THE ENERGY EFFICIENCY DIRECTIVE EXPLAINED
On the 22nd June, 2011, the European Commission published a draft Directive, provisionally known as the “Energy Efficiency Directive”
The EU has a target to save 20% of its primary energy consumption (against business as usual projections) by 2020 through improvements in energy efficiency. However, the Commission estimates that the EU is currently only on track to achieve half of that target. The proposed Directive has been produced by the Commission in response to calls from both the European Parliament and the European Council to close the gap between ambition and action.
The proposed Directive is very broad in scope, and would affect energy generators, suppliers, and consumers. It would replace the existing Energy End Use Efficiency and Energy Services Directive and the Cogeneration Directive both of which have been fully implemented in the UK.
- Full details of the proposed Directive can be found at the European Commission’s website[External link]
ENERGY EFFICIENCY DIRECTIVE – KEY PROVISIONS
Article 3 – Energy Efficiency Targets
- Member States are to set their own indicative national energy saving targets taking into account the EU 2020 Target.
- By 30 June 2014 the Commission will assess whether the EU is likely to achieve the 20% target based on the sum of the targets set by Member States and an assessment of national plans.
Article 4 – Public Bodies
- Member States are to ensure that, as from 1 January 2014, 3% of the total floor area of buildings over 250m2 owned by public bodies is renovated annually to the meet at least the minimum energy performance requirements set in current building regulations.
- Member States will be required to establish and make publicly available an inventory of buildings owned by public bodies detailing the energy performance of each building.
- Public Bodies must be encouraged to adopt and implement energy efficiency plans and energy management systems.
Article 5 – Purchasing by Public Bodies
- Public bodies will be required to meet high energy efficiency standards when procuring energy-using products, IT equipment, tyres, buildings and services from third-party providers.
Article 6 – Energy Efficiency Obligation Schemes
- Member States must establish an energy efficiency obligation scheme requiring all energy suppliers (or distributors) to meet an annual energy-saving target equal to 1.5% of their energy sales by volume in the previous year. Alternatively, Member States may opt to take other measures to achieve energy savings amongst final customers as long as they deliver equivalent energy savings. Such alternative approaches must be approved by the Commission.
Article 7 – Energy Audits and Energy Management Systems
- Member States must promote the availability of energy audits and encourage SMES and households to undergo an audit.
- Member States must ensure that large companies undertake an independent audit by 30 June 2014 and every three years thereafter. These audits may be conducted under existing energy management systems or voluntary agreements between stakeholder organisations and Government.
Article 8 – Metering and Informative Billing
- Member States must ensure that final consumers are supplied with individual meters and that energy efficiency and the needs of final consumers are taken into account when setting meter functionality as part of the roll-out of smart metering.
- Member states are also required to ensure that from 1 January 2015 billing is accurate and based on actual consumption.
- The Directive sets out minimum requirements for the frequency of billing and provision of historical consumption information for comparison purposes.
Article 9 – Penalties
- Member States must establish proportionate, effective and dissuasive penalties for non-compliance with Articles 6-8
Article 10 – Co-generation
- Member States will be required to produce a National Heating and Cooling Plan setting out action to be taken to develop the national potential for co-generation. The Plan must be submitted to the Commission by 1 January 2014 and then updated every five years
- Member States must ensure that all new thermal electricity plant above 20MW allow for recovery of heat by means of a high efficiency co-generation unit and is sited where waste heat can be used. Similarly, when existing thermal electricity plant above 20MW is significantly refurbished or its permit is updated, it must be converted to allow operation as a high-efficiency co-generation installation provided it is sited where waste heat can be used.
- Authorisation criteria must also be adopted whereby other new or substantially refurbished industrial installations with a thermal input above 20 MW also capture and make use of their waste heat.
- Member States may lay down exemptions from these requirements on the basis of availability of heat load or a negative cost/benefit analysis, though these conditions for exemption must be approved by the Commission.
Article 11 – Energy Transformation
- Member States must draw up and update every 3 years an inventory detailing the energy performance for all combustion installations and refineries with a total rated thermal input of 50MW.
- The Commission will use this information to assess the energy efficiency potential of these installations and, if necessary, may propose requirements to improve the efficiency of these installations when new installations are permitted or re-permitted after periodic review.
Article 12 – Energy Transmission and Distribution
- Member States must ensure that energy regulators pay due regard to energy efficiency in their decisions relating to the operation of gas and electricity transmission and distribution infrastructure.
- By June 2013 Member States must adopt plans which assess the energy efficiency of their gas, electricity and heating and cooling infrastructure and identify concrete measures and investments to deliver cost-effective improvements.
- Member States must guarantee transmission and distribution of electricity from high efficiency co-generation, as well as priority or guaranteed access to the grid and priority dispatch for CHP electricity.
Article 13 – Availability of Certification Schemes
- Member States must ensure that by 1 January 2014 certification and qualification schemes are available for providers of energy services, energy audits and energy efficiency improvement measures.
Article 14 – Energy Services
- Member States must promote the energy service market through making available lists of providers, model contracts, and disseminating a range of information on incentives to support energy service projects.
Article 15 – Other Measures to promote Energy Efficiency
- Member States must evaluate and take appropriate measures to remove non-regulatory barriers to energy efficiency including the landlord and tenant split and administrative practices relating to public purchasing, accounting and budgeting.
Article 19 – Review and Monitoring of Implementation
- Member states must report annually on progress towards the national energy efficiency target and submit a detailed supplementary report every three years, setting out national energy efficiency policy.