EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 12.3.2009 
SEC(2009) 269 
COMMISSION STAFF WORKING DOCUMENT 
 
Accompanying document to the 
COMMUNICATION FROM THE CO MMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMI TTEE OF THE REGIONS 
 
on Mobilising Information and Communication T echnologies to facilitate the transition 
to an energy efficient, low carbon economy  
  
IMPACT ASSESSMENT  
  
{COM(2009) 111 final} 
{SEC(2009) 268} {SEC(2009) 270}  
 
EN 2   EN TABLE OF CONTENTS 
SUMMARY OF CHANGES SINC E ORIGINAL SUBMISSION ...................................... 4 
1. Background, context and consultation ......................................................................... 5 1.1. Background and context............................................................................................... 5 1.2. Consultation and expertise ........................................................................................... 6 2. Problem definition and rationale for intervention........................................................ 7 2.1. What is the problem and what are the causes?............................................................. 7 2.2. Problem focus of this Impact Assessment ................................................................. 14 2.3. Existing policy respon ses to challenges..................................................................... 14 
2.4. Justification for EU intervention – subsidiarity and EU added value........................ 16 
3. Objectives.................................................................................................................. . 17 
3.1. Operational objectives................................................................................................ 17 3.2. Consistency with other EU  policies and objectives ................................................... 18 
4. Policy options............................................................................................................. 1 8 
4.1. Option 1: No further EU action.................................................................................. 18 4.2. Option 2: Stronger collaboration and partne rship within existing frameworks    - 
highlighted in a second Communication.................................................................... 20 
4.3. Option 3: Commission Recommendation on mobilising ICT to facilitate the 
transition to an energy-effi cient, low-carbon economy ............................................. 21 
4.4. Option 4: Regulatory or legislative measures ............................................................ 22 
4.5. Summary of main elements of Options 1, 2 and 3..................................................... 23 5. Analysis of Potential Impacts and Comparison of Options ....................................... 24 5.1. Assessment of Option 1: No further action at the EU level....................................... 24 5.2. Assessment of Option 2: Stronger collabo ration and partnership within existing 
frameworks................................................................................................................. 25 
5.3. Assessment of Option 3: Recommend ations on partners hip initiatives, 
interoperability and best practices.............................................................................. 26 
5.4. Comparison of Options .............................................................................................. 27 6. Sub-options under the Preferred Policy Instrument................................................... 29 6.1. Description of Sub-options ........................................................................................ 29 6.2. Assessment of Sub-options ........................................................................................ 31 6.3. Comparison of Sub-options ....................................................................................... 33 
 
EN 3   EN 7. Evaluation and monitoring......................................................................................... 35 
Annex I ....................................................................................................................... ............. 36 
Annex II....................................................................................................................... ............. 39 
Annex III ...................................................................................................................... ............ 45 
Annex IV....................................................................................................................... ........... 47 
Annex V ........................................................................................................................ ........... 48 
Annex VI....................................................................................................................... ........... 49 
 
EN 4   EN SUMMARY OF CHANGES SINC E ORIGINAL SUBMISSION 
1) In their opinion of 27 Oc tober the Impact Assessment Board (IAB) requested a re-
submission of the Impact Assessment on "ICT and energy efficiency" for the following main 
reasons: 
• The report should incorporate ongo ing developments in the base line and clarify in which 
respects current policy in struments are inadequate 
• The report should specify the conc rete actions that will be taken in the various options 
• The report should present not only benefits but also costs 
A final criticism, given orally at the heari ng, was that the document should be written in a 
more clear and non-t echnical language.  
The present draft addresses the comments of the Board in the following manner:  
With respect to the first point, the new draft of the Impact Assessment clarifies that the 
proposed initiative intends to be complementary to the existing and proposed policy initiatives 
in the area of energy efficiency. The problem defi nition section (2.2) expl ains that the current 
progress towards the 2020 energy efficiency target is  so far slow and that the potential of ICT 
in enabling more significant improvements in ener gy efficiency is still largely unexploited on 
a mass scale. Also, while the current regulation in the area focuses on in dividual products or 
components, ICT can provide a systemic view of energy use and provide tools for better 
visibility, measurement, control and mana gement of energy consumption. Section 2.3 
provides references to the existing policy initiatives and clarifies in what ways the present initiative can complement those.  
The existing and proposed polic y initiatives und er the reviewed Energy Efficiency Package
1 
form part of the baseline Option 1 (see Sect ion 4.1) together with the existing voluntary 
commitments, agreements and initiatives undertaken by industry, cities and regions. 
Assessment of Option 1 addresses the question w hy these initiatives, while they are very 
valuable and go in the right direction, are unl ikely to provide a systemic solution to the 
problem.  
With respect to the specification of concrete actions that will be undertaken in the various 
options, the current draft contains a more clea r description of options  1, 2 and 3 and a more 
detailed assessment of possible sub-options und er the Option 3. This approach has allowed a 
more rigorous appraisal of the concrete m easures that could be recommended. Some sub-
options that were previously envisaged have been discarded because they were found either 
potentially quite costly or difficult to implement in the short term.  
The assessment of costs has improved as it is now included in the asse ssment of all options 
and sub-options. It remains mainly qualitative an d for most measures it is considered not very 
significant. Nevertheless, a new Annex IV provides examples of  costs of smart meters and 
carbon accounting and foot-printing.  
With respect to the clarity of the report, so me background information and evidence has been 
moved to the Annexes and effort has been made to provide a more clear structure of the main 
report summarizing the key point s in graphs and tables.  
                                                 
1 COM (2008) 772 Communication Energy Efficiency: delivering the 20% target 
 
EN 5   EN 2) Following the resubmission of the revise d IA on 28/01/2008, the IAB delivered a second 
opinion in which it considered that, though the revised document addressed most of the 
recommendations previously made by the Board, the following points needed to be covered: 
• The report should compare the chances of reaching the 20% target of energy saving 
under the baseline scenario a nd under the preferred option 
• The report should specify the ma in actions that the Commis sion will take to support 
the implementation of the Recommendation 
• In terms of procedure and presentation, Se ction 4, Section 5 and Section 6 of the 
report could be reduced in length and avoid duplication 
The present redrafted version addresses the co mments of the Board in the following manner: 
As regards the first point, the risk of not ach ieving the 20% target in energy saving has been 
clarified by making explicit refe rence to the 13% attainable saving that is mentioned in the 
Commission Communication on energy efficiency. In fact, the Commission has 
acknowledged in November 2008 that "These measures shoul d achieve energy savings of 
about 13% by 2020 if properly im plemented by Member States.  Even if this represents a 
major achievement, this falls far short of what is needed". Annex 1 to this Communication 
contains the list of the measures, with the resp ective contribution in per centage points. It is 
clear that the mentioned 13% is not a static num ber and the situation is  constantly evolving - 
as new measures are implemented, these will translate in further efficiency and savings. 
Nevertheless, the opportunity to  complement the existing meas ures and to speed up possible 
efficiency gains is beyond questioning. 
In terms of the other side of this question - to  know what will be the probable contribution of 
the proposed measures to achieving this targ et, "Assess the magnitude of the contribution", 
this point was addressed by referring whenever relevant to the studies that include the potential saving of ICT in certa in domains and areas of activit y. It is worth noting that the 
Recommendation aims precisely to have a decisive contribution towards making energy 
efficiency gains more accurately measurable. Ne vertheless, according to the studies available, 
ICT-enabled improvements would represent a sa ving of up to 15% of total energy use by 
2020. These savings have been identified mainly  in the heating and lighting of homes and 
buildings; in more efficient electrical power grids; in better supply-chain management and 
transport logistics, and in manufacturing. All but the latter sector are addressed in the 
Recommendation. 
With respect to the second item,  Option 3 now c ontains a brief descriptio n of the actions that 
the Commission intends to develop in order to  create the best conditions for the full 
acceptance of and compliance with th e Recommendations (see Point 4.3). 
Finally, the last point was not considered as it would imply a major redrafting of the text and 
this did not seem usef ul at this stage.  
1. B
ACKGROUND , CONTEXT AND CONSULTATION  
1.1. Background and context  
This Impact Assessment accompanies a proposal for measures to realise energy-efficiency 
improvements across the EU ec onomy by unlocking the potential for faster development, 
 
EN 6   EN deployment and take up of relevant inno vations in information and communication 
technology systems and services.  
On 13 May 2008, the Commission adopted a fi rst Communication on ICT for energy 
efficiency2 and drew attention to th e potential for additional en ergy-efficiency improvements 
in ICT use, and through ICT-enabled in novations. This Communi cation initiated a 
consultation and partnership-building process wi th a view to identif ying opportunities for EU 
measures, quantifying their poten tial cost and energy-efficien cy benefits, and stimulating 
business-led and partnership initiatives which could be developed at EU-level. 
1.2. Consultation and expertise  
This impact assessment builds on an extensiv e contribution of an ad -hoc Advisory Group 
convened by DG Information Society and Media;  on the results of an open on-line public 
consultation and the support and advice from Member States in th e i2010 High Level Group. 
Within the Commission, an InterService Group was set up in May 2008. It included 
representatives from ten DGs: RTD, TREN, ENTR, ENV, REGIO, MARKT, the SecGen, 
DIGIT, SANCO and the JRC. It met four times3 and served to exchange information about 
the various policy initiati ves already in place and in preparati on; to co-ordinate the analysis of 
opportunities and to review this impact assessment in its earlier  versions. The work of this 
InterService group and the necessary  contacts that have been ta ken at the working level with 
the different DGs concerned has been an effective tool for ensuring that this initiative is in 
coherence with the overall ener gy efficiency policy framework. 
The Impact Assessment also references the resu lts of a number of studies, notably a study by 
BioIntelligence4 commissioned by DG Information Soci ety and Media, and the Smart2020 
report5, commissioned by the Global eSustainability In itiative (GeSI) of companies in the ICT 
sector and The Climate Group. Input has also been used from the parallel series of seminars 
organised by the International Telecommunications Union6 and the OECD expert workshop 
on ICTs and environmental challenges7. Reference is made to the relevant external sources 
when their input is used in this Impact Assessment. 
An on-line public consultation was launc hed on 20 May 2008 using the Commission’s 
Interactive Policy-making tool (I PM). It closed on 21 July. Wide  visibility was given to the 
consultation through the i2010 Hi gh-level group and the Adviso ry Group, and at a workshop 
hosted by the Committee of the Regions on 26 May. Over 400 respons es were received. 
Around half of the respondents represented prof essional organisations and more than two 
thirds work directly with ICTs for energy efficiency. The conclusions in detail are included in the relevant chapters of the present Impact As sessment. In general, the results of the public 
consultation confirmed and supported th e direction taken in the Commission's 
                                                
 
2 COM (2008) 241 of 13th May 2008: Addressing the challenge of energy efficiency through Information and 
Communication Technologies 
3 28th May, 7th July, 3rd and 26th September 
4 Impacts of information and communication technologies on energy efficiency: BioIntelligence service, in 
collaboration with the European Council for sustainable energy and the Fraunhofer Instiute, July 2008. 
5 SMART2020: Enabling the low-carbon economy in the information age: McKinsey  &co, for The Climate 
group and the Global eSustainability Initiative: www.smart2020.org 
6 www.itu.int/ITU-T/climatechange . 
7 May 2008, Denmark  
 
EN 7   EN Communication of 13 May and provi ded input that is convergent  with that provided by the 
ad-hoc advisory group.  
The Advisory Group met 4 times; on 25 June, 24  July, 25 September 2008 and jointly with 
the i2010 High Level Group (Directors General re sponsible for Information Society policies 
in the Member States and EEA  countries) on 18  November. 
It included representatives of th e main ICT-sector associations8, of major ICT-user sectors, 
regional associations and leading academics. The Advisory Group was assisted by 6 thematic 
consultation groups addressing specific opportun ity areas: Buildings, Lighting and Photonics, 
Manufacturing, Smart Grids, Road  Transport and Structural Ch ange. The input from these 
groups and from Members of the Advisory Gr oup has been compiled in to a report by an 
independent rapporteur  and endorsed by the all group members. 
The European Parliament responded to the in vitation in the previ ous Communication and 
adopted an own initiative reso lution which has been taken into  account in the proposal. There 
has been ongoing consultation with the Committee of the Regions and the Economic and 
Social Committee, which adopted opinions respectively on 27 November and 4 December . 
2. PROBLEM DEFINITION AND RATIONALE FOR INTERVENTION  
2.1. What is the problem and what are the causes? 
Need to accelerate energy efficiency improvements – ICT can help 
According to the latest Commissi on Communication on energy efficiency9, most Member 
States are so far not on the right track to achieve the 20% energy e fficiency target by 2020 
and acceleration of efforts is needed. The speed of energy efficiency improvements is 
absolutely crucial in the light of the global energy and climate targets.   
The Commission has put in place both regulatory  and non-regulatory measures in the area of 
energy efficiency and continues to strengthen those measures. The renewed Energy Efficiency 
Package announced in the Commission Co mmunication on energy efficiency will 
undoubtedly contribute to energy efficiency im provements but does not give a guarantee that 
the proposed measures alone will be sufficien t to meet the targets. In its Annex 1 , this 
Communication  gives a quantitative evaluation of the expected impact of some specific 
energy efficiency legislation and measures when fully implemented. It is also stated in this 
Communication that the Member St ates are implementing the legislation and it is therefore 
too early to assess the full impact s of such legislation. Neverthele ss, it is clearly stated that 
“The energy saving potentia l is not being realised fast  enough. These measures should 
achieve energy savings of about 13% by 2020 if  properly implemented by Member States.  
Even if this represents a major achievement, this falls far short of what is needed”.   
Moreover, the Package does not explicitly address the enabling potential of ICT in 
contributing to a more energy efficient econo my. There is therefore an opportunity to 
complement  the existing measures, extend the potential for energy efficiency improvements 
and accelerate the change.  
                                                 
8 The European ICT Association (EICTA) and the Ameri can electronics Association (AeA)) and the Global 
eSustainability Initiative (GeSI) 
9 COM (2008) 772 Communication Energy Efficiency: delivering the 20% target 
 
