Energy efficiency is one of the key dimensions of the EU ́s energy union strategy

By Miroslav POCHE, MEP (S&D Group), Member of the ITRE Committee, EP rapporteur on EED

The main aim of the EU ́s energy union strategy is to make energy more secure, affordable and sustainable. It should accelerate the transformation of the European energy system and contribute to the transition to decarbonized economy by 2050.

All five pillars of this strategy are interlinked, mutually reinforcing and stimulating actions in various segments of this key economic sector.

Market integration, decarbonization of energy mix, innovation  these are important policy dimensions which substantially contribute to the one or more goals of the energy union.

The energy efficiency is also one of the five pillars. However, it is the pillar that contribute to all goals of the strategy at the same time.

Reducing our energy consumption and improving the way we use energy will strengthen our energy security, make the energy more affordable for households and industry as well as facilitate deployment of renewable energy sources and make European energy mix cleaner.

This is also the reason for promoting the energy efficiency first principle which has been supported both by the European Parliament and the Commission for a very long time.

The meaning of this principle is to prioritize in all energy planning, policy and investment decisions measures that make energy demand and supply more efficient.

It also considers energy efficiency as “an energy source in its own right” because energy we do not use is energy we do not need to produce or import.

There are clear benefits of energy efficiency policy. However, it is still relevant to look on the areas where they can appear in order to better understand the role it plays within the overall energy union strategy.

The first area is the security of energy supply. More than half of energy consumption in EU comes from imported sources and some Member States are dependent on imports for more than 75 per cent.

Moderating energy demand, therefore, provide cost-effective solution of increasing dependence on energy imports. The evidence proves that countries with higher energy intensity rely on energy imports more heavily.

In particular it can improve the situation of countries with high dependency on gas imports. Substantial part of EU gas consumption is used in buildings, especially for heating, where potential for savings has not been fully tapped so far.

Targeted measures to modernize the heating systems, to renovate and better insulate buildings will directly translate in gas imports reduction and improved energy security of Europe.

There are also relevant economic reasons for implementing energy efficiency first principle.

Energy efficiency can contribute to improving trade position of EU through significantly reducing costs of energy imports.

Some studies estimated that 40 per cent efficiency target for 2030 would save up to 2 trillion Euro on energy imports during 2020-2030.

We are no longer discussing this level of ambition, however, there is strong evidence that higher target will save huge amount of money and improve our balance of trade.

In addition to trade position of EU, energy efficiency will have benefits in terms of growth, increased international competitiveness and creation of decent local jobs.

It is possible to once again use the example of building sector where almost 40 per cent of all energy is consumed.

According to the European Commission renovation and energy retrofits add twice as much value to the economy as the construction of new buildings with substantial part of the work done by the local SMEs.

Having in mind that three quarters of buildings in Europe are still energy inefficient, there is enormous economic potential which can accelerate economic growth across the Union.

Lastly the energy efficiency measures can help industry to cope better with international competition by reducing their energy, as well as material, intensity and associated costs.

Energy efficiency has also significant health and social benefits. Especially it can be the way how to address growing problem of energy poverty.

More than 50 million European households cannot afford to attain adequate thermal comfort, to pay their energy bills or to live in homes without mold, damp and comparable inconveniences which are caused by bad insulation, ventilation and heating.

And these are people which are at the same time unable to bear the costs of renovation or retrofitting of their homes. The new legislative framework for energy efficiency policy should therefore target in particular households which are in danger of energy poverty because there has been very little done so far.

It is long term solution how to can help millions of people to make their lives better, to improve their health and to make paying their energy bills easier.

There are certainly other reasons why energy efficiency is one the key dimensions of energy union strategy. For example, moderation of energy consumption leads directly to greenhouse gas emissions cuts and is key for meeting our international climate commitments.

Energy efficiency also contribute to higher shares of renewable energy in our energy mix.

However, these three dimensions alone security, economic and social make the energy efficiency so important for the European Union in next decades.