1 Energy efficiency
| (26683)
10368/05
COM(05) 265
| Green Paper on Energy Efficiency or Doing More with Less
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| Legal base | — |
| Document originated | 22 June 2005
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| Deposited in Parliament | 4 July 2005
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| Department | Environment, Food and Rural Affairs
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| Basis of consideration | EM of 13 July 2005
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| Previous Committee Report | None
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| To be discussed in Council | No date set
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| Committee's assessment | Legally and politically important
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| Committee's decision | For debate in European Standing Committee A
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Background
1.1 According to the Commission, there would be very good reasons,
even without high and volatile oil prices, for the Community to
make a strong push towards a re-invigorated programme promoting
energy efficiency at all levels. These include competitiveness
and the Lisbon agenda, where it says that studies have shown that
the Community could save at least 20% of its present energy consumption
in a cost-effective manner; environmental protection (including
its Kyoto obligations), where it suggests that Europe has a particular
role to play in providing an example to developing countries through
the development of new policies, co-operation and technologies
to promote energy efficiency; and promoting the security of its
energy supplies, where it notes that, on present trends, the Community
will by 2030 be 90% dependent on imports for its oil requirements,
and 80% as regards gas. The Commission has therefore attempted
in this Green Paper to identify the bottle-necks which prevent
cost-effective efficiencies from being made, as well as the ways
in which those bottle-necks can be overcome.
The current document
1.2 The Commission says that, despite the progress which has been
made since the 1970s —
for example, in the fuel efficiency of cars —
there are still a number of obstacles to increased energy efficiency.
These include a lack of information on the costs and availability
of new technology and of existing energy consumption, as well
as a lack of training on proper maintenance. It suggests that
these factors can be a particular problem with long-term investments,
and that such decisions can also be affected where different interests
arise, for example as between landlords and tenants. Other relevant
factors include technical barriers arising from a lack of standardisation
of equipment and components; misleading prices, arising from a
lack of transparency and the exclusion of external costs, particularly
in the transport sector; and the extent to which some energy tariff
structures have unintentionally created incentives to consumption.
The Commission also notes that, despite the role of Energy Service
Companies (ESCs),[1] financial
institutions are often reluctant to support energy efficiency
projects, but that, in encouraging energy-saving technologies,
ESCs can help to address the dilemma that, whilst a fall in prices
arising from market liberalisation will result in increased consumption,
this may well not be energy efficient.
1.3 The Commission puts forward a number of key actions
which it says can be taken either at Community level, nationally
or regionally to overcome these bottle-necks.
COMMUNITY LEVEL
1.4 The Commission notes that setting out energy
policy for the Community as a whole is a complex task, since its
responsibilities in this area are not clearly defined in the existing
Treaties (thus requiring measures to be adopted using other legal
bases), in addition to which there are a large number of players
at different levels, making a strong political message essential
if they are all to be mobilised. It also suggests that around
half of the 20% savings it regards as attainable in current energy
use could be achieved by the full application of existing measures,
and the balance by a range of new ones. More specifically, it
proposes the following steps:
Integration of energy considerations into other
Community policies
— Research
and technological development
1.5 The Commission stresses the importance of research
in this area, and notes that the Seventh Framework Programme for
Research and Development proposes that energy projects should
concentrate on a limited number of key priorities, including the
use of renewable sources for power generation and fuel production,
clean coal technologies, smart energy networks and energy efficiency.
— Promotion
of best practices and technology
1.6 The Commission proposes extending the "Intelligent
Energy-Europe" programme for the period 2007-2013, with a
greatly increased budget of €780 million, and with the aim
of supporting a broad range of promotional activities, and addressing
non-technological[2] barriers
to energy efficiency and the use of renewable sources. It also
proposes that each Member State should adopt an Energy Efficiency
Action Plan, setting out the measures it intends to take to achieve
a given energy efficiency target.
