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COM(79)313
Vol.1979/0119

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(79)313 final
Brussels.21stJune1979
THIRDREPORTONTHECOMMUNITY 'SPROGRAMME FORENERGYSAVING
(Communication bytheCommission totheCouncil)
COM(79)313final

THIRD REPORT ONTHISCOMMUHI'WS PROGRAMME
FOR ENERGY SAVING
Table ofContents
cion
1.THE CHALLENGE TODAY
2.AliOVERVIEW OFMEKBER STATES' FROGRAMKES FOR ENERGY SAVING
3.Tl!3EUROPEAN COMMUNITY 'SENERGY SAVING PROGRAMME
4.PRINCIPAL ISSUES FORENERGY SAVING POLICY
-Energy pricing practices
-Investment inindustry
-Investment incommercial and industrial buildings
-Investment inthe home
»
-rJnergy saving asabusiness opportunity
■-Standards and legislative requirements
.nowbuildings
.motor vehicles
.rational production anduse ofheat andpower
-Information and education
5.NEW LINES OFACTION FOR THE COMMUNITY 'SENERGY SAVING
PROGRAMME
5.1 .Enovry saving objectives ;
-energy saving objectives 1990
-commitment toadopt energy saving programmes
with comparable effects
-energy pricing practices
-statistical indicators
ry.2 .Co-ordination and exchange ofinfe-mation ;
-buildings
-industry
-European technology data bank
-rational production anduse ofheat andpower
3*3 .New specific Community actions ;
-voluntary indicative targets formotor vehiclas
-accelerating thework ofinternational bodies
responsible for standards
-standards fornewbuildings3age
1
2+Annexas 1,2
3+Annex 4
5
6
7
7
8
9
10
10
n
14
15
15
16
16
16+Annex 3
16
17
17
17
18
18
18
18
19
19
19

rpjjTIP OnTHEC-Ji'MUWITY 'SPROGRAMME
FOR FfKHGY SAVING
Tho -challenge today
1.1 .FortheCommunity asawhole ,itisestimated that energy savings
equivalent toabout8<?ooftotal primary energy requirements ,orthe
equivalent ofJOto80million tonnes ofoil ,were achieved inthe
year 1977 .Butalthough thelong-term potential forfurther energy
savings isthought tobevery large ,doubts grew astowheihc --
energy savings could beobtained atthesame rate inthefuture .
With thereturn toanapparent abundance anddeclining real prices ,
there were even some whodoubted ifthey were really necessary .
In1978 ,forthefirst time since the1973 crisis ,aclose link
between economic growth {2.8% )andincreases inenergy consumption
(2.3fo)re–established itself .Asimilar link wa~ -. >-
1.2 .Recent ,events have modified this environment :consumers arenow
facing shortages andrising prices .There istherefore arenewed
incentive toreduce energy requirements ,butthemargins for
eliminating waste arenowsmaller than they were in1974 •Future
savings will increasing ?.^-x-souire investment innewequipment or
buildings ,orretrofitting theold ,andmore energy conscious
behaviour from both -investors and consumers .
1.3 .Itisnowunderstood that sustained economic growth depends upon an
efficient andrational production anduse ofenergy .Forthose
countries like Ireland andItaly where industrialization andlevels
ofwelfare are still less developed than inother parts oftheCom­
munity ,promoting adissociation between economic growth andenergy
requirements isparticularly important ,since economic andsocial
trends aregenerally favouring anincrease intheenergy intensity
ofeconomic activity .Forthose countries where industrial restructure
tion and thegrowth oftheservice sector aretending toencourage a
dissociation between economic growth andenergy consumption ,thetask
must betoconsolidate what hasalready been achieved ,andtoadvance
towards aneven greater dissociation .TheEuropean Council meeting in

