The Never Ending Fight with Climate Targets

Evzen TosenovskyI have already written many times about the proposed measures, which will include several cost-effective initiatives that will achieve an increase in the energy efficiency of the energy production, electric appliances, transport or buildings. I have also many times shaken my head about the constant flow of ideas from some of my colleagues; mostly from the left and green political spectrum of the European Parliament. The end of the last year was overshadowed by the Eurozone crisis, nevertheless we should even more pay attention to the slowly returning topic of climate targets and therefore to interventions in fundamental market principals, which have been responsible for the prosperity in most of Europe. The more it becomes clearer that Europe is the only contender in the contest for the most ambitious climate target, the more generous and controversial targets are agreed on. For the now well known 20% target of energy savings until 2020 new instruments have been created for its realization. For example we can mention the European Commission’s directive proposal on energy efficiency. The proposed text implies that the main objective of the proposal is to decrease energy consumption; this is higher energy savings and not energy efficiency as such. As a result the technical and technological opportunities are not taken into account, which would not affect the GDP growth. I see as a main problem, the fact that energy traders or transmission system operators are forced to decrease each year the energy consumption of its end-users by 1.5% from their market share. This step would be either against the functioning of the market economy (it is not wartime, when energy supplies are allocated) or against the constitutional law–nobody can force the consumer to decrease its energy consumption. In the directive the energy companies are encouraged to motivate their end-users to decrease their energy consumption. For example by changing the old boiler for a new and a more efficient one or by including thermal insulation on buildings–here again the European Commission artificially intervenes in the market-based environment.

When reading the proposal I also came across the excessive emphasis on the obligatory use of waste heat in new and current industrial facilities. For me this method is problematic in many ways. The proposal wants to achieve a decrease in primary energy consumption in the EU at any price. However this would be in contrast with some of the main EU goals such as competitiveness and protection of the environment. The European Commission’s proposal is not acceptable for me mainly because it forces the Member States to intervene in their market mechanisms, which would lead to a reduction of competitiveness in the energy production sector. Therefore the EU risks to regularly increase the end-user prices, which would have negative effects on the European industrial competitiveness, not to mention the rise in new bureaucracy.  The other reason why the European Parliament should redraft this proposal on energy efficiency is because the proposal is based on incorrect calculations of social engineers in the area of installations that combine heat and electricity. They claim that the co-generation facilities can achieve 70-80% efficiency as opposed to the current 40% efficiency of the thermal power plants. The success of combined production can only become a reality if its driven by the demand for heat. The size of the power plant is also not taken into account–the bigger the power plant the higher efficiency it can have. What is however most important is that the provision of co-generation facilities are and should be decided by market forces. The question thus is how the European Commission will solve the ecological limits of town housing developments and at the same time force the energy producers to move closer with their facilities to new housing locations?

The proposed directive includes several other similar controversial points. I strongly hope that the final version of the directive will take into account many of the objections. Unfortunately the trend looks to be rather the opposite.

The current news on the fulfilment of the energy efficiency target do not represent in my view the reality. The European Union is proud of the results, which it has achieved until present in the area of higher energy consumption effectiveness. However it does not talk about the primary reason that has influenced the current levels.  The main driver was not the higher efficiency or better effectiveness in consumption of this commodity, but the substantial decrease in productivity of the European economy. These facts have great influence on the final number, which the representatives of the European Commission proudly present.

By Evžen Tošenovský

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Category: CONTRIBUTORS, Evžen Tošenovský