The Link Between Energy Efficiency and Energy Security
Russia has invaded Ukraine. Nato members and allied countries have imposed sanctions that risk reprisals from the unpredictable Vladimir Putin. So far, energy flows are exempt from those sanctions. Europe depends on Russia for 40% of its gas imports after all. Some believe Russia may yet turn off the gas taps – although oil and gas make up a substantial share of Russia’s revenues – and warn that now, more than ever, the EU must live up to its “energy efficiency first” mantra.
The situation is reminiscent of 2014, when Russia annexed Crimea. Back then, Russia also provided Europe with about 40% of its natural gas imports – and 53% of its overall energy supply. “It feels like kind of the same thing, but on steroids,” says Brook Riley, head of EU affairs at the Rockwool Group, an insulation manufacturer.
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The 2014 crisis triggered discussions about how EU member states could reduce their dependency on the former Soviet superpower, and a European energy security strategy was proposed.
One of the suggestions was to pay more attention to energy efficiency as a tool for enhancing energy security. The idea is simply that the more energy efficient Europe is, the less energy it needs. This directly translates into a reduction in energy imports and at the same time, more comfortable homes and lower energy bills for consumers.
“By reducing energy [use], you actually deliver additional benefits for citizens; for example, with the increased comfort that comes with renovating homes,” explains Arianna Vitali, secretary-general of the Brussels-based Coalition for Energy Savings. “Clear planning to reduce energy use is beneficial [on many levels] and is not just a reaction to a geopolitical problem.”
A missed opportunity for change
There was a campaign for energy efficiency in 2014. The European Commission memorably cited that every 1% of energy saved means a 2.6% reduction in gas imports, and then-EU energy commissioner Güenther Oettinger pushed for an energy efficiency target of 30% below a 2007 baseline.
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By GlobalDataThat 30% figure was purportedly ambitious but was met with criticism from NGOs and think tanks, who wanted a 40% target. Ironically, the European Commission itself calculated that a 40% target would raise GDP four times more than 30%. The European Council (member states) later dragged the target down to 27%, stating that the matter would be revisited in the future.
Since 2014, Europe’s dependency on gas imports has grown. Even without Nord Stream 2 going ahead, the EU still depends on Russia for more than 40% of its gas supply. “The EU member states should have taken measures years ago,” says Vitali. “[We saw it] in 2014 and now, we really see, once again, we have been late […] to reduce energy consumption in the building sector.”
“It is a catastrophe that we didn’t act back then because we actually knew what was going on,” says Niels Fuglsang, the Danish MEP leading the revision of the Energy Efficiency Directive in the European Parliament. “Europe has obviously not been up to its task when it comes to gas imports from Russia. It is not just about business, it is about security policy. I think it will change this time because the Ukraine situation is the biggest security threat to Europe since the Cold War.”
“It is not that there wasn’t support for building renovation and renewables in 2014, there was – but it was watered down by concerns about high costs and a feeling that gas diversification was somehow simpler,” recalls Riley. “Now, people want to make up for wasted years and everyone sees that a euro invested in energy efficiency is a euro less for financing the invasion.”
This time round, gas diversification still looms. Commission President Ursula Von der Leyen has said the EU’s gas contingency plan involves sourcing gas from elsewhere (Norway, Japan, Qatar and the US). Yet, the idea of replacing gas with more gas seems to many like a wasted opportunity. They argue that now is the time to accelerate the net-zero transition, especially with the Intergovernmental Panel on Climate Change’s latest report detailing the harmful impacts that lie ahead.
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“It is ironic to see comments turning to the potential for LNG imports on the western coast of Europe when this was a concern a few years ago, where it would have meant importing gas from Trump's America, and beyond gas, the dependency on oil and the petromonarchies [should be] a strong geopolitical concern,” says Yves Marignac, a spokesperson for négaWatt Association, an energy transition think tank.
There is hope yet for those in favour of energy efficiency. In July 2021, the Commission proposed a revision to the EU Energy Efficiency Directive as part of its 'Fit for 55' package to reduce greenhouse gas emissions by 55% by 2030. The Commission proposes ambitious, binding new targets, a near doubling of a binding annual energy end-use saving requirement and a massively increased scope of a requirement to renovate public buildings. It wants each member state to renovate at least 3% of the total floor area owned by public entities annually to a nearly zero-energy standard. In parallel, a revised energy performance of buildings directive should introduce the EU’s first-ever minimum energy performance standards for buildings.
A case for higher ambition
Now the directive needs to be agreed to by member states and MEPs. “The negotiations could be quite controversial,” says Vitali. “Member states are quite reluctant to increase ambition and they probably see the Commission proposal as the upper limit [whereas MEPs may want to go further still].”
"Things have changed since the European Commission's proposal last summer, both in terms of the Ukraine crisis and also in terms [increasing] energy prices," says Fuglsang. "I think colleagues recognise that. I hope we can find the majority [in favour of] increased ambitions compared to the proposal."
Fuglsang released his draft report on the recast of the Energy Efficiency Directive on 21 February. In it, he proposed an increased target of a 43% reduction of energy consumption based on the Commission's original 36%. “We need binding targets and to make sure that action is triggered immediately," he says. "We need milestones – not just a target for 2030 – but milestones for 2025 and 2027, so that member states act immediately. I hope that colleagues will agree with me that we need to increase the European Commission’s level of ambition.”
Riley also makes a case for ambition. “If you are assuming business-as-usual is somehow acceptable, then it can look challenging. But if you look at it from the point of view where business-as-usual means runaway climate change – which has been very clear for years – and relying on extremely unpredictable and dangerous gas imports, then [higher ambition] looks far more attractive.”
Italy’s 'Super Ecobonus' scheme is one example of energy efficiency policy’s game-changing potential. Homeowners get a 110% tax credit in return for home renovations that increase their buildings’ energy efficiency. To qualify, candidates must carry out at least one “driving project”, such as enhancing thermal insulation. Riley suggests upping the ante of schemes like the Ecobonus: “We can tweak incentive systems, so that people are encouraged to go for deeper renovations, which means moving off gas. Suddenly, you will notice quite substantial results [within] the year.”
With energy security thrusting energy efficiency back into the limelight, there is also a case to be made for energy sufficiency, which questions the fundamental ways in which we live and consume. NégaWatt has been advocating for a re-evaluation of these habits for some time. The think tank asks: “In urban areas, do we really need a one-tonne car to move a single person over short distances? Will we ever need larger and larger TV screens? Can’t we do differently, while still living comfortably?”
“[We need] structural changes in our mobility, our use of buildings and in our overconsumption of goods that could reduce the need for energy services [in the first place],” says Marignac.