Paris on12and 13March 1979 recognized this byunderlining theneed
forvigorous new efforts tosave energy ,and foranequivalence of
effort from all Member States .
1.4 .Anumber ofshort-term actions arenecessary .However ,many ofthese
actions ,bytheir very nature ,canonly beapplied temporarily and
will not induce energy saving onapermanent basis .Therefore ,while
taking these immediate actions ,wemust not forget the longer term .
1.5 .This report addresses itself tothe longer term issues .Itassesses
themeasures taken trntil no:-:byMember States and attheCommunity
level .Itexplores themain policy options for future action .Finally ,
itexamines possible ne>:lines ofaction for theCommunity .
1.6 .Itisthethird inaseries ofreports ontheCommunity 'sprogramme
forthe .rational useofenergy ,foreseen intheCouncil 'sresolution
of17December 1974^«Thefirst report waspublished inJanuary
2) 3)1976 andthesecond report inMarch 1977 •
Anoverview ofMember States 0profframme sfor enerev savins
2.1 .During thepast three years ,Member States have been putting into
place thebasic measures andprocedures intheir energy conservation
programmes .Annex 1shows theprogress made since 1975 inintroducing
%some ofthemost important specific measures forenergy saving .The
Dutch ,Danish ,German ,Br*.11 andFrench programmes each have a
substantial ,though notcomprehensive coverage .Belgium ,Luxembourg ,
Italy andIreland have notmade equivalent progress tothat ofother
Member States since 1975 *
This picture needs tobecompleted byatable showing thepublic funds
committed toenergy saving in1978 .Itisdifficult togive accurate
figures ,because majny programmes have multiple objectives ,ofwhich
energy saving isjust one ,andbecause thebudgetary implications of
1)Council Resolution of17December 1974 concerning aCommunity
action programme fortherational useofenergy .
2)First Report ontheCommunity Programme fortheRational Useof
Energy .Brussels ,January 1976 .
3)Second Report ontheProgramme fortheRational UseofEnergy .
Brussels ,March 1977 •

taxcredits arehard toestimate accurately .Annex 2gives best
estimates for1978 *
2.2 .Inaddition tospecific measures ofgovernment policy ,energy prices
have hadanimportant influence onenergy saving .They can strengthen
the effect ofspecific measures ,orcompensate ,toadegree ,for
their absence .Ontheother hand ,inadequate pricing policies can
acttocounterbalance ,oreven undermine ,vigorous programmes of
specific measures .
TheCommission 'sservices have made ananalysis ofelectricity and
gas tariffs and discussed theresults with theEnergy Committee of
theEuropean Communities .PVirther work isneeded torefine thedata ,
and toinclude oilproducts inthecomparison ,before firm conclusions
aredrawn .Nevertheless ,itiscertain that asignificant number of
cases are identified where prices have apparently declined inreal
terms ,andwhere promotional tariffs (e.g. decreasing block rates )are
still offered .
The European Community 'senergy 'saving programme
TheEuropean Community 'senergy saving programme hasdeveloped the
following main lines ofactivity .
3.1 .Thefirst activity isthat ofaregular review ofMember States' energy
programmes andobjectives ,inaframework ofgeneral guidelines and
specific measures ,recommendations ordirectives ,adopted bythe
Council ofMinisters .Afull listing ofthese guidelines and specific
measures isgiven inAnnex 4V
3.2 .Secondly ,theCommission pursues studies into anumber ofthemes of
general interest toallMember States .TheCommission hasbegun fact-
finding studies into energy prices inthemarket ,andreports have
been submitted totheEhergy Committee .Itprepares short andlong-
term market forecasts ,andscenarios ,which examine indetail the
evolution ofenergy demand andexplore themargins ofchoice .

