EU Energy Efficiency Initiatives Stina Soewarta, European Commission Prague, June 2, 2005

1. EURIMA conference EU Energy Efficiency InitiativesStina Soewarta, European CommissionPrague, June 2, 2005

2. Outline • Green Paper • reasons, objectives, scope, timetable • The Directive on Energy end-use efficiency & energy services • progress in Council, remaining issues, timetable • Buildings and Eco-design Directives

3. Green PaperGross energy consumption (1725 mtoe) 2005

4. Green Paper EU has large potential to improve energy efficiency and to save energy • Lisbon & Kyoto require improved energy efficiency • Measures in pipeline can achieve half of potential • Additional measures needed for period to 2020 • All sectors to contribute.

5. Green Paper

6. Green Paper Energy efficiency and saving energy EU priorities • Need to provoke a public debate • Need to discuss roles for EU and Member States • Need action now • Will propose concrete measures for debate • Commission adoption foreseen in June

7. Green Paper Barriers to improvements in energy efficiency • Structural factors linked to the market • Lack of commitment among public authorities • Indifference among consumers • The difficulty of defining a fair price

8. Green Paper Additional measures proposed • Energy savings in power stations: 40 Mtoe • Cogeneration: 20 Mtoe • Buildings Directive to cover all buildings: 30 Mtoe • Implementing the Eco-design Directive: 20 Mtoe

9. The Directive on Energy end-use efficiency & energy services • To promote cost-effective energy efficiency using targets, mechanisms, incentives and institutional, financial and legal frameworks to remove market barriers and imperfections. • To develop and transform energy efficiency measures into a commercially viable and self-sustaining market. • To develop a market for integrated energy services (energy + technology).

10. The Directive on Energy end-use efficiency & energy services • 1 % annual overall target for each MS (Article 4): • 1,5 % annual public sector target (Article 5): - to increase the demand for EE products and energy services through public procurement • Obligation for energy distribution and/or retail energy sales companies (Article 6): - to ensure the active offering and promotion of energy services to customers

11. The Directive on Energy end-use efficiency & energy services Expected impact of Directive: • Will expand market for energy services & efficiency • Will increase use of energy performance contracts, 3rd-party financing & other shared-savings contracts • Harmonised definitions, measurements will promote single market for energy services and efficiency • Harmonised bottom-up measurement system could allow for an EU-wide white certificates market

12. The Directive on Energy end-use efficiency & energy services • Constructive development in Council; LUX Pres. foresees Political Agreement in June • UK Pres. wants Common Position by end 2005 • General agreement on measurement system: Committee & harmonised top-down/bottom up system • Council issues: mandatory vs. indicative targets; public sector target vs. procurement requirements

13. Other Initiatives • Eco-design Directive: wide-ranging & effective • Buildings Directive: already having strong impact