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Energy Efficiency

Using energy more efficiently is the only long-term response to rising energy prices

E3G’s programme of work on energy efficiency has been driven by an understanding that boosting the efficient use of energy in Europe is critical to ensuring the public remain on board with a fair and just European decarbonisation project. Even in Germany – the wealthiest Member State in Europe, 13% of households live in fuel poverty. In the UK numbers are higher at 14%; in the EU the Commission itself estimates around 56m people (11% of EU citizens) are unable to keep their homes warm as energy prices relentlessly rise. Using energy more efficiently is the only long-term response to rising energy prices. It is also a core means of both protecting and creating jobs in Europe.

Europe has some of the highest energy prices in the world, yet its industry overall remains competitive due to its efficient use of energy compared to overseas competitors. With other regions (notably China) catching up, this needs to continue if European industry is to keep sales and exports on track and workers jobs secure. Energy efficiency is also critical to ensuring European energy security. High energy import levels in the EU make it vulnerable to externally driven energy prices shocks of the sort seen in the 1970s with the oil crisis; they are also a substantial drain on European financial resources. In 2012, more than EUR 421bn was spent on energy imports. Energy efficiency is an opportunity to turn this situation around – by replacing energy imports with high quality job creation in Europe focused on the development, manufacture and deployment of energy efficiency technologies.

Over the past seven years the energy efficiency programme has evolved, reflecting our better understanding of the barriers to energy efficiency; the systems changes needed to unlock efficiency at scale; and the political and policy battles we need to win. We started back in 2010 with a focus on financing energy efficiency and how to develop policy frameworks that will facilitate the flow of private finance to energy efficiency. During that time we made the case that access to low cost finance will be key to driving the uptake on household energy efficiency. Through careful financial and market analysis built the case that the UK Green Investment Bank needed to back the UK’s Green Deal – which it did in 2013. Since then it has become increasingly clear that cleverly targeted public finance – managed within the appropriate institutional and regulatory settings – will have a key role in scaling up financing in the buildings sector. We have set out the role the European Investment Bank and national public banks can play both in lowering costs of investment and aggregating loans to ensuring financial scale can be reached through involving the capital markets. Finally, since public policy support for energy efficiency is - at its heart - a matter of whether politicians and policy makers are prepared to provide a level playing field for demand side and supply side energy investments, we have focused on building the economic case for prioritising the use of public funding to support energy efficiency. Our work’s current emphasis is on convincing governments that energy efficiency must be at the heart of energy infrastructure renewal, and thus requires the same long-term, systematic and capital investment-led approach typically taken for traditional infrastructure priorities, such as in transport, communications, energy supply, transmission and distribution.

As we inch closer to a new framework for energy efficiency in Europe, our work continues.  We are developing a vision of and support for a set of large-scale structural reforms needed to unlock the full energy efficiency potential of the economy, which we believe is critical to ensuring a prosperous, resource efficient and equitable future for Europe. Energy efficiency – and the promotion of market frameworks that facilitate the role out of both energy saving and demand side management technologies - continue to be a core priority for E3G.

E3G also ran an energy efficiency campaign: the Energy Bill Revolution, an alliance campaign that called for home energy efficiency to be made a UK infrastructure priority. Its work is being taken forward and expanded via the Energy Efficiency Infrastructure Group, a business-led alliance that is developing comprehensive proposals for a residential and non-residential buildings energy infrastructure programme encompassing energy efficiency and heat decarbonisation. Its proposals have been successfully reflected in the overall ambition for home energy efficiency in the UK’s 2017 Clean Growth Strategy, and the priority given to energy efficiency in the National Infrastructure Commission’s 2017 interim infrastructure assessment.