Revision of the EU’s Energy Efficiency Directive (EED) (GEN - 904.00)

The proposed Primary Energy Factor is being questioned

GEN - 904.00. On 17 January 2018, the European Parliament has adopted a set of amendments regarding the revision of the EED. Besides the overall objectives, the European Parliament proposed to lower the Primary Energy Factor (PEF), which is at 2,5 today. It appears like an agreement would be found to move to 2,3. The consequences are not yet fully understood.

Revised EED

The objective of the revised EED is to boost energy efficiency with a binding target of 35% improvement of energy efficiency by 2030. To meet these overall targets, EU member states are asked to set their own national targets, to be monitored and achieved in line with a draft law on the governance of the Energy Union.  

The 35% target should be considered on the basis of the projected energy consumption in 2030 according to the PRIMES model that simulates the energy consumption and the energy supply system in the EU.

Besides the overall objectives, the discussion on the PEF may require some attention.

Primary Energy Factor - PEF

The purpose of the primary energy factors (PEFs) set out in Annex IV of the EED is to assist Member States to translate final energy savings into primary energy savings in the framework of Article 3 (energy efficiency targets) and Art.7 (energy efficiency obligation schemes). 

The conversion table for the various fuels in Annex IV translate into kWh electrical energy: Applicable when energy savings are calculated in primary energy terms using a bottom-up approach based on final energy consumption. For savings in kWh electricity Member States may apply a default coefficient of 2,5. Member States may apply a different coefficient provided they can justify it.

The Commission proposed to lower the PEF value: from 2,5 to 2,0. The amendment by the European Parliament proposed a PEF value of 2,3 and to revise it anew five years later in 2024. The trilogue negations between Commission, Council and Parliament started in February, with the objective to reach a provisional agreement by 30 June 2018.

The impact of PEF on other Directives (for example EPBD, Ecodesign) and Implementing Regulations is not yet known or even fully understood. For Ecodesign, DG Energy would continue with its current approach and evaluate the consequence of a new PEF once the EED has been adopted.

The original PEF value of 2,5 was achieved after over 25 years of discussion.

The modification of the PEF has been argued by the fact that technological progress has resulted in a growing share of renewable energy sources in the electricity generation sector over the past years in electricity generation compared to the time when the PEF value of 2,5 was agreed upon. 

Consequences of modifying the PEF

If Member States would opt to apply a justified different PEF (compared to the current PEF of 2,5 or the future new PEF), the consequence could be that the performance of a product may vary by Member State and according to the national implementation of implementation of European legislation. It may become advantageous to profile equipment differently (e.g. application in EPBD versus Ecodesign or Energy Labelling that would use a different PEF).  

Depending on the view, this increases complexity as the principles of the Single Market is undermined. On the other hand, it would offer opportunities to cater for specific markets. At present it looks unlikely that Member States would opt for national PEFs.

The major consequence of lowering the current PEF value to 2,5 to another value, e.g. 2,3 or 2,0, is that it will automatically improve the performance of equipment that relies on electric energy. This will change the relative performance compared with equipment using fossil fuels. 

Study on PEF for electricity and corresponding CO2 equivalent factor

Just recently theResearch Center for Energy Economics published this study commissioned by COGEN Europe, the European association representing the cogeneration sector.According to this study, the additional electricity demand from sectors subject to electrification will rely less on renewable electricity and more on fossil fuel generation, compared to the average electricity mix. Based on the study, European renewable and efficient heat industry associations (AEBIOM, COGEN Europe, EFIEES, EGEC and EHP) call for a dedicated PEF approach for calculating the real efficiency of heating systems.

Recommendation

It is not yet clear what the outcome will be of the trilogue discussions will be. A lowering of the PEF seems likely. Manufacturers are encouraged to consider the possible consequences that could become a reality by 2020.

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