It’s time to unlock the demand side potential in accelerating the energy transition.

In recent months the term “polycrisis” has found its way into our vocabulary. This term captures the multiple crises (climate; energy; inflation; war in Ukraine; …) that are impacting society at large. A sobering reality is that all these crises were created by mankind, as we use the wrong energy and waste too much of it, thus paying far too much in powering our economies and living our lives. On the flipside this means that as mankind we are in the driver’s seat in tackling these challenges. The good news is that the solutions are also interrelated and have raised the relevance and awareness of the energy transition to efficient and clean technologies.

Much attention goes out to the “supply side” of the energy transition, both on the energy mix (with ongoing high use of coal; a search for alternative gas supplies; scaling renewables; investments in hydrogen and nuclear) and energy intensive industries with large stimuli programs in Europe and the US (the Green Deal Industrial Plan and the Inflation Reduction Act). Yet the structural changes to decarbonize our energy system at the supply side of the energy transition will need time to reach scale and impact.

As the world needs solutions on a much shorter term, the time is right to unlock the vast potential at the “demand side” of the energy transition. This largely comes down to stepping up our collective efforts on energy efficiency.

The electrification of heating, transport and other service systems require a massive amount of electricity. The average global electricity consumption of a household (3400 kWh) is almost exactly equal to the annual amount of electricity needed to charge an electric vehicle or to power a heat pump. Already the grid is close to a point where countries are at or near capacity.

For example, while the lighting sector is positively known for the transition to LED lighting, lighting alone still accounts for 13% of global electricity usage. Importantly around half of all light points in the US and EU are still conventional, offering an enormous opportunity for rapid reductions of lighting-related energy consumption. LED lighting retrofits are relatively fast and easy, with few invasive activities involved.

Through a complete switch to connected LEDs, the EU has the potential to save €65.1 billion in energy costs annually and mitigate 51 MTons of carbon emissions, while freeing up enough electricity to power 47 million heat pumps and thus keep a quarter of all households warm each year. The reduction in carbon dioxide would be equal to the sequestration capacity of a forest the size of Switzerland.

Like for lighting, many other solutions exist and Europe’s “demand side companies” operate at the cutting edge of active and passive energy efficiency technologies including lighting, building management systems, sensors, controls, insulation, windows and many others.

Energy efficiency technologies can generate savings often called “low-hanging fruit” waiting to be picked, so let us roll up our sleeves and pick those fruits for the benefit of Europe’s competitiveness and the well-being of its citizens.

Harry Verhaar
Head of Global Public and Government Affairs
Signify

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Step up political leadership on energy demand reduction

It’s four months since European Leaders agreed to reduce their countries’ gas demand by 15% [1], and two months since they agreed on a similar target for electricity demand (10% total reduction, with 5% during peak hours [2]). And it’s now the time to ensure the delivery of these targets.

As the pressure on European citizens and industries from high energy prices persists, the delivery of those targets becomes more than ever a matter of political leadership. Gas supplies from Russia are likely to fall next year while competition for liquified natural gas (LNG) supplies increases. Filling in gas storage ahead of next year’s winter might prove far more challenging [3]. We need a long-term solution.

The only option left is to act on the energy demand side. Reducing energy consumption would come with three substantial benefits. First, a permanent improvement to energy security. Second, lower carbon emissions. And finally, a shift in the state budgets, from short-term relief funds to capital investment on assets like better building stock and modern industrial processes.

Now is the time for leaders to use all the tools at their disposal to enable a substantial and sustained reduction of energy consumption. This includes setting up an industrial strategy and designing ambitious regulations. But it also requires galvanising efforts around skills and technical support in sectors where it is most chronically needed, like buildings retrofit and electrification. Next year is the European Year of Skills and offers a great opportunity to do so [4].

For the buildings sector, there are ample examples of good practices of investment in skills and advisory services like one stop shops [5]. Member States, industry and social partners can share and scale them to reduce energy consumption in buildings across the EU. But the industry needs more than incentives for innovation and public investments. Above all it needs a clear signal about the direction of travel. It is up for political leaders to do this through ambitious regulations, like minimum energy performance standards [6], while encouraging the sector to embrace modernisation and digitalisation.

This is the time for European leaders, social partners, and private sector stakeholders to think strategically about the practical delivery of energy saving targets as they pave the way towards green and digital transitions. 

Vilislava Ivanova
Senior Researcher
E3G

Sources:
1. European Council (2022). Member states commit to reducing gas demand by 15% next winter
2. European Council (2022). Council agrees on emergency measures to reduce energy prices
3. IEA (2022). Europe needs to take immediate action to avoid risk of natural gas shortage next year 4. EC (2022). Commission kick-starts work on the European Year of Skills
5. Renovate Europe (2022). Speeding up the delivery of renovation – skills
6. E3G (2022). High Minimum Energy Performance Standards for buildings

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It’s time to act to address Europe’s buildings issue

As we are drifting towards winter, I am struck by the gap between the urgency to protect European citizens from the consequences of poorly performing homes, and the reluctance of our leaders to decisively act on it. We are witnessing intense debates on the energy efficiency files under the Fit for 55 Package, and this is not nearly the end of it.