-4-
Itissponsoring astudy entitled "LowEnergy Growth Societies ",
toexamine ways inwhich society 'seconomic ,social andenvironmental
goals might beachieved without large increases inprimary energy .
Afirst report isexpected inJune 1979 *
3.3 .Thirdly ,theCommunity hasadopted aprogramme topromote theuse
ofbest-practice technology anddesign ,and todevelop amarket for
energy saving equipmsnt andmaterials ataEuropean level ,through
thegranting offinancial aids todemonstration projects inthefield
ofenergy saving .Aspart ofthemanagement ofthis scheme ,aclose
co-ordination ismaintained between this and national schemes .
3.4 .Inaddition ,thegroups ofexperts chaired bytheCommission 's
services arebeginning tobuild upcomparable estimates ofthecost-
effectiveness ofspeoific measures tosave energy inbuildings ,
selected industries ,domestic appliances andmotor vehicles .
3.5 *In "therelated field ofresearch anddevelopment ,theCommission 's
services manage aCommunity research and development programme in
energy saving ,assisted byanadvisory group ofnational experts .
Afirst four-year programme isnownearing completion andasecond
four-year programme hasbeenproposed totheCouncil ofMinisters' ^*
TheCommission 'sservices also organize regular meetings toencourage
.better co-ordination between nal-onal programmes ,and tocompare
I
priorities and results .
3.6 .Finally ,theCommission intends -tosupport investment inenergy
saving through Community sources ofloan finance reventually combined
with grant ,interest rebate ortaxcredit schemes operated byMember
States :forexample ,itseems likely that thefirst series ofpro­
jects tobesupported bytheNewFinancial Instrument (Ortoli facility )
oftheCommunity will include energy saving projects .
1)COM (78)388final

3.7 *TheCouncil ofMinisters hasnow taken decisions todeal with all
proposals made bytheCommission inthecontext oftheprogramme of
workbegun in1977"^.Thus ,during thepasttwoyears ,there has
been good progress made indeveloping theCommunity 'sprogramme ,but
now itisanappropriate moment todecide upon such changes of
emphasis anddirection asseem necessary .This should bedone with
regard totheprincipal issues forenergy saving policy inthenext
fewyears .
Principal issues for energy saving policy
Atthehorizon 2000 to2020 -itisaccepted that thetechnical potential
forsaving energy is-rsxylarge .Studies intheUnited Kingdom ,
France ,Germany elsewhere have shown that thegeneralized useof
today 'sbest-practice andcost-effective technology anddesign could
save ,bythese dates :
•15 "to35ioofprimary end–use reqruiren)er >+s industry ;
.20to35$ofprimary end-use requirements intransport ;
•upto50$ofprimaiy end-use requirements inthedomestic
and tertiary sectors .
Energy savings due tobroader economic and social forces atwork -
for example therestructuration ofindustry and thegrowth ofthe
service sector –are also expected tobeimportant ,butare difficult
toestimate .
However ,energy savings inthenext fewyears will depend uc-t ->nthe
long-term potential ,but onthepropensity offirms andhouseholds ^
adapt tocurrent market conditions ,aided "hygovernment measures to '
encourage energy saving .
This section discusses more generally thepropensity offirms and
households toadapt tochanging market conditions .Theprincipal
issues are :
-energy pricing practices ;
< ' *
r
l)COM (77)39final "Anintensification oftheCommunity 'sprogramme
for saving energy ".

-therate ofinvestment innewenergy –efficient equipment and
buildings ,orinretrofitting theexisting ;
-thedevelopment ofenergy conservation asabusiness opportunity ;
-theproblem ofstandards andlegislative requirements ;
-information and education .
ι
Energy pricing practices
Energy prices play akeyrole inenergy saving policy .Inappropriate
pricing practices will undermine theimpact ofspecific measures to
save energy .Toensure that energy prices give correct signals to
energy consumers and toinvestors inenergy saving alike ,energy
prices should reflect thefollowing principles :
(a)Taxation onenergy should bemaintained oreven increased to
reflect the scarcity ofenergy asafactor ofproduction ;
(b)Energy prices should belinked tothelong runcosts ofreplacing
and developing energy resources ;
(c)Energy prices inthemarket should besubject tothegreatest
possible degree oftransparency .Publicity about energy prices ,
andthecosts andconsumption ofequipment using energy ,should
bedeveloped aswidely aspossible .
Special attention should begiven toexamining cases where energy
s
pricing practices encourage inr^ased consumption ,for example by
offering promotional tariffs .
Insome Member States ,many energy prices are subject toapproval by
thegovernment orbyaregulatory agency .Thepractice isgenerally
tokeep energy prices down bythis means ,because ofwider economic
and social considerations ,sometimes forextended periods .There­
after asudden ,inflationary adjustment maybecome necessary .If
energy prices cannot bederegulated ,energy policy considerations ,
especially energy saving ,must atleast begiven their proper weighting
Theimpact ofprice increases issometimes dulled bytheautomatic or
semi-automatic indexing ofwage andsalary increases toenergy prices
through theretail price index ,andbytheability tooffset some
energy purchases against tax (forexample ,thecompany car).The

