulted in a GDP slump, with a strong impact on energy use. Energy consumption dropped in particular in the transport sector. Furthermore, 2020 was a very warm year with a low energy consumption for heating.
GDP and climate are strong drivers for energy consumption. They need to be considered when interpreting energy consumption development. The decoupling graph below shows this relation. 2020 FEC and PEC figures are put in relation to heating degree days and GDP:
The 2020 energy consumption figures should not distract us from the fact that Member States are not on track on to meet EU energy and climate goals. Improving the legislation on energy efficiency, and in particular the target governance and enforcement mechanism, is more urgent than ever.
Stefan Scheuer Consulting has published an assessment of the Fit for 55 package, with recommendations how to ensure target achievement in the future.
The EEA “Trends and Projections 2021” report published earlier this week concludes that all three energy and climate targets for 2020 are achieved. Are they really?
2020 was a very warm winter, and the Covid crisis reduced economic activity considerably. And weather and activity are strong drivers for energy consumption.
The decoupling graph provided by Stefan Scheuer Consulting clearly shows this relation. 2020 FEC and PEC estimates by EEA are put in relation to heating degree days and GDP.
“The decrease in energy demand for 2020 is not a result of an increase in energy efficiency, but a sad accident,” says Stefan Scheuer. “These figures should not distract us from the fact that we are failing to take serious energy efficiency measures.”
Improving the legislation on energy efficiency, and in particular the target governance and enforcement mechanism, is more urgent than ever. Stefan Scheuer Consulting has published an assessment of the Fit for 55 package earlier this month, with recommendations how to ensure target achievement in the future.
Throwing money at the problem of slow energy renovations alone won’t solve it. Citizen-led renovation programmes are an approach to create demand for energy renovations on the ground. The financing of the development of such programmes however matters. Stefan Scheuer Consulting has developed a financing guide in order to provide orientation and an overview over the many opportunities available.
The political context for citizen-led renovation has changed over the last two years since the start of the project. These are the key elements providing new opportunities:
In 2020 the EU Climate Law establishes new climate targets, climate neutrality by 2050 and 55% greenhouse gas emission reduction by 2030.
The Fit for 55 package includes several provisions that aim at an increase of energy renovations of the existing buildings stock. In particular, the proposed EED recast increase the energy efficiency target ambition level and strengthens target governance. Buildings will play an important role to achieve these goals. For a first time, the Commission proposal acknowledges the role of energy communities in the legal provisions. Furthermore, the Fit for 55 package proposes a new ETS for the buildings and transport sector which would be linked to a new Social Climate Fund to manage negative social impacts of higher energy prices.
The 2021-2027 EU budget foresees several instruments that can be used to finance the renovation wave. At least 30 per cent of both Multiannual Financial Framework (MFF) and Next Generation EU (NGEU), or 547 bn Euro, must be spent for climate purposes.
Cohesion and structural funds already applied climate action earmarking during the last budget period. This has been strengthened in the new MFF 2021-2027 and was extended to all regions, including high GDP ones.
The EU Recovery and Resilience Facility was put in place in order to help the EU to emerge stronger and more resilient from the current crisis. 37% of the funds are ringfenced for climate investment. The Renovation Wave is one of the components that Member States are encouraged to address in their Recovery and Resilience Plans.
The Commission launched a Just Transition Mechanism as part of the European Green Deal with the Just Transition Fund as an instrument to support the territories most affected by the transition towards climate neutrality.
The EU supports the energy transition now via the LIFE programme for the environment and climate action. The first call of its subprogramme LIFE Clean Energy Transition was launched in July 2021. It includes several topics that can be used by citizen-led initiatives on energy renovations.
The European Parliament’s Committee on Industry, Research and Energy (ITRE) has launched a so-called Pilot Project for a “Support service for citizens-led renovation projects”. The publication of the tender is expected later this year.
The EIB’s ELENA tool continues to cover project development costs for sustainable energy investment programmes.
The project aims to develop an innovative approach building upon existing activities by renewables cooperatives. It started in 2019 as a cooperation between REScoop.eu and Stefan Scheuer Consultancy, financed by the European Climate Foundation. REScoop.eu is reviewing the experience of mature retrofitting programmes run by their member organisations in order to encourage the replication of such programmes. Stefan Scheuer Consulting is analysing the policy development at EU level in order to identify ways to improve the policy framework and financial support for citizen-led renovation.
