Pan-European Energy Efficiency
- Problems and Visions
By Gunnar Boye Olesen, co-ordinator of the European ECO-forum Energy
& Climate Group
Pan-European cooperation for energy efficiency should develop from the
current exchange of information between governmental experts combined
with scattered activities by EBRD and technical assistance programs. It
should develop into cooperation that is useful for a larger public and
that really improve the framework for energy efficiency throughout Europe,
including former Soviet Republics. The same is true for the potential
cooperation on renewable energy.
At the environment ministers meeting in Århus, Denmark, 1998 (Arhus98)
the ministers welcomed a “Guideline on energy conservation in Europe”
with a number of recommendations for national activities and international
co-operation on energy conservation. In the ministerial declaration adopted
at Arhus98 was also agreed a number of issues for cooperation, including
phase-out of environmentally harmful energy subsidies before 2005, and
a request to the World Bank, EBRD (European Bank for Reconstruction and
Development) to give a priority for energy efficiency. Similar agreements
have been reached at other international meetings, e.g. OECD, UN-ECE.
Unfortunately the ministerial agreements have not been followed up by
much actual cooperation. The decisions from Arhus98 are in principle followed-up
by the Energy Efficiency Working Group of the Energy Charter, a group
that has as its main task to implement the Energy Charter’s protocol on
energy efficiency and related environmental aspects. This protocol has
a long list of proposals for cooperation on energy efficiency, but the
only binding commitments of the countries are that they shall make reviews
of their energy efficiency policies. The working group is busy to get
these reviews finished. It is also a forum for exchange of information
on energy efficiency among its members. It has not worked on many of the
proposals for international cooperation from Arhus98 or from its own protocol.
To improve the Pan-European co-operation on energy efficiency, a new
impulse is needed, in addition to the follow-up from Arhus98. This could
be a proposal from the NGOs, pushed by national NGOs in several countries
as well as internationally. It could also be new initiatives from EU,
EBRD, or others, e.g. as the new EU-Russia dialogues. The rest of this
article describes potential areas for start-up of new Pan-European cooperation,
mainly based on the “Guideline for energy conservation in Europe”. The
proposals will be discussed at the ECO-Forum Energy & Climate Group
email list, and at the Pan-European NGO Energy Seminar, September 16-22
in Denmark. If we develop proposals that we can agree are good enough
and important enough, we will push for the start of the proposed cooperation
as soon as possible.
ENERGY PRICE REFORMS
The ministers decided at Arhus98 to recommend a phase-out of environmentally
harmful energy price subsidies and introduction of measures to internalise
external (environmental) costs by 2005. The
Progress should be assessed for Kiev 2003. The OECD countries have agreed
upon a similar goal, and experts at an OECD & UN-ECE Workshop June
2000 in Prague agreed further details.
Co-operation on phase-out of environmental harmful subsidies is an obvious
issue for international co-operation. An important first task would be
to make a guideline for phase-out of these subsidies, with quantification
of the subsidies, examples of optimal phase-out, and policy recommendations.
Price reforms should also include internalisation of external costs, and
a guideline for this would also be an obvious task to make before Kiev
ENERGY MARKET AND ENVIRONMENT
Restructuring of energy markets, in particular liberalisation and privatisation
is often done without proper environmental concern. International cooperation
to address this problem should include:
· Dissemination of models for market regulation that encourages
energy efficiency and integrates environmental concerns in the market
· Indicative goals for sustainable development, in particular goals
for renewable energy use and for implementation of energy efficiency technologies.
COGENERATION AND RENEWABLE
The benefits of CHP and renewable energy are well known, but the
current situation in CEE is that other sources of energy are promoted
to the extent that it threatens CHP and the development of renewable energy.
To address this problem, countries must include optimal development of
district heating and renewable energy in their energy plans. In addition,
international co-operation in the field should be strengthened.
The first international co-operation task could be to organise the dissemination
of information on best practice with district heating and cooling infrastructure
and combined heat and power (CHP) stations, and of small-scale energy
supply and renewable energy. This could include the creation of international
centres for CHP and renewable energy supply.
MDB ENERGY EFFICIENCY INITIATIVE
The importance of MDBs (multilateral development banks) in CEE is
widely recognized. ECOs generally find that the current MDB investments
are far from ideal and that they should focus more on energy efficiency
and local solutions. To do this is proposed:
· An international standardized code of conduct for energy efficiency
investments should be developed. This code of conduct should promote small-scale
investments and enable transparancy and comparability.
· All investments, bilateral aid, funding, etc. in energy and energy
services should be subject to - at least - a simple energy and environmental
· The problems of high interest rates for lending to small projects
via commercial banks should be avoided, e.g. by establishment of non-profit
lending institutions that have been successful in many parts of the world
from the Danish mortgage institutions to the Bangladesh Grameen Bank,
· MDBs should integrate energy efficiency in all their energy lending
projects, to include at least energy efficiency investments that are more
cost-effective than energy supply investments under consideration.
Efficiency Labelling and Standards
Given the success with energy efficiency labelling and standards,
all countries should be invited to participate in relevant schemes, including
the EU energy labelling system.
ENERGY, ENVIRONMENT AND EMPLOYMENT
The importance of employment and environment effects of energy investments
is well known, but very often the effects are not quantified adequately,
leading to conclusions such as “all projects create jobs”. Job creation
for a given investment in energy efficiency is usually higher than for
supply-side investment. As a start of international co-operation in this
field is proposed:
· Experience with job creation and energy investments should be
shared and information exchanged internationally.
· Methodologies for quantifying employment effects of investments
should be shared internationally and tested in relevant CEE countries.