importance ofthese effects ,and inparticular therelationship between
energy price increases and inflation ,should bestudied further .In
general ,therelationship between energy prices and -consumer and investor
behaviour isnotwell understood andwould repay intensive study .
Investment
4-2.1 .Asiswell known ,investment inenergy saving inindustry
encounters anumber ofobstacles :
-management sometimes applies stricter criteria toenergy "cost-
cutting "investments than toreducing labour costs (which
represent amuch higher share oftotal manufacturing costs )or
to"market' development "investments ,even though theeffect on
profitability isdirectly comparable ;
–inmost industries ,investment ofallkinds isnot undertaken
unless there are short pay–back periods .Incontrast ,the
energy industry isused toconsidering long pay-back periods
when evaluating investments inenergy supply ;
–amongst small andmedium-sized businesses especially ,there is
still alack ofknowledge about energy saving technologies and
designs .There isnosimple orcomprehensive sourv .. •–
toguide engineers andmanagers towards thebest practice ;
–experience hasshown that ,unless accompanied byproper training
andsupervision ,many ofthetheoretical benefits ofinvestment
inenergy saving are lost .
* *-'--V
Forthese reasons ,financial incentives arerequired toencourag
investment inenergy saving inindustry .Action totackle the
above obstacles directly ishowever important ,toensure that the
best use ismade ofpublic funds .
4.2.2 .Investment inenergy saving incommercial andindustrial buildings
encounters many ofthesame obstacles asinvestment inindustry ,
butwith theadded problem that ,forthedeveloper

.3.
orowner ,theallimportant factor isoften the "rentability "of
hisproperty .Itseems tobethecase that ,inEurope ,therun­
ning costs ofthebuilding areoften treated .-asarelatively minor
issue bythedeveloper andrenter alike .The'importance of
running costs ,andhence ofenergy consumption ,must bebetter
understood bythemarket .Thepublic sector candomuch bysetting
anexample ,both asthepromoter ,owner anduser ofmany buildings ,
andasanimportant influence intheprivate rental market .
With careful design andbyavoiding excessive lighting ,mechanic –
•ally assisted ventilation isnormally sufficient for summer cool­
ing intemperate climates ,andairconditioning canbeavoided in
allbut exceptional circumstances .
Wide publicity for thebest-practice -for example ,recent office
buildings with virtually all their heating requirements supplied
from free heat gains –canalso promote greater awareness of
running costs .
4.2.3 .Investment inenergy saving inthe home once again encounters dif­
ficulties arising from short time horizons ,andabias infavour
ofcurrent rather than capital expenditure .There are problems of
access tofinance onreasonable terms ,oftheavailability of
cheap andreliable expertise ,and inthecase ofrented property ,
ofaseparation ofmotivation ,responsibility and benefit .Each
ofthese obstacles must betackled .
But themain problem isoften thought tobethat ofcost-effective -
ness especially inthecase ofexisting buildings .Asanumber of
Member States have now embarked upon major programmes ofaid for
theretrofitting ofexisting homes ,asound discussion ofthe
effectiveness ofsuch programmes ,based onthe lessons of
experience ,will beincreasingly possible .
Pull advantage must betaken oftheopportunity provided byurban
renewal programmes ,orprogrammes toalleviate rural poverty .If
substantial renovation isrequired ,theadditional costs ofimprove­
ments tothermal insulation andtoheating gys-tems which properly
reflect theuseful life ofthebuilding after renovation ,will be
small .

