Specific Challenge:

In the Energy Union Strategy, Energy Efficiency was recognised as a resource in its own right which should be enabled to compete on equal terms with generation capacity and to have primary consideration across all policies^[1]. However, the structure of energy demand as well as the real value beyond the fuel's cost and the (energy and non-energy) impacts of energy efficiency are still not well understood with the effect that benefits of energy efficiency are not sufficiently taken into account in financial and political decision making, and planning, while prices of fossil fuels remain relatively low.

Scope:

2018:  Make the energy efficiency first principle more operational

The research projects should help to make the Energy Efficiency First principle more concrete and operational and to better understand its relevance for energy demand and supply and its broader impacts across sectors and markets. In particular, it needs to be analysed how energy efficiency programmes along the efficiency chain, i.e. end-use, operation, transmission and generation/utilisation of resources, can compete in reality with supply side investments (e.g. additional generation capacities or import capacities) including at the level of countries and having in mind limited public budgets. It would also be necessary to describe and assess how it interacts with and correlates to other policy objectives, at a policy level as well as at the level of implementation.

Actions which conceptualise and assess the impacts and model the energy efficiency first principle, in particular as regards:

• its role and value in the energy system (e.g. for planning of generation assets and networks adequacy etc.) and the energy market (participation in capacity market, participation and impact on prices and costs on wholesale and balancing/reserve markets);
• its role and value in financing decisions (considering as well that in some Member States retail prices do not reflect real costs);
• its economic and social impacts;
• its correlation and interaction with other policy objectives (e.g. renewable energy, demand response);
• existing best practices worldwide where energy efficiency projects are given priority over additional supply side measures.

Expected Impact:

2018:

Actions are expected to support policies aiming to promote and implement the "energy efficiency first-principle" based on a sound assessment of the concept and its impacts. To this end, actions should lead to a better understanding of:

• all relevant aspects linked to the "energy efficiency first-principle";
• its impacts (e.g. technical, economic, socio-economic, and ecological etc.) on the relevant sectors and markets;
• its potential across the different policy areas and sectors;
• its consideration and valorisation in modelling and assessments; and
• its interaction with other policy objectives both at policy level (e.g. climate and renewable policies, circular economy) and at the level of concrete application (e.g. design of buildings).