In Europe the top barriers to implementing the decision-making principle of “efficiency first” in energy system planning and policymaking turn out to be lack of political will, lack of expertise and awareness, professional cultures, die-hard personal habits, and overarching regulatory structure.

That’s according to a survey of 45 experts in energy efficiency in buildings, infrastructure, and planning from across Europe undertaken by the Enefirst consortium.

The principle of efficiency first has been supposedly enshrined in EU legislation since 2018. It’s meant to give priority to demand-side measures whenever they are more cost-effective from a societal perspective, instead of automatically making investments in energy infrastructure.

Giving it priority would mean it would be applied systematically to all energy-related investment planning. However, to date, it has yet to be systematically and effectively implemented.

According to Senta Schmatzberger, a researcher for the report, a broader understanding of the benefits of putting efficiency first is needed to make this happen.

“The barriers are reinforced by a lack of knowledge about the benefits of putting efficiency first beyond energy savings for end-users, and particularly, its benefits for society as a whole,” she said.

Political barriers were seen as paramount and the survey participants have called for a proactive dissemination of good practices and case studies.

But financial barriers were also considered significant. These include lack of awareness and knowledge amongst funders and banks.

The multiple benefits of efficiency first are hardly understood at all, despite being one of the chief selling points – but they require a broader type of cost-benefit analysis or similar assessment to be appreciated.

The barriers can be seen everywhere around the world, so making it a common practice would require a cultural change along the whole chain of actors.

While some cultural barriers are related to actors’ own habits and practices, others are about breaking silos (for example, between supply-side and demand-side experts in energy companies, between craftsmen of various building trades).

Best practice

The report is accompanied by a review of 16 best practices from across Europe and the US about how to directly address the barriers. They include:

• Using Time-of-Use tariffs to spread demand round the day
• district heating networks
• demand response
• decoupling sales from revenues for utilities
•  modifying distribution system planning rules
• using water heaters as grid storage
• digital energy management in buildings
• implementing a passive house and fabric first building code
• and making building energy performance a condition of giving support to renewable energy.

Need for local supply chains

Using local demand-side resources for example, requires commercially viable and readily available solutions. This “is especially challenging in terms of timing: both the timeframe needed to develop such an approach, and taking important decisions on network investments need to be aligned,” said Schmatzberger.

All of the energy stakeholders sitting around the table must agree that these local, demand-side resources are reliable and available, which is often not the case, she says.

“Mistrust and lack of confidence in these resources draws attention to another potential barrier which must be addressed: cultural and technical differences between professionals in charge of supply, and professionals in charge of energy efficiency programs.

“If we want to advance and scale efficiency in our energy markets, these challenges must be addressed,” Schmatzberger said.

Given the urgency to decarbonise as well as to address the post-pandemic economic recovery with sustainable, long-term impacts, evidence-based decision-making support for policymakers is an important first step towards eradicating the barriers to efficiency first implementation.

Schmatzberger says Enefirst – a 3-month EU-funded project – is “building towards providing actionable policy guidelines for decision-makers at EU-level to ensure that efficiency first can be effectively implemented at all levels of governance.”

Those solutions in detail

Here’s a bit more information about those best practices:

Time-of-Use tariffs – incentivise customers to shift their electricity use from high- to low-demand periods, allowing them to save on energy expenses while benefitting the power system.

Social constraint management zones – involves the procurement of “smart” or “non-wires” solutions from residential and community consumers in congested areas in its network; as used in  a new  initiative from Scottish and Southern Electricity Networks.

Demand flexibility in district heating networks – improves the load factor of households for heating to accelerate their rollout. Works by reducing capital costs by managing heat load and reducing demand peaks. Experimental studies resulted in peak reductions between 5 per cent and 35 per cent.

Demand response by French utilities – works by bringing demand response to wholesale electricity markets.

Enabling rules for demand response – because many renewable electricity sources are intermittent they can be integrated better by making demand flexible. This case study comes from Germany.

Decoupling utility sales and revenues – discusses measures that induce utilities to help customers save energy whenever it is cheaper instead of producing and delivering it.

Replacing a polluting power plant with efficiency resources – case study from Oakland, California, where a utility and community electricity supplier organised the replacement of an old and polluting peak fossil fuel plant with demand-side resources.

Updating distribution system planning rules to support the growth of distributed energy resources. This example is from Colorado and Nevada.

Assessing the value of demand-side resources – in the U.S. utilities must have methodologies for evaluating non-wire solutions in order to address pressing grid problems. This looks at the exemplary ConEd’s BCA (Benefit-Cost Analysis) Handbook.

Water heaters as multiple grid resources – tanks equipped with electric resistance water heaters can not only store hot water but provide further grid services as well as save money for consumers. In Hawaii this was achieved by a start-up that supported efficient grid operation.

Digital building logbooks – storing all of the information related to the building can help influence the effectiveness of policies, as well as inform and engage building owners  during a renovation.

Reducing energy demand with a passive-level building code – introduced in the Brussels Capital Region in 2015, this is expected to lead to a transformation of the whole building stock by 2050. Brussels developed market solutions before introducing regulation, thus achieving a very low or no cost premium on passive design.

Deferring grid infrastructure investments by encouraging local end-use efficiency measures – in the US, several electricity and natural gas utilities have made successful use of locally targeted energy efficiency programmes to defer such investments.

Requiring building energy performance to be eligible for a heat pumps grant – in Ireland you needed to achieve a minimum level of building energy performance prior to getting supply-side investment.

Fabric first approach in Ireland – similarly The Better Energy Communities is a renovation grant scheme that takes an energy efficiency first approach. Residential and non-domestic energy projects are only supported if they prioritise energy efficiency measures over renewable and smart technologies.

Linking renewable support to building energy performance – likewise, the feed-in tariff in the UK was dependent upon buildings first achieving a minimum building standard.

Read more here.

David Thorpe is the author of Passive Solar Architecture Pocket Reference, and ‘One Planet’ Cities: Sustaining Humanity within Planetary Limits. He also runs the online course, a Post-Graduate Certificate in One Planet Governance. He is based in the UK.