EN 8   EN In addition, it has been noted that the quantita tive information relating to energy-efficiency 
gains achieved and achievable through ICT is often inconsistent, relying on incomplete 
baseline data and varying me thodologies. It is a major barr ier to understanding energy end-
use and a serious hurdle for policies aimi ng to deliver energy-efficiency. While the 
Commission is taking steps to address this  challenge, ICT can nevertheless make an 
invaluable contribution to improving the reliabilit y and comparability of data, beginning with 
its own processes. The data and information ac quired can, in turn, be used to assess, in a 
transparent and verifiable way, its applicatio n to increasing energy efficiency across all 
economic and civic sectors. 
ICT-based innovations represent th is untapped potential. Recent studies have identified many 
opportunities for the ICT-sector and ICT-based innovations to make a significant contribution 
to improving energy efficiency. These opportunities are however not being realised in the whole economy fast enough and on a mass scale. The problem that needs to be addressed is 
twofold:  
• How can the change to a more energy effi cient, low-carbon economy be accelerated 
through ICT in the view of the global 20%  energy efficiency target by 2020? 
• Why are we not seeing faster deployment of  ICTs that could ach ieve these additional 
efficiency gains?   
The answer to the first question can be provided by the ICT sector itself : there is certainly a 
necessity for continued innovation based on re search and development but many of the 
available and cost-effective technol ogies are (or can be made) comm ercially viable in the near 
future. There are many examples of ICT tools and technologies that can render whole systems 
and complex processes more energy efficient.  The key point is that ICT can provide a 
systemic solution  and therefore it is a powerful enabler of change. The EU has legislation in 
place improves energy efficiency of  individual products (light bu lbs, electric equipment in 
stand-by mode, televisions, etc.) but the ove rall energy savings depe nd also on how the 
equipment is used, how energy consumption in a system (a building, logistics chain, 
manufacturing process, a hous ehold, a city) can be effectively managed, monitored and 
controlled.  
The second question needs to be analysed in more detail in order to determine whether some 
kind of additional public interv ention would be necessary or not. First and foremost, mass 
deployment of any new technology or tool takes time. Big t echnological revolutions happen 
in several stages and, from historical experien ce, that can take up to several decades. The 
importance of energy savings and climate change policies has risen only in recent years, the 
demand for tools managing and reducing energy c onsumption is still relatively low, although 
increasing. If the diffusion of ICT solutions for energy efficiency economy is left only to the 
market forces, there is a certain probability that it could happen anyw ay as energy prices 
increase and traditional sources of energy become scarcer. However, there is a high probability that these developments may not ha ppen on a mass scale in the time-frame of the 
2020 targets.  
It is therefore pertinent to as k what the obstacles are that hinder faster deployment of ICT-
based innovations for energy efficiency in th e short to medium term, how these obstacles 
could be removed and whether so me form of public intervention can play a catalyzing role in 
this process.  
The initiating Communication, the subsequent consu ltations, external studies and this Impact 
Assessment focus on three distinct areas of opportunity and related challenges:  
 
EN 9   EN • Energy efficiency in the ICT sector itself 
• ICT-enabled energy efficiency in major energy-using sectors 
• Energy efficiency in the economy at larg e (consumers, businesses, communities, 
public administrations) 
Energy efficiency in the ICT sector itself 
ICT equipment and infrastructures use electri city as their primary form of energy, and 
represent some 8% of the total electricity consumption in EU 2710. The legislative 
environment, technological innovation and best  practices are contri buting to significant 
improvements in energy-efficiency and reducti ons in carbon emissions. However, as the 
range and penetration of ICT devices and servic es increases, its overall  energy use is growing 
at a faster rate than such improvements can offset. 10.9% of  EU 27 electricity  consumption in 
2020 is projected to be consumed by ICT. At  the global-level, ICT energy consumption is 
expected to triple to over 3000 TWh/a by 2020, re presenting about 3% of  total greenhouse gas 
(GHG) emissions in 202011. Compensating for this rebound effect  is critical to  the success of 
ICT-based strategies to achie ve energy savings and reduce carbon emissions. The potential 
for ICT to become part of the solution rather than part of the problem  will depend on its 
capacity to minimise its own footpr int; this includes its supply chain. 
The following main obstacles to reducing energy use in the ICT sector can be identified:  
- Absence of commonly agreed measurem ent, quantification and management 
methodologies and tools, particularly for complex systems; risk of greenwashing: 
Annex V outlines a range of individual companies' commitments to making 
improvements. Nevertheless and as the a nnex highlights, the problem of making 
common, easily understood and measurable commitments remains. Some companies 
have chosen to commit to efficiency improvements; others to energy end-use 
reductions; others still to carbon emissions reductions. Ba seline years do not always 
concur. There are different profiles within th e sub-sectors of the industry itself. Chip 
manufacturers face much different challenge s in controlling energy costs than do 
software companies, for example. In the absence of commonly agreed measurement methodologies and tools, there is a real ri sk of greenwashing - taking market share 
from solutions that offer legitimate benefits  and thus slowing the penetration of real 
energy-efficient innovation in the marketplace . The establishment of a level playing 
field in therefore urgently  required to promote legitim acy, transparency and real 
progress in energy efficient ICT and ICT for energy efficiency.  
-  Investment problem: It has been shown that the real energy savings from ICT 
investments materialise not only by replac ing or installing equipment, but in 
rethinking processes and systems and redesi gning them on more energy efficient and 
sustainable patterns. This requires up-front investments for which the business case is 
not always clear - especia lly at a time of economic and financial uncertainty.  
- Interoperability and standardisation issues, slow innovation adoption: As noted earlier, 
demand for ICT tools for energy efficiency appl ications is still rather low and clearly 
at the "early adopter" stage.  Reasons for this include insufficient awareness of these 
technologies; uncertainty a bout the effectiveness and durability of the new technology 
                                                
 
10 BioIntelligence study 
11 SMART2020 
 
EN 10   EN until it becomes mainstream; skills gaps and the fear of becoming dependent on a 
single supplier12 until proper markets with multiple players develop. Interoperability 
has emerged as a major issue - especia lly in the case of buildings and smart 
metering13: without these issues being addresse d it is possible that deployment in 
certain cases would result in encouraging supplier "l ock-in" and a reduction of 
consumer choice. Some Member States have  already moved forward and set their own 
timeframe for the rollout and even technical requirements of smart meters but, without a common functional specification, such m easures may create technical barriers to 
interoperability. 
ICT-enabled energy efficiency in major energy-using sectors 
Recent analyses indicate that ICT-enabled improvements could reduce energy use and carbon 
emissions across all sectors of the economy
 by five- to ten-times14 the footprint of the ICT 
sector itself which is currently estimated at around 2%. This woul d represent a saving of up to 
15% of total energy use by 2020. These savings ha ve been identified mainly in the heating 
and lighting of homes and buildi ngs; in more efficient electrical  power grids; in better supply-
chain management and transport logistics, and in manufacturing. A fuller  analysis, sector by 
sector, is to be found in Annex II.   
The main obstacles to reducing energy use in th ese sectors through ICT tools and services are 
the following:  
- Absence of commonly agreed measurem ent, quantification and management 
methodologies and tools, particularly for complex systems: Similarly to the ICT 
sector, this obstacle impedes widespread ta ke-up of ICT tools in  many sectors. Many 
ICT monitoring, auditing and design tools already exist but common approaches 
adapted to the specificities of each sector have not emerged yet.  
- Absence of cross-sectoral partnerships: As with previous "IT" and "computerisation" 
revolutions, to develop its full potential, the process of deploying ICT solutions in 
other sectors requires wide stakeholder involvement a nd the development of new 
partnerships between the ICT solutions pr oviders and the client sectors. These 
partnerships remain rather fr agmentary and under-developed.  
- Lack of awareness and visibility of inform ation: Precise inform ation about energy use 
is the  condition for managing energy costs. The lack of common monitoring and 
measurement systems (ICT-enabled) and information aggregation and reporting systems (software-based) inhibits the ta king of better informed business decisions 
which fully take into account  the growing importance of energy costs. Where clarity 
and visibility of actually ener gy usage is absent, it become very difficult to deploy ICT 
(and other) solutions to exploit energy savi ngs potential to the maximum – either by 
                                                
 
12 A "lock in" situation can result for ICT users if substi tute or alternative solutions are not interoperable. 
Similarly, the cost of migration can be high if an ICT solution is tied to one provider only. Both situations 
impede competition  unfolding to maximise its beneficial effect.  
13 Smart meters are integral to the power delivery sy stem, allow for bi-directional communication, audible 
warnings of peak load (and charging) times and feed-in enabling for "consumers" who also generate 
14 The Smart 2020 report estimates a potential of 5-times  the ICT-footprint, globally; The BioIntelligence study 
also estimates potential saving of about 5-times the IC T-footprint under the eco-scenario to 2020, and the 
Report by the American Council for an energy-effic ient economy for the AeA estimates up to a 10-times 
saving: http://www.aeanet.org/EUenergy  
 
EN 11   EN isolating particular energy inefficient pr ocesses or by more fu lly re-engineering 
business practices.  
- Investment problem: The problem of up-front  investment has been already explained 
above. This problem is further exacerbate d by principal-agent problems in some 
sectors (e.g. buildings), where investment is not made by the ultimate beneficiary, which reduces or removes the incentive for investment. The principal-agent problem 
refers to the situation wher e those who might invest in particular energy efficiency 
measures are not those who w ould be the direct beneficiar y of any resultant savings.  
- Interoperability and standardisati on issues, slow innovation adoption 
- Other obstacles: For example, lack of skille d technicians and IT specialists in some 
sectors who would be able to integrate ener gy efficient tools and technologies in the 
specific and often very complex systems in those sectors.  
 
Energy efficiency in the economy at large  
ICTs have demonstrated in the course of the past 20 years their capability to induce 
fundamental and long lasting chan ges in business and society: new lifestyles, products and 
services, new business models, ways of working and market structures. The challenge is now 
to ensure that further evoluti on is directed towards energy-effi cient growth and the realisation 
of a sustainable information society
15. If ICT sector can manage its own energy footprint and 
enable the reduction in the often complex sy stems in the energy-using sectors, it can 
ultimately facilitate a major behavioural change  in the whole economy.  
The key obstacles preventing a stru ctural and behavioural  change in the short to medium term 
are similar to those described above for the ICT sector itself and for other energy using sectors:  
- Lack of awareness, visibility and informa tion about energy use: Citizens, businesses, 
cities and public administrations need acce ss to ubiquitous, system atic and near real 
time information about the magnitude, sources and efficiency profil es of their energy 
use to be able to make energy efficient c hoices. However, such access is not generally 
available. This results in a l ack of "empowerment" to act.  
In the case of citizens , real time feedback alone to c onsumers on their rate of energy 
consumption has been shown to lead  to dramatic behaviour changes
16. The 
introduction of smart metering would not only provide real-time information to 
consumers but also the possi bility of enabling better ma nagement and control of 
electricity consumption by users and supplie rs. However, smart metering is still a 
rarity in the EU, which is partly due to the interoperability problems and lack of 
common functional specifications mentioned earlier.   
Public administrations  at all levels generally do not  have a systematic overview of 
their own energy consumption and carbon foot print. Cities, for example, represent 
more than 75% of total energy use and ar e extremely complex and multi-dimensional 
physical, social and economic structures. Lo cal government authorities have the means 
                                                 
15 IMRWolrd Global eIntelligence report: Thinking about the e-green myth. 
http://www.imrworld.org/product.php?id=121&brand_id=&brand=&cat_id=68  
16 HEAT (Household Energy Awareness Technologies) Pr oject, Finnish Environment Institute, and others 
 
EN 12   EN to directly influence their own consum ption and that of those businesses and 
households located on their administrative te rritory. These include the public buildings 
and public spaces constructions, renovation s, and in many cases, public utility 
networks transportation systems. The en ergy efficiency imperative now makes it 
necessary to adopt a systemic approach to  all aspects of urban planning, operations 
and service provision. Energy use patterns an d profiles are not currently visible to 
users and decision makers because sophisti cated simulation, planning and footprinting 
tools are not systematically used.  
- Limited use of green public procurement: “GreenIT“ strategies and procurement 
criteria have been developed by some Member States and several EU policy 
instruments call for mobilising public procur ement. However, they focus on national 
administration level. Mandatory Public Proc urement criteria would still apply only to 
certain equipment types. There is howev er significant potential for green public 
procurement also at the regional and loca l level and in big pr ivate businesses.  
 