Asking citizens to adapt their behavior to mitigate the risk of gas shortages and subsidizing their bills seem to be the only political answer. Yet, we all know that solutions addressing only the symptoms will not help in the long run.

The solution to the cause is the EU Renovation Wave, however we cannot overlook the challenges to this. We need an additional 275 billion euros to finance it (1), and the acceleration of the rate and depth of renovation calls for coordination and new business models.

We have been sleepwalking on the issue for too long, hypnotized by cheap fossil energy hiding the leaks and waste of our buildings. It is not too late to change that.

It is our responsibility to help politicians join the dots between short- and long-term concerns. The equivalent of 1,7% of EU GDP was spent to mitigate the impact of the energy crisis so far (2). By contrast, financing the Renovation Wave would represent 1,5% of the GDP. Add to that jobs, health and productivity benefits, and a boost to our climate agenda.

It is also our responsibility to explain what renovation market actors need to be able to invest, train, and innovate. Building owners, manufacturers, banks, real estate and building professionals need visibility. This visibility is at the heart of the MEPS (Minimum Energy Performance Standards) proposal, a true renovation accelerator.

The best energy will always be the energy we do not need, thanks to the efficiency of our buildings.

We can help make this a reality.

by Céline Carré
Head of Public Affairs
Saint-Gobain

Sources:
1. Question 5 in FAQ on the Renovation Wave: https://ec.europa.eu/commission/presscorner/detail/en/qanda_20_1836
2.  Bruegel, 21/09/2022 and Europe’s Deepening Energy Crisis Pushes Bill to $500 Billion

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EED recast: Parliament’s ITRE committee outlines its visions to revise the Directive

On Tuesday 13 July 2022, the ITRE committee of the European Parliament adopted its position to revise the Energy Efficiency Directive, a key file of the Fit for 55 package to put the EU on track towards reducing at least 55% of GHG emissions by 2030 and phase out fossil fuel imports from Russia.

Exactly one year after the presentation by the Commission of the ‘Fit for 55%’ package, aimed to put the European Union on track to reduce GHG emissions by at least 55% in 2030, the ITRE committee acknowledges that energy efficiency must be substantially increased to combat climate change and make the European Union less dependent on energy imports.

In view of today’s energy crisis, MEPs in the ITRE committee agreed to set energy efficiency binding targets for the Union and for the Member States, both for primary and final energy consumption by 2030. This is a very timely and long-awaited approach that we strongly support.

Monica Frassoni, President of the Alliance, said: “We are only seeing the tip of the iceberg of this energy price crisis. Without a strong policy signal from the EU to put energy savings first, citizens and businesses will suffer the consequences. And the climate crisis is even more worrying with natural catastrophes impacting our lives on a daily basis. There is an opportunity in the plenary of the Parliament to fix the shortcomings of the Directive and in particular the exclusion of mandatory renovation of social housing and the partial consideration of energy efficiency savings from fossil fuel appliances. We look forward to continuing to cooperate with the Institutions to improve the directive. There is a good basis to work with and succeed, no ifs and buts, to structurally address both energy and climate crisis”.

You can find the full press release here

Media contact:
Antoan Montignier
+32 499 84 97 28
antoan.montignier@euase.eu

About us The European Alliance to Save Energy (EU-ASE) is a cross-sectoral, business-led organisation that ensures that the voice of energy efficiency is heard across Europe. EU-ASE members have operations across the 27 Member States of the EU, employ over 340.000 people in Europe and have an aggregated annual turnover of €115 billion.

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The water-energy nexus repowering the EU

The water-energy nexus is the interdependency of water and energy: energy is needed for abstracting, storing, treating or disposing water but also for moving, heating and cooling water across industrial cycles, while water is also heavily used for the generation and transmission of energy. The nexus holds the potential to generate large-scale energy and water savings across sectors and reduce greenhouse gas emissions.

The energy use by water and wastewater infrastructure amounts to about 4% global electricity consumption and 3,5% in the European Union (IEA, 2016).

Water utilities can become energy neutral and even energy positive with existing technologies and low costs of investments.

The revision of the EU Urban Wastewater Treatment Directive (UWWTD) represents a key opportunity to deliver the transition in the sector. A good way forward would be introducing an energy efficiency target for wastewater treatment plants of a certain size, for example bigger than 10,000 in population equivalent (p.e.). Mandatory energy audits for wastewater treatment operators which include measuring water efficiency could also help advance the energy efficiency of the sector.

This would reinforce and echo new provisions on water and the energy savings obligations for public bodies, currently being negotiated by co-legislators in the Energy Efficiency Directive (EED) recast.

Digitalisation in the water sector is an important enabler towards energy neutrality. In wastewater treatment, existing digital solutions can achieve significant energy savings with limited investment needs (no civil engineering or hardware costs) within a short period of time. Intelligent pumps for wastewater management, for example, can save up to 70% energy per utility with 80% inventory reduction, thus lowering costs for utilities.

Saving water, saves energy and saving energy saves water. It is now time to advance energy efficiency and “RePower” the EU through the water-energy nexus!

by Tania Pentcheva
Senior Manager Government and Industry Relations
Xylem Inc.  

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