Germany’s energy policy is one thing right: efficiency – POLITICO

Martin Rossen is Senior Vice President of Communications and Sustainability at Danfoss and former Chief of Staff to the Danish Prime Minister’s Office.

Europe’s energy future depends not only on its ability to produce more renewable energy, but also on reducing demand through improved energy efficiency.

Europe’s energy problem is very simple in nature. There will not be enough energy to meet demand in the near future. The European Union and its member states are all net importers of energy, as is the UK, with more than half of the EU’s energy needs met by imports.

But the only country that seems to have taken an approach that addresses both the supply and demand sides of the energy problem is Germany, and others could follow its example.

For years, Europe seems to have forgotten that energy is a scarce resource. But this suddenly changed when Russia invaded Ukraine earlier this year. Energy scarcity is now a backdrop for governments across the continent as they seek to assess energy scarcity scenarios and build portfolios of corresponding policies.

While the initial response to the energy crisis focused on storing gas, especially LNG, and diversifying its fuel sources, current policies are gearing up to help businesses and citizens survive the winter by rescuing soaring energy sources. We focus on taking the pressure off the price. But the big question is whether it will survive the next winter.

Few policies currently target the underlying challenge of reducing energy demand by improving energy efficiency.

Samantha Dart, senior energy strategist at Goldman Sachs, says most policies now address affordability issues, but Europe has energy shortages and will focus on curbing demand. Similarly, Jason Bordoff, director of the Center for Global Energy Policy at Columbia University, argues that European countries can improve their energy efficiency to improve competitiveness and energy security. We should pursue policies that increase energy efficiency and ease the path to green energy.

Over the past few months, the International Energy Agency (IEA) has repeatedly called for significant improvements in energy efficiency. Meanwhile, the Organization for Economic Co-operation and Development recommends policy interventions that weaken incentives to reduce consumption. Supporting improved energy efficiency.

Worryingly, however, what is currently happening in European capitals does not reflect the opinions of these experts.

The Bruegel Institute, a Brussels-based think-tank that tracks government responses to the energy crisis and related spending, says that European countries are taking steps to cut home and business energy taxes, subsidize energy bills, and increase energy production. found spending billions of euros on A much smaller percentage, if any, is spent on energy efficiency programs.

As an example, the UK government just recently announced a £1.5 billion program to improve energy efficiency for low-income households. This figure is smaller than the £150bn program to freeze annual household costs for electricity and gas. Additionally, the UK has now dropped plans to roll out an energy distribution campaign in preparation for winter blackouts.

However, programs to improve energy efficiency are not driven solely by government spending. They are also shepherded through provisions that promote private behavior. It is true that these policies are difficult to understand, but at present few countries appear to demand energy savings in exchange for energy tax cuts or subsidies.

And even when the focus is on the demand side, it’s mostly about promoting behavioral change, such as begging citizens to turn off their lights, or rules requiring lower temperatures in public buildings. Such policies, of course, have a role to play in managing the serious energy crisis. They’re cheap, even free, and they keep demand down.

At the time of writing, however, the only real exception to these supply-oriented strategies is Germany. Right at the center of the energy crisis, its energy policy has been called everything from naive to disastrous.

Germany is currently the only country with real plans to permanently reduce energy demand. Its goal is to reduce gas consumption by 20% and includes a series of energy saving provisions for both businesses and government agencies.

These include essential heating system maintenance and optimization. This will require landlords of gas-heated buildings to carry out respective inspections within the next two years. Owners of large buildings are obliged to perform hot water balancing, a process that optimizes the flow of water in the heating system. Also, if energy usage exceeds 10 gigawatt hours per year, companies are obliged to implement small efficiency measures with a payback period of less than three years.

The cumulative effect of these efforts is enormous.

A total of 21 terawatt hours (TWh) could be saved just by optimizing the heating system.To put it in co

According to ntext, electricity consumption across Belgium, a medium-sized European country, was 83 TWh in 2021. The financial conclusion is that optimizing the heating system will save 4.2 billion euros in energy bills annually.

With this approach, Germany is likely to emerge from the energy crisis as a greener and more efficient economy, and other European countries could benefit as well. After all, if governments really want to fight energy inflation on an energy-starved continent, improving efficiency is the best solution.

By taking advantage of the energy crisis to improve energy efficiency, countries can gain three benefits. Improves energy security. And ease the way to renewable energy systems.

The good news is that the solution is out there. Now just push.

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