6. Progress of the European Union towards its energy efficiency targets

6.1 Current progress in reducing energy consumption

The European Union (EU) is currently on track to achieve its target of improving energy efficiency by 20 % by 2020. In 2014, it had reduced its primary [1] and final [2] energy consumption by 12.0 % and 10.9 %, respectively, compared with 2005 levels. According to preliminary estimates from the European Environment Agency (EEA), the EU’s primary energy consumption increased slightly in 2015 (by 1 % compared with 2014) and final energy consumption increased by 2.5 % (EEA, 2016a and 2016b).

The Energy Efficiency Directive (EED) defines the EU energy efficiency target for 2020, which can be expressed in terms of either primary energy consumption or final energy consumption (EU, 2012). Meeting the target will require energy savings of 20 % from levels projected for 2020 in the Commission’s Energy Baseline Scenario (EC, 2008). The present analysis tracks progress towards the 2020 targets by measuring energy consumption against 2005 levels. Using this reference year allows consistency in the assessment towards 2020 climate and energy targets across the whole report, since 2005 is the base year for expressing national greenhouse gas (GHG) targets under the Effort Sharing Decision (ESD), as well as national targets under the Renewable Energy Directive (RED). The year 2005 is also a relevant starting point for monitoring trends in energy consumption, since, along with 2006, it is one of the two years in which EU energy consumption reached its highest levels ever.

The EU’s 2020 target expressed in terms of final energy consumption corresponds to an 8.8 % reduction from 2005 levels. In 2014, the EU had reduced its final energy consumption by 10.9 % compared with 2005 levels, to levels below the target set for 2020. This corresponds to an annual decrease of 1.2 % per year on average (see Figure 6.1).

The decrease in final energy consumption between 2005 and 2014 was influenced by a number of factors, such as structural changes towards less energy-intensive industrial sectors, improvements in end-use efficiency, lower energy consumption in the transport sector, as well as the economic recession (Odyssee-Mure, 2015). Furthermore, final energy consumption decreased by 4.1 % in just one year, between 2013 and 2014. The year 2014 was exceptionally warm, which resulted in less demand for heating in Member States than in previous years.

The EU’s 2020 target expressed in terms of primary energy consumption is equivalent to a 13.4 % reduction from 2005 levels. In 2014, the EU’s primary energy consumption was 11.8 % lower than in 2005. The average annual reduction in the EU’s primary energy consumption between 2005 and 2014 (of 1.3 % per year) was more than the average annual reduction required to achieve the 2020 target (of 0.9 % per year between 2005 and 2020). In other words, in 2014, the EU’s primary energy consumption was below an indicative linear trajectory drawn between the actual consumption level in 2005 and the targeted level for 2020. According to preliminary estimates from the EEA, the EU’s primary energy consumption slightly increased in 2015 (by 1 % compared with 2014), although it still remained below the indicative linear trajectory (EEA, 2016b).

The 12 % decrease in primary energy consumption between 2005 and 2014 was largely driven by the reduction in final energy consumption observed during that period. The other factors that contributed to this decrease are related to the production of final energy (e.g. electricity and heat) from primary energy as follows:

• The efficiency of the conversion of primary sources (e.g. coal and gas) into final energy has improved.
• There have been changes to the fuel mix for the production of electricity and heat:
  • The proportion of thermal generation (excluding combined heat and power (CHP)) has decreased.
  • The proportion of nuclear energy has decreased: the conversion efficiency of nuclear technology is considered lower than the average efficiency of thermal generation, so a decrease in the proportion of nuclear energy statistically improves the overall conversion efficiency of the energy system.
  • There proportion of renewable sources for electricity production (such as hydro, solar photovoltaic, wave and tidal, and wind) has increased: these renewable energy sources are considered to have 100 % transformation efficiency, so an increasing proportion statistically improves the overall conversion efficiency of the system. The increase in the consumption of renewables from 2005 — and the subsequent substitution of fossil fuels — is estimated to have contributed to a 2.0 % reduction in primary energy consumption in 2014 (EEA, 2014).

Figure 6.1       Primary and final energy consumption in the EU, 2005–2015, 2020 and 2030 targets

Note:      The 2020 target represents energy savings of 20 % from levels projected for 2020 in the Commission’s Energy Baseline Scenario (EC, 2008). The indicative 2030 energy efficiency target represents an improved energy efficiency of at least 27 % compared with 2030 projections in the same Energy Baseline Scenario.

Source: EC, 2008; European Council, 2014; EEA, 2016a and 2016b; Eurostat, 2016a, 2016b and 2016c.

6.2 Projected progress towards the European Union's 2020 energy efficiency target

No mechanism currently requires Member States to regularly report projections of their energy consumption levels. Assessing the projected progress of Member States ‚— and subsequently of the EU — towards their energy efficiency targets based on Member States information, as is done for GHG emissions, is therefore not possible.

The EU will achieve its 2020 target on energy efficiency if the average annual decreases in primary and final energy consumption observed between 2005 and 2014 are maintained until 2020. This, however, may prove challenging considering the potential effects of an economic recovery and demographic trends on future energy consumption trends.

In its assessment of progress made by Member States towards the national energy efficiency targets for 2020, the European Commission concluded that, despite the achievements of previous years, additional efforts are needed, particularly in the building, transport and generation sectors. To close the remaining gap between current levels and the 2020 primary energy consumption target, Member States should accelerate their efforts in order to achieve their national energy efficiency targets for 2020, or go beyond them.

6.3 The 2030 targets on energy efficiency in the context of Energy Union

In October 2014, the European Council endorsed an indicative energy efficiency target of at least 27 % for 2030, in comparison with the 2020 Energy Baseline Scenario target of the European Commission (European Council, 2014). This Energy Baseline Scenario, based on the Price-driven and Agent-based Simulation of Markets Energy System Models (PRIMES), was used to set the 20 % target for 2020 (EC, 2011).

A 27 % improvement of energy efficiency by 2030 corresponds to:

• a primary energy consumption of 1 369 Mtoe in the EU, which is 20 % lower than in 2005 — this level corresponds to an average annual decrease of 0.8 % per year between the 2020 target and 2030 (compared with a 0.9 % average annual decrease between the 2005 level and the 2020 target);
• a final energy consumption of 1 039 Mtoe, which is 13 % lower than in 2005 — this translates to a 0.4 % average annual decrease between the 2020 target and 2030 (compared with the 0.6 % average annual reduction between 2005 and the 2020 target).

Considering this, actual reduction targets for 2030 are less ambitious than those for 2020 because the average annual reduction rates are lower than those required for the achievement of the 2020 targets. A 27 % energy efficiency target could be reached by 2030 by continuing, beyond 2020, the efforts made to reduce the EU’s primary energy consumption between 2005 and 2020. Achieving the final energy consumption target in 2030 requires only a 2.2 % reduction from 2014 levels.

The target will be reviewed in 2016, following a review of the EED. A 30 % improvement of energy efficiency by 2030 would correspond to a 23 % decrease in primary energy consumption or to a 16 % decrease in final energy consumption, compared with 2005. Individual Member States are also free to set their own higher national targets.