The Energy Efficiency Directive 2012 (EED) was brought into force on 4 December 2012. It introduces binding measures for energy efficiency on the public sector and industry and covers the entire energy chain from generation and transmission to end use.
The UK and other EU member states have to implement the EED by 5 June 2014.
Renovation of buildings
The EED will require EU member states to establish a long-term strategy for investment in the renovation of residential and commercial buildings with the aim of improving their energy efficiency.
Public bodies specifically will be required to lead by example in ensuring that 3% of the total floor areas of heated or cooled buildings owned by central government are renovated each year to meet minimum energy performance requirements (or take other cost-effective measures in other eligible buildings), and that inventories of such buildings are set up.
Energy suppliers and regulatory authorities
Each member state will be required to set up an energy efficiency obligation scheme to ensure that certain energy distributors and retail energy sales companies achieve a cumulative end-use energy savings target by the end of 2020 (or take other policy measures to achieve energy savings).
The directive will also require member states to ensure that national energy regulatory authorities (such as Ofgem in the UK) pay due regard to energy efficiency in carrying out their regulatory tasks.
Energy audits and reporting
Each member state is required to promote energy audits and all large enterprises will be subject to independent and cost effective energy audits to be reported at least every four years. Small and medium sized enterprises and enterprises implementing an energy or environmental management system will be exempt.
If member states consider their national level of technical competence and reliability in energy efficiency is insufficient, they will be required to ensure that certification, accreditation and equivalent schemes are available for providers of energy services, audits, managers and installers by December 2014.
Promotion of cogeneration and district heating and cooling
By 2015 member states will be required to carry out and notify to the European Commission a comprehensive assessment of the potential for high efficiency cogeneration (the generation of electricity and useful heat jointly) and efficient district heating and cooling.
They will be required to implement policies that encourage taking into account at both local and regional levels the potential for efficient heating and cooling systems, to take measures to ensure development of such infrastructure and to undertake a cost benefit analysis to identify the most resource and cost efficient solutions to meet heating and cooling needs.
Barriers to energy efficiency
Where appropriate, member states will be required to take measures to remove regulatory and non regulatory barriers to energy efficiency. These can include providing incentives, repealing or amending legal or regulatory provisions, or adopting efficiency guidelines.
Member states will also be required to facilitate the establishment of financing facilities, or use of existing ones, for energy efficiency improvement measures.
Monitoring member state progress
To ensure co-operation with the above measures each member state will be obliged to set an indicative national energy efficiency target and to report to the Commission annually on progress towards these targets.
With a view to achieving such targets, from 2013, by 30 April each year member states will be required to report on their progress achieved, and by 30 April 2014 they will be required to submit National Energy Efficiency Action Plans.
The EED also contains a host of other measures including:
- an obligation on the public sector to purchase energy efficient products, services and buildings
- improvements to metering and billing information
- a requirement to promote the energy services market
When implemented, these measures will translate to an increased focus on energy efficiency and additional compliance costs for businesses. There could also be an impact on the value of inefficient building stock.
When coupled with the minimum energy standards provided for in the Energy Act 2011 (see 'Will an EPC rating of F or G prevent a letting?') best advice is to consider energy efficiency sooner rather than later.