Incentives and Smarter Technology Will Help Europe Meet Energy Efficiency Goals

Innovative technology solutions and a more detailed utility bill will change consumption patterns.
Published: Fri 31 Oct 2014

In this live studio interview with Paul Hodson, head of unit, energy efficiency, directorate-general for the European Commission (EC), at the European Union Sustainable Energy Week, Engerati asks whether Europe’s current regulatory framework is effective in attaining desired energy efficiency levels.

Energy efficiency obligations

Hodson explains that the EC works with member states and a number of them work through energy efficiency obligations on utilities- either distribution system operators or electricity suppliers. Through this, they can expect to obtain savings among their consumers. He says, “It has been possible, within the existing regulatory framework, to introduce those obligations which work and are one of the most powerful ways of attaining energy savings in buildings in the residential sector.”

He adds that the EC also wants to encourage peak shifting for energy efficiency: “We want people to adapt their consumption to electricity market prices and because people don’t perceive those prices, they don’t have the incentive to make the necessary changes.”

Changing consumption patterns

While it is clear from the electricity system, as a whole, that there is every incentive for people to reduce or transfer their consumption when the price is high, it is still not being done. To instigate this move forward, Hodson believes that the following must be in place:

  • Smart household appliances

  • Smart meter

  • Consumer rights and data protection to instill confidence

  • Rights for aggregators to sell peak shifting into the balancing market and you need incentives which will come from differentiated pricing.

While the EC is working on the abovementioned list, Hodson says that it remains to be seen whether this will enable peak shifting. In addition to the proposed smart technology, he adds that more regular and detailed billing will also help to alter consumption patterns.