A rant about the EU’s energy efficiency target

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I don’t blog here much any more, so if anyone is still reading this site they are perhaps overly optimistic. But I would like to briefly discuss a question that has been perplexing for a while.

Here it is.

The EU is currently debating whether it should set an energy efficiency target. The target has been mentioned heavily in the media, or at least media of the green variety, recently.

First, I’ll explain what the target is, given that most reports have got the thing wrong. It is not a target to reduce EU energy consumption by 30%, or to improve energy efficiency by 30% by 2030. Instead it is a target to reduce EU energy consumption by 30% in comparison with what it is expected to be in 2030.

This baseline, however, is dubious at best. In 2007, an EU model predicted what energy consumption would be under business as usual in 2020 and 2030, and this is the basis of the target. As anyone with any familiarity with the issue knows, such long-term forecasts are essentially worthless. And just think, one year after this forecast was made the EU economy almost collapsed totally. So, why not make a new forecast?

This however is not what I want to discuss. Instead, I want to figure out why people think an energy efficiency target will reduce fossil fuel imports or consumption. For, unless I am missing something, this is utter gibberish.

However, this now appears to be the common view. See Chris Huhne in today’s Guardian. An energy efficiency target will stick it to Putin, supposedly.

But, how can it?

The EU now has a bunch of proposed energy and climate targets. One is for energy efficiency, a second is for renewables and a third is for greenhouse gas emissions. The greenhouse gas emissions target is to reduce EU GHG by 40% below 1990 levels by 2030. Does this greenhouse gas emissions target not essentially set fossil fuel consumption in 2030? How can it be lowered by an energy efficiency target?

Almost all of the EU’s greenhouse gas emissions comes from burning fossil fuels. So, to simplify things let’s assume that the greenhouse gas emissions target simply relates to fossil fuel use for energy generation.

How then would an energy efficiency target reduce fossil fuel energy imports or consumption?

If you reduce fossil fuel consumption, you then reduce greenhouse gas emissions. This will then probably just reduce the price of carbon on the European Emissions Trading Scheme, which will in turn increase the burning of fossil fuels. So, again. How can the efficiency target possibly reduce fossil fuels use or imports?

Paradoxically, the target may even make it more difficult to reduce emissions. Think about carbon capture and storage. What happens if you attach a carbon capture device to a power station or blast furnace. Two things: carbon emissions go down and consumption of fossil fuels goes up. So, the expansion of carbon capture and storage will actually make it more difficult for the EU to meet the energy efficiency target.

Similarly, there are no shortage of problems with how this target is defined. As far as I know the current formulation of the target is purely in terms of primary energy consumption. This is deeply problematic. Let’s imagine I replace a 40% efficient coal power plant with a 60% efficient gas power plant, a 40% efficient nuclear power plant or a wind farm.

If I do it with a gas power plant, efficiency goes up significantly. If I do it with a nuclear power plant it stays the same. However, if I do it with a wind farm it more than doubles. Why? Because under the EU’s definition of primary energy, a wind farm is 100% efficient, as is a solar panel. This is a totally arbitrary decision and clearly should not be the basis of sound policy making.

Even more paradoxically, a higher efficiency target would probably promote the use of coal. If emissions are set by the GHG target, but energy consumption is lower, then you are much more free to burn coal than gas, which emits more carbon dioxide per unit of energy.

I could go on, there are more contradictions inherent in the proposed EU energy and climate policies, but we would be here much too long.

Anyway, that’s my vent over. But, the comments section is open to anyone who can explain to me how an EU energy efficiency target can reduce fossil fuel imports, when fossil fuel consumption is essentially set by the greenhouse gas emissions target.

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3 thoughts on “A rant about the EU’s energy efficiency target

    Mark Brinkley @slopingsite said:
    July 28, 2014 at 9:44 am

    Robert,

    It’s not a stupid question (and you know it’s not). It strikes at the very illogicality at heart of the energy debate. The goal should be to decarbonise our energy supply, not to set arbitrary levels of how much energy we should or should not be using. Paradoxically, if we use much less energy than we do now, we may be making it harder to decarbonise energy supplies because we have reduced the demand for energy overall, making expensive low carbon energy measures even more expensive and consequently less commercially viable.

    Mark

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      Robert Wilson said:
      July 29, 2014 at 9:54 am

      Very true.

      The most depressing aspect is that these debates were had back when the EU debated the 2020 targets. It was absolutely clear than that the suite of targets and policies set up were inherently inefficient. Yet, anyone who pointed this out tended to get attacked. Strangely, wanting to make climate policy more efficient makes many people suspect you aren’t serious about climate change.

      One of my favourite stories was back in 2007 when the Blair government realised the suite of targets were likely to be counter-productive. Naturally, they were rounded on by greens. Yet, what the Blair government concluded (but didn’t act on) was exactly correct. They predicted that the renewables target would end up making the ETS redundant and push down the carbon price. This is exactly what happened.

      http://www.theguardian.com/environment/2007/aug/13/renewableenergy.energy

      However, instead of learning the obvious lesson here and getting rid off the (green) crap, environmental lobbyists simply want us to dial the crap up a level in the hope that it works second time round. People never learn.

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    Jamie said:
    August 1, 2014 at 7:31 am

    “Paradoxically, if we use much less energy than we do now, we may be making it harder to decarbonise energy supplies because we have reduced the demand for energy overall, making expensive low carbon energy measures even more expensive and consequently less commercially viable.”
    I disagree. By the time we’re delivering low carbon technologies on a very large scale we’ll have squeezed out the vast majority of the potential cost reductions achievable through learning.
    Imagine at some point in the future we have two scenarios: we either use half of the energy we do today or we use the same energy as we do today. And let’s also say that in both scenarios we decarbonise.
    Learning rates for renewables are about 20% per doubling of capacity aren’t they? So delivering half the energy we use today should cost a bit over 60% of the cost of delivering all of the energy we use today. I don’t see how that’s going to make a meaningful difference to the commercial viability of low carbon technologies vs fossil fuel technologies, especially given the price escalation which the ff sector will continue to see.

    In my view a renewables target and efficiency target go hand in hand quite nicely. You get lower ghg emissions per unit of energy consumed, you get lower ghg emissions because you’re using less fossil fuels and you have to build less capacity than you would have without the efficiency gains. But I agree that using primary energy as the metric is wrong and it should be based on consumption and I also think it should be a target based on today’s consumption not on some hypothetical future consumption.

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