EN 13   EN Hierarchy of problems and causes/obstacles:  
Note: The obstacles are not matching the problems in a one-to-one  relationship; it is the various combinations of them which le ad to the observable problems 
 
 
  P 
R O B L E M 
S 
O
BSTACELE
S ICT solutions for energy efficiency not 
used on a mass scale  
ICT sector and its own energy use Limited use of ICT solu tions in major energy 
using sectors Untapped potential of ICT for energy efficiency in the economy at large 
Weak co-ordination and partnerships in the ICT sector and across sectors  Lack of awareness,  visibility and 
information about energy use 
Absence of commonly agreed measurement, quantification and management methodologies and tools, particularly for complex systems; greenwashing Interoperability and standards, risk of lock-in 
Limited use of green public procurement Upfront investment and principle agent problems Speed of energy efficiency improvements 
 
EN 14   EN 2.2. Problem focus of this Impact Assessment 
This proposal on its own cannot eliminate all the above mentioned  proble ms; it is intended to 
be enabling in its objectives and actions and fully complementary to other EU and Member 
State policies in areas such environment en ergy, climate, industry, research and innovation 
policies.  
There are problems which this initiative cannot directly  address, such as certain investment 
and "agency" problems. These are nevertheless alluded to bot h for completeness sake and 
because there is evidence17 that creating greater transparency  in respect of energy usage leads 
to improvements in these two areas.  
The key problem that this impact assessment will address is the lack of awareness of, 
information on and visibility of energy use across all sectors of society coupled with 
inadequate measurement and quantification capabil ities in respect of energy use. This is the 
area where ICT can provide its most useful cont ribution not only in the ICT sector itself but 
also in other sectors of the EU economy. The im pact assessment will also attempt to address 
the related issue of fragment ation and under-development of pa rtnership initiatives between 
the ICT sector and other sectors and thus indi rectly address the probl em of technology fear, 
slow innovation adoption and interoperability. 
2.3. Existing policy responses to challenges 
 
It is important to recognise that the existing re gulatory and non-regulatory measures at the EU 
and Member State level undoubted ly contribute to a more energy efficient economy but the 
ICT sector, through application of innovati ve ICT solutions for measurement and 
management of energy consumpti on, can facilitate and accelerate that change. In  that sense, 
the current initiative is complementary  to the existing policies.  
The complementarities and synergies are further explained in more detail with regard to 
concrete initiatives:  
• The Action Plan for Energy Efficiency18, the Energy Services Directive19, the proposal for 
the Liberalisation Directive20 and the Directive on energy security21 all emphasize the 
importance of transparency regarding consumer energy usage. Member States, however, have considerable latitude in implem entation. The last Communication on energy 
efficiency
22 clearly states that there is a real risk of falling sh ort of the global target of 
20% energy savings by 2020. Furthermore, n one of these instruments requires any 
"intelligence" to be added to the me tering or monitoring of energy usage.  
                                                 
17 OECD 
18 COM(2006)545 Communication Action Plan for Energy Efficiency: Realising the Potential  
19 Directive 2006/32/ECof the European Parliament and of the Council of 5 April 2006 on energy end-use 
efficiency and energy services  
20 Proposal for a directive amending the Directive 2003/ 54/EC concerning common rules for the internal market 
in electricity, COM (2007) 528 
21 Directive 2005/89/EC of the European Parliament and of the Council of 18 January 2006 concerning 
measures to safeguard secur ity of electricity supply and infrastructure investment 
22 COM (2008) 772 Communication Energy Efficiency: delivering the 20% target 
 
EN 15   EN • Eco-Design of Energy-using Products Directive, the eSTAR23 initiative and other existing 
voluntary initiatives by the ICT sector are extremely valuable initiatives and address, inter alia, certain ICT products. However, the main technology focus of this impact assessment 
is on system-level energy savings as opposed  to single products or components. The 
systemic view and the attempt to tackle the problem of real-time and visible measurement of energy use are clearly complementary to  what these initiatives and legislative 
frameworks are already doing at the level of  individual products. For example, the Eco-
Design Directive and the Energy Labelling Directive will increase energy efficiency of products such as light bulbs, electric equipment in stan d-by mode, street and office-
lighting equipment, etc. However, the overall energy use or consumption reduction 
depends also on how
 these individual pieces of equipment are used in a system 
(households, businesses, cities, etc.) The problem definition of this impact assessment argues that ICT can help tackle this part icular part of energy use by providing the 
necessary measurement tools.  
• Energy Performance of Buildings Directive is  not explicit about ICT's role and any 
enhancement that the present initiative can bring is clearly complementary. Again, this 
Directive provides a framework for concrete  measures and require ments concerning new 
buildings and buildings that undergo major renovation (ener gy performance certificates, 
regular inspection of heating and air-conditioning systems, etc.). ICT can facilitate 
implementation of this directive and enable ev en further cuts in energy consumption of 
the current buildings stock e.g. through embedded intelligence and networked controls, 
ICT systems enhancing heating, ventilation and air-conditioning, and integrated building 
management systems.  
• Sustainable Consumption and Production Action Plan's24 overarching objective of 
empowerment for better choices, con tinuous improvement through innovation and 
stimulation of demand. This activity promotes  consumer empowerment through inter alia 
energy and resource-efficient consumer products, mandatory labelling under the revised 
Ecodesign directive, incentives  and public procurement and the creation of a “Retail 
Forum” to improve large retailers’ environm ental performance, promote the purchase of 
greener products and better inform consumers. ICT can be a key enabler in realising these 
ambitious goals. A second major priority of  the Sustainable Production and Consumption 
and Sustainable Industria l Policy Action Plan is promoting leaner production  where 
additional ICT contributions will  be particularly important in  areas such as: developing 
targets and tools  to monitor, benchmark and promote energy efficient production, the 
analysis and modelling of barriers to the e xpansion of eco-innovations and to their full 
uptake by other sectors and not least in facilitating an d promoting environmental 
performance in SMEs through customized advice. 
• The EU Green Public Procurement (GPP) framework is a cont inuous platform for 
exchange including mandatory eSTAR criteri a for public procurement of office 
equipment. The latter focuses on the equipment level and on the equipment's own energy use. The framework includes national administrations only.  
                                                
 
23 The European Programme Energy Star (eSTAR): A Re gulation that requires EU institutions and central 
Member State government authorities to use energy e fficiency criteria no less demanding than those defined 
in the ENERGY STAR (US) prog ramme when purchasing office eq uipment: www.eu-energystar.org  
24 COM(2008) 397/3 Communication from the Commission on the Sustainable Consumption and Production 
and Sustainable Industrial Policy Action Plan  
 
EN 16   EN     
2.4. Justification for EU intervention – subsidiarity and EU added value 
The challenges are cross cutting, trans-border and indeed global: the energy efficiency issue is 
one of the main planks in the EUs climate and energy strategy to 2020 and is at the top of the 
political agenda. There is a growing understandi ng that the problem is urgent and that all 
means need to be mobilised and mobilised qui ckly to reverse recent energy consumption and 
emissions trends.  
Problems persist in all Member States:  Even in the Member States that have made the most 
progress and individual efforts in support of the energy efficiency goals, the market is visibly 
not remedying the obstacles identified fast e nough. Under these conditions, common efforts at 
the European level are necessary and can f acilitate the emergence of the framework 
conditions for economies to integrate energy effi cient solutions in pr oduction processes and 
business and consumer consumption patterns.  
Multi-stakeholder action needed:  The problems identified cannot be remedied by the EU or 
Member States alone; not only does cross border action need to be stimulated but industry, 
cities and civil society has to become engaged as well.  
Leadership : It is acknowledged that international instit utions have a role to play in providing 
independent platforms for exchange for stakehol ders and assuming the cr ucial leadership role. 
In the current context there ha ve been explicit calls from industry for EU leadership.  
Economies of scale and scope : European co-ordination c ould offer synergies between 
actions at Member State and regional  levels. As shown by the evaluation25 of the National 
Energy Efficiency Action Plans, there are sign ificant variations among Member States in 
preparedness and ability to take action. Theref ore, sharing replicable solutions and building 
on each others' work and experience can be benefi cial. The need for sharing best practices and 
reflecting on and possibly undertaking comm on measures has been confirmed by the 
representatives of the Member  States participating in th e i2010 High-level group, which 
provides a forum for open co-ordination of the Member States Information Society policies. 
Internal Market : Commonly agreed methods in some ar eas (e.g. metrics for efficiency or 
calculation of carbon footprints for comparabilit y among Member States) and standards (for 
reducing equipment cost and enhancing interopera bility) would increase the transparency of 
cross-border flows of products and services.  
ICT solutions will not only improve energy e fficiency, they will also stimulate the 
development of a large leading-edge market for ICT enabled energy-efficiency technologies 
and software that will fost er the competitiveness of European industry and create new 
business opportunities. Theref ore providing public incentives and the right framework 
conditions for the take-up of innovative ICT enab led energy efficiency te chnologies will be of 
the utmost importance and will ultimately support the core strategic goals of European industrial, environmenta l and research policy. 
                                                
 
25http://www.energy-efficiency-wat ch.org/fileadmin/eew_documents/Documents/R esults/EEW_Press_Release_1_-_June_2008.pdf  
 
 
EN 17   EN 3. OBJECTIVES  
Global and specific objectives 
The measures considered in this impact assessment are a complimentary contribution to the 
broader objectives of the EU in the area of ener gy and climate, notably to contribute to energy 
security and a 20-30% reduction in green-house gas emissions by an improvement in energy 
efficiency by 20% by 2020.  
Therefore, measures are intended to leverage IC T in order to contribute to the Action Plan for 
Energy Efficiency and the Sustainable Cons umption and Production Action Plan through 
wider and faster take-up of IC T-based innovations both within th e ICT sector itself, in other 
major energy-using activities and through taking the first steps (measurement and awareness) 
in enabling a structural shift to an ener gy-efficient, low-carbon information society. 
The global objective can be translated into th ree specific objectives tackling the key areas 
where progress can be made. The following three specific objectives have  been identified:  
− Address energy use and emissions re ductions in the ICT sector itself 
− Address the potential of ICT for energy e fficiency across major energy using sectors 
− Encourage an enduring shift in the be haviour of consumers, businesses and 
communities 
The section below provides more detail on eac h of these objectives, linking them back to 
relevant sections in the problem definition an d splitting them further into more detailed 
operational objectives.  
3.1. Operational objectives  
Address energy use and emissions reduc tions in the ICT Sector itself 
As explained in the problem definition, the ICT s ector is projected to growth further in the 
future and has therefore a specific interest in managing and controlling its own energy and 
carbon footprint. Moreover, given the innovati on and technological capability of the ICT 
sector, it is well placed to show leadership to  other sectors and use the ICT-based tools and 
solutions in its own business operations. The operational objectives in this area would 
therefore be as follows:    
• Support and reinforce industry-led initia tives aiming at establishing common energy 
efficiency measurement methods, metrics,  benchmarks and impr oved energy-efficiency 
in the complex ICT systems – including supply chain activity.  
• Encourage industry in the ICT sector  to reduce its own energy use and carbon emissions  
Address the potential of ICT for energy ef ficiency in major energy using sectors  
Businesses in all sectors of the economy need  to start becoming aw are of the need to 
visualise, measure and quantify energy cost a nd deploy the tools that provide them with 
precise energy consumption information. These calculations form the basis for better 
management of energy and are the pre-conditio n for running automati on tools and simulation 
design software. The operational objectives un der this heading theref ore focus on tackling 
those problems:  
 
EN 18   EN • Encourage ICT solutions providers in partneri ng with energy using sectors in order to 
provide solutions based on co mmonly adopted methodologies. 
• Promote the use of measuring, management, c ontrol, design and re porting ICT tools in 
major energy using sectors 
Encourage an enduring shift in the behavi our consumers, businesses and communities  
Energy efficiency has started to  become an issue beyond the poli tical and can be a key trigger 
for behavioural change for businesses and citizen.  Awareness needs to be developed of ICT's 
potential role to support and en able this change: ch ange in awareness l eading to change in 
behaviour. Pioneer, regional and lo cal authorities and cities could take the first step to engage 
in this process:  
• Encourage regional and local authorities and innovative city initiatives where ICT 
innovations could play a lead role in explo iting the possibilities to track, control and 
manage energy usage.  
• Strengthen the demand side for ICT for energy efficiency innovations  
• Advance the deployment of ICT solutions for citizens such that they reflect information 
about actual energy consumption and costs including real time energy use visibility  
3.2. Consistency with other EU policies and objectives 
The operational objectives are in tended to be complementary to and consistent with the 
Union’s Climate and Energy polic y, the Sustainable Development Strategy (SDS) and Lisbon 
goals. They are in the mainstream of Informati on Society Policy genera lly and especially the 
mission to encourage the widespread availabil ity and accessibility of ICT-based services, 
especially those that have the greatest impact on the qual ity of life of the citizens.   
The operational objectives contribute both in  terms of the economic stimulus and 
environmental commitments entered into by the Member States in the conclusions of the December 2008 European Council. The objectives are essentially "enabling". Consistency of 
these operational objectives with other EU po licies and objectives has been checked with 
other services of the Commission (DG TREN, DG ENTR). As presented in Section 2.4, the 
objectives of the current initiative are comple mentary to those of th e other EU policies.  
4. P
OLICY OPTIONS  
Four broad policy options have been considered . They are described below and are compared 
in section 5. They represent different approaches  and also different polic y instruments. One of 
these approaches is chosen as a preferred one at the end of section 5 and analysed and assessed in more detail in section 6. To this end, sub-options within the preferred option are 
identified. Because the effectiv eness of the broad options and also sub-options depends on the 
degree of engagement of the business community  and civil society, the description includes 
an indication of the support expressed for their key elements in the Consultation process.  
4.1. Option 1: No further EU action  
This option is the reference against which others are compared. It assumes no further 
measures, either within existing EU interven tion frameworks, by business or civil society 
beyond those taken up to early 2009. As presented in Section 2.3 of this impact assessment, 
 
EN 19   EN there are number of policy interventions already in place or proposed in the area of energy 
efficiency. These mostly focus on individual  products, components or equipment but not 
specifically on some of th e problems identified in this impact assessment. It is assumed in this 
option that these initiativ es will continue and th at the relevant EU dire ctives will be updated 
as planned in the latest review  of the Action Plan for Energy Efficiency and the Sustainable 
Consumption and Production Action Plan.  
In addition to the policy interv entions already in place or pr oposed, there are a number of 
voluntary agreements and commitments ongoi ng driven by various industry groups and 
associations as well as regional, local city a nd even international initiatives. These voluntary 
initiatives are listed below:  
• Voluntary initiatives in the ICT sector: 
o Climate savers computing initia tive (Intel, HP and others)26 
o GeSI – Global eSustainability Initiative27 
o AeA, American Electronic Association "H elping the EU achieve its 20% targets" 
o EICTA, European Information and Comm unications Technology Association "High 
Tech, Low Carbon Economy" 
o BASDA and AFDEL (business application softwa re developers associations in the UK 
and France) "green ch arter" initiatives 
o Cisco and others "Connect ed Urban Development" 
Besides these voluntary initiatives by different  industry groups, concrete commitments of 
some individual companies in the ICT sector  exist, as document ed in the Smart2020 
study. Annex V of this impact assessment presents these individual commitments.  
• Voluntary initiatives at the regi onal, local and city level:  
o The Eurocities declaration on climate change 
o The Covenant of Mayors 
o The UK Greenshift and the French TIC 21 initiatives 
Measures have been already taken with in the i2010 policy framework and the EU 
programmes for research to suppo rt the realisation of energy efficiency gains through ICT-
based innovations. For example th e ENERGYSAFE project in the 6th Framework Programme 
as well as other research actions in the IST Th ematic priority have contributed to opening 
opportunities for greater energy efficiency  in buildings and lighting. In the 7th Framework 
Programme, the ARTEMIS JTI28 has a priority research topic within its work-programme on 
embedded systems to support energy efficiency in buildings. The ICT Policy Support Programme
29 launched an EU-wide thematic network to  exchange experiences in deployment 
of ICT-based innovations for energy efficiency and to build partnerships for ICT-enabled 
energy efficiency in cities and regions.  
                                                 
