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					                   ECEEE STATEMENT
         on the European Commission’s Green Paper
 “Towards a European strategy for the Security of Energy Supply”
                        COM(2000)769



Introduction
The European Council for an Energy Efficient Economy, eceee, is a non-
profit, independent organisation representing a broad group of organisations
and people with expertise in energy efficiency. eceee has a unique resource
base of knowledge and information on energy efficiency.

eceee experts are working together with the Commission on energy
efficiency issues. eceee would very much welcome a continued co-operation
with the Commission and is certainly prepared to participate therein with all
its expertise.

eceee’s comments to the Green Paper reflect input from many of its
individual and organisational members.

General Comments
eceee welcomes the Green Paper “Towards a European Strategy for the
security of energy supply” (in the following referred to as the Green Paper)
as an initiator for an in-depth debate on European Energy Policy and
strongly supports the Green Paper’s summary in which the Commission:
recognises the limited room for manoeuvre on the supply side and the
promising scope for action to address energy demand; and
calls for a long-term energy strategy based on an active energy savings
policy.

eceee strongly supports the Green Paper’s statements that “the Union must
rebalance its supply policy by clear action in favour of a demand policy”
and that energy efficiency is the condition sine qua non for increasing
security of energy supply. While the Green Paper identifies the forecasted
rising dependence on energy imports as the threat to supply security, the
11th September 2001 has added the dimension of internal security of supply
and thus has given even more convincing arguments for an active energy
efficiency policy.

eceee wishes to point out that energy efficiency not only increases the
security of supply, but also makes environmental sense as it contributes to
the Union’s, and to each Member State’s, goal of cutting carbon dioxide
emissions according to the Kyoto Protocol. It also makes economic sense,
as it reduces the energy bills of the end user, thus assuring the end user’s
competitiveness - one of the goals of liberalisation of the energy markets -
by reducing the quantity as well as the price of the energy consumed.
Together with renewable forms of energy, energy efficiency promotes
innovation and structural changes required gearing the European Policy
towards sustainability. The promotion of innovation also produces
economic benefits by having cross-cutting beneficial effects on
competitiveness.

eceee notes with encouragement that the Commission is calling not only for
technical efficiency improvements, but also “for a real change in consumer
behaviour”. In other words, the Green Paper addresses the need not only to
introduce efficient technology but also to control the rising demand for
services from energy. This call is supported by the observation that the rate
at which efficiency improvements have reduced the specific demand for
energy has been outweighed by the rate at which the demand for services
from energy has increased.

The obvious net result to date of the “competition” between the
improvement of the efficiency of individual services and the increase of the
demand for services from energy is the persisting increase of energy
consumption. It is important that the development in energy consumption
volume stays within a range that enables an increasing market share of
sustainable energy forms, leading to 100% coverage of such energy forms in
the long run. The consequence of this logic is that demand side management
in the widest sense possible should be an essential and sizeable building
block in any segment of European energy policy implementation in the
short, medium and long run.

eceee believes that the arguments in favour of energy efficiency have never
been so obvious and convincing as they are now. Therefore eceee supports
the main conclusions of the Green Paper regarding the need for an active
energy demand policy and the need to balance the past and present supply
side focus of energy policies on all levels, i.e. local, regional, national and
European.

eceee noted with satisfaction that the Green Paper integrates all current
initiatives of the Commission and of the European Parliament that go in
direction of an “energy intelligent Europe”. eceee welcomes the integration
of current initiatives at the European level such as the Action Plan on
Improved Energy Efficiency, the European Climate Change Programme,
and the European Parliament’s initiative for an Energy Intelligent Europe.

Energy efficiency need more focus
Energy efficiency has in the past played a very important role in mitigating
the growth of the energy consumption in Europe. The continuous reduction
in energy intensity since 1973 contributed strongly to reduce EU
dependency on imported energy resources. A large part of this reduction is
due to energy efficiency progress beside structural changes of economy.



