Distributive policy

Schneider Electric: How European climate policy can strengthen energy efficiency measures

This blog is co-authored by Morten Petersonmember of the European Parliament.

Big cities under water. Unprecedented heatwaves. Terrifying storms. These are just some of the nightmarish scenarios discussed by UN Secretary-General António Guterres following the release in April of the latest report from the Intergovernmental Panel on Climate Change (IPCC). on climate science.

The conclusions could hardly be more striking. We are on track for global warming of more than double the 1.5°C target set under the Paris Agreement in 2015. To avoid this, carbon emissions must peak by barely three years and declining rapidly thereafter.

EU regulators are responding to this challenge. As part of the Green Deal, the bloc has pledged to achieve carbon neutrality by 2050. This ambition will provide the EU with the most comprehensive set of regulations and laws in the world to drive the green transition.

But there is still much to do – and soon. This imperative has only been accentuated in the context of soaring fossil fuel prices.

The world of energy is changing. The traditional focus on centralized, top-down distribution is shifted and replaced with a much more end-user focused approach. Energy systems are, therefore, increasingly decentralized, digitized and decarbonized.

This transformation represents a significant opportunity for the EU, which spends around €1 billion on energy imports every day. EU policy makers need to pay more attention to how energy is consumes – not just how it is generated, transmitted and distributed. This means better incentivizing end users to use their energy as efficiently as possible, minimizing unnecessary waste.

Energy efficiency is a key driver of the transition to lower emissions

Decarbonizing the global economy means reducing our dependence on fossil fuels and dramatically increasing our use of renewable energy sources like solar, wind, biomass and hydroelectricity. Also, because electricity is a cleaner and more efficient form of energy than oil and gas, we need to keep electrifying everything from how we power cars to how we heat buildings.

Already in Europe, these profound and positive changes in the production and distribution of energy are underway. However, renewable energy and electrification alone cannot achieve the EU’s net zero ambition.

The International Renewable Energy Association (IRENA), for example, calculates that such measures can contribute just 45% of the emissions reductions needed to limit global warming to 1.5°C above pre-industrial levels.

So how can policy makers ensure that we are using these cleaner forms of energy as efficiently as possible?

Digitization and demand regulation as a way to increase energy efficiency

Digital technologies make energy waste visible. For example, by providing real-time information on complex transformation and distribution processes, these tools have recently helped to significantly reduce energy waste in Europe. These improvements are partly due to the regulatory impetus given to network operators under the Energy Efficiency Directive (EED) of 2012.

But to accelerate decarbonisation in line with the Green Deal, EU policymakers need to more actively stimulate untapped efficiency improvements on the demand side. This means encouraging consumers, businesses, building operators and others to invest in tools that help save energy.

This will also allow end users to reduce their costs. For example, smart meter technologies digitally optimize processes such as lighting and temperature control, dramatically reducing energy bills in factories, homes, hospitals, office buildings and other buildings.

Likewise, improvements in distributed power generation and smart grid technologies are increasingly enabling end users to also become producers of energy, or “prosumers”. In many parts of the EU, for example, excess energy generated by rooftop solar panels can now be sold directly to the grid.

Regulatory stimulus needed

More can be done to encourage the adoption of such innovations. Once fully deployed, an ambitious transposition of measures related to building management systems (or BAC) included in the revised directive on the energy performance of buildings (EPBD 2018/844) could lead to savings equivalent to 14% of total consumption. final energy of buildings. Concretely, by 2038 the EU would save the equivalent of 46 billion cubic meters (bcm) of fossil gas, 64 metric tons (mt) of CO2 and 36 billion euros.

Similarly, a recent study by the Schneider Sustainability Research Institute (SRI) estimated that, under current conditions, rooftop solar panels could supply up to 20% of Europe’s overall electricity demand. Nevertheless, the continent’s rooftops remain chronically underutilized.

“Fit for 55” and the way forward to greater energy efficiency

In an important step towards realizing the ambition of the Green Deal, the European Commission last July published a series of policies aimed at reducing the bloc’s net greenhouse gas emissions by at least 55% by 2030.

Titled “Fit for 55”, the package included revised regulations, proposing that member states nearly double their annual energy savings obligations, roll out electric vehicle (EV) charging stations, introduce minimum energy performance for buildings and deploying energy management systems in industry, among other measures. This makes ‘Fit for 55’ one of the most complex and ambitious legislative projects ever undertaken by the EU, a subject covered in our recent white paper on the proposals.

However, other opportunities remain to catalyze systemic and bottom-up change in EU energy policy. Consumers are driving the transition to a new sustainable, digital and electrified energy world; what we call “Electricity 4.0”.

Key technologies are dramatically transforming energy demand and offering new services to consumers. Investing now in a smart, decentralized energy system can affect structural change long before 2030. A timely and ambitious redesign of the “Fit for 55” package can prove crucial in this process.

About the co-author

Morten Petersen is a member of the European Parliament, an elected member of the Danish Social Liberals, vice-chairman of the Committee on Industry, Research and Energy (ITRE) and substitute member of the Committee on Civil Liberties, the justice and home. business (LIBE).