Almut Bonhage: A financing guide for Citizen-led Renovation, October 2021
This financing guide aims at providing orientation and an overview over the many opportunities on how to finance the development of citizen-led renovation programmes.
The political context for citizen-led renovation has changed over the last two years since the start of the project. These are the key elements providing new opportunities:
In 2020 the EU Climate Law establishes new climate targets, climate neutrality by 2050 and 55% greenhouse gas emission reduction by 2030.
The Fit for 55 package includes several provisions that aim at an increase of energy renovations of the existing buildings stock. In particular, the proposed EED recast increase the energy efficiency target ambition level and strengthens target governance. Buildings will play an important role to achieve these goals. For a first time, the Commission proposal acknowledges the role of energy communities in the legal provisions. Furthermore, the Fit for 55 package proposes a new ETS for the buildings and transport sector which would be linked to a new Social Climate Fund to manage negative social impacts of higher energy prices.
The 2021-2027 EU budget foresees several instruments that can be used to finance the renovation wave. At least 30 per cent of both Multiannual Financial Framework (MFF) and Next Generation EU (NGEU), or 547 bn Euro, must be spent for climate purposes.
Cohesion and structural funds already applied climate action earmarking during the last budget period. This has been strengthened in the new MFF 2021-2027 and was extended to all regions, including high GDP ones.
The EU Recovery and Resilience Facility was put in place in order to help the EU to emerge stronger and more resilient from the current crisis. 37% of the funds are ringfenced for climate investment. The Renovation Wave is one of the components that Member States are encouraged to address in their Recovery and Resilience Plans.
The Commission launched a Just Transition Mechanism as part of the European Green Deal with the Just Transition Fund as an instrument to support the territories most affected by the transition towards climate neutrality.
The EU supports the energy transition now via the LIFE programme for the environment and climate action. The first call of its subprogramme LIFE Clean Energy Transition was launched in July 2021. It includes several topics that can be used by citizen-led initiatives on energy renovations.
The European Parliament’s Committee on Industry, Research and Energy (ITRE) has launched a so-called Pilot Project for a “Support service for citizens-led renovation projects”. The publication of the tender is expected later this year.
The EIB’s ELENA tool continues to cover project development costs for sustainable energy investment programmes.
This document is part of the project ‘Citizen-led Renovation’ by Stefan Scheuer Consulting and REScoop.eu, financed by the European Climate Foundation.
The project aims to develop an innovative approach building upon existing activities by renewables cooperatives. It started in 2019 as a cooperation between REScoop.eu and Stefan Scheuer Consultancy, financed by the European Climate Foundation. REScoop.eu is reviewing the experience of mature retrofitting programmes run by their member organisations in order to encourage the replication of such programmes. Stefan Scheuer Consulting is analysing the policy development at EU level in order to identify ways to improve the policy framework and financial support for citizen-led renovation.
Almut Bonhage: A financing guide for Citizen-led Renovation, October 2021
The Fit for 55 package has the potential to deliver on the EU’s energy efficiency targets while the economic energy savings potentials for 2030 are increasing, according to a new study by Stefan Scheuer Consulting and Fraunhofer ISI.
The proposed recast of the Energy Efficiency Directive increases the EU target ambition, makes the EU level target binding, and introduces potentially powerful target governance tools.
It includes a formula to allocate the EU’s 2030 energy efficiency targets among Member States. A target allocation is new to energy efficiency but has been used with success for renewable energy and climate targets. But Member States would be allowed to deviate from the results of energy efficiency formula when determining national energy efficiency targets. The EED recast proposal includes a common correction factor, which could be used at the end to adjust national targets and ensure no gap is left to the EU target. But the Commission has not set out when and how it intends to use this tool.
The proposed EU 2030 energy efficiency-target levels of reducing energy demand by 9% compared to business as usual is an increase from the current 32.5% target to 36% for final energy demand and 39% for primary energy demand. Latest assessments show that economic energy savings potentials have been growing and if tapped would reduce final and primary energy demand by 17% and 18% respectively compared to business as usual.