26 Started by Intel and Google, but now with a much wide r participation. Participants in the Climate Savers 
Computing Initiative, computer and component manufac turers commit to produci ng products that meet 
specified power-efficiency targets,  and corporate participants commit to purchasing power-efficient 
computing products. 
27 GeSI is a global partnership of ICT companies that promotes technologies for a sustainable development. 
28 https://artemisia-association.org/  
29 within the new Competitiveness and Innovation Programme 
 
EN 20   EN The OECD, EPC, CEPS have all prioritised IC T for energy efficiency in their work from 
2008 onwards.  The ITU, CEN,  CENELEC are also increas ingly focused on the area. 
Development of Member State initiatives has been patchy – with some more advanced 
Member States having adopted explicit policies30, but with the general picture one of slow 
progress. 
4.2.  Option 2: Stronger collaboration and pa rtnership within existing frameworks 
   - highlighted in a second Communication 
A second policy option could be to use existing policy and intervention frameworks to 
strengthen collaboration between Member Stat es and local authorities, and partnerships 
between different business sectors a nd in Public-priva te partnerships.  This could be 
highlighted in a further Communication . The focus would be on strengthening research, and 
building on the opportunities for pre-commercial public procur ement within the i2010 policy 
framework. The margin for leveraging significant new partnerships  or extending influence 
beyond current constituents would be relatively limited.  
The main existing frameworks at the EU level where partnerships and collaboration can be 
further strengthened in clude in particular:  
• The ICT Thematic Priority in the Framew ork Programme and the ICT Policy Support 
Programme (ICT PSP) within the Competitiven ess and Innovation Programme (CIP):  
o Across the sectors of application and fo r real-time monitoring of energy-use, 
provisions could be made in the 7th FP a nd in the ICT PSP of the CIP to establish 
interoperation protocols for networked system s of ICT-enabled energy-use monitoring 
and management, and to support large-scale de monstrations and the exchanges of best 
practices across the EU.   
o For energy use and carbon reporting, the RTD and CIP frameworks could be used to 
develop consensus on codes of practice for wide-scale use of ICT systems for 
monitoring and reporting energy-use in companies (including SMEs) and public 
administrations.  
o The CIP programme could be further exploited to access local and regional authorities 
and promote ICT tools to improve energy efficiency.  
o To reinforce and co-ordinate industry-led in itiatives for improved energy-efficiency in 
complex ICT systems and services, RT D on “future networks” and on “next 
generation components” for ICT systems have  been identified as key themes for the 
ICT thematic priority in the 7th FP in 2009-10. A stronger focus on energy-efficiency 
could be developed within these them es and perhaps even more broadly. 
• The i2010 policy framework:  
o The i2010 framework could bring together all three parties in partnership at the EU-
level perhaps under a new Flagship initiativ e to strengthen partnerships for ICT-
enabled structural change towards more energy-efficient cities and regions, and 
facilitate exchanges of best practice.  
                                                 
30 The Netherlands has undertaken to reduce emissions from the sector by 20% by 2020 using 2005 as the 
baseline year.  
 
EN 21   EN o Research support could be used to deve lop consensus on protocols for energy-use 
monitoring at city and regional-level, and to  demonstrate ICT-base d strategic-planning 
and monitoring tools for consistent  energy-use tracking and reporting. 
 
4.3. Option 3: Commission Recommendation on  mobilising ICT to facilitate the 
transition to an energy-efficient, low-carbon economy  
A third option could be to go beyond the co-ord ination possibilities of existing policy, 
research and innovation frameworks and fo rmulate actions, wherever possible into 
recommendations to a wider range of stakeholders  including to the ICT sectors,  industries, 
Member States, regional and local authori ties and cities. The Recommendation would be 
accompanied by supporting measures which the Co mmission can put in place in order to 
facilitate implementation of the recommen dations and complement actions of other 
stakeholders by its own actions and guida nce. These supporting measures would be 
highlighted in an accompanying Communication.   
Under this option, the Commissi on would propose to address stakeholders in the three key 
areas identified in the problem definition:  
- A set of recommendations addressed to the IC T sector in order to measure, control and 
manage its own energy footprint and encourage it to take a lead ing role in promoting energy 
efficient solutions in other sectors. 
- A set of recommendations addressed to the ICT sector to establish pa rtnerships with other 
major energy-using sectors, i.e. buildings a nd lighting, manufacturing, l ogistics and transport 
and electrical power grids. Recommendations coul d either tackle all these sectors or focus on 
a sub-set of issues/sectors where quick gains could be achieved first.  They would encourage 
partnership building and across sectors and with the ICT sector and stimulate adoption of 
common measurement, control and management tools for energy use.  
- A set of recommendations to catalyze a wider stru ctural change in the economy at large; i.e. 
beyond the ICT sector and other major energy using sectors. Recommendations would be 
primarily addressed to Member States and to th eir local and regional authorities. The key idea 
would be to help “empower” busin esses, public administrations at all levels and ultimately 
also citizens to make informed choices about their energy use and management and to provide 
them with the tools to measure a nd control their en ergy consumption.  
The accompanying Communication would address the following issues:  - Use of regional funds for measures supporti ng energy efficiency and sustainability. As 
regional funds can be used for ICT infrastr uctures, innovation and energy efficiency, the 
Commission would complement the recommendati ons to the local and regional authorities 
with a practical guidance on how local and regi onal authorities can ex ploit ICT and develop 
that guidance in collaboration with the Co mmittee of Regions and other stakeholders.  
- Support for broadband infrastructures. The Recovery Plan approved by the European 
Council in December 2008 includes a major budgetary stimulus for development of broadband infrastructures which will open up opportunities to connect communities and 
innovative businesses.  
 
EN 22   EN - Support the implementation of the recommende d measures. The Commission would act as a 
facilitator of discussi ons and partnership building among the relevant sector associations. An 
independent review group would be put in place to assess progress, recommend actions and advise on future initiatives.  
In more concrete terms, as explained in th e Explanatory Memorandum that accompanies the 
Recommendation, the Commission will kick-start th e process and will assist in the setting-up 
of the ICT for energy efficiency Steering Group.  
Further to this
, the Commission will: 
– Facilitate and contribute to improved co llaboration between public and private 
stakeholders, where necessary, to reach the required objectives; 
– Ensure the monitoring and follow-up of the Re commendation as well as the assessment of 
the progress of the sectors i nvolved against the recommende d measures and any relevant 
targets set; 
– Explore the possibilities of cr eating a European web portal that will serve as an open 
information and communication platform for th e exchange of best practices, knowledge 
and experience on the use of ICT for energy efficiency purposes. 
The Commission will make the review exerci se proposed in the Recommendation in 2012 and 
publish its results.  
In addition, the Commission will  continue to propose that related resear ch be financially 
supported via its various programmes. 
 
4.4. Option 4: Regulatory or  legislative measures 
There have been no calls for opt ion 4: a regulatory approach to achieve the objectives. A 
regulatory approach would inevitably impose a greater cost and administrative burden, 
notably on SMEs, and could unhelpfully constrai n developments in a highly innovative field. 
Beyond the regulatory measures already undertaken or pla nned by the Commission, as 
detailed in previous sections, there is only limited room for further legislation for the 
following reasons:   
- Not all the objectives can be achieved by re gulation (it is not possi ble to regulate the 
establishment of partnerships), therefore, this option cannot be  a standalone option and would 
have to be complemented by additional measures.  
- Certain aspects of standardisation and/or openness of systems could be mandated for some 
specific industrial tools and application ar eas. However, and in accordance with the 
Commission's general standardisation policy wher eby this task is devol ved where possible to 
industry and standards organisations , this is not an option to be  considered in the immediate 
future. In the long term, however, if no visible progress has been made, this option could be 
reconsidered.  
- The philosophy of this initiativ e is to draw the attention to the systemic view of energy 
efficiency and ICT's potential enabling role as  opposed to mandating or regulating for product 
 
EN 23   EN or equipment level energy efficiency improvement s. As every sector, system and context is 
different, regulation cannot be generalised.  
- Many of the above mentioned markets are sti ll immature and regulation could interfere with 
potentially favourable technological and mark et developments by constraining them.   
- Any legislative action initiated now would be t oo slow to impact the market; at least 1 year 
for legislative process and another 2 for transposition. 
- Finally, attempting to make ICT systems for en ergy efficiency mandatory in Member States' 
public procurement would (if successful) likely lead to the undesirabl e result of depriving 
Member States of the flexibility of a cas e by case assessment. Pre-commercial public 
procurement and lead markets are opportunities a nd the task is to enable Member States, 
cities and regions to best make  use of these instruments.  
Option 4 has not been considered practical or appropriate at this stage and is therefore 
discarded and not assessed further. 
4.5. Summary of main elements of Options 1, 2 and 3  
Option 1 Option 2 Option 3 
Existing legislation at the EU and 
national level and legislative proposals 
and initiatives in the pipeline 
Voluntary industry in itiatives in the ICT 
sector 
No or very limited partnerships across 
sectors  
Some regional and local/city voluntary 
initiatives 
Continuation of initiatives under the FP 
and CIP Strengthened focus on energy efficiency 
in the Framework Programme and the 
CIP (large-scale pilots, exchange of best practice, codes of practice) 
Closer partnership of business, regions 
and governments under a new i2010 flagship Recommendation to the ICT industry to 
agree on common methodologies and 
tools for measuring and controlling their own energy footprint 
Recommendations to the ICT industry to 
establish partnerships with key energy using sectors to encourage partnership 
building and across sectors and with the 
ICT sector and to stimulate adoption of common measurement, control and 
management tools for energy use 
Recommendations to Member States 
and their regional  and local authorities 
to monitor, manage and control their 
own energy use, and use ICT tools to support 'energy-efficient' decision 
making 
Accompanying Commission measures 
highlighted in a Communication 
 
EN 24   EN 5. ANALYSIS OF POTENTIAL IMPACTS AND COMPARISON OF OPTIONS  
5.1. Assessment of Option 1: No furt her action at the EU level  
With respect to the policy interventions alread y in place or proposed at the EU level, it is 
reasonable to assume – in line with the as sessment made in their respective impact 
assessments – that they will strongly contribute to improvements in energy efficiency and more specifically to the global energy saving ta rget of 20% by 2020. However, there is a risk 
that the full potential of signifi cant energy efficiency benefits will  not be realised because, as 
noted earlier:  
– The enabling nature of ICT is not explicit ly recognised, nor is there any specific 
commitment from the ICT sector itself (apart from the individual commitments outlined in Section 4.1) to contribute to measuremen t and reduction of energy consumption.  
With respect to the voluntary commitments and existing voluntary initiatives both in the ICT 
sector and across sectors, regions and cities, these certainly represent a positive sign and can usefully complement the ini tiatives of the Commission, Member States and other public 
authorities. However, it can be reasonably as sumed that a number of key problems will 
remain:   
– Homogeneity: Industry associati ons and civil societ y groups tend to be rather homogenous 
in their stakeholder participation. As pointed out in the problem sec tion; cross disciplinary 
(engineers, users) and cross i ndustrial (ICT and other industries) contacts and dialogue are 
a necessity if ICT deployment for energy effi ciency is to fully materialise and gain 
mainstream acceptance. Currently the new types of partnerships across different sectors do 
no exist. 
– Piecemeal: The more stakeholder groups are bei ng formed the more the approach becomes 
piecemeal. This is not a drawback for specific subtasks or problems to be solved, however the absence of a common strategic view and agreed goal setting (e .g. "collective green 
target setting") renders these in itiatives less effective. In an  explicit recognition of this 
shortcoming there have been calls from these groups for leadership
31.  
– Economies of scale and scope: Worthy initiati ves at the European and worldwide level 
need coordination to share information, experi ence and best practice in order to build on 
each others' work and not duplicate efforts.  
– Scaling problem: Voluntary commitments that  originate from industry groups are of a 
limited visibility and usefulness: e.g. valuable  codes of practice have  been developed for 
data centres and broadband access32 but taken up only by a limited number of players. 
Similarly, other complementary commitments by participants in the Global eSustainability 
Initiative (GeSI) or the climate-savers com puting initiative have measurable but limited 
impact.  The major framework for voluntary commitmen ts to improve energy-efficiency at 
the equipment (rather than system or even systemic levels) is Energy STAR, and the 
                                                 
31 European Information and Communications Technolo gy  Association – EICTA, American Electronics 
Association – AeA,  Global eSustainability Initiative - GeSI 
32 http://re.jrc.ec.europa.eu/energyefficiency/   
 
EN 25   EN European eSTAR programme52, whose success is due, in consid erable part, to legislative 
backing and consequent near  universal acceptance.   
Cost of implementation 
For Option 1, the additional cost of implementa tion is zero as no new measures are proposed 
under this option. However, with respect to the opportunity costs of “not doing anything 
additional at this stage ”, these costs are not equal to zero and can be potentially relatively 
significant. They are certainly ve ry difficult to quantify and attribute at this point in time (also 
due to the lack of proper measurement) but the basic assumption is that if energy efficiency 
gains are realised too slowly with respect to th e global target, this will likely entail additional 
costs at a later point in time – this applies as much to individuals and businesses as it does to 
nations. Annex VI provides concrete figures of percentage added effort required year on year 
for delays33. 
In conclusion, the current initiatives – whether in the form of existing policy instruments or 
voluntary initiatives by different actors – will improve energy efficiency but do not sufficiently address the key problems outlined in  this impact assessment and present a risk 
that their implementation on the ground will be rather slow and piecemeal with respect to the global 2020 energy efficiency target of 20%.  
5.2. Assessment of Option 2: Stronger collabo ration and partnership within existing 
frameworks 
One advantage of Option 2 is that the framewor ks for support to collaboration in RTD and in 
CIP Pilot projects to demonstrat e ICT-based innovations already exist, and there is already 
substantial stakeholder participation in some actions. These frameworks are already used to a 
limited extent to support innovations in energy efficiency, and a stronger focus on this goal 
can be proposed beyond the curr ent workprogramme of 2009-2010.  
The disadvantages of option 2 are that many of the technologies which this work would wish 
to see deployed are already at the stage of commercialisation, and whereas the CIP pilot 
projects are more deployment and short term focussed, collaboration in RTD will only be of value for the next generations  of technologies which coul d be available beyond 2015. The 
focus of collaborative ICT-RTD in the pe riod 2009-2010 has already be en the subject of 
substantial consultation with the ICT research community and Member States prior to this 
consultation on energy-efficiency, and the next opportunity for a major re-focus of resources 
will not be before 2011-13. Ther e will therefore be little impact  on real-world deployment of 
the results of new collaborative RTD until afte r 2015, and it is therefore unlikely that RTD 
can contribute to the operati onal goals in Section 3 in th e short to medium term.  
The operational objectives also concern mark et deployment initiativ es and require the 
participation of non-research organisations. Indeed they require the broadest possible 
stakeholder participation. The Commission coul d take a role of coordinator; however 
resources would not allow working intensivel y with several sectors, cities and public 
administrations at the same time. Therefore, this  exercise would remain very limited in scale 
and scope. However valuable a framework i2010 has proven to be in interactions with 
                                                
 
33 Annex VI provided by the IMR World e-Business Intelligence Ltd illustrates what would be the cost to 
business of delaying efforts to reduce energy usage, given the 20% energy efficiency target by 2020.   
 
