The EU Internal Energy Market for the 21st Century

Energy Efficiency – the shale gas of Europe

Randall Bowie

European Council for an Energy Efficient Economy eceee Joint Committee Meeting

European Parliament - National Parliaments17 December 2013, European Parliament, Brussels

What are the problems?• A problem of rising energy prices

• A fear of worsening competitiveness

• A problem of dangerous climate change

• A problem with high unemployment

• A problem to ensure citizens' health & welfare

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Ways to solve the problems• A need to reduce energy costs (≠ price): efficiency

• A need to consider what competitiveness really is

• A need to reduce GHGs & address climate change

• A need to ensure economic growth & investment

• A need to increase productivity of labour & capital

• A need to reduce pollution, improve health-comfort17 December 2013 The EU Internal Energy Market for the 21st Century 3

Tools to solve the problems• Completion of the internal energy market (IEM)

• Start by completing the IEM for energy efficiency

• Sun, wind, geothermal & tidal are our near future; shale gas not viable in most of EU, nor necessary

• “Unconventional fuels” still fossil fuels, with GHG

• Innovation, resource efficiency, “front-runners” &

high quality best, not competing with low prices

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Completing the internal energy market

• Respect principle of trias energetica by first reducing energy demand with savings, then RES

• Develop capacity markets, tariff structures,

demand response, storage, for intermittent RES

• All RES, large & small needed: interconnectors & distributed/local generation both required

• Buildings (40%) part of our infrastructure, like grids

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EU standardisation work: critical & global• EU standardisation, a prerequisite for the internal market

• EU standards are being used more & more outside the EU

• Standards energy-using products, min. perf., CE-marking,

essential reqmts., RES, measurement methods, safety, health, fire resistance, sustainability, etc.

• European Norms (ENs) become ISO (global) standards

• EN ISO 50001 (Energy management schemes - EMS)

• pr EN 16247-1 (Energy audits); promoted in Energy Efficiency Directive Article on Audits & EMS

The EU Internal Energy Market for the 21st Century

Why more EU regulation & harmonisation?

• Single market: harmonisation; no trade barriers; no dominate players; economies of scale, demand loci;

• Traded, competitive, energy-efficient goods & services, certification, mutual recognition, educat. & training; EUco-financing key

• Best practice, R & D, information shared; SME support

• Co-operation not same as collusion (EU comp. laws)

• Long-term regulatory framework, goals promote investmnt

• Binding targets (energy efficiency, RES, GHG) = flexibility

The EU Internal Energy Market for the 21st Century

A closer look at energy efficiency

• Existing cost-effective energy-efficient, technolo-gies can cut EU energy consumption by 41% 2030¹

• Energy consumption in EU residential bldgs can be

cut by 61%, industry by 26%, transport by 41% 2030

• By 2050, EU bldg stock can save 80%² of its energy

consumption by increasing renovation rate from 1% to 3%/year; with “deep”renovations of factor 5

¹Fraunhofer, ² Ecofys

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The Multiple benefits of energy efficiency

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ENERGY SAVINGS – OUR FIRST FUEL

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Denmark: 2013 Assessment Green taxes

• Economic effects of green taxes tracked by different indicators

• Calculations show total production in private sector not influenced by green taxes with no significant influence on employment, private consumption or balance of payments.

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The Danish Case

• Clean energy technology sales are 3% of GDP - highest in the world.

• Though small, Denmark is home to large clean tech companies, such as Danfoss, Vestas, Grundfos, Novozymes, Rockwool, Siemens Wind Power, & Velux, & suppliers & consultants for green tech.

• Energy technology represents 10% of total Danish exports of goods, with green energy technologies constituting the largest share.

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Denmark: 2013 Impact of Green taxes

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Let’s review the solutions

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EU energy import dependency

Savings potential high in iron/steel industry

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Savings potential high in cement industry

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Savings potential high in chemical industry

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Energy price gap closed by cost cuts

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Some conclusions

• The EU internal energy market needs to address problems with investments in energy efficiency and renewable energy to ensure competitiveness

• Green, low-carbon jobs & growth should be EU priority, otherwise they will develop elsewhere

• EU can & should be a “front runner” & leader

• Energy efficiency & binding energy savings target should be a first key element in completing IEM

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Putting it all into perspective: it is up to us

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Juno probe observes Earth-Moon dance at a distance of 1Mkm as it is sling-shot towards Jupiter

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Thank you for your attention.