The package includes important new elements which boost the delivery of energy efficiency targets. Carbon pricing for buildings and transport if coupled with requirements to use the new revenues, through the new Social Climate Fund to give vulnerable parts of society access to energy efficiency improvements in order to cut their energy bills.
The study includes the results of a test run of the new formula to allocate the target among Member States (see table).
This report is part of the project ‘Stronger EED Target Governance’ by Stefan Scheuer Consulting and Fraunhofer ISI, financed by the European Climate Foundation. It assesses the Fit for 55 package published by the Commission on 14th July 2021 and provides high-level recommendations for strengthening the target ambition and governance and for increasing the synergies with other pieces of the package.
This analysis builds on the findings of the first phase of our project, which started in March 2021. The findings are presented in Annex 1 (EED target governance options) and 2 (Energy Savings potentials) to this report. In the first phase, we: – assessed the different governance approaches in EU climate and energy policies; – developed an energy efficiency target benchmarking and allocation approach; and – updated the EU’s and national economic energy savings potentials.
Wolfgang Eichhammer, Matthias REUTER, Stefan SCHEUER: Will the Fit for 55 package deliver on energy efficiency targets? A high-level assessment, October 2021
The Fit for 55 package has the potential to deliver on the EU’s energy efficiency targets while the economic energy savings potentials for 2030 are increasing, according to a new study by Stefan Scheuer Consulting and Fraunhofer ISI.
The proposed recast of the Energy Efficiency Directive increases the EU target ambition, makes the EU level target binding, and introduces potentially powerful target governance tools.
It includes a formula to allocate the EU’s 2030 energy efficiency targets among Member States. A target allocation is new to energy efficiency but has been used with success for renewable energy and climate targets. But Member States would be allowed to deviate from the results of energy efficiency formula when determining national energy efficiency targets. The EED recast proposal includes a common correction factor, which could be used at the end to adjust national targets and ensure no gap is left to the EU target. But the Commission has not set out when and how it intends to use this tool.
The proposed EU 2030 energy efficiency-target levels of reducing energy demand by 9% compared to business as usual is an increase from the current 32.5% target to 36% for final energy demand and 39% for primary energy demand. Latest assessments show that economic energy savings potentials have been growing and if tapped would reduce final and primary energy demand by 17% and 18% respectively compared to business as usual.
The package includes important new elements which boost the delivery of energy efficiency targets. Carbon pricing for buildings and transport if coupled with requirements to use the new revenues, through the new Social Climate Fund to give vulnerable parts of society access to energy efficiency improvements in order to cut their energy bills.
The study includes the results of a test run of the new formula to allocate the target among Member States (see table).
The authors say:
Stefan SCHEUER: “This is a leap for the credibility of EU energy efficiency policy. The tools are put forward to secure a new and binding EU target. But they need to be placed in the right order, so that at the end of the target allocation the wrench is at hand to tighten the nut. Extended carbon pricing coupled with the Social Climate Fund can provide the tailwind for energy efficiency investments, further boosting confidence that this time around the EU is going to deliver on its targets.”
Matthias REUTER, Fraunhofer ISI: “Our assessment shows that economic energy saving potentials are growing, as efficient technologies become economic, and would get the EU two times further than proposed, reducing final and primary energy demand by 17% and 18% respectively compared to reference projections”.
Wolfgang EICHHAMMER, Matthias REUTER, Stefan SCHEUER: Will the Fit for 55 package deliver on energy efficiency targets? A high-level assessment, October 2021
The new 55% climate target will bring major revisions of the EU’s energy and climate laws. Quite opposing policy options are on the table. Strengthening the existing policy architecture or moving to a carbon price all-out approach. This new study informs the discussion about these options. It looks at the interactions and synergies between three of the key policy instruments: Effort Sharing Regulation (ESR), EU Emission Trading System (EU ETS) and the energy savings obligations in Article 7 of the Energy Efficiency Directive (EED).
The study clearly shows that the ESR is an important driver for national action to deliver energy savings and thus to ensure cost-effective and equitable GHG reductions (see info graphic).
The study assesses different scenarios with more ambitious ESR targets for Member States and with an increased level of energy savings under Article 7. Most countries would need to fully deliver their EED energy savings obligation in order to meet the ESR targets, not only with the current level of 0.8% savings per year but with an increased level of 1.6%.
