What role for energy efficiency auctions in the energy transition?

Panel: 2. Efficiency and beyond: innovative energy demand policies

This is a peer-reviewed paper.

Authors:
Samuel THOMAS, Regulatory Assistance Project (RAP), France
Marion Santini, Regulatory Assistance Project, Belgium
Dario Di Santo, FIRE, Italy
Christos Tourkolias, CRES, Greece

Abstract

More and more European countries are turning to energy efficiency auctions as a way of delivering cost-effective energy savings. Germany, Portugal and Switzerland already have auctions or tender programmes in place. In 2021 Denmark launched its first energy efficiency auction, while Greece, Italy, Turkey and the United Kingdom are among the countries considering this mechanism.

This paper draws upon research undertaken for the Horizon 2020 ENSMOV project on the role of energy efficiency auctions in meeting EU Member States’ energy savings obligations under Article 7/8 of the Energy Efficiency Directive, assessing the design features that affect eanergy savings, cost-effectiveness and strategic fit within energy efficiency policy frameworks. The paper considers the relative merits of energy efficiency auctions and energy efficiency obligation schemes in the broader context of the energy transition. On the one hand, meeting more ambitious climate change targets requires policy measures that can deliver significant quantities of energy savings. On the other, as energy efficiency measures become more expensive and complex year-on-year and Member States aim to implement the Energy Efficiency First principle, understanding the cost-effectiveness of energy efficiency actions will become increasingly important.