EN 26   EN Member States and existing consti tuents, it is restrict ed in its time horizon. As the objectives 
have been considered beyond 2010, continuity of structures and institutional arrangements is 
key to their realisation.  
Cost of implementation 
For Option 2, the additional cost of implem entation would be insignificant and would 
essentially include the cost of co-ordinating stakeholders within the new i2010 flagship 
initiative, the cost of organising the energy effi ciency awards and other actions for increased 
visibility of the results of research undertak en in the energy efficiency area, such as 
conferences, publications, etc. The increased focus of the RTD and CIP frameworks on 
energy efficiency would not mean that new and additional EU budgetary resources would 
have to be found in the current programming period. It might howev er mean that at least some 
resources available for the current programming period would have to be shifted from other 
priorities within the programmes and that th e future work programmes would have to put 
more emphasis on this field. This can be ch allenging and politically  difficult to realise 
because these decisions are taken separately  and follow their own specific comitology 
procedures and it is impossible for this impact  assessment to pre-empt their outcomes. With 
respect to the opportunity costs referred to under Option 1, these would be somewhat reduced 
in comparison to Option 1 as pilot initiatives and large scale research projects will 
progressively be implemented but there is still a risk of soluti ons not being readily available 
on a mass scale in the short to medium term.  
In summary; the operational objectives can only be partly accommodated within the existing 
frameworks.  
5.3. Assessment of Option 3: Recommendati ons on partnership initiatives, 
interoperability and best practices  
The advantages of Option 3 are that the scope  of recommendations could more accurately 
reflect the operational objectives as develo ped in section 3. Recommendations would 
encourage those stakeholders that are ready a nd willing to institute change i.e. provide a 
stronger political signal and visi bility for those willing to take up the challenge. It is assumed 
that the range of such 'volunteer' organisations or sectors will rapidly expand once there is more visibility for initiatives and more awar eness and knowledge abou t the cost and energy 
saving potential of cert ain ICTs, not to mention consumer  pressure. In comparison with 
Option 2, the clear political signa l represented in the use of the Recommendation instrument 
and consequent higher visibili ty could be expected to be tter catalyse the objective of 
accelerating change in the timeframe envisaged. 
By focusing on co-ordination, partnership buil ding and deployment of ICT tools, Option 3 
can be implemented faster than Option 2, given th e readiness of several major stakeholders to 
act upon Commission recommendations. The need to accelerate change has been identified as 
the key challenge for this initiative and Option 3 sc ores better than other alternatives in this 
respect, as it offers a potential for faster and more flexible implementation while addressing a wider spectrum of stakeholders beyond the existing collaboration frameworks.  
In summary, Option 3 can: 
– Address a wider spectrum of organisations  
 
EN 27   EN – Catalyze on the fact that the consultation ha s indicated the readiness of several major 
stakeholder groups to take initiatives within a policy framework at EU-level. 
– Reinforce various business-led a nd city-regional partnership initia tives that exist, provide a 
strong political signal an d more visibility.  
– Enable systemic effects and improvements in energy efficiency at the system level to be 
addressed. 
– Ensure faster implementation in comparison to Option 2 
Option 3 does carry risk in terms of the achievement of the objectives: i.e. as much is left to 
industry or individual cities and regions with a limited role for the Commission in terms of 
coordination and agenda setting, the extent to which the problems will be remedied is still 
subject to uncertainty. This risk in achieving th e first step operational objectives could delay 
the ultimate longer term objectives. Nevertheless,  the risk can be mitigated by an adequate 
evaluation and monitoring system and by the in volvement of the Commi ssion as a facilitator 
in the partnership and consensus building processes.  
Cost of implementation  
Option 3 presents certain difficulties in assessment of the costs that can be attributed to it. 
Firstly, there is a cost of co-ordination, build ing partnerships across sectors and agreeing on 
the common methodologies and tools for measurem ent, exchanging best practice, etc. This 
cost is relatively insignificant and certainl y manageable for the parties involved. Secondly, 
there is the cost of the ICT tools themselv es: smart meters, energy accounting software, 
automation tools, measurement and quantification tools, ICT tools for optimisation of energy 
consumption (embedded intelligence), etc. The indicative cost of some of these potential 
investments is investigated and illustrated in Annex IV. Thirdl y, there is a certain amount of 
up-front cost in restructuring an d/or behavioural change that wi ll have to occur if energy 
consumption is to be reduced in any significan t way. This cost can be potentially significant 
in some cases but also partly or even entirely  offset by the benefit of using less energy (and 
therefore paying lower energy bills).  Nevertheless, it is important to note that this Option is in 
the spirit of the general policy on climate change and energy and particularly in the spirit of 
the 2020 global targets agreed by the EU. Th e Recommendation is meant to facilitate 
achievement of those targets and is not at the or igin of those targets. It would, therefore, be 
incorrect to attribute the co st of restructuring to th e Recommendation itself.   
5.4. Comparison of Options  
Comparison of options and their impacts will be carried out in two steps:  
- In the first steps, broad policy options outlin e in Section 4 (Option 1, 2 and 3) will be 
assessed against a set of predefined criteria. This general assessment will take into account also the suitability of the different policy instruments (no change, Communication, Recommendation) for achievi ng the objectives. A preferred policy 
option will be identified as a result of the comparison of the three main options.  
- In the second step, the content of the pref erred policy instrument will be defined in 
more detail and assessed again against a set of criteria and against the policy 
objectives defined in Section 3.  
The assessment criteria 
 
EN 28   EN The extent to which the global, specific and ope rational objectives materialise depends mainly 
on the degree of commitment of the business community and civil society: i.e. how many industry players in how many sectors, how many  cities and public admi nistrations commit to 
take action. The scope and strength of comm itment of stakeholders are therefore very 
important criteria of success of this initiati ve. The preferred option should be enabling and 
catalyzing change rather than imposing it thr ough regulatory measures at this stage.  
It is also important to note that the criterion of “speed of implementation” is crucial to the 
success of any proposed actions/meas ures. If the actions are to contribute to the 2020 energy 
efficiency goals and complement the Commissi on Action Plan for Energy Efficiency in a 
useful and timely manner, it is  important that there is a st rong potential to achieve the 
operational objectives in a relatively short term.  
The criterion “cost of implementation” also fo rms an integral part of the assessment of 
options to avoid disproportionate implementa tion costs of any measures that would be 
proposed.  
Options 2, 3 are therefore assessed in comparison with Option 1 in terms of: 
Strength and Scale of commitment by the ICT sector, businesses, regions and cities 
Speed of implementation  
Cost of implementation  
Risks/uncertainties with respect to implement ation of the options and expected impacts 
A summary of the assessments of the two main policy options considered using Option 1 as a 
baseline is given in the table below. Options  are assessed against the five above-mentioned 
criteria.  
 Policy Option 2 
Stronger collaboration and partnership 
within existing frameworks  Policy Option 3 
Recommendations on partnership initiatives, 
interoperability and best practices – in 
addition to Option 2  
Strength + 
Strong commitments. However low visibility 
and hence relatively weak political impetus 
for projects 
 
 ++ 
Industry and specific regional and city 
organisations have called for recommendations 
in the consultation process as the “signal” that 
would enable widespread mobilisation of the 
ICT sector, its clients and partners (present and 
prospective) 
Scale  0 
ICT-sector partnerships with cities and 
regions have already been initiated, however, 
the reach is inevitably smaller and there is a 
clear lack of co-ordination, visibility and 
critical mass  
 
 ++ 
A number of business groups appear ready to 
act immediately on Commission 
Recommendations, and could be ready with 
large-scale deployments within 12-24 months
“GreenIT City” groups also appear ready to act 
on Commission Recommendations, and could 
be ready with political commitments within 6 
months and large-scale deployment within 12-
24 months 
Speed of implementation 0/+ 
Slow paced steady progress ++ 
Faster implementation and uptake due to 
 
EN 29   EN New RTD initiatives initiated by Calls for 
proposals in 2009-10 would not be 
operational until 2010-2011, and would not 
deliver prototype solutions and consensus on 
interoperation protocols until 2012-2013. greater flexibility in implementation and 
several industry groups, cities and MS working 
in parallel. 
Risk  - 
Small scale but some risk involved in 
uncertainty related to the comitology 
procedures for the future priorities and 
budgetary allocations for the FP and CIP- 
Less control for the Commission. However, the 
Commission would still be involved as a 
facilitator and coordinator and monitor 
progress 
Cost of 
implementation 0/- 
Insignificant - 
Voluntary agreements will impose co-
ordination costs on participants, but under their
control. The recommendation can indirectly 
cause cost for some “late movers” in some 
sectors and public administrations in the 
acquisition and implementation of ICT tools. 
Conclusion  
As the assessment shows, Option 1 already invo lves improvement in energy efficiency as a 
result of the existing or proposed policies and voluntary initiatives. However, the assessment 
also points out significant shortcomings and reasons why it is reasona ble to assume that 
Option 1 by itself will not sufficiently tackle the problems and achieve the objectives, or at 
least not in the given timeframe.  
With respect to Option 2, there is no doubt that  research effort and contribution of public 
funds to research and deployment of energy e fficient technologies shoul d continue and should 
be even intensified to the extent possible. Howe ver, given the urgency an d nature of the issues 
at stake, the EU and MS research funding alone cannot solve the problem. Option 2 is 
therefore not a preferred option. Not because it is an approach that should not be pursued at 
all but because a more holistic approach involvi ng wider range of stake holders and realisable 
in the short term is available.  
Therefore, Option 3 can be identified as the pr eferred option. It scores  positively against the 
assessment criteria for scale and strength of commitment and speed of implementation. In 
comparison to Option 2, it is certainly a more ambitious approach which addresses a wider 
range of stakeholders.  
6. SUB-OPTIONS UNDER THE PREFERRED POLICY INSTRUMENT  
6.1. Description of Sub-options 
The assessment in Section 5 identified Recommendation as a preferred instrument for this 
specific intervention and described the content of the Recommendation in broad terms: it 
would address a wider stakehol der base, it would be focu sed on issues that can be 
implemented in a short to medium-term, it woul d focus on the three main areas outlined in the 
problem definition and it would be accomp anied by supporting Commission actions outlined 
in a Communication. This secti on presents a list of concrete recommendations that could be 
envisaged, assesses and compares them and draw s a final set of recommendations that could 
best achieve the given objectives.  
 
EN 30   EN The following specific recommendations coul d be addressed to the ICT industry:  
1. The Commission could recommend that the ICT industry agree on establishing 
common methodologies and tools for the energy  efficiency of systems and networks 
and make those comprehensive, transparent and verifiable.  
2. The Commission would recommend that th e ICT industry develop roadmaps by 2010 
for the reduction of its energy use a nd carbon emissions and commit itself to 
ambitious and transparent targets for this reduction.  
3. The Commission could recommend a specific qu antitative target for reducing energy 
consumption and carbon emissions in the ICT sector. This target would be set by the Commission and would be in line with th e global 2020 energy efficiency target.  
4. Given the international nature  of the ICT industry and th e often complex supply chain 
relationships, the Commission could reco mmend that the ICT industry collaborate 
with international suppliers  in order to develop new energy efficiency and carbon 
reduction strategies and make sure that ex isting EU and international frameworks are 
taken into account.  
The following specific recommendations could be addressed to the ICT sector to establish 
partnerships with other energy-using sectors :  
5. The recommendation could choose to focus on ly on some of the key energy using 
sectors where major savings could be realis ed in the short-term and where a strong 
commitment of stakeholders has been already signalled during the consultation 
process. This would be the case of the logistics and the buildings and construction sectors. The Commission woul d recommend that the ICT s ector forms partnerships 
with these sectors so that their tools are based on comm on methodological approaches 
for measurement and reporting of energy cons umption, already being prescribed under 
the Directive on the Energy Performance of Buildings
34 and the Freight and Logistics 
Action Plan35. 
6. A recommendation could be made to the electr icity sector to accelerate investment in 
automated customer communications and accele rate the roll-out of smart meters and 
real time energy consumption displays to households.  
7. The Commission could recommend that Memb er States agree on common functional 
specifications and a timeframe for the roll-out of smart metering 
8. As in the case of the ICT sector, the Commission could set a specific quantitative 
target for these sectors in order to reduce their own energy consumption and carbon footprint.  
The following recommendations could be envisaged in orde r to encourage a shift in 
behaviour of consumers, businesses and communities in the economy at large:  
                                                
