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The European discussion on targets

eceee on target setting and target achieving

eceee understands the importance of targets to set a long-term target and to monitor progress. Targets are useful economy wide and sectoral (e.g. for industry or buildings).  Sectoral targets, in particular, can provide important feedback to analysts, programme managers and decision-makers. While binding targets can reinforce political commitments, however, eceee is well aware that the political mood today is cautious, particularly in Member States. In part, there is concern that previous attempts to have a common methodology for targets have failed. Nevertheless, targets are important to maintain priority, focus and attention. eceee welcomes the debate going on throughout Europe and has published this new report to help contribute to that debate.

eceee documents and links

  • New report: National energy efficiency and energy saving targets (24 May 2011)
  • Accompanying Report: Country specific information (24 May 2011)
  • Energy Efficiency Policy in Europe (EEP)
  • eceee Summer Studies (Energy efficiency policy has always featured prominently in the eceee Summer Studies we encourage readers to search for papers).

One main point of discussion – and disagreement among various stakeholders – is if and how to use energy efficiency targets on national or EU level. eceee has recently completed a study on targets setting and implementation in EU countries.

New report: National energy efficiency and saving targets (24 May 2011)
Accompanying report: Country specific information (24 May 2011)

Targets  comes up regularly as an “instrument” to motivate policymakers and consumers to save energy.  Targets have been used for decades and only now is there consideration for binding targets both at the EU level and for individual MS.  As it stands now, there is a non-binding energy savings target for 2020 (confirmed by many Energy Councils and other policy documents) which could become binding if sufficient progress is not achieved by 2013 or 2014.  This was discussed in the March EEP (but has been removed from the latest draft of the proposed Energy Savings Directive). See EEP page.

Continuing the discussion on targets

An energy intensity target, or indicative targets as used in the past, are not enough now. We have to face the fact no target that the EU has set since 1986 has been achieved. An effective target needs to reflect both energy efficiency improvements and energy savings. For more information, see summary of May 2010 eceee workshop on efficiency and sufficiency. More emphasis must be placed on actual energy savings (i.e. reduction in energy consumed) in order to contribute meaningfully to climate change objectives and to adequately address energy security. Improving energy efficiency, while important, is not sufficient. Energy savings that include and measure consumption reductions are necessary.

To effectively contribute to climate change objectives an absolute target is needed for energy savings. The current EU objective is to reduce energy consumption by 20% by 2020 compared to a baseline mainly from energy efficiency. This means that there is a need for twin tracking – monitoring the reduction of primary energy while at the same time monitoring and analysing final energy demand to better understand how much of the savings is coming from improved energy efficiency. This is particularly important in the individual end-use sectors. This is also necessary to avoid using fuel switching and conversion away from electricity as a means of meeting primary energy savings targets.

There are proposals to have an energy savings target based on a projection to 2020 of future energy demand. It is controversial and difficult to get consensus on the projection. Projections are based on assumptions that can (and do) change regularly. However, the "accepted" projection, if one can be achieved, can lead to a specific result for 2020 and it is then possible to lower that by 20% with the resulting downfall being the "absolute target." That gap, however, does not necessarily come from energy efficiency improvements alone, due to structural, autonomous and stochastic effects.

A second option is to set the target from a base year. This happens for GHG emissions reductions. Some believe this penalises some countries that have already undertaken effective reductions and countries that have had disruptions in their energy balances because of political change or major economic restructuring. This could be dealt with by a burden sharing (not same target for all countries) or by having different base years as is already the case under the UN Framework Convention on Climate Change (UNFCCC).

eceee prefers a target based on a base year[1] to be reviewed after two years to ensure it is the appropriate way forward. Anything less is much more difficult, given problems with getting timely and reliable end-use data due to statistical lags. During that period, an independent analysis should be undertaken to better understand the shortcomings, to better understand the effect on overall impact and to recommend a new way forward.[2]

There is no adequate “global” energy efficiency indicator and it probably makes more sense to have sectoral indicators as defined by the IEA in several studies. Having sectoral analyses also helps analysts and programme managers to better understand the impact of specific programmes that contribute towards the total impact. This does not provide an “exact” estimate of energy efficiency improvements but can act as a proxy to help programme implementation and policy development. Examples of sectoral targets are the public sector and buildings. Energy savings in both of these are also considerably easier to measure than with an overall savings target. There are goals in the Energy Services Directive that help towards achieving the more important 20% target.

Ideally, all Member States could agree to a specific primary energy target that would be mandatory. A binding final energy target would then be developed to complement the overall primary energy target, for the reasons given above. Given the history of meeting targets, there is an understandable reluctance that is acknowledged by eceee. Turning this reluctance into enthusiasm is essential. A target should be considered the final step of measuring the energy efficiency improvements that will result in normal cases once the proper frameworks – institutional, financial and technical – are put in place.  Member States should not use this as an opportunity because targets are important in providing feedback on progress to improving energy efficiency. eceee is willing to help monitor MS actions closely and publicising them to wide audiences.

Having weighed the advantages and shortcomings, eceee still calls for a mandatory approach to target setting.  But there is a need for a calm and reasoned debate to ensure that all Europe understands the need for them, feels comfortable with using them and fully understands why improving energy efficiency is so important that all efforts to create and maintain that priority are taken.

[1] Take a base-year end use energy consumption and set a reduction target to be lower than this at some year in the future.

[2] This would obviously build on some of the measurement methodologies currently under review and development in Europe.