Efficiency First must tackle implementation issues to be effective
(EurActiv, 6 Oct 2020) Efficiency First policy needs to be effectively applied across the EU in order to meet decarbonisation goals, writes Zsuzsanna Pató and Jan Rosenow.
Zsuzsanna Pató and Jan Rosenow are from the Regulatory Assistance Project, an NGO focusing on policy to accelerate the transition to a clean, reliable and energy efficient future.
As is the case in many countries in Europe, households in Great Britain can benefit from public subsidies if they install renewable heating systems. This is not surprising given that heating our buildings results in about 20% of the nation’s carbon emissions. What is surprising, though, is that the amount of subsidy you receive is higher if your home is less energy efficient.
The subsidies are based on the expected heat demand – the less efficient the building, the more expected heat demand, and the bigger the subsidy payments. This perverse incentive has led installers of renewable heating systems to advise their customers to put energy efficiency measures last instead of first. As a result, energy is supplied that it would be cheaper to avoid, a heating system is installed that is more expensive than necessary, subsidies are paid in excess of what is needed, and heat demand is not aligned with energy system needs but with the subsidy system. This is a shining example of how disjointed policy making can lead to unnecessary and undesirable consequences.