The study has been carried out over the last months by Stefan Scheuer Consulting, the Regulatory Assistance Project and Öko-Institut.
The authors say:
Stefan SCHEUER: “The ′Fit for 55′ package is a unique opportunity to improve the coherence of the EU’s climate and energy efficiency policies. The ESR is essential to maximise the synergies between the different legislative instruments. Higher national GHG targets will secure national efforts needed to address market failures and barriers to energy efficiency investments together with the EED energy savings obligations.”
Samuel THOMAS: “The energy savings obligation under the EED’s Article 7 will at least need to be doubled in order to meet the 55% climate goal: from the current 0.8% to 1.6% starting in 2025. These need to be energy savings on the ground, accurately measured and verified, and fully additional to EU measures. Energy savings obligations can ensure meaningful national contributions in unlocking the cost-effective abatement potential of energy efficiency.”
Note: Climate campaigners launched a petition to support national climate targets in the ‘Fit for 55’ package (https://www.everybodycounts.eu/) ahead of the Commission’s public consultation on the ESR ending on 5 February 2021.
Jakob GRAICHEN, Stefan SCHEUER, Samuel THOMAS: Strengthening synergies between climate effort sharing & energy savings obligations, an input to the “Fit for 55” package, February 2021
The new 55% climate target will bring major revisions of the EU’s energy and climate laws. Quite opposing policy options are on the table. Strengthening the existing policy architecture or moving to a carbon price all-out approach. This new study informs the discussion about these options. It looks at the interactions and synergies between three of the key policy instruments: Effort Sharing Regulation (ESR), EU Emission Trading System (EU ETS) and the energy savings obligations in Article 7 of the Energy Efficiency Directive (EED).
The study clearly shows that the ESR is an important driver for national action to deliver energy savings and thus to ensure cost-effective and equitable GHG reductions (see info graphic).
The study assesses different scenarios with more ambitious ESR targets for Member States and with an increased level of energy savings under Article 7. Most countries would need to fully deliver their EED energy savings obligation in order to meet the ESR targets, not only with the current level of 0.8% savings per year but with an increased level of 1.6%.
The study has been carried out over the last months by Stefan Scheuer Consulting, the Regulatory Assistance Project and Öko-Institut.
The authors say:
Stefan SCHEUER: “The ′Fit for 55′ package is a unique opportunity to improve the coherence of the EU’s climate and energy efficiency policies. The ESR is essential to maximise the synergies between the different legislative instruments. Higher national GHG targets will secure national efforts needed to address market failures and barriers to energy efficiency investments together with the EED energy savings obligations.”
Samuel THOMAS: “The energy savings obligation under the EED’s Article 7 will at least need to be doubled in order to meet the 55% climate goal: from the current 0.8% to 1.6% starting in 2025. These need to be energy savings on the ground, accurately measured and verified, and fully additional to EU measures. Energy savings obligations can ensure meaningful national contributions in unlocking the cost-effective abatement potential of energy efficiency.”
Note: Climate campaigners launched a petition to support national climate targets in the ‘Fit for 55’ package (https://www.everybodycounts.eu/) ahead of the Commission’s public consultation on the ESR ending on 5 February 2021.
Jakob GRAICHEN, Stefan SCHEUER, Samuel THOMAS: Strengthening synergies between climate effort sharing & energy savings obligations, an input to the “Fit for 55” package, February 2021
2019 saw a declining energy demand, according to latest Eurostat data. This happens the second year in a row now since 2014 when economic growth in the EU picked up again and indeed the EU’s energy efficiency flagship, the energy savings obligation, started.
Having a closer look at the 2019 FEC/PEC data shows some interesting trends:
1. 2020 energy efficiency targets are reachable, especially for primary energy consumption (PEC), which declines faster than final energy (FEC). This could be due to the ongoing switch from coal to PV and wind energy. The latter are 100% efficient by convention which compares well to the roughly 30-40% efficiency for coal.
2. Final energy consumption (FEC) looks less good and achieving the 2020 energy efficiency target is uncertain. This is worrying because this is due to our leaky homes and polluting cars. Reducing energy end use is crucial to ensure the transition to a carbon free energy system is socially equitable.
Look out for the for Odyssee-Mure project, which provides more detailed analysis and insights.
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