Does “Efficiency First” mean “Renewables Last”?
The European Commission’s “Clean Energy for All Europeans” package of legislation puts “Efficiency First.” Generally praised by energy efficiency advocates, this principle evokes fear in the renewable energy sector. Does Efficiency First mean that renewable energy takes the back seat? Will Efficiency First slow down the remarkable expansion of renewable energy in recent years?
The answer to these questions is a clear “no.” In order to completely decarbonise energy production, we need more investment in renewables, not less. Just as the energy system cannot be decarbonised through energy efficiency alone, a system with 100 percent renewables cannot be achieved without extensive energy efficiency. This is one reason why the International Energy Agency (IEA) has described energy efficiency as a “first fuel.”
A study by the Wuppertal Institute shows that the emission reductions needed to meet climate goals—especially reductions resulting from the electrification of heating and transport—are neither easily achieved through technology, nor economically efficient without substantial energy efficiency gains. For a successful energy transition, we therefore need to accelerate the deployment of renewable energy, while drawing on more energy efficiency and demand response to optimise and reduce demand. Trying to decarbonise wasteful energy consumption by simply subsidising more and more energy production is an exercise in futility.
The question is rather: How can we achieve a world with 100 percent renewable energy and systematically tap into the existing energy efficiency potential? This has been neglected in many EU countries. Renewable energy was promoted and grid expansion was approved. However, groups advocating for reduced energy consumption have been less successful than those lobbying for more renewable generation and larger grids. This is partly a result of the disparate nature of the energy efficiency industry’s many different technological solutions.
As a solution to this conundrum, the Regulatory Assistance Project (RAP) has developed and helps European and Member State policymakers implement the principle of Efficiency First. Put simply, Efficiency First “prioritises” investments in customer-side efficiency resources, including end-use energy efficiency and demand response, whenever the resources would cost less or generate more value than investing in energy infrastructure, fuels, or supply alone. This type of systematic approach is a prerequisite for complete decarbonisation of the energy system.
The International Renewable Energy Agency (IRENA) recently published a study systematically assessing the synergistic effects of energy efficiency and renewable energy. The conclusion is that, in tandem with efficiency, higher penetrations of renewable energy can be achieved, leading to significantly lower energy system costs and faster decarbonisation of the energy system. Efficiency First aims to make the most of those synergies—energy efficiency and renewable energy are inextricably linked as we strive for a successful energy transition.
A version of this blog was originally published by eceee.