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Study shows sound primary energy factor approach needed to deliver EU energy objectives

The Research Center for Energy Economics (FfE), today published a study on the Primary Energy Factor (PEF) for electricity and the corresponding CO2 Equivalent Emission Factor (CEEF) applicable to technologies coupling heat and electricity sectors.

According to the study, commissioned by COGEN Europe, the additional electricity demand from sectors subject to electrification will rely less on renewable electricity and more on fossil fuel generation, compared to the average electricity mix.
Research Center for Energy Economics
Based on the study, European renewable and efficient heat industry associations (AEBIOM, COGEN Europe, EFIEES, EGEC and EHP) call for a dedicated EU PEF approach for calculating the real efficiency of heating systems, which use or produce electricity, in order to inform energy consumers correctly and help deliver the European Union’s energy and climate objectives.

The FfE study uses the “displacement mix”, a simplified marginal method1, to assess the efficiency and CO2 intensity of the electricity mix associated with the additional electricity generation and, with some restrictions, additional electricity demand from sectors subject to electrification, e.g. heating. The study found that the “displacement mix” EU PEF is 2.81, with a CO2 intensity of 986 g CO2/kWh2.

Dr. Serafin von Roon, FfE Managing Director, said in a statement: “The displacement mix method provides a new way of looking at our increasingly complex and dynamic electricity supply system. Shifting towards marginal approaches will support policymaking in the energy transition, as they more accurately identify efficient and carbon saving technologies, including those which couple the heat and electricity sectors.”

By demonstrating that the marginal approach allows for a more accurate estimate of the real efficiency and CO2 intensity of additional electricity generation and consumption units, the FfE study brings new evidence to the debate on the PEF in the Energy Efficiency Directive (EED) and its use in other policy contexts. Based on the study’s findings, it is clear that the average PEF value of 2.0 proposed by the European Commission in the EED review differs significantly from the “displacement mix” PEF estimated at 2.81, which better reflects energy systems dynamics linked for example to the electrification of heat.

Therefore, the average EU PEF should not be applied outside the EED, especially in legislation addressing the heating sector like Energy Labelling, Ecodesign and Energy Performance of Buildings.

Commenting on the study, COGEN Europe’s Managing Director, Hans Korteweg, said: “Given the size of the heating sector and the difference between the average and marginal approaches highlighted in the study, choosing the wrong approach would provide a distorted picture of reality, undermining the potential for energy efficiency and CO2 emission reductions in this important sector. It is key that consumers can continue to trust the energy labels on space heaters to make informed choices on the actual efficiency gains and energy bills reductions.”à‚  à‚ 

Philippe Dumas, Secretary General of EGEC, said: “Comprehensive assessments such as the FfE analysis published today, are key to showing that additional electricity demand due to heating electrification may not mean more renewable electricity. Therefore, decarbonising the heating sector should not focus on electrification. Renewable heat from biomass, biogas, geothermal and solar thermal energy must be given a fair shot. Getting the primary energy factor right will be key in ensuring a level playing field is created.”

There is no one-size-fits-all PEF methodology or value for its different purposes. In Ecodesign, Energy Labelling and Energy Performance of Buildings Directive, which target sectors responsible for more than 30% of EU’s energy consumption and 36% of CO2 emissions, a dedicated impact assessment is needed, taking into account the marginal PEF approach and the specificities of the heating sector.

This will ensure that the PEF reflects the real performance of a space heating system, not its desired performance in a hard to predict future. For the EED review, an average annual PEF should be no less than 2.3 to reflect the real efficiency of the electricity system taking into account the latest EU data and its use should remain strictly limited to EED. This call is supported by key industry associations active in the fields of renewable energy and energy efficiency.

Read the study in its entirety HERE.