In the framework of Fit for 55 Package, the European Commission (EC) has completed a stakeholders consultation process for the revision of the Energy Efficiency Directive (EED). The proposal for the revised directive is expected to be published in June. At the same time, the EC will also issue a guidance regarding the implementation of Energy Efficiency First (EEF) principle.

The main objective of the EC is to make this directive crucial for the energy sector and compliant with the new 2030 target for greenhouse gas (GHG) emissions reduction. The goal is to increase its overall ambition and design to deliver greater energy savings. This vision for higher ambition represents an opportunity to transform the EED not only into a genuine vehicle for optimised energy consumption, but also for its production and distribution, regardless of the type of fuel and energy vector.

This can only happen if the overall philosophy of the directive is reviewed to lead to system efficiency, which requires a change of focus from final energy consumption to encompass, and this time seriously, primary energy savings. For this to happen, we need to have higher energy efficiency targets systematically expressed both in final and primary energy terms, and article 7, the only one with a compulsory target, to allow supply side energy efficiency measures to be counted, without any limits and ceilings, towards its objective.

Energy efficiency on the supply side will be addressed, with a reinforced article 14 as well as specific provisions on efficient district heating. This has to be done in a way that will provide genuine incentives for investments in “no regrets” solutions such as highly efficient cogeneration. Therefore, it is crucial that cogeneration remains an essential component of the definition of highly efficient district heating. In addition, increased efficiency on the supply side should not be reduced to electrification of the heat supply.

Complementing electrification and variable renewables, high efficiency cogeneration is a “no regrets” supply side efficiency solutions today and up to 2050. To this end, the revised EED must prioritise high efficiency cogeneration for all required thermal heat and power supply. This would ensure that heat demand which cannot be electrified is supplied where possible through cogeneration.

Moreover, flexible electricity from cogeneration can help support power grids where and when needed. For that, any revision of the Primary Energy Factor for grid electricity should follow strict criteria to make sure that as we move towards more integrated energy systems and foster more ambitious energy savings, the PEF reflects seasonal and marginal aspects, as well as the national mixes (rather than an average, at EU level and on an annual basis).

Last but not least, as a shift towards systemic efficiency requires that the energy efficiency first principle is duly enshrined in the revamped Directive, it is paramount to safeguard the meaning of the EEF principle as defined in the Governance Regulation. This definition encompasses energy savings on the supply side and hints on at the importance of a systemic approach to energy efficiency – as opposed to project level and in-silo type of assessment.

Consequently, the guidance under preparation should consider the benefits and the costs of direct, indirect electrification and greening of gas grids, as well as mitigation options including cogeneration & heat pump complementarity in maintaining power system stability during winter, and cogeneration efficiency gains for hydrogen and renewable gases use.

As an industry, we have been in continuous dialogue with the European Commission to make sure solutions such as cogeneration get the recognition they deserve in the framework of the Green Deal, given the numerous benefits they provide at the energy system level and their contribution to smart energy systems integration. Maybe this time around, the EC, the Council of the European Union and the European Parliament will make things right and we will get the EED we all need.

 

Contribution by Kamila Waciega
Director, Energy, Public Affaires Department at Veolia

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