More energy efficiency would be the right answer to high energy costs in Europe

The headwind for an energy and climate policy towards renewable energies from the EU can be felt again and again. But now it seems to be getting even bigger in favor of the existing old and paid power plants. As the Süddeutsche Zeitung reports, the industry is probably exerting massive pressure on the European heads of state and government and is demanding greater cost orientation and exemption from taxes.

These demands appear to be reflected in the draft resolutions for the planned summit of heads of state and government on Wednesday in Brussels, which have already been agreed. Support for renewable energies is to be “restructured in a cost-oriented manner”, other energy technologies (fracking?) are to be supported and climate policy is to be realigned.

The background is that the industry is concerned about its competitiveness. High energy prices in Europe would wipe out all their efforts to become more competitive and create jobs and growth.

Energy costs are always made up of at least two factors

When considering the costs, it is interesting to look solely at the unit price. Costs are always made up of the unit price and the number of pieces or quantity. So the prices for the kilowatt hour (kWh) of energy and the amount of energy would have to be considered. In the entire discussion about energy costs, however, attention is rarely drawn to the amount of energy, and this must be considered in the same way as the individual price per unit of energy.

Investing in energy efficiency is the strongest and fastest way for industry to reduce energy costs. The European Council for an Energy-Efficient Economy (eceee) has published a position paper on this and has shown that politicians have the wrong focus when it comes to discussing costs. The paper is entitled “European competitiveness and energy efficiency: focus on the right topic”.

As already mentioned, the point is that high energy prices are not necessarily the cause of high energy costs. More energy efficiency reduces energy consumption and thus compensates for the disadvantage of higher energy prices.

The Executive Director of eceee, Nils Borg, points out that both European studies and studies by the International Energy Agency (IEA) have shown a high, short-term potential for a cost-effective reduction in energy consumption. No new technology is required for this. Therefore, the first response to high costs (triggered by high prices) should be to increase energy efficiency.

In addition, the energy price is only one component when considering international competitiveness. When making an international comparison, companies in the energy sector must also consider security of supply and the risk of failure.

More energy efficiency for more competitiveness in Europe

Energy efficiency can support competitiveness in various ways. The solution to the question of costs is only the short-term consequence. In the longer term, energy efficiency lays the foundation for an innovative and adaptable economy that can cope with the demands of rapidly changing global markets.

The eceee position paper shows a strategic framework for increasing European competitiveness through greater energy efficiency in five points:

  1. Determination and development of the cost-effective potential for energy efficiency, based on a life cycle cost analysis. This lowers energy costs for companies and individual consumers, reducing dependency on energy imports and reducing uncertainty about future price increases.
  2. Development of methods for the implementation of energy efficiency programs that promote new business models and intelligent systems, as well as a holistic approach to dealing with the market and the customer. Behavioral economics is a key element here.
  3. Ensuring that technologies and applications for devices, constructions and developments of the systems are made fit for the global markets, while at the same time the requirements of the local markets are met. European industry is strengthening its leadership, both in terms of innovation and understanding of the needs of users of the services provided by energy and energy-related products.
  4. Fine-tuning these activities for a roll-out of decentralized renewable energy generation in smart grids, as well as full attention to passive technologies and
  5. Positioning Europe as a leader in sustainable energy and resource efficiency over the long term.

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