                                                               Dec 2001 2 (6)
At present, energy efficiency progress is analysed through the use of energy
efficiency indicators developed in the SAVE program, and adopted by
EUROSTAT, allowing the identification of structural change effects and
energy efficiency effects for the whole economy or at disaggregated levels.
However saved energy (“negawatts”, “negajoules”) have not yet been
reported in policy documents with the same accuracy as the different form
of energy consumption and energy supply.

Further work in assessing energy efficiency is needed in order to measure
energy savings resulting from policies and measures implemented. The
present need to develop a methodology for the measurement of the
reduction of CO2 emissions in the framework of the implementation of the
Kyoto Protocol gives rise to the expectation that the same approach can be
adapted to the measurement, estimation, and eventually certification of
energy savings. This would be the basis for a rational energy efficiency
policy, for pertinent cost/benefit calculations, and for strategic planning.

Such an analysis would give convincing arguments for the proposed shift
towards an active demand policy, would show the relative impact and
potential of supply side and demand side measures, respectively, and would
identify the driving forces both for wasteful and for efficient use of energy.
The competing effects of these driving forces are highlighted by the shift
from a 25% decrease of the energy intensity of the European GDP in the
80s, well above historical average, to a poor 10% reduction in the “cheap
and abundant energy”-90s, with present alarming tendencies to stagnation.

While the Commission is clear on what to do on the supply side (or at least
rely on the supply side industry to fill the gap due to its own strength), it is
vague in the context of services from energy and control of energy demand.
eceee takes this as an indication that the actual priorities may not change in
the future. This pattern reflects the difference in intensity and speed with
which the Commission has been able, in the past, to implement policies and
resolve problems arising on the supply side and on the demand side,
respectively. This weakness of the Green Paper is particularly disappointing
since the main conclusion of the Green Paper is the urgency of an energy
demand policy.

For eceee, one of the main methodological weaknesses of the Green Paper
is the lack of explanations on the forecast presented and
the absence of forecast scenarios for potential forms of active demand
policies

eceee points out that scenario forecasts would also help to identify the
magnitude of changes needed to reach certain goals, and eventually the
costs and benefits resulting from the implementation of suggestions made in
the Green Paper. The analysis of different scenarios taking into account the
socio-economic drivers for energy demand should allow the best strategy
for an active demand policy to be identified.

                                                               Dec 2001 3 (6)
Elements for an ambitious energy demand policy
eceee notes that there is a strong need for a Strategy for the European
energy demand policy, which the Green Paper calls for, and an Action
Programme, which would follow from it.

eceee acknowledges that the Green Paper offers a set of elements of an
active demand policy, and a set of instruments ranging from energy taxation
to Community programmes such as SAVE and ALTENER. eceee regrets,
however, that the Green Paper, in spite of its promising title, does not offer
a strategy for the implementation of these and other elements of such a new
policy.

In eceee’s view, the required solidarity, flexibility and adaptability in
defining and implementing an active European demand policy needs a
demand policy umbrella under which all concerned DGs co-operate. At
present a good deal of energy policy is presented under the climate
protection umbrella, which needs to be complemented, according to the
suggestions in the Green Paper, by a security of energy supply umbrella.
Together this will form the umbrella for the requested ambitious European
energy demand policy.

The main goals for energy demand policy is protection of the environment,
security of supply, increase of the competitiveness and creation of jobs.

A European Energy Demand Policy should include
 priorities,
 financing,
 instruments,
 programmes and
 institutions.

eceee finds that the current initiatives at the European level such as the
Action Plan on Improved Energy Efficiency, the European Climate Change
Programme and the European Parliament’s initiative for an Energy
Intelligent Europe can form the basis for defining a demand side policy.
eceee proposes the following initiatives as the first step in a new
comprehensive policy:

   Implementation of the directive on energy performance of buildings,
   Re-design of the SAVE and ALTENER Programmes in a new
    framework programme for an energy intelligent society,
   Establishment of a European Sustainable Energy Agency,
   A framework directive for minimum efficiency requirements for end-
    use equipment,
   A strengthening of the framework directive for energy labelling,
   A directive on Energy Demand Management,
   A directive on the promotion of combined heat and power (CHP),

                                                              Dec 2001 4 (6)
    A energy-efficient public purchasing initiative,
    Initiatives in the industrial and transport sectors,
    A strong Campaign for take-off and Public Awareness campaign,
    New economic incentives including minimum level for energy taxes, a
     proposal for differentiation in tax levels for energy saving products and
     a European Investment Fund,
Overall energy saving targets at the European level and concrete target
setting for Member States (with burden sharing and standardised reporting
similar to the Kyoto agreement and the renewable directive) shall also be
considered.

