by Roger Milne

Achieving a new legally binding energy efficiency target agreed last week by the European Union will involve a new obligation on energy supply companies that they will find “challenging” to meet, the ­sector has warned.

That’s the view of Energy UK now that Europe has agreed a new Energy Efficiency Directive designed to reduce energy consumption and dependence on imported fuels. It is estimated that the directive will reduce primary energy consumption by just over 58 million tonnes of oil equivalent by 2020. This represents less than 40 per cent of the Commission’s initial plans.

The directive sets out measures to achieve a 17 per cent cut in energy consumption by the end of this decade rather than the 20 per cent goal initially proposed. Environmental campaigners have complained that this lacks ambition and reflected heavy ­lobbying by some countries, ­particularly the UK government.

Member states face a legal obligation to establish energy efficiency schemes for households, industries and transport or bring in policies to drive efficiency improvements. Governments will also have to improve efficiency in electricity generation, transmission and distribution, and in public sector buildings. The measures encourage greater deployment of combined heat and power projects.

A key element of the original package was an obligation on energy suppliers to cut energy use year on year equivalent to 1.5 per cent of annual sales. Campaigners have estimated that the final package will mean that figure is closer to between 1 and 1.25 per cent

of sales.

Energy UK chief executive David Porter told Utility Week that the outcome of the negotiations was a reasonable compromise compared with the initial proposals.

He said the new obligation on suppliers was “challenging” and would be “hard to deliver”.

This article first appeared in Utility Week’s print edition of 22 June 2012.

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