Raising the priority for industrial energy efficiency

Energy Efficiency

I

20 November 2017

I

Rod Janssen

Energy efficiency policy certainly follows an interesting path, perhaps more so for the industrial sector. Europe has been experimenting with how to unlock the potential of industry so that all European society benefits and improving its energy performance is considered a key. Yet, it has largely left it to the Emissions Trading Scheme that is designed to reduce carbon emission and not necessarily improve energy efficiency. 

But, increasingly more and more realise that improving efficiency is fundamentally important, in large part for the non-energy benefits: improved competitiveness, improved products, job creation, leadership in innovation of technologies and so on.

As one colleague, Hans Nilsson, is always willing to point out: energy efficiency is not difficult but it is complicated! It is complicated in the policy developments at the EU and national levels. It is complicated within industrial organisations where many within the management structure have different views of the importance of improving efficiency.

There has also been a problem in that there has been far too little discussion on industrial issues at the European level related to policy developments. This is increasingly a problem because the European Commission’s November 2016 “clean energy package” proposal that is now going through the final stages of the approval process was largely devoid of any new initiatives for industry.

All is far from lost. While there are several good initiatives on the ground, I would like to refer to two. 

Only this week, I was fortunate to participate in the abstract selection for next year’s eceee industrial efficiency 2018 . I am one of the co-chair. Industrial Efficiency 2018 offers a mix of formal presentations and informal events as well as great networking.  It will be held next June in Berlin. The abstract selection meeting showed a vigour and level of commitment that was most encouraging.  And, as a major plus, it became obvious there are going to be some very good papers delivered next year.

Altogether there will be about 100 presentations, many in the form of peer-reviewed papers. The importance of these papers is that they provide needed evidence about what is happening and what should be happening in industrial energy efficiency and the circular economy. They should be a wake up call that there is need for more policy development, more policy analysis and more targeted programmes. It is important that the “evidence” presented gets well known by the EU institutions and stakeholders.

Separately in October, a special and unique event took place in Brussels: industry raised its voice to express the importance of all efforts to promote improvements in their energy performance. Key is in improving the flow of investments. The event was under the Energy Efficiency Financial Institutions Group (EEFIG) , established in 2013 by the European Commission Directorate-General for Energy and United Nations Environment Programme Finance Initiative.

EEFIG provides an open dialogue and work platform for public and private financial institutions, industry representatives and sector experts to identify the barriers to the long-term financing for energy efficiency and propose policy and market solutions to them.  While EEFIG covers both the buildings and industry sectors there was a growing concern amongst industry representatives that it was not able to adequately air its views.

In the October roundtable, more than 70 participants discussed two themes:

The first theme on recent trends in financing industrial energy efficiency, challenges and solutions to Them looked at efforts to de-risk investment and there were many good examples provided. It also considered how to get industry to consider investments in industry efficiency as strategic investments as they do for many of their other investments that increase production. 

The second theme – was on moving forward – how to further improve the industrial energy efficiency, and make It more accessible to SMEs. The 2012 EU Energy Efficiency Directive (EED) provided many measures to encourage industrial energy efficiency: mandatory audits for large industry, promotion of energy management systems and supporting SMEs. Now, it is a matter of how to ensure cost-effective measures are identified and implemented. Also it is important to know what can be done to encourage private investment in industrial measures and to have some understanding of what the impact was of the mandatory audits under the EED. The discussion was robust and it highlighted that it is important for focused discussions on aspects of industrial energy efficiency.

This is less common in Brussels than it should be. There was a very good discussion about the need for transparency:  amongst companies to share experience in improving efficiency as well as within companies between management and the technical teams. Importantly, the energy efficiency networks well known in countries such as Switzerland, Germany and Sweden were shown as an important approach for improving transparency.

While there were other themes discussed, importantly, everyone learned something. There were many examples of financial instruments or experience at the factory level that surprised most of us since these were new revelations. 

Final comment

Remember those words above: everyone learned something.  Both the eceee industry event and the EEFIG event highlight the need for more discussion, more evidence of best practice, good practice and, sometimes, some mistakes. Industry has an important role in helping Europe meet its Paris climate agreements through improved energy performance. It is also important that policymakers appreciate the full range of benefits to our economies from improving industry’s performance. But to make it work, there is a role for policy. There is a role for significantly more initiatives. The signs are increasingly more encouraging. Yes, improving energy efficiency is not difficult but it is complicated. And it is quite fascinating.

Related articles

Best ideas for Energy Efficiency

Sign up for our monthly newsletter and stay connected to the best ideas in energy efficiency finance, -managment, -recovery, -IoT, -blockchain, - Virtual Reality

About the Author

Rod Janssen is the President of Energy Efficiency in Industrial Processes (EEIP).