The common measures at European level should be seen in conjunction
with the measures taken in the different member states, and it is important
that the Commission should co-ordinate these activities.

Energy efficiency and liberalisation of energy markets
eceee regrets the omission of analysis of the interaction between
market liberalisation and energy demand. The Green Paper deals
with demand and supply as two separate policy fields, and does not
recognise interaction mechanisms, e.g. that it is not the liberalisation
of the production level, but the competition on the retail level that
discourages demand side management by energy companies. The
regulation of transmission, distribution and retail gives the energy
companies incentives to increase sales and the competition focuses on
short term issues (lowest price on kWh).

The Green Paper correctly observes that the liberalisation of the supply
markets leads to lower energy prices, which goes “against policies to curtail
increasing demand and to combat climate change”. The Commission states
that the achievement of the internal energy market, and the consequent fall
in electricity prices, has given a new position and role to energy demand. In
eceee’s view, the Commission should have balanced the internal supply
market policy by implementing equally concrete policies for the service
market on the demand side.

eceee strongly urges the Commission to complete the internal energy market
by developing the required active demand policy. The proposal for a
directive on Energy Demand Management and promoting of correct tariff
regulation in the remaining monopoly segments of the energy business is
the first step in such a policy.

Energy demand outside of Europe
eceee strongly supports the Commission in its view about the decisive role
of the European Union for the future energy demand outside the European
Union, which will undoubtedly have strong repercussions on the security of
energy supply of the European Union.



                                                               Dec 2001 5 (6)
In this spirit, the European Union will play a double and doubly beneficial
role:

Firstly, by fulfilling its own goals and simultaneously serving as an example
for developed countries in their transition from a supply oriented to a
demand oriented energy policy, with its promise to comply with economic,
environmental and social objectives; and
Secondly, as a facilitator and enabler for developing countries and for
countries in Central and Eastern Europe to assure their access to efficient
technologies, to instruments and methods for their large scale diffusion, and
to instruments and methods for prudently guiding the customer’s choices.

Contact details
eceee's contact person for this position paper is Peter Bach.
E-mail: pb@ens.dk, Tel: + 45 33 95 43 25
For general questions about eceee, please contact us by e-mail at
eceee@eceee.org


The European Council for an Energy Efficient Economy, eceee, is a non-
profit, independent organisation representing a broad group of organisations
and people with expertise in energy efficiency. eceee has a unique resource
base of knowledge and information on energy efficiency. One of the roles of
eceee is to offer a strong voice to stakeholders for energy efficiency.

eceee seeks to bring policy makers together with a wide range of experts
and promotes the understanding and application of energy efficiency in the
society on the base of solid knowledge, insight and information. Among
others, the peer-reviewed proceedings of the eceee Summer Study form a
substantial body of published information and its participants constitute a
powerful network of thinkers and doers on energy efficiency in Europe and
beyond.

Despite its obvious advantages, energy efficiency fails to be systematically
utilised as a tool for combining economic prosperity with sustainable
development. The ultimate challenge for eceee therefore is to gain proper
recognition for the role of energy efficiency and of control of demand for
services from energy, both in industrialised economies and in developing
countries. eceee addresses the “energy demand side” as a complex mix of
responsibilities, actions and actors. eceee perceives a significant gap
between specialists from different areas, between energy analysts and policy
makers. To fill this gap, eceee offers a mix of disciplines that enables it to
analyse the driving forces for wasteful uses of energy and the stumbling
blocks for intelligent use of energy, and to evaluate the various approaches
to shape and control demand for services from energy.




                                                              Dec 2001 6 (6)

				
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