EU leaders failed to agree on a new energy efficiency target, despite negotiations going on to the early hours on Wednesday night last. The importance of the sector and cogeneration’s place within it was a key point of discussion at COGEN Europe’s 25th anniversary Power of Heat annual conference in Brussels last week.
In her opening remarks, Margherita Ardagna, Chair, COGEN Europe one reason why energy efficient solutions are so important to making Europe’s ultimate climate targets.
“The Power of Heat title is very important to talk about. Half our energy consumption is from heat.”
“There is no silver bullet to meeting the Paris Agreement. It will need a mix of renewable energy resources and energy efficiency across the whole value chain as well as well as smart digital solutions. We strongly believe that cogeneration allows for all of those things.”
The organisation’s Snapshot Survey showed that the identified potential for additional cost-effective energy savings and CO2 emission reductions from cogeneration remains untapped due to weak national implementation of EU energy efficiency legislation.
One of the most compelling voices on the day belonged to Kamila Waiega of Veolia and COGEN Europe Energy Policy working group, who first used some statistics to illustrate the difference appreciation of cogeneration could mean for the bloc.
“Cogeneration in Europe today accounts for 11 per cent of electricity and we want that to be 20 per cent by 2030. It accounts currently for 15 per cent of heat we want that to be 25 per cent of heat by 2030.”
“It contributes 21 per cent of the EU’s CO2 reduction target and 14 per cent towards the energy efficiency target – we want to contribute up to 23 per cent of the EU’s CO2 reduction target and 18 per cent of the bloc’s energy efficiency target by 2030.”
“Energy efficiency should be applied across the whole energy value chain. It’s renewable energy and energy efficiency not renewable energy or energy efficiency.”
Waiega added that it needs to be understood that renewable penetration requires greater energy efficiency and the cogeneration lobby ‘had a strong ally in the European Parliament in backing that.’
Unfortunately as of Thursday an impasse between the Parliament and Bulgaria, representing the council, means no agreement on a target.
The European Parliament said they were not willing to go below a 32.5 per cent target for energy savings by 2030, along with a 0.84 per cent annual savings. But Bulgaria, which currently holds the rotating Presidency of the Council, felt it did not have a mandate to go that high.
When it was put to Waiega last week that the member states only pay lip service to the subject of energy efficiency, she responded by suggesting an alternative approach in delivering the message that energy efficiency is in these nations’ own best interests.
“We struggle to communicate understanding at Brussels level so we can’t expect members states to be familiar. Every time we have an investment decision, let’s look at the most cost-effective way. Get energy efficiency measured first and then invest in more generation. We need to insist on it in this form in the texts.”
“We also need to explain to policy makers how energy efficiency from first principles can win them votes.”
“That means vocalising the benefits in terms of economics, politics of their future voters, and when we talk about energy efficiency we can’t forget energy poverty.
“In order to reduce that energy efficiency is the first policy measure- reducing energy bills, savings outweigh so much that we can’t really not do it so we need to be able with our arguments and examples and our industry to show decision makers at national level how energy efficiency measures from first principles can help them gain votes.”
“It’s a bit Machiavellian but at this stage of negotiation, we ned to play the same tools as politicians play.”
Paul Hodson, Head of Unit Energy Efficiency, DG Energy, European Commission told the gathering it was important to focus on energy efficiency at demand side as well as gain recognition on supply side in terms of more efficient transmission and avoidance of distribution losses. He also confirmed the implementation of article 14 of the Energy Efficiency Directive isn’t having the desired effect.
“When we originally conceived that provision, we wanted to rule that CHP would be the norm – if you build a power plant CHP would be the power plant – we’re not convinced article 14 is delivering that default impact. We intend to recommend to the new commission that they ask members states to carry out that analysis – compare assessment of heat supply and do it better and more focused than previously and get to a better outcome.”
Benedik Javor MEP Green Party, said besides demonstrable, environmental and economic benefits, in terms of GDP, increasing employment, and general EU competitiveness/ favourability to SMEs, the whole area of energy poverty loomed large.
“When it comes to energy poverty, human dignity, social exclusion and health, policy makers can’t be insensitive. It affects something in the region of 50-150m EU citizens.”
“Overall there is a sound business case for a 35 per cent binding target, for both the EU and member states.”
Wednesday’s negotiation breakdown was well signposted by Javor at the COGEN Europe event.
“Parliament has moved a lot but there’s been no real move from the council. In effect member states are arguing against their own best interest. They don’t understand how the clean energy mechanism works and that it’s the best for all, whether in the east or western states. We must convince them not to go against the higher ambition of the parliament.”
The industrial case for a more influential cogeneration sector was made convincingly by Peter Botschek, director of the European Chemical Industry Council.
“The growth of the chemical industry between 2013 and 2050 is expected to be in the region of 45 per cent. That’s good news for CHP as the reduction of the sector’s CO2 footprint since 1990 has been achieved to a large extent by cogeneration technology.”
Botschek added that the European chemical sector expected cogeneration to continue to play a central role to 2050 and beyond.
“Policies should benefit low carbon access in terms of biomass and hydrogen replacing gas. Provide access to finance in that area.”
Finally Javor’s concluding remarks noted a hunger by investors to participate in the development of energy efficient technologies, if policymakers can be persuaded to shift focus.
“It’s about preventing the necessity of building new capacity. It should be regarded by the Commission as in the same market as creating new capacities.”
“I know from meetings with market players – big investment groups are hugely interested in high energy efficiency targets and expect the EU to adopt a strong ambitious energy efficiency target- the likes of GE Capital, BNP- Paribas are keen to invest. They just want a stable regulatory environment.”
“Member states want to open the door to more flexibility, but they are acting against their own interests in this way as that vision goes agains the predictability required for major investments.”