-9-
When investment isprincipally for energy saving ,there are still
strong arguments for substantial public aids .Ifmeasures are
carefully adapted tothe specific circumstances ofeach home ,
cost-effective measures will beidentified .Itis,however ,
essential that measures areproperly adapted toeach situation ;
hence the importance ofcheap and reliable expertise .
Thedemand forhigher standards ofcomfort with rising standards
ofliving ,risks being amajor source ofgrowth in
energy requirements inthemedium term .Atarate ofretrofitting
yfooftheworst stock ayear ,itwill probably take tentofifteen
years inmany Member States before theaverage energy performance
inhomes isadapted even totoday 'sprice ofenergy .
4.3 .Bncrf^y savin ,?asabusiness opportunity
Oneofthemajor difficulties forgovernment isthat itcannot conduct
adialogue onpolicy with anenergy saving industrv
itdoes with theenergy supply industry .Government could encourage thts
development ofanenergy saving industry forexample bysponsoring
exhibitions andtrade fairs onthis theme andbybringing therelevant
industries together inworking parties with government .Infact ,a
number ofcompanies arealready exploring energy saving asabusiness
opportunity –inparticular some oftheoilmajors ,insulation andglass
manufacturers andinformation andcontrol systems manufacturers –buta
balanced development will require strong participation from small and
medium-sized businesses too .
Aless-fragmented energy saving industry would also beofhelp toits
potential customers .Inthehome forexample ,itisdifficult fortne
householder todecide between theconflicting claims ofsellers of
insulation ,heating controls ,cavity fill anddouble-glazing .Itwould
bebetter ifhecould turn toacompany which wasnot •selling this or
that individual product ,butacredible total service .

-10–
Itisimportant topromote theeducation andtraining ofdistributors
andtradesmen ,tobring them uptoalevel ofexpertise commensurate
with themarket which isnowdeveloping .InPrance ,catalogues of
energy-saving equipment ,classified indecreasing order ofcost-
effectiveness ,arebeing published .Inanumber ofMember States ,
steps have also been taken toinvolve theenergy supply industries -
thegasandelectricity utilities inparticular -inoffering services
andexpertise toindustry andthehome .IntheUnited States ,
utilities arenowrequired tooffer totheir customers anadvice and
assistance service ,including ,ifrequested ,assistance inobtaining
thenecessary loan finance and identifying suitable contractors .
There have been occasions where state regulatoiy agencies have refused
applications from utilities fortariff increases until ,intheir view ,
satisfactory energy saving programmes were inoperation .
Banks could beencouraged topaymore attention toenergy
saving when evaluating loans tofirms orhouseholds ,and toundertake
amore general development ofleasing schemes forenergy-saving
equipment .
Finally ,therapid introduction ofsophisticated butcheap newmeasure
ment andcontrol systems ,and thegeneralized use ofinformation
•systems ,could beanimportant aidtoenergy saving quite apart from
thewider considerations ofindustrial policy .They canprovide a
precise control andmonitor :.^Tunction ,andimprove thehuman beings'
interaction with buildings andequipment .Software used asdesign
aids canfacilitate theacceptance oflegislative standards forenergy
performance .
»
4»4 «Standards and legislative requirements
4.4*1 *Mandatory performance standards areaccepted asbeing necessary
fornewbuildings .However ,because ofourlimited under­
standing ofthefactors affecting thethermal performance of
buildings –particularly thehuman factors –andofpossible
side effects from very high standards ,mandatory standards in
theEuropean Community (with theexception ofGermany and
Denmark )arestill setatprudent levels .
••/••

