Ordinary consumers were often forgotten in the debate over the Energy Efficiency Directive that was passed by MEPs last week – and some fundamental flaws meant it fell short of what it could have achieved
An overwhelming majority of the European Parliament passed the Energy Efficiency Directive last Tuesday. This vote concluded – for the parliament – what was an occasionally tempestuous debate between supporters and opponents of stricter energy efficiency measures. During this debate, energy consumers were too often kept on the sideline.
Efficiency has to be a cornerstone of a 'consumer-centric' energy policy. Saving energy is the single most effective measure to reduce our energy consumption and lower our energy bill. It helps meet the double objectives of cutting CO2 emissions and tackling the towering energy costs that have become a major concern for consumers across Europe.
Amid the bickering over a binding energy efficiency target and renovation goals for public sector buildings it went largely unnoticed that the directive made provisions on many very straightforward consumer issues such as metering and billing information, energy services, as well as consumer information and empowerment programmes. For the European Consumer Organisation, or BEUC, a final assessment of this directive must therefore look beyond the long-term efficiency achievements and focus on how consumers will actually manage to save energy and cut costs.
One of the main aspects of this new law is the introduction of an energy saving scheme for utilities, requiring energy companies to make yearly savings amounting to 1.5 per cent of their annual sales. Throughout the negotiation period, BEUC sought particularly strong financial monitoring provisions that would require energy companies to report the costs they pass on to consumers under these schemes and assign national regulators to regularly review the impact the schemes have on consumers' energy bills.
The directive as passed by the parliament last week did not reflect this standpoint. Consumers therefore risk losing out twice. First, it is crystal clear that energy companies will pass on the cost of this scheme to customers. Secondly, the legislation gives the energy sector a free hand to make the required savings by the means most convenient to them. To provide any consumer benefit, savings under this scheme should be made in a transparent and cost-effective way.
A second aspect which raises major consumer concerns is that of smart meters. Although the new rules do bring useful obligations such as ensuring meter data is understandable and comparable, the directive marks another misguided milestone on the hasty roll-out of smart meters across Europe. The final text states that when a connection is made in a new building – or when it undergoes major renovations – smart meters must be installed.
The fundamental point is that lawmakers pressed ahead with a system which we believe offers few benefits to consumers who want to reduce their energy consumption. Our research shows that smart meters will only benefit some households. For instance, households with low consumption rates or vulnerable consumers with financial constraints who already limit their energy use would be unable to make additional savings.
Moreover, smart meters will lead to much lower savings than those claimed by the industry. Our research predicts a best-case scenario of a 2-4 per cent energy reduction per year – and only if consumers are given the right monetary information, something that has not been achieved. Another fundamental flaw is that accurate bills have not been made mandatory for smart meter owners. This is unacceptable as receiving accurate bills is the foremost and most veritable consumer benefit of smart meters.
This directive is an important, if imperfect, pillar of Europe's efforts to reach the EU's 2020 energy efficiency target. But a regrettable lack of ambition has left many consumers who need support to become more energy efficient in the dark.
Monique Goyens is the director general of the European Consumer Organisation, which published its full study here