Adding energy efficiency into the energy mix is essential to delivering Europe’s climate goals

The views expressed are those of the author and do not necessarily reflect the position of FORESIGHT Climate & Energy

Energy efficiency should be considered as important as other power generation fuel types

Despite it not often making the headlines, energy stakeholders and lawmakers know that energy efficiency can drastically reduce the carbon footprint of Europe’s building stock, which currently accounts for about 40% of the EU’s energy consumption and 36% of greenhouse gas emissions.

But what about energy efficiency as a form of fuel? That may sound like an absurd suggestion. Yet this is exactly the type of idea we need if Europe is to have even a remote chance of achieving any of its ambitious energy and climate goals, whether it is gaining energy independence, reducing its greenhouse gas (GHG) emissions by 55% by 2030 or becoming carbon neutral by 2050.

At least 75% of the EU building stock is energy inefficient. Among other factors, these buildings lack the proper insulation needed to keep heat in (or, in the summer, out). Therefore, they need higher flow temperatures to deliver the same level of indoor comfort. Needless to say, getting that higher temperature requires more energy.

This highlights the correlation between energy efficiency and energy use. With heating and cooling responsible for an estimated 35% of a building’s total energy consumption, increasing a building’s energy efficiency can go a long way in reducing fuel use.

In other words, the more efficient the building, the more energy saved. As these savings means less energy needs to be produced, energy efficiency should not only be included in the energy mix but given equal footing to other fuel types.

CAPACITY CHALLENGE

To see why energy efficiency must be at the centre of the energy mix, one needs only to look at the EU’s goal of installing 30 million heat pumps by 2030—part of its REPowerEU policy package to phase out the Union’s dependency on Russian fossil fuels.

Heat pumps use electricity to concentrate heat potential and are comparatively more energy efficient than gas boilers. It, therefore, stands to reason that replacing gas boilers with electric heat pumps would reduce both Europe’s dependence on foreign gas and its building stock’s total emissions. Unfortunately, this is easier said than done.

While heat pumps are a key part of Europe’s energy transition, shifting domestic heating from gas to electric creates a capacity challenge: in a decarbonised grid, there simply is not enough renewable energy to meet demand.

This challenge becomes even more acute when looking at seasonal impacts, such as winter peaks. With heat pumps, overall electricity demand for electric heating would increase by 356 terawatt-hours per year (TWh/year). However, the additional generation capacity needed to deliver this demand, due to winter peaks and generation troughs, would be 2129 TWh/year. That is nearly a fivefold increase over the current electricity supply.

AN ALTERNATIVE APPROACH

Traditionally, we would meet such an increase in demand by producing more energy. However, doing that sustainably—via renewable sources—would require significant investment into new energy capacities and infrastructure, resulting in an increased risk of blackouts and soaring energy system costs.

It would also mean meeting the higher demand by using an energy supply that is more intermittent and that cannot be scaled up in response to demand.

An alternative approach is to retrofit those inefficient buildings so they are energy efficient and heat-pump ready—this starts with insulation. A well-insulated home will slow heat loss to the outside, allowing the water flow temperature to go as low as 35°C and still deliver a warm, comfortable home.

According to the Building Performance Institute Europe (BPIE), insulating a home’s attic and roof could save up to 14% of residential heating energy. This translates into annual energy savings equal to 26  billion cubic meters of fossil gas saved or about 16.77% of the EU’s 2021 imports from Russia.

Another recent BPIE analysis shows that rolling out building insulation in Germany, France, Slovakia, Slovenia, Czechia, Italy, Poland and Romania would lead to a 44% reduction in natural gas and save 45% of final energy demand for heating residential buildings in those countries.

FUEL OF CHOICE

What these numbers make clear is just how essential energy efficiency is to the energy transition. Without energy-efficient buildings, there is no foreseeable way forward to reduce our dependency on fossil fuels or achieve our climate goals.

Given its proven capability to serve as an alternative to new power capacity, energy efficiency deserves a front-row seat within EU energy policy.

A good place to start is to designate energy efficiency as the fuel of choice in all EU and national energy mixes. This would prioritise retrofitting buildings, thus ensuring all buildings are properly insulated and ready to support electric heating solutions and, as a result, Europe’s climate and energy ambitions. •

If you have a thoughtful response to the opinions expressed here or if you have an idea for a thought leadership article regarding an aspect of the global energy transition, please send a short pitch of 200 words outlining your thoughts and credentials to: opinion@foresightdk.com.