Crafting an energy-efficient Europe

Europe is tackling CO2 emissions with a dual approach: increasing renewable energy and decreasing energy consumption. While renewables often steal the spotlight, energy efficiency tends to take a back seat despite its crucial role in Europe’s strategic goals. A new policy simulator aims to change this perception by illustrating the impact of energy-saving measures on the economy, wellbeing, environment and climate.

Davide Sabbadin and Alberto Vela wrote this piece for the EU Sustainable Energy Week.

Energy efficiency unlocks many strategic doors.

Firstly, energy efficiency is a cornerstone of the EU’s triple climate policy architecture—together with carbon pricing and renewables. Within this interplay, efficiency paves the way for renewables to displace fossil fuels and achieve decarbonisation.

Secondly, amidst energy insecurity in the EU, efficiency offers a clear solution to cut reliance on energy imports. While scaling up renewables is critical in the long run, deployment takes time. In the short term, efficiency is crucial for cutting dependence on fossil fuels from petrol states.

Finally, using less energy yields great economic benefits for administrations, industries and households. Beyond cost savings, it improves air quality, creates jobs, reduces energy poverty and increases asset value.

What is efficiency about?

Energy efficiency is about the various measures taken to reduce wasteful energy consumption, from building insulation improvements to the use of more efficient appliances.

Energy efficiency is already integral to ongoing market transformations in Europe. Heat pumps using renewables are up to seven times more efficient than gas and hydrogen boilers in terms of primary energy consumption.

Electric cars are 60-70% more efficient than combustion vehicles. Given the intrinsic and huge energy losses from fossil fuel combustion, electrifying our economy with current technologies can already achieve savings.

Dangerous distractions

Despite the introduction of an “Efficiency First” principle and compulsory targets in the EU Energy Efficiency Directive, improved energy savings are not yet a given.

The focus on unrealistic “cure-all” technologies is distracting demand-side actions. The EU Commission’s recently proposed 2040 climate targets have been criticised for overselling carbon capture and storage, which many consider a costly and unproven technology.

EU funds to be invested into Small Modular Reactors, have also been questioned as many experts consider them too costly and nascent to make a substantial impact on climate change.

On the contrary, energy efficiency with renewables has proven to be climate-effective over the years. The savings resulting from Ecodesign and Energy Label, for instance, have been so major that all large economies have followed.

Pressure to plan

The Paris Agreement Compatible (PAC) scenario, a reliable decarbonisation model, suggests the EU can nearly halve its energy demand to achieve climate neutrality by 2040.

While the “Fit for 55” package has spurred energy efficiency planning at national and local levels, such as for heating transition and building renovations, the urgency to meet efficiency and renewable targets is straining ministries and local governments, who often lack resources for modelling and planning demand-side measures.

A new tool

Decision-makers increasingly rely on energy modelling tools to assess and identify the most effective pathways to transition away from fossil fuels.

REFEREE is the first free online tool that allows everyone to take the driver’s seat in energy decision-making. With its easy-to-use interface, users can simulate energy regulations, taxes and subsidies for specific regions or countries and measure their impact on various socio-economic indicators. Spoiler: the benefits of efficiency extend far beyond just energy savings.

With REFEREE, users can determine how many jobs a member state could create by increasing the annual rate of building renovations, how the air quality index could improve by implementing energy-saving measures in industry, buildings, and transportation, or how much public money could be saved by switching to more efficient public lighting.

Energy efficiency isn’t just about measures; it’s a culture. Tools like REFEREE foster a more democratic understanding of energy efficiency and sufficiency, bringing us closer to a Europe that achieves much more with much less.