Realising Europe's Efficiency Pipeline
Energy efficiency, particularly in buildings, should be a front-running strategy to address European energy security. Buildings account for about 40 percent of energy use and more than a third of natural gas use in Europe. Energy efficiency can be viewed as a “pipeline” that delivers reliable, cost-effective services, just like a natural gas pipeline delivers the fuel service for heat and hot water. Unlike natural gas (or other conventional energy sources), however, energy efficiency burns no fuel and emits no pollution. Plus, it is a domestically sourced resource that reduces both import dependency and reliance on fossil fuels, which is essential to meeting Europe’s climate and energy security objectives. Even amidst uncertainty over the potential magnitude of rebound effects triggered by efficiency improvements, increasing the productivity with which energy resources are utilised means that Europe can get more energy services out of its resources than ever before. In this way, energy efficiency can also be an important driver for Europe’s economic growth. This paper introduces key steps for building a strong “efficiency pipeline” that can deliver these benefits, particularly in the context of Europe’s energy security challenges. The paper begins with a discussion of energy security in Europe, followed by an overview of the potential of energy efficiency in buildings to reduce energy use and natural gas dependency. Next, it describes the concept of the efficiency pipeline and the importance of an “Efficiency First” approach in energy regulation and infrastructure planning to ensure that Europe meets its energy security needs with the most cost-effective mix of resources. Finally, the discussion draws on international experiences with Efficiency First in developing preliminary recommendations and areas for further inquiry in Europe.