The Potential Market for Energy Efficiency Services in the EU
Paolo Bertoldi
European Commmission. Direction Générale XVII, Energie
Rue de la Loi 200, B-1049 Bruxelles, Belgium
Abstract
Although nowadays the attention on energy efficiency is generated by the climate change debate and by the need to reduce CO2 emissions, we should not forget that energy efficiency is economic, i.e. users can get the same service (e.g. lighting, heating, cooling, etc.) for less money and in addition users can also enjoy a better service.
So why doesn?t everybody in the domestic and commercial sector embrace energy efficiency? This has been explained in terms of barriers to the penetration of energy efficiency. These barriers include lack of information, lack of expertise, split incentives and lack for capital for investment in energy efficiency.
At the same time as the climate change debate goes on, the other major activity of the EU energy policy is the liberalization of the electricity and gas markets. In this respect, a milestone has been reached with the electricity internal market Directive adopted in December 1996. Although some countries had already introduced an extensive market liberalization, now all fifteen Member States shall proceed with the same market opening. The Directive has already proven to be a catalyst, inducing liberalization in Member States even earlier than had been anticipated. One of the key messages that market liberalization will pass on to utilities is : ?put your customers at the centre of your corporate strategy?. Although competition might result in the short run in cheaper electricity prices, utilities will soon start to realize that added value services will be the key to retain their customers and to win new ones. Utilities will transform themselves from a commodity supplier to service supplier. What customers want are services (e.g. lighting, heating, cooling, etc.) and electricity or gas are only the means to provide these services. Yet the majority of utilities have concentrated their strategy on the carriers of the services, they have remained trapped in the belief that "the meter is their customer".
In the EU today there is a large potential for energy efficiency improvements especially in the domestic and commercial sectors. In the commercial sector lighting upgrading offers a large potential for the reduction of electricity bills. Utilities and Energy Services Companies (ESCOs) have a unique opportunity to fill this gap and help commercial customers to overcome barriers to lighting upgradings. The European Commission has been promoting energy services and "third party financing" for a number of years through the SAVE programme. to further promote energy efficiency in the commercial sector the Commission is now investigating the feasibility of a European "Green Lights" programme.
In the future we expect to see energy services to become common practice and part of the utilities? customer services in all Member States leading to more efficient and higher quality lighting system at more affordable prices.
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