 
34 Directive 2002/91EC; www.buildingsplatform.org 
35 COM (2007) 607 final 
 
EN 31   EN 9. A recommendation could be made that co mpanies, using ICT tools, should track, 
identify and reveal to the consumer the total energy and carbon footprints of product 
end to end.  
10. A recommendation could be made that reta ilers and others depl oy machine-readable 
energy labelling systems to enable citizens to make low-carbon choices in their daily 
lives.  
11. Cities, utilities and other intermediaries could be called upon to ensure that European 
citizens are offered the possibility of  being billed on a monthly basis.  
12. The Commission could recommend that ci ties and regions through the aegis of 
Member State regional and public authorities take the lead in establishing multi-sector partnerships to adopt a syst emic view of their operati ons and deploy ICT systems to 
monitor, manage and control energy usage
36.  
13. It could be recommended to Member States  and their public administrations, as well 
as regions and cities,  to exert greater demand-side pressure through “GreenIT” public 
procurement . The Commission would a ssist local and regional authorities in their 
efforts to leverage the green public procur ement practices by producing a toolbox with 
information, sources and methodologies.  
6.2. Assessment of Sub-options  
Options for individual recommendations will be  first assessed in terms of their expected 
benefits, costs and risks/uncertainties  related to their implementation:  
 
Options Benefits Costs Risk of non-compliance 
ICT sector 
1 Building partnerships within the ICT 
industry common measurement tools  
lower risk of “greenwashing” Low cost of establishing voluntary 
agreements and codes of conduct Low; many stakeholders have 
already asked for some leadership from the 
Commission 
2 Concrete commitments for energy 
savings based on commonly agreed 
methodologies and targets Lower energy consumption and carbon 
emissions from the ICT sector in the 
short- to mid-term Lower energy bills for ICT businesses Cost of adapting the ICT tools and 
methodologies 
Cost of restructuring (partly or entirely offset by the benefits of lower energy 
bill) Some companies may be 
reluctant to commit to ambitious 
targets 
3 Benefits from concrete energy savings 
if ICT sector implements the targets 
Easier to monitor progress towards the 
global 2020 targets Potentially high cost for some sectors 
within the ICT industry where the targets 
were too ambitious Imposed targets, not agreed by 
the industry, therefore high risk 
of non-compliance. Risk of 
“regulatory failure” (setting targets when the quantification 
and measurement issue is not 
solved yet) 
                                                 
36 The DEHEMS RTD project provides one example including the city of Manchester 
 
EN 32   EN 4 Strengthened international co-operation 
in the area of energy efficiency, increased potential to achieve more 
savings throughout the whole supply 
chain Cost of building partnerships and 
developing strategies Relatively low, will depend 
partly on willingness of international partners in the 
supply chain  
ICT and Energy-using sectors 
5 Strong commitments, visibility and 
leadership from stakeholders who 
already showed willingness to act upon the recommendation. New partnerships 
between the ICT sector and other 
sectors. Common measurement and quantification capabilities Low and manageable. For most 
stakeholders in these sectors the cost 
will be lower than the benefits (e.g. better managed energy use in logistics 
means direct savings of operational 
costs) Low risk of non-compliance as 
these sectors indicated 
readiness to act upon the recommendations 
6 Potential to deliver high visibility and 
real opportunities for encouraging 
behavioural change and better 
management of energy but in mid- to long-term perspective Involves up-front costs and is likely to 
be difficult to implement technically in a 
short term without commonly defined 
specifications and standards High risk of non-compliance; 
not feasible at the early stage of 
energy markets liberalisation 
where there is uncertainty with respect to the evolution of the 
energy markets 
7 Less ambitious than Option 6 but 
creates the necessary conditions for 
roll-out of smart meters. Enabling rather than “command and control” 
approach Low cost Relatively low risk of non-
compliance but depends on 
Member States and the progress must be monitored 
8 Highly ambitious but di fficult to realise 
the benefits of energy savings without 
common methodologies and ICT tools in place to enable those savings High up-front costs for some 
stakeholders in some sectors may be 
disproportionate High risk of non-compliance. 
Risk of “regulatory failure” 
(setting targets when the quantification and measurement 
issue is not solved yet and very 
different sectors are involved) 
Economy at large 
9 Better information for the consumer, 
high visibility and traceability of energy 
consumption and carbon footprint Difficult to implement on a mass scale in 
the short term.  High cost of determining 
the total energy and carbon footprint for some products and services  High risk of non-compliance 
(with the exception of a few first 
movers who are already doing it) 
10 Highly ambitious. Similar to Option 11, 
high visibility empowering consumers 
to make informed choices. A strong 
political signal for the first movers and existing voluntary initiatives.  Similar to Option 11; involves cost of 
labelling High risk of non-compliance, 
can be implemented only when 
common methodologies and 
tools are in place and energy and carbon foot-printing is 
carried out on a mass scale.   
11 Increased visibility and an opportunity 
for consumers and businesses to better 
manage their energy consumption  Increased costs for energy providers; a 
detailed impact assessment of concrete 
implications would need to be carried out, a review of energy legislation may 
be necessary High risk of non-compliance 
12 Opportunities for new partnerships. 
Common tools for energy 
measurement and management of Cost of developing energy efficient 
strategies and implementing ICT tools, 
cost of energy accounting. Relatively High commitment from first 
movers and most progressive 
cities. Risk of some reluctance 
 
EN 33   EN energy consumption fo r cities, regions 
and public administrations.  Opportunity to identify new energy savings within 
the complex systems  low and manageable.  and budget constraints for slow 
adopters.  
13 Systematic green procurement at the 
regional and local level would bring 
significant positive impacts in terms of a more systemic approach to energy 
use in the public sector, more energy 
savings and increased accountability No additional cost or very limited cost of 
implementation  Depends on implementation in 
individual MS. Risk of non-
compliance can be lowered by providing a clear guidance and 
reinforced monitoring 
It is apparent from the table above that th e recommendations differ in the level of their 
ambition, the costs involved and risks and uncer tainties related to possible non-compliance. 
Some recommendations would be highly beneficial from the perspective of the consumer or 
the overall energy efficiency ta rget but would involve high co sts for some businesses in the 
short term or would be difficult to im plement because common methodologies and 
measurement tools are not yet in place.  
6.3. Comparison of Sub-options   
In order to summarize the assessment and comp are the 13 possible sub- options for concrete 
recommendations, the following fi ve criteria are used:   
– Potential for energy savings  – for most measures, concrete  energy savings represent an 
indirect but desired effect/result of thei r implementation. They depend on many factors 
including the commitment of stakeholders and costs of imp lementation. Therefore, this 
criterion assesses only the potential for ener gy savings, other things being equal.   
– Speed of implementation  – expected speed of putting the measure in practice. A measure 
which can be implemented within  two years would score high.  
– Cost of implementation  – the precise cost is in some cases difficult to identify. This cost 
therefore includes the direct co st of a measure (e.g. the cost of building partnerships and 
developing the tools) and indire ct cost that can be reasonably attributed to the measure 
(e.g. cost of some restructuring needed to m eet a specific quantitativ e target for a sector) 
– Risks/uncertainties  – as mentioned above, these are re lated to the risk of non-compliance 
and reluctance of the stakeholders to commit 
– Overall effectiveness  – the extent to which each sub-option achieves the objectives 
outlined in Section 3. This is a summarizing cr iterion which takes into  account the results 
of the previous four criteria. For example, if the potential fo r energy savings of an option is 
high but the cost is high as well and there is a high risk of non-compliance, the option 
would score “low” in  this criterion.  
The table below summarizes the main results of the assessment: 
 
EN 34   EN Options  
Energy savings potential 
Speed of implementation  
Cost of implementation 
Risks/Uncertainties 
Overall effectiveness 
1. Common methodologies and tools in the ICT 
sector high medium 
to high low low high 
2. Roadmaps for energy use reduction to be 
presented by the sector high high low to 
medium medium high 
3. Quantitative targets for energy use reduction  high medium medium 
to high high low 
4. International collaboration within the supply chains medium high low low medium 
to high 
5. Focus on logistics, buildings and smart meters, 
adoption of common tools high high low low high 
6. Accelerate investment and roll-out of smart meters 
in the electricity sector high low high high medium
7. Common functional specifications and a 
timeframe for the roll-out of smart metering medium 
to high medium low low medium 
to high 
8. Quantitative targets for key energy using sectors high low high high low 
9. Track, identify and reveal energy and carbon 
footprint of products and services  medium low medium 
to high medium 
to high low 
10. Machine-readable energy labelling systems medium 
to high low high high low 
11. Billing on a monthly basis medium 
to high low medium 
to high high low 
12. Partnership of cities  and regions with ICT to 
deploy ICT tools and disclose their energy use high medium 
to high low to 
medium low high 
13. Encourage green IT procurement at regional and 
local level high high low medium high 
The comparative table reveals that the overall effectiveness of some recommendations is low 
for various reasons: some of th em represent a more “command and control” approach (e.g. 
setting detailed quantitative targets for sector s) which would be difficult for many actors to 
comply with at this stage, some of them are premature at this stage or relatively costly to 
implement and therefore carrying a higher risk of non-compliance.  
As noted earlier, Option 3 is conceived as a platform for building new partnerships, 
developing common tools and catalyz ing change, rather than impos ing strict targets. It is 
therefore assumed that sub-options of a mo re “enabling” nature with limited cost of 
implementation and some stakeholder commitme nt will be more likely to achieve the 
objectives in the short term. It can be therefore concluded from the assessment and comparison that sub-options 3, 6, 8, 9, 10 and 11 should not be pursued as part of the Recommendation at this stage. The retained sub-options 1, 2, 4, 5, 7, 12 and 13 would then 
form the preferred policy option for a Reco mmendation, together with the accompanying 
measures outlined in section 4.3.   
 
EN 35   EN 7. EVALUATION AND MONITORING  
The preferred option does carry  a certain risk of non-rea lisation irrespective of how 
committed certain sectors, cities and businesses app ear to be. In order to assess the progress in 
implementation and the need for further or stronger measures for the achievement of the strategic objectives, monitoring will start im mediately and a comprehensive evaluation will 
carried out in 2012.  
The Commission will be in charge of mon itoring progress and providing a report on the 
implementation and impacts of the Recommendati on. Member States will be asked to inform 
the Commission of actions taken in respons e to the Recommendation within 12months.  
The link between ICT-use and energy-efficiency  improvements across the economy, either in 
specific areas of energy-use, or in structural ch ange is too complex for aggregate measures of 
energy-efficiency to be used as indicators of the effectiveness of the measures considered. It is 
therefore proposed to base the evaluation and monito ring on the operational objectives  in the 
specific areas of focus. 
 Special attention will be paid  to assessing progress in the three main areas addressed i.e.:  
• The extent to which the  ICT Sector has e ngaged in addressing energy use and emissions 
reductions and in particular progress in  benchmarking, strategy elaboration and 
implementation 
• The development of partnerships and uptake of  ICT for energy efficiency  in the major 
energy using sectors addressed 
• Evidence of ICT's contribution to energy effici ency emerging in the strategic thinking and 
tactical implementation in the behaviour of consumers, businesses and communities.  
Specific indicators will include the following: - The letter of inte nt by the ICT sector a ssociations to agree on common methodologies and 
metrology tools, received within 6 mont hs of adoption of the recommendation 
- Status of standardisation activities with respect to the common methodologies and 
metrology tools in the ICT s ector and in other sectors 
- Common functional specificati ons for smart meters by 2011 
- Roadmaps containing highly ambitious, quantita tive targets for increasing energy efficiency 
presented by the ICT sector by 2010 
- Common measurement and repo rting formats for energy consumption and carbon emissions 
of the processes and services pres ented by the logistics sector by 2012 
- ICT solutions in the buildi ngs and construction sector co mmonly adopted in partnership 
with the ICT sector 
 
EN 36   EN Annex I 
Extended Analysis of Energy use of ICT equipment and services 
ICT equipment and infrastructures use electri city as their primary form of energy, and 
represent some 8% of the tota l electricity consumption in EU  27. Equipment, such as PCs, 
mobile phones and the communications infrastructu res with data-centres used about 3.5% (97 
TWh/a) of electrical power in the EU in 20052. In addition, to this, consumer electronics, 
notably TVs and HiFis also used about 4.5 % (120 TWh/a) of electrical power, and are 
increasingly networked through co mmunications infrastructures.  
Together, these classes of equipment were responsible for about 2% of green-house gas 
emissions: about ¼ from production and ¾ from use. This estimate is consistent with others37. 
Worldwide, the ICT equipment and service-foot print is estimated to  be about 1150 TWh/a 
(also representing about 2% of GHG emissions).  
In future, ICT systems become more pervasive,  performance levels continue to rise and 
energy intensive applications to proliferate. Thus, despite continuing improvements in energy-
efficiency of individual equipment, their total energy use is growing, as is their share of the 
total: 10.9% of EU 27 electricity consump tion in 2020 will be consumed by ICT.  
BAU Scenario Annual Electricity Consumption of ICT (in TWh/a)
050100150200250300350400450
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Annual Electricity Consumption in TWhCellular Phone Network
Telecom Core Network
Servers/Data Center
Mobile phones
Broadband Modems 
Fax Machines
Smart Phones
DECT Phones
Set-Top-Boxes
VHS/DVD Player
Audio Systems
Televisions      
Imaging Equipment 
Mobile Devices 
Computer/Monitors
 
Energy-efficiency appears to be still sub-optim al for three reasons: Energy costs have been a 
small part of the “total cost of ownership” of  ICT equipment, infrastructure and data centres 
(although for the latter energy-costs are now b ecoming comparable with equipment costs); 
Energy-use depends on how equipment is used as  well as on the intrinsic energy-efficiency 
(users have often not taken advantage of ener gy-saving features), and energy-use in complex 
                                                 
37 Gartner: Green IT – The new industry shockwave, 2007; the SMART2020 report: www.smart2020.org , and 
the report of the Energy Servers consortium, October 2007. 
 
EN 37   EN systems, such as data-centres, is a combinati on of heating/cooling, light ing and facility-design 
– beyond the competence of any single supplier. 
Opportunities and obstacles  
ICT equipment and services can certainly be more energy efficient: Competitive pressures, 
technology innovations and market changes38, voluntary agreements39 and initiatives40 are 
already improving energy-effici ency. Mobile telephones ha ve become 100-times more 
energy-efficient in the last 20 y ears, and the energy-use of base  stations has been cut by over 
70% from 2001 to 2006. The average standby-power consumption of a TV has been cut from 
6W in 1995, to 2.5W in 2007, and “best-in-class” is now 0.3W41. These trends are reinforced 
by new targets of 0.5 or 1W by 2010 adopted u nder the eco-Design of energy-using Products 
Directive42. 
Demand-side pressure for great er energy-efficiency is also growing. The dominance of 
energy-efficiency characteristics in advertisi ng for ICT systems demonstrates the strength of 
customer interest. Public administrations are now major purchase rs: Energy-use by ICT-
systems for e-Government and public administra tion is now a significant part of the energy-
footprint of Governments. Several Member St ates have developed “Green IT” procurement 
strategies43 and Regulation (EC) No 106/2008 of the Eu ropean Parliament and of the Council 
of 15 January 2008 on a Community energy e fficiency labelling programme for office 
equipment makes the use of the underlying requir ements of the (volunta ry) Energy Star label, 
mandatory for central government authoriti es and Community Institutions in public 
procurement contracts falling within the scope  of the Public Procurement Directives. 
 
