Policy is sometimes contradicting itself

Jan. 16, 2015 | Energy efficiency - easier said than done

An old proverb says, "Don't sell the skin till you have caught the bear". This seems to be good advice in the whole energy efficiency debate. In five years from now, we will wish each other a good new year 2020 and after the celebrations are done, there will be time to assess, where we stand with the 2020 targets. Most likely, the GHG reduction target will be reached, the RES target may be, but we will hardly have achieved a 20% reduction in final energy demand.

It is surprising, that on the one hand, energy efficiency is and has been cited as the low hanging fruit. Good for society by leading to lower energy cost and keeping purchasing power local, thus maintaining affordability of energy supply and supply security as well as generating employment. Good for the environment in general by replacing watts produced with megawatts saved and with this, reducing production, transport and use related pollution. Good for the atmosphere in particular by avoiding fossil fuel based emissions.

On the other hand, it seems to be nearly impossible to create a market framework that triggers consumer behaviour in the corresponding direction. Fossil fuels are still cheap for various reasons, the most astounding one being, that many governments directly or indirectly still subsidize their use. The introduction of a working Emission Trading Scheme in Europe, let alone on a world level is far from reality and support for renewable energy and energy efficiency is put on hold due to the difficult economic times. Instead, the case for a free market solution and a level playing field of technologies is made.

In a market reality, a new product requires an investment and an investment is expected to pay back over time. Usually savings in operating cost or other benefits from the use of the investment have to provide this payback. In today's time of cheap fossil fuels, the payback point may not be reached. This is especially the case where the investors follow a short time horizon with expected time horizons of 2-3 years.

Yet, not all is lost. On a policy level, we see strong efforts to create an energy union as an overarching umbrella for Europe's climate and energy policy. Energy used for heating will receive particular attention in 2015. The year will kick of with a high level Commission event on heating and cooling (26./27.2.2015) and will follow up with a number of important fairs and exhibitions, among them the EHPA heat pump conference (28.5.2015), and will eventually see the introduction of the energy label for heaters into the market.

We want to use this edition of our newsletter to shed light on energy efficiency with a specific focus on its use in non-domestic applications. The aim is to provide positive examples of energy efficiency measures in order to avoid non-action by lack of knowledge. Large non-domestic heat pumps are the big brother of residential units. While the latter are understood by today, the potential of the former is still not realized - both in thinking and in projects. With capacities from several 100 kW to a few MW non-domestic heat pumps can meaningfully change the energy supply structure of buildings, quarters and whole cities.

The articles present show that technology is ready and administrators have listened. It will now require a joint effort by society to create a playing field with advantages for energy efficiency in order to plug the fruits and enjoy their tasty flavour.

EHPA stands ready to contribute. We will continue to move heat pump based heating and cooling to the centrepiece of the debate in 2015 and will provide information to make the debate an informed one. It needs a positive circle towards an truly sustainable European energy system.

Thomas Nowak, Secretary General, EHPA