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UTILITY Week 27th March 2015

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UtilitY WEEK | 27th March - 2nd april 2015 | 13 Policy & Regulation Analysis T he UK is not only lagging behind many European Union member states when it comes to energy efficiency, it is fid- dling the figures to suggest it is making bet- ter progress than it is in reality. So says a report from the Coalition for Energy Savings in Brussels. The coalition assessed Britain's declared progress towards targets set in the EU's 2012 Energy Efficiency Directive. The report, Implementing the EU Energy Efficiency Direc- tive: Latest Analysis of Member State Plans for End-Use Energy Savings Targets (Article 7), shows that the UK is not the worst per- former, but lies somewhere in the middle. Progress towards energy reduction targets of 1.5 per cent a year and 20 per cent compared with 2009 by 2020 has been poor throughout the EU. Denmark and Ireland are the only countries to have pre- sented credible plans to meet them. The coalition says: "Most other submissions con- sist of incomplete and weak plans that fail to show how member states will deliver on the targets." "Writing legislation is one thing," says coalition secretary general Stefan Scheuer, but "applying the legislation requires an army of implementers", and "the army is not yet ready". He says the directive is a "milestone for energy efficiency" but believes the political will is not sufficient to achieve real advances in efficiency, despite European Council state- ments on the need to meet the 2020 targets. The report says the main problem with the UK's compliance calculations is that they include energy savings in areas that are not eligible, notably from building stand- ards required anyway under the 2012 Energy Performance of Buildings Directive. To be included in the compliance calculation, energy savings must go beyond a EU mini- mum baseline set for each country and be beyond those required anyway under other European laws. Only half of UK energy-saving efforts are eligible for inclusion in its declaration, Scheuer says, arguing that there is a "clear case for the Commission starting infringe- ment [proceedings] for bad application of new legislation". The UK's efficiency plans score only three out of a maximum of six – two points each for "completeness", "eligibility and addi- tionality" and "coherence". The UK scores zero for "eligibility and additionality", and notches up one point for "coherence", but does achieve the maximum two points for "completeness". In contrast, Denmark scored a maximum six points and Ireland five, dropping a single point for "eligibility and additionality". The UK was beaten by Belgium, Croatia, Italy, Latvia, Malta, Portugal, Cyprus, France and Spain, which all scored four. Sharing the three-point score with the UK are Austria, Greece and the Netherlands. However, several countries fared worse: Estonia, Finland, Sweden, the Czech Repub- lic and Poland were awarded two points; and Germany, Luxembourg, Slovakia and Slovenia scored just one. Bulgaria, Hungary, Lithuania and Romania scored zero. The coalition says those that scored two or less did so because their official reports on energy efficiency progress towards the tar- gets in the directive were not accessible, or of poor quality, and had many questionable measures and claimed savings. Scheuer says a regulatory environment that encourages public and private invest- ment in energy efficiency is essential, but this would be difficult to achieve with most member states "hostile" to any new legisla- tion. "We need to bring other actors into the game," Scheuer says, adding: "You need to bring utilities into building the energy ser- vices market." So what are Ireland and Denmark doing right? Scheuer says they have given energy efficiency "high political attention" and had "managed to get their utilities on board" with voluntary agreements later formalised in law. Also, Ireland has been hit by the financial crisis and politicians there see energy effi- ciency as an investment opportunity, espe- cially in the building sector. Scheuer says the UK should rethink its approach and switch from a focus on sup- ply-side reforms to a consumer-orientated market-driven decentralised system, such as smart metering. The UK is investing heavily in centralised systems such as the Hinkley Point C nuclear power plant rather than spending money on energy efficiency, he notes. Scheuer also said the UK's failings were the result of the government soening its energy-efficiency targets. Scheuer does, however, praise the UK's Green Deal policy as a "novel and creative" way of splitting energy-efficiency incentives between tenants and landlords. He also believes British utilities have been support- ive of Article 7 of the directive, and have a decade and a half of experience from imple- menting the EU's energy-efficiency obli- gation, a less formal set of guidance that existed before the directive. Responding to the coalition's suggestion that the UK was miscounting and would not meet its energy savings targets, a spokes- man for the Department of Energy and Cli- mate Change says Britain's performance has been backed by a separate assessment for the European Commission by consultants AEA Ricardo. He argues that the consultants' conclu- sions have not called into question the UK's ability to meet the Article 7 Energy Effi- ciency Directive target: "We have a strong track record on energy demand reduction and are recognised as a global leader in this area." Pressed on the miscounting claims, the spokesman says: "The UK has not received a request to revise or update the notifications it has submitted to the Commission to date. Should we receive such a request, we would of course look to work with the Commission to make any appropriate changes and com- ply with the request." British utilities organisation Energy UK declined to comment on the coalition's find- ings. A spokeswoman said the Commission was currently reviewing the legislation. "The energy-efficiency obligation will soon be revised, so we will wait to see the changes", she said. Sara Lewis is a freelance journalist Efficiency: can utilities help? The UK is lagging behind other EU member states on energy efficiency. Sara Lewis asks if it is time to change tactics, and bring utilities on board to help build a market for energy services.

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