10 Reasons to make Efficiency First operational Why we need to put E1st into practice

The primacy of energy efficiency originates from the basic laws of physics: according to the second law of thermodynamics, each time energy transfer takes place, total entropy increases. As increasing entropy, by and large, entails one sort of environmental impact/pollution or another, and valuable resources for humanity are well correlated with high entropy systems, the most important strategy to prevent environmental impacts related to energy production and use is to minimise the need for it. “The only truly sustainable kWh is the kWh never produced” – is a regular motto in environmental curricula.

E1st comes down to prioritising investments in energy efficiency -– whether end-use savings and demand response to energy supply side – whenever they would cost less or deliver more than investing in supply or networks. Applying this logic to all energy policy decisions can strengthen Europe’s economic recovery, lower fuel imports, build competitiveness, create jobs, improve air quality and bring down the costs of the transition to a low-carbon society.

On the demand side, investments in efficient solutions are impeded by numerous market barriers to individual action; and on the supply side, industry traditions, direct and hidden subsidies to fossil fuels and nuclear, business models and regulatory practices have frequently favoured, and continue to favour, supply-side energy infrastructure and sales over lower sales and energy saving technologies.

From wholesale energy markets to the individual household or industrial site, it is a combination of end-use efficiency (e.g. better insulation, windows and heating systems and smarter household appliances), supply-side efficiency (e.g. combined heat and power generation, reduction in transmission and distribution losses) and system efficiency (e.g. demand response).

It has been informed by approaches developed in the United States starting in the late 1970s and extending to today and a range of geographies. This matters because many promising ideas and approaches have been developed and implemented in a variety of countries around the world: it is worth reviewing this experience and the lessons-learned for implementation in Europe.

The European Commission expressed the opinion that it is time for policymakers to catch up with what is happening on the ground: “To make Efficiency First a reality, we need to embed the principle into our models and impact assessments, funding and infrastructure decisions, and into all energy and climate policies” said former European Commission Vice President for Energy Union, Maroš Šefčovič. Policymakers should start prioritising and facilitating investment in managing energy consumption to unlock more private finance, boost energy productivity and accelerate a return to growth and an energy infrastructure that will be in line with the Paris Agreement.

I.e. to: (i) always consider it on a par with other options, from renewables to grid reinforcements and (ii) systematically using efficiency to frame how Europe plans, finances and delivers its energy system.

E1st is a powerful approach to energy policy that could save families and businesses billions of euros in energy costs annually, improve energy security, and accelerate progress toward Europe’s goals for carbon reduction and a clean energy economy. The benefits of energy efficiency should be adequately taken into account in financial and political planning and decision making.

Innovating how the same or even higher levels of energy services can be supplied by equal or lower amounts of energy is at the core of reaching ambitious climate targets, among others.

For the EU, 76% of the additional greenhouse gas emission reductions would need to be delivered through energy efficiency according to the IEA. To achieve such a prominent role for energy efficiency, the European Union has adopted the principle of ‘E1st’ through the launch of the Energy Union Communication in February 2015, as one of its five pillars.