— Giving
citizens better information
1.7 The Commission draws an analogy with efforts
to improve public health, and suggests that publicity campaigns,
directed at industrial and domestic consumers and service providers,
and providing information on reducing energy consumption, would
be effective.
— Improving
taxation
1.8 The Commission says that at present Community
tax policy remains too often a simple budgetary tool, and that,
without increasing overall tax levels, it could be used to promote
measures in areas within the Community's competence, such as duties,
which would ensure that the polluter pays, and which would either
encourage or discourage certain forms of behaviour (for example,
a system of vehicle taxation which would support the development
of cleaner fuels). It adds that, if the need for unanimity in
such areas makes it impossible to make progress, enhanced cooperation
by a group of Member States, as provided for under the Amsterdam
Treaty, might be envisaged as a last resort.
— Better
targeted state aid
1.9 The Commission points out that the guidelines
it uses currently to approve state aids relating to energy efficiency
expire at the end of 2007, and that their revision will provide
an opportunity to place greater stress on measures which support
eco-innovation and productivity gains.
— Using
public procurement to "kick-start" new technologies
1.10 The Commission notes that, although many technologies
exist for improving energy efficiency, the market in some cases
is not significant enough to cover development and production
costs. However, public procurement aimed at more energy efficient
products could help to achieve the increased sales needed to address
this problem.
— New
or improved financing instruments
1.11 The Commission regards finance as one of the
major problems, and says that, although Member States have already
put in place different support mechanisms, it is important to
consider establishing a more favourable framework at Community
level — for example, involving the European Investment Bank
and the European Regional Development Fund — to increase
the efficiency of these schemes and gain the confidence of investors.
Specific energy policy measures
1.12 The Commission highlights three areas which
it believes specific energy policy measures could be pursued.
These are buildings (where it points out that a Directive
on Energy Performance[3]
is due to come into effect shortly, and where it sees merit in
extending its scope in areas such as renovation and lighting);
domestic appliances (where, following the newly adopted
Directive on Eco-design, it wants to see the requirement to provide
energy efficient information to consumers extended to a wider
range of appliances, and to cover their "stand by" function);
and fuel consumption of vehicles (where it says that efficiency
gains have been offset by increased usage and a move towards heavier
high performance cars, and where it therefore proposes to discuss
with the manufacturers the implications of this for the existing
voluntary agreements to aimed at reducing emissions of carbon
dioxide from new passenger cars).
NATIONAL LEVEL
1.13 The Commission suggests that measures to encourage
energy efficiency are in many ways more appropriate at national
level, and that the latter will also reinforce the Community's
own efforts. It notes that there are examples of good practice
in every Member State which deserve to be made widespread, and
it then identifies areas where more could be done. These include
the regulation of network activities (where it says that
cost-effective measures could be taken by operators to reduce
significantly the 10% of electricity which is lost during its
transport); the regulation of supply activities (where
distributors will be required in future to offer energy services
packages, and to promote the metering of real time consumption);
and measures to reduce the levels of energy wasted during electricity
generation (where it suggests that the need for new generation
capacity presents the Community with a unique opportunity to improve
radically fuel efficiency across its generation capacity). In
particular, the Commission suggests that among the issues which
need to be considered are the need to ensure that only the most
fuel-efficient combined cycle gas turbine technology is being
used; to promote a shift in generation away from the big power
stations in favour of distributed and on-site generation; to encourage
co-generation; and to seek to improve the energy yield of coal-fired
plants as soon as possible. The Commission also refers to the
role of white certificates of the kind used in the UK,
and to the possibility of creating a Community-wide system.
REGIONAL AND LOCAL LEVEL
1.14 The Commission believes that action on energy
efficiency will produce all its potential gains only if operations
undertaken at Community and national level are reflected locally,
and it points out that the Community has already taken numerous
initiatives in this area, such as the "Intelligent Energy
- Europe" programme, which brings the various actions together
and strengthens the synergies between them.