The Implementation of the EMAS scheme by DG DIGIT at the European Commission, for 
the purpose of the procurement of PCs used commission-wide is one such example. Since 
2006, procurement procedures evaluate offers based on the technical performance vs cost 
where cost is no longer the cost  of purchase alone but the To tal Cost of Ownership (TCO) 
(cost of purchase + cost of energy consumption)  of the equipments. Prior to this, the trend 
towards higher performance at lower prices  had led to a trend towards more energy 
consuming PCs at every new batch purchased. The two purchase procedures launched since 
the introduction of the TCO criteria have led to the acquisition of PCs with energy 
consumption similar to the levels of 2002 and a lmost half the consump tion of those purchased 
through the last procedure pr ior to the use of CTO. 
 
It is difficult to estimate the extent to which these efficiency improvements will be off-set by 
more pervasive use and higher performan ce requirements by 2020: There are major 
                                                 
38 For example, the shift from PCs to laptops, and from CRT to LCD displays 
39 For example the Energy Star initiative supported by the EU and USA. 
40 For example the "Climate savers Computing initiative" : www.climatesaverscomputing.org 
41 High-tech: Low Carbon. The role of the European digital technology industry in tackling climate change: 
Report by the European ICT Associati on (EICTA), April 2008. www.eicta.org 
42 Member States endorse Commission proposal to reduce standby electricity consumption 
http://europa.eu/rapid/pressReleasesAction.do?refer ence=IP/08/1117&format=HTML&aged=0&language=E
N&guiLanguage=en  
43 Notably Sweden, Denmark, Norway an d the UK: www.oecd.org/sti/ict/green-ict  and http://green-
broadband.blogspot.com/2008/05/webcast-of-oecd-workshop-icts-and.html 
 
EN 38   EN uncertainties about the likely growth in use, and energy-impacts of higher-capacity broadband 
infrastructure and data centres. In the EU, upgrading to higher-speed broadband access, higher 
capacity data centres and larger-screen TVs ar e likely to be the major drivers of higher 
energy-use44: On current trends, total energy use could grow to over 400 TWh/a by 2020: 
about 10.5% of projected incr eased electrical pow er consumption in 2020. However, one 
study estimates that, with some additional measures45, energy use could be limited to less than 
300 TWh/a in 2020, still under 8% of EU electrical power-use. 
At the global-level, the ICT energy consumption is expected to triple to over 3000 TWh/a by 
2020, representing about 3% of total GHG emissions in 2020. This increase  is mainly driven 
by higher usage in India and China,  and higher-capac ity data-centres46. 
The major obstacles to faster improvement in energy-efficiency of ICT equipment and 
services appear to be:  
The speed of energy efficiency improveme nts: Though many improvements have been 
implemented at the level of individual device s, a system-based view as opposed to a device 
based view is often lacking.  
Sub-optimal use of public procurement to act as  leverage and create a forceful demand side 
and a critical mass: Beyond ener gy efficiency criteria for indi vidual devices and equipment, 
public procurement should first of  all adopt a systemic view in order to spot and avoid 
rebound effects47. It can be also tool to provide wide scale acceptance and spread of 
technologies, be it particularly energy efficient ones or state-of-the-art  ones though the tool of 
pre-commercial IT48 procurement.  
Limited user awareness and slow behaviour change. The vast majo rity of users, for example, 
are unaware that their desk-top computers come loaded with energy saving features that 
simply need to be enabled. Informatics support teams and indeed purchasing departments are still ignorant of the steps that could be taken to improve an or ganisations IT infrastructure 
efficiency as well as performance. 
 
                                                
 
44 the BioIntelligence study 
45 "Virtualisation", consolidation and re-location of da tacentres; strengthened voluntary initiatives and codes of 
conduct; Green Public procur ement and more focused RTD 
46 SMART2020 report 
47 Are those when energy efficiency improvement does not  translate in aggregate sa ving but energy usage is 
transferred elsewhere.  
48 COM(2007) 799 
 
EN 39   EN Annex II 
Detailed Analysis of ICT-enabled improvement s in existing key energy-using activities 
Buildings and lighting  
Buildings use about 40% of energy and repr esent a similar proporti on of carbon-emissions. 
More than 50% of energy used in buildings is electrical power. The majority of energy 
consumption is due to space and water heating within households49. 
Recent research50 has shown that ICT-systems can impr ove the control and management of 
heating, ventilation, air conditioning, lightin g, and other energy-hungry devices. Recent 
developments in nanotechnology (e.g. windo ws, surfaces), sensor/actuator technology, 
wireless communication technolog y, and data processing and c ontrol offer new opportunities 
to embed networked ICT sensors and controls. Th is assessment addresses three main areas of 
opportunity:  
Heating, ventilation and cooling (HVAC) an d water-heating represents over 40% of 
residential electrical power use. However, th ere are now numerous commercial systems with 
smart ICT-based monitors and controllers. In conjunction with new boiler, pumps, heaters, 
radiators, and insulation, it is estimated that  ICT-systems can enhance the effectiveness of 
HVAC systems, with savings of 15-25% in resi dential property and 20-30% in commercial 
buildings51. The SMART2020 report indicates that be tter building design, management and 
automation could enable savings of about 15% in energy-use in North America. Additional 
savings may arise from spin-off technologies such  as electronically-con trolled “mirror-films” 
on windows17. 
Lighting represents about 14% of EU electrical power use in the EU52 and about 19% 
globally53. Most domestic lighting stil l uses incandescent bulbs, with poor energy-efficiency 
(12-15 lm/W) and short lives (1,000 hours). Compact fluorescent bulbs have higher 
efficiencies (60-100 lm/W) and much longe r lives (10,000 hours). Solid-state lighting54 is 
now becoming commercially available as a spin-off from the ICT sector: It has efficiencies of 
60-110 lm/W, with very long lif e (10,000-50,000 hours) and could cu t energy use by a further 
30-50% compared with compact fluores cent bulbs. Measures already proposed55 could 
already reduce lighting-energy-use by 25-30%.  Recent studies suggest that ICT-based 
occupation and natural-light monitors, smart- lighting systems could cut energy use by a 
further 25-30% by 202056. 
Use of electrical equipment (notably washi ng machines, dishwashers, refrigerators and 
ICT/consumer electronics) repres ents about 40% of el ectrical power use in homes in the EU. 
                                                 
49 http://www.odyssee-indicators.org   
50 Emerging Trend Update 3. The Role of ICT as En abler for Energy Efficiency  EPIS Work Package 1 – 
Deliverable 1.3 ETU. JRC 
 51 The lower estimates from the BioIntelligence report, p 15 0-153; the upper estimates from the Electra report, 
but with a wider range of technology-measures. 
52 Estimated at 13.8% of electrical power use in residential buildings by BioIntelligence (p.164) 
53 International Energy Agency : Light's labours lost, 2006: www.iea.org/Textbase/npsum/Light2006SUM.pdf  
54 Inorganic (LED) and organic light-emitting diodes (OLED) systems 
55 in the Framework of the eco-design and Energy-using Products Directive - 2005/32/EC on the eco-design of 
Energy-using Products (EuP) 
56 bioIntelligence  
 
EN 40   EN Their energy efficiency is addressed in the Directives on energy and end-use efficiency and 
energy-services, and energy-labelling of house hold products. The Intell igent energy-Europe 
Programme accelerating uptake and promoti on of energy-efficiency. Embedded ICT 
processors in such equipment already make a significant contri bution to improved efficiency. 
Embedded intelligence and networked contro ls could enable further improvements. 
The combination of these innovations, even on cu rrent trends, could probably enable energy-
savings in residential and commercial  buildings of about 450 TWh/a by 2020. An accelerated 
eco-strategy could possibly generate saving of up to 2000 TWh/a57, about 50% of projected 
electrical power use in buildings by 2020. 
There appear to be specific obstacles to  the realisation of these opportunities:  Firstly, there is 
a need for real-time energy-use visualization. “Smart Building Management Systems” rely on 
embedded intelligence and communications. Howe ver, sensors are still only in preliminary 
deployment; connection models & protocols58 need harmonisation and standardisation, and 
there is no standardisation of communication between proprietary platforms & networks. 
There is a lack of a syst ems-based view of buildings59. 
Additionally, there is a lack of incentives for architects, builde rs, developers and owners to 
invest in smart building technology from which th ey will not benefit, and an unclear business 
case and absence of business models supporting/pr omoting investments in energy efficiency: 
energy consumption is a small part of building cost structure, yet building automation costs 
can be high and payback periods are often long.  
The buildings sector is slow to adopt new technology – a 20-25-year cycle for residential 
units and a 15-year cycle for commercial buildings  is typical. In case of lighting technologies 
alone, the turnover rate in somewhat higher , though still low: some  15 years in case of 
commercial building lighting (t he biggest consumer).  
The LED technology is well known60, however, there seems to be a low awareness of their 
use in combination with ICT control systems.  
There is a perception bias, especially in case  of consumers who are often deterred by the 
initial higher investment and where purchase deci sions do rarely rely on life cycle cost and 
saving assessment.  
Manufacturing industry  
Manufacturing contributes 22% to Europe’s GDP and is responsible for 17-18 % of primary 
energy use [EC Green Paper, ELECTRA]. The c onsultation has identified energy-use and 
                                                 
57 BioIntelligence. In fact the accelerat ed "eco-strategy" is essentially conf ined to assuming increased consumer 
information to promote "vale efficien cy" and life cycle costs of product pu rchases, Europe wide adoption of 
green public procurement, extension of the Energy Star and EUP regeims to all products and the 
"development of financial incentives to foster green products". It is not therefore, in any sense, rigorously 
modelled. 
58 NFC - Near Field Communication, Bluetooth, Wi-Fi, RFID, ZigBee, Z-Wave, en Ocean, PLC, etc 
59 In most cases, separate controllers are used for so lar thermal, space heating and cooling, or the air-
conditioning system, without exchanging information. This leads to sub-optimal energy flow, comfort and 
cost. 
60 ChangeWave Energy Efficiency Report, 2008: 37% of  companies identified LED as the easiest way to cut 
back on energy usage.  
 
EN 41   EN opportunities for savings in four sectors:  discrete manufact uring, semiconductor 
manufacturing, process i ndustries and services. 
ICT could play a significant role in motor-systems and industrial-process optimisation 
[SMART2020]. Motors use about 70% of the elect rical power in industr y: However, 88% of 
the motor drives are not electronically controll ed. Some 50% could be equipped with  variable 
speed drives and save up to 50%  of energy-used [Electra]. More efficient use of compressed 
air presents opportunities for en ergy savings of 10-50% [COM PR AIR]: Research suggests 
that an awareness-raising programme in volving information, decision-making and 
measurement guidelines could reduce electric ity consumption by almost 17 %. In the 
electronic sector, the World Semiconductor Counc il has set a target to reduce normalised 
electricity consumption by 30% from 2001 to 2 010 [EECA ESIA]. In process industries, “in-
silico” simulation and process optimisation could revolutionise the way the chemical industries operate in the next  20 years [Wohlleben]. Model-ba sed catalysis could lead to 
efficiency gains of up to 50%. Model-based synthe sis concepts could lead to efficiency gains 
of up to 20%, and process modelling could lead to energy efficiency improvements of around 5%. 
The main obstacle to the realis ation of these opportunities appear s to be the lack of real-time 
information on energy-use: To optimise and oper ate an efficient factory, energy has to be 
measured locally and in real time. Developmen ts in microelectronics and embedded systems 
make it possible for networked embedded devices to provide real time feedback. Embedded, 
smart components and systems, sensor/actua tor networks and control algorithms can 
exchange data between the automation system and the enterprise resource planning system. 
Advanced systems are needed to monitor the stat e of production, the hea lth of the plant, and 
life-cycle information. Advanced scheduling al gorithms can reduce the time required to re-
tool or re-arrange production lines, and ICT-driven optimis ed production planning could 
allow scheduling of energy intensive tasks to avoid high impact peak loads. One major food 
processor has realised 9% energy-savi ngs by setting up an energy-monitoring system
61. 
In addition, machine tools are a major energy-user. However, energy efficiency of machine 
tools remains largely un-documented. The m achine tool sector, which is typically 
characterised by SMEs, lacks the incentives a nd expertise to significantly improve the energy 
efficiency performance. Coordinated action is needed at machine level, systems level and 
infrastructure level. The end-users of machin e tools cannot themselves  upgrade to variable 
speed controls, since the motors are embedded in equipment. They also lack information 
about energy-use in motor systems, and wire less networks to interc onnect equipment and 
plant-management systems are not yet standardised. 
Transport and logistics  
Transport systems represent a bout 30% of energy end-use, and numerous opportunities exist 
for improvements in energy-efficiency and ra tionalisation of trans port logistics: More 
efficient vehicles, road telematics for route guid ance, traffic control and road-charging; better 
fleet management; more efficient traffic lights, and systems to encourage eco-driving. Efficiencies in transport and logistics could deliver savings of nearly 500 TWh/a (equivalent 
                                                