-11-
Itwill bemany years before the statistical and .theoretical
basis canexist forsetting high performance standards by
calculation .Intheimmediate future ,higher standards can
best besetonthebasis oftheempirical observation that
numerous examples already exist ofbuildings with standards
much higher than thelegal minimum ,that operate successfully -
anddonotcost more (either onafirst cost oronalife cycle
basis )than theaverage building .Thefirst priority must be
toensure that every Member State hasmandatory minimum per­
formance standards inforce fornewbuildings inresidential
andoffice use-Belgium and Ireland must give particular
attention tothis .Thereafter acommitment can bemade to
gradually increase mandatory standards until thelevel ofthe
best existing practice isreached ,oruntil amajor industrial
orother constraint isreached which requires apause for
reflection .TheCommunity should nowexamine regular and
predictable increases inrequired standards ,inplace of
infrequent large changes with thedisruption they involve .
4«4»2 .Inthefield oftransport ,andmor?especially motor vehicles ,
thesituation israther different .However ,thetransport sector
will beoneofthemain growth sectors inenergy consumption for
some years tocome ,though inthelonger term saturation effects
areexpected .Since there isnosubstitute insight inthe
near future forthepetrol ordiesel –powered internal combustion
engine ,thegrowth inenergy requirements will beforoil
products orexpensive synthetic fuels .Shortages inliquid
fuels risk being particularly acute bytheendofthis century .
Ascars andlight vanfe make upbyfarthelargest proportion
ofroad vehicles ,activity hasbeen concentrated onthem .
Theaimhere istopromote thepurchase anduseoffuel-
conservative vehicles .Astherecent past hasalready shown ,
fuel canbesaved byusing engines which areofBmaller
capacity ,orwhich consume their fuel more efficiently through
technical design improvements ,orpreferably byacombination
ofboth ..
••/••

-12
4.4•2.1 .Another contribution towards fuel saving would bethepromotion
ofdiesel –engined cars andvans which consume less fuel than
similar petrol-engined models ,particularly incongested traffic .
Similarly thepossibility ofencouraging theuse oflicpiified
petroleum gas (LPG)incars andvans needs tobeinvestigated
more thoroughly ,inview oftheexpected increase insupply of
that fuel .However ,further work Isneeded todetermine the
implications forenvironmental pollution ofthechoice between
diesel ,LPG ,andpetrol-engined cars andvans .
4.4*2.2 .Theuseoffiscal measures andtherefore theprice mechanism
hasbeen investigated byaspecial group ofexperts .The
evidence todate isthat price elasticities forthepurchase
and use ofmotor vehicles are small .Insuch asituation fuel
andvehicle taxes ,which insome cases arealready high ,would
have tobeincreased very substantially toobtain significant
fuel savings ;such increases might become politically difficult
tojustify andimplement .However ,asoneofthemain reasons
for thelowprice elasticity appears tobethevehicle owner 's
lack ofperception ofthereal costs ofusing hiscar ,efforts
should bedevoted toincreasing that perception .
Inthemeantime ,inpursuing theobjective oflower fuel con­
sumption ,taxes onvehicles and excise taxes onfuels should
continue tobeused incombination inorder toatleast main­
tain thecost ofmotoring inreal terms .Ifperception of
costs canbeincreased ,such measures would have greater
impact ateach level .Moreover ,totheextent that diesel -
engined vehicles aretobeencouraged ,taxation onsuch
vehicles and their fuel will need tobeatleast consistent
andpossibly more favourable than forpetrol-driven vehicles ;
similarly ,fiscal treatment ofLPGfuel andvehicles mayneed
reappraisal .Aninterim report onfiscal measures will be
available T?ymid-1979 |and -itisintended topursue further
theanalysis oftheeffectiveness andimplications ofcarand
fuel taxation .

4.4*2.3.Turningtowardsmeasuresaffectingthemotorindustryitself,
theUnitedStateshasadoptedmandatoryfuelconsumption
standardsinordertoencourageanaccelerated improvementin
fueleconomy.Thequestionariseswhethertherearevalid
argumentsinfavouroftheEuropeanCommunitydoingthesame.
TheCommissiondoesnotbelievesuchastepwouldbejustified
untilothermeