The ups and downs of EU energy efficiency policy

Bricks and mortar

Picture this: the doorbell rings and you aren’t expecting visitors.There’s a bright eyed boy standing outside with ‘salesman’ written all over him. Thank goodness, you don’t see any of the outward signs of the zealous evangelist. No short sleeved white shirt with a name tag, no brochure-laden black rucksack. Besides, they always travel in pairs. Curiosity finally gets the better of you. He tells you he’s here to talk about your energy use.

It’s definitely a quirky concept. His company wants to do an energy audit and – at its own expense – pay for new windows, wall insulation and other measures to cut down energy consumption. Let’s assume, for example, that you’re spending €200 a month on heating and electricity use. He offers to knock 15% off that. And you don’t have to pay anything.

At this point most of us would be getting suspicious. Why the sudden generosity? What’s in it for him? And we’d be right – up to a point. The idea behind those ‘ESCOs’ (energy service companies) is that they guarantee, say, a 15% reduction in bills but actually save much more. Up to 50% or even 70%, depending on the building. The difference between the guaranteed savings and the real savings goes to reimburse the ESCOs’ investment and pay them a profit.

Nice one! But if it’s good for them it suits us customers too. Many of us simply don’t have the spare cash to replace, for instance, an energy guzzling oil boiler with a heat pump, or to upgrade wall and roof insulation. And even if we have the means, we often don’t retrofit our homes anyway. There’s no time, we don’t have the knowhow, or it’s just too much hassle to do more than cosmetic improvements. ESCOs can break the inertia and front the money to get things moving.

Now for some political moralising. The Commission’s draft Directive on Energy Efficiency is currently being debated by the European Parliament and the Member States. Its Article 6 (link) aims to revolutionize the ESCO market by obliging energy companies to save energy. Support it! Strengthen it! Think it over, and you’ll see that Article 6 is really about encouraging energy companies to change their business models and start making money by selling energy services. In other words, to make ESCOs of them.

It’s a policy that adds up. At present, ESCOs mostly retrofit public buildings or help companies develop smarter energy management systems. Much more has to be done to extend the model and cut down household energy use (40% of Europe’s energy consumption – most of which has to imported – and 36% of its CO2 emissions).Giving energy companies a share of the task is a clever and inclusive solution. It’s too much to expect them to support energy savings legislation if it just means selling less electricity and gas. But offer them an exciting new market and they would be fools to turn it down.

Enough said… But next time you get an unexpected knock on the door, be less cagey about opening it. It might be your local ESCO.

By Brook Riley (Friends of the Earth Europe) and Erica Hope (Climate Action Network Europe)

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