 
61 Jacob Fruitfield, Ireland: Annual report for 2007 
 
EN 42   EN to cutting emissions by 200 MtCO2e) in the EU alone, and over 3000 TW h/a (or 1.5GtCO2e) 
worldwide62. 
In relation to manufacturing ac tivities, it has been estimated that ICT-optimised logistics 
could also enable a 16% reduction in transp ort emissions and a 27 % reduction in storage 
emissions globally [SMART2020]. These improve ments can be made through software to 
improve the design of transport routes and networks, route optimisation and inventory 
reduction. 
The specific obstacles to realisation of thes e opportunities are the fragmentation of the 
market, the lack of standards and the lack of sy stems for freight exchange  and a lack of data 
and the complexity of logistical systems63. 
Electrical power grids  
Energy generation and distributi on uses one third of all prim ary energy. The architecture and 
management of energy distribution and transmissi on relies on a technolo gy that is currently 
120 years old. Deploying networked ICT could make not only the management of power 
grids more efficient and reliable but also facilitate the integration of renewable energy sources.. A “smart Grid” is a set of electroni c meters, software and other tools which, once 
connected trough the internet or in to a network allows power to be provided and shared more 
efficiently, reducing the need for peak ca pacity, and allowing two-way, real-time 
communication with customers. ICT can help reducing distribution and transport losses, 
which average 7-8% in Europe64. ICT-systems in  “Smart Grids” have been identified in 
numerous studies as an opportunity for effici ency improvements and FP5 and FP6 projects 
dedicate considerable resources to them.  
A key element in Smart Grids is the Smart meter at the energy-user’s location . Smart Meters 
provide the customer with real-time displa y of energy-use, link to an onsite Energy 
Management Systems, and via a communica tion network to the energy company for 
monitoring and billing (Automat ed Meter Reading, AMR). Howeve r, smart meters also offer 
customers more accurate real-time bills; inform ation that could encourage investment in 
energy efficiency; lower costs through reduced peak consumption and increased security of 
supply. 
In most European countries, energy consumption is still measured with induction meters that 
can only measure the cumulative consumption. Th e EU directive on energy end-use efficiency 
and energy services, however, requires the in stallation of individuali sed meters that can 
inform end-users about their ac tual energy consumption. Some initiatives have already been 
taken by some Member States and companies. Amongst others
65 the up to now largest and 
widest scale example is in Italy. From 2000 to  2005 Enel deployed smart meters to its entire 
customer base of 30 million. Meters included a Power-line Communicator transmitting data to 
an interface to existing IP-networks. However, most meters were read via a GSM link because 
this network has the broadest coverage. in 2006, also the Dutch ministry of economic affairs 
decided to replace all electricity and gas me ters by automated meter-reading systems.  
                                                 
62 SMART2020 
63 Logistics: sustainability champion or lagg ard? ELUPEG: www.supplychain-consulting.com 
64 www. Leonardo-energy.org 
65http://maps.google.com/maps/ms?ie=UTF8&hl=en&msa= 0&msid=115519311058367534348.0000011362ac6d7d21187&ll=53.956086,14
.677734&spn=23.864566,77.519531&z=4&om=1  
 
EN 43   EN Real-time feedback to users has shown reduc tions of 5-25% of energy consumption66. Trials 
in Finland and the US have shown reductions of 6-7% in energy-use. In the US Olympic 
Peninsula project67, active participants reduced power-u se by 15 percent during key peak 
hours. Consumers saved approximately 10 percent on their electricity bills.  In the  pilot project 
of the Norwegian SINTEF Energy Research  institute, the customers reduced their 
consumption by 24.5%. In Britain,  for residential and small businesses, smart metering was 
estimated to lead to 3.4% in energy savings and 1% carbon savings. The trials in Canada in 
2006/07 indicated a 6% average energy conservati on effect and critical Peak load shifting 
(summer) by 5.7% - 25.4%68. According to the Smart 2020 repor t, Smart grid technologies 
could reduce global carbon emissions by  3.9% by 2020 (2.03 GtCO2e) and save $124.6 
billion.  
There are other advantages of “smart meteri ng”: According to the French regulator, the 
implementation of smart metering could increa se supplier switch capability by factor 10, 
decrease non-technical losses by 50%, and decrease residential consumption and CO2 
emissions by 5%. The UK Government BERR report69 indicates smart metering solutions can 
provide more accurate billi ng of customers; improved en ergy network management; the 
facilitation of energy efficiency measures; improved customer services, and reduction in costs of pre-payment meters. IBM co nducted an international survey
70 of 1900 households 
highlighting also the attitude changes smart metering induces in people vis-à-vis energy 
efficiency.  
Only a combination of technologies can de liver large-sale smart metering: Embedded 
computer systems in smart meters and appl iances, connected by broadband access; Power 
Line Communications, optical fi bres or wireless technologies71. Various protocols72 can 
provide connectivity in the customer premises. However, all these comb inations and options 
will need to interoperate, and common standa rds are still needed for the Smart meter 
communications interface.  
The Measuring Instruments Directive73 regulates metering products through technical 
standards for ‘essential requirements’ including accuracy, durability, and security. It allows compliant goods to be awarded the ‘CE markin g’, giving them free m ovement throughout the 
European Community. The Commission has re cently issued a standardisation mandate
74 for 
utility meters.  
 In addition, a key obstacle is the rapid t echnology change in commu nication technologies. 
The “smart meter” business case will be built on a long term view, maybe 10 – 15 years 
                                                
 
66 The Effectiveness Of Feedback On  Energy Consumption. A Review For Defra Of The Literature On Metering, Billing And Direct 
Displays. Sarah Darby, April 2006  
67 http://gridwise.pnl.gov/docs/op_proj ect_final_report_pnnl17167.pdf  
68 http://www.oeb.gov.on.ca/documents/cas es/EB-2004-0205/smartpricepilot/OSPP%20Fin al%20Report%20-%20Final070726.pdf  
69 Impact Assessment of Smart Metering Roll Out for Domestic and Small Businesses, April 2008 
70 http://www-03.ibm.com/industries/utilities/doc/content/landingdtw/3165578119.html?g_type=pspot 
71 For example: GSM/GPRS. 3G, Wimax etc 
72 For example: CAT5, WiFi, Bluetooth, Zigbee, and Homeplug etc 
73 Directive 2004/22/EC of the European Parliament and of the Council on measuring instruments   
74Standardisation mandate to CEN, CENELEC and ETSI in the field of measuring instruments for the 
development of an open architecture for utility meters involving communication protocols enabling 
interoperability 
 
EN 44   EN whilst communication technologies are changing very rapidly and may have a much shorter 
lifecycle. 
Establishing an entirely smart grid is also a ve ry investment intensive. Its realisation will 
require a holistic approach; implementing it a piecemeal way is hardly likely to generate a 
substantial return on individual investments.  
 
EN 45   EN Annex III 
Examples of ICT-enabled Structural Chan ge enabled improvements in efficiency 
Quoting from Prof L Hilty75 “The long-term availability of  ICT services may enable and 
foster a transition to a less materi al-intensive economy in two ways:  
Firstly, by helping us to monitor and understa nd the processes in the environment much 
better; this will hopefully lead to a higher leve l of awareness and more effective governance 
of our interaction with the e nvironment, i.e. the mass and en ergy flows between society and 
ecosystems at the local, regi onal and global levels (environm ental information processing); 
Secondly, by establishing business models and life styles in which production and 
consumption is dematerialized, i.e. value creation is  based on creating stru ctures and almost 
decoupled from mass and energy turnover, while  consumption is focused on services and 
almost decoupled from traditional ownership of  physical goods (structura l dematerialization).. 
What is needed from the standpoint of sustainab ility is a deep structural change which would 
make the above mentioned substitution effects into an essential feature of the economy. In an economy that has been dematerialized in this way, value-added would depend a lot more than 
it does today on the creation of structures and not on the churning of material and energy.” 
 
Conceptual framework for ICT and Sustainab ility developed by Prof. Hilty at EMPA 
Dematerialisation and virtualisation have alre ady had direct impacts on the utilisation of 
energy; through reducing the ener gy costs related physical ma nufacturing (replacement by on-
line goods or services) or reducing transaction costs (e.g. travel).  
The SMART2020 report indicates that replacing energy-intensive activities (such as physical 
products and meetings) with lo w-energy alternatives (such as  eCommerce, eGovernment and 
video-conferencing) could save about 1000 TWh/a by 2020 worldwid e; about 1-2% of 
energy-use (equivalent to about 500 MtCO2e emissions), compar able with the footprint of 
ICT use. The largest savings identified to date come from wider use of telework, saving up to 
                                                
 
75 Information Technology and Sustainability - Essays on the Relationship between ICT and Sustainable 
Development, Hilty 2008 
 
Innovation
Innovation
 
EN 46   EN 500 TWh/a by reduced commuting and office-space.  Tele-and video-conferencing could also 
replace 5-20% of global business travel. For th e EU, the estimate of about 1% savings by 
2020 (BioIntelligence) is comparable and consistent with other sources76.  
In 2007, 54% of EU27 citizens (16-74) had internet access at home, and over 50% of 
Europeans now use some on-line Internet servic es. Over 75% of businesses, 65% of schools 
and 45% of doctors have broadba nd connections. Over 80% of ba sic Government services are 
available on-line. Between 2000 and 2008 Internet usage has grown in Europe (EU 27) by 
340%.77  
Importantly, ICT and the associated “e-economy” or “e-business” sector is by far the fastest 
growing sector of the economy: the ICT sector as a whole grew from 5.8% of GDP in 2002 to 
7.3% in 2007, and may grow to nearly 9% by 202078. eCommerce has grown to over 19% of 
retail turnover in the UK in 2008 and is projected to grow to over 40% by 202079. One way to 
accelerate the shift to a less energy-intensive  and low-carbon economy may be to accelerate 
the growth of on-line services,80 though the extent to which th is would have positive effects 
depends on the success in improving the energy- efficiency of the ICT tools themselves, 
covered in the previous section.   
                                                 
76Wider use of telework and videoconferencing could reduce GHG emissions by about 50 MtCO2e/a  by 2010  
Saving the climate at the speed of light : WWF/ETNO 2006; and WWF/HP 2008 
77 http://www.internetworldstats.com/stats4.htm  
78 www.globalinsight.com 
79 IMRG figures, reported inuSwitch.com, August 2008 
80 Heiskanen et al., 2001; Hilty and Ruddy, 2002, Bohn et al., 2002 
 
EN 47   EN Annex IV 
Some Investment Figures 
1. "Smart Meters" 
Before quantifying "gross cost" of smart meters it is as well to cons ider the understanding of 
"smart". 
A simple "energy use display" which can be ca rried around a house or bu siness premises and 
communicated wirelessly to a "non invasive" sens or clipped to the incoming electricity power 
lines can cost less than 30 Euros.  It has no other function that to  alert (or keep visible to) the 
user the fluctuations in his pow er usage i.e. there is no additi onal functionality. However this 
"visibility" element is clearly non-negligibl e and can represent the biggest element in 
inducing "behavioural change", and savings that are well superior to the 30 euros. 
The latest and most functional smart meters which are actually integral to the power delivery 
system allow for bi-directional communication, audi ble warnings of peak load (and charging) 
times and feed-in enabling for "c onsumers" who also generate. 
Prices for these meters run to about 100 Euros pe r customer – but the enablement of some of 
the associated services obviously requires some additional investment by the provider. 
The emergence of the "ultimate" smart meter will undoubtedly be tied to the emergence of a 
fully liberalised energy market. Such a meter w ould need to be not onl y smart but be capable 
of switching between energy "service providers " both for supply and ge neration purposes and 
would therefore need to be  "non-proprietary and open". 
 The Business Case varies according to the comp etitive situation in a given Member State and 
according to the functionality of the 'smart ' meter. According a the study performed by 
Capgemini81 which differentiated 3 scenarios with  3 different levels of metering 
functionalities, the investment wa s globally profitable, with a rate  of return between 8 and 22 
percent on average over 5 y ears. In all 3 cases, the consumer was the greatest beneficiary  of 
the investment, while in the first two cases (where the meter has restricted functionality) the standalone pay-off for the distri butor was negative. A Dutch study
82 came to a similar 
conclusion; the investment would have  a positive net present value.    
 
                                                 
81 Comparatif international des systèmes de télé-relève ou de té légestion et étude technico-éc onomique visant à évaluer les 
conditions d'une migration du parc actuel  des compeurs, Capgemini, 8 March, 2007  
82 Hans-Paul Siderius, Aldo Dijkstra: Smart metering fo r households: Cost and Benefits for the Netherlands  
 
EN 48   EN Annex V  
ICT Sector - Reduction Target Issues 
The Smart 2020 Study, Annex 4 illustrates the ex isting commitments made by a selection of 
businesses in the sector to make reduction in their GHG emissions or energy consumption. 
This illustration shows a wide diversity in targets, baseline dates and target dates for 
achievement. This diversity fundamentally compli cates the ability to m easure against the EU 
baseline. It also illustrates that many ICT bus inesses are not, currentl y, on target to achieving 
a 20/20/20 reduction. This inconsistency complicates carbon accounting, standards and 
measurement issues. 
Companies Target reduction % Baseline date Target 
date Comment 
BT 80 1996 2020  
Vodafone Plc 50 2006 2020  
Telecom Italia 30 2007 2008 Energy 
efficiency only 
HP 25 2005 2010  
Deutsche telecom 20 2006 2020  
Ericsson 20 2006 2008 (Energy reduction only) 
France Telecom 20 2006 2020  
Intel 20 2007 2012  
Sun Microsystems 20 2002 2012 US CO2 only 
Bell canada 15 ? 2012  
Dell 15 ? 2012  
Alcatel–Lucent 10 2007 2010  
Motorola 6 2000 2010  
Nokia 6 ? 2012  
     
EU 20 1990 2020  
US Interim To 1990  level 1990 2020  
US Long term 80 2020 2050  
 
 
EN 49   EN Annex VI 
The Cost to Business of Delaying Efforts to Reduce Energy Usage 
 
(Added reduction effort required by a delay between one year and the next) 
• If business is set a 20% reduction target the following  Compound Annual Energy Re duction (CAER) rates are 
what we would expect to see reported depending on the start date of their efforts. 
• CAER is a cumulative measure (eg it is a % reduction  on the level the year before and is therefore an 
increasing effort measure over time) 
• This means that a business starting its effort in 2009 must  report a 1.84% or better CAER year after year to hit 
target.  
• This removes the need to set quantitative or methodolog ical targets as the CAER co vers effort not specifics. 
• Interestingly the baseline date (1990?  2006?) is actually unimpo rtant as the rates above ensure that effort to 
a set target reduction rate is being measured against effort start date to a set target percentage. 
• This makes reporting far less problematic and allows a measurable reduction standard to be used to set 
targets across any business or sector