SECTORAL MEASURES
1.15 The Commission highlights areas where action
is particularly needed. One of these is aviation, where
it draws attention to the "Single Sky" initiative (where
it says the consequent reduction in congestion has resulted in
substantial fuel savings, and to its plans to introduce a Communication
which will focus on the use of economic instruments to reduce
greenhouse gas emissions). The other is road traffic (where
it draws attention to the part which satellite navigation systems,
congestion charging and cooperative driver assistance can play
in achieving greater energy efficiency, and to the potential offered
by promoting alternative solutions such as rail and inland maritime
navigation, as well as the use of alternative fuels).
ACTION AT INTERNATIONAL LEVEL
1.16 The Commission points out that energy efficiency
performance varies widely, and that, although the Community's
record in this area is good, huge scope remains for much closer
and more vigorous cooperation with the majority of other countries
— a development which it suggests would serve the Community's
strategic and geopolitical interests, for example by helping to
reduce international demand for oil from energy-importing countries,
such as China, and in relation to climate change. The Commission
says that the Community should, in the first instance, work with
its industrial partners within the International Energy Agency
to establish energy efficiency plans, and that the cause of energy
efficiency can be promoted in the context of the World Trade Organisation
(WTO) by negotiating favourable tariff treatment for goods on
the basis of their energy efficiency performance. In addition,
it proposes that energy efficiency should be integrated into the
Community's development policy, where it notes the vulnerability
of many countries to increases in energy prices.
1.17 Finally, the Commission says that it has decided
to set up a European Sustainable Energy Forum, which will meet
twice a year, and bring together the Commission itself, Member
States, the European Parliament, national energy regulators and
representatives of European industry and non-governmental organisations.
In addition, it has sought to stimulate debate by putting forward
what it describes as 25 non-exhaustive questions, on which it
has invited replies.
The Government's view
1.18 In his Explanatory Memorandum of 13 July 2005,
Minister of State (Climate Change and the Environment) at the
Department for Environment, Food and Rural Affairs (Mr Elliot
Morley) says that the UK welcomes the release of this Green Paper
and its focus on energy efficiency. He adds that the Government
shares the Commission's view that action is needed, and he believes
that this will undoubtedly play an important part in meeting the
UK's commitments on climate change. In commenting on the way in
which the Green Paper brings together a number of existing initiatives,
he welcomes the focus on the actions which can be achieved at
different levels, and, although he describes as "challenging"
the Commission's target of reducing the Community's projected
energy consumption in 2020 by 20%, he says that the Government
supports that ambition and hopes that a package of measures to
achieve it can be agreed. He adds that, from the UK perspective,
this should focus on actions to add value to existing efforts
by strengthening the evidence base, promoting better regulation,
facilitating exchange of information between Member States, bringing
forward appropriate legislation, enhancing research and development,
and engaging industry and third countries more effectively. He
also believes that the timing of the Green Paper provides a prime
opportunity for the UK to influence the development of a solid
framework which will tackle barriers to energy efficiency throughout
Europe and in the wider international arena.
Conclusion
1.19 Like so many documents of this kind produced
by the Commission, this Communication is both over-lengthy and
poorly structured, making it difficult in places to identify the
various recommendations and conclusions at all clearly. Despite
this, the Communication is wide-ranging, and deals with an important
subject, which has a potential impact at a number of different
levels. For that reason, we believe that it should be debated
in European Standing Committee A.
1.20 In the meantime, we note one aspect of the
document in which the Commission points out that the Community's
responsibilities in the area of energy policy are not clearly
defined in the existing Treaties, thus requiring measures to be
adopted using other legal bases. To that extent, we see something
of an analogy with the situation which has arisen in connection
with the Commission's Communication on European Space Policy,
to which we drew attention in our Report of 19 October 2005.[4]
We would welcome the Government's views on this point.
1 Companies which supply efficiency solutions, and
which are paid according to the savings achieved. Back
2
Legal, financial, institutional, cultural and social. Back
3
2002/91/EC. Back
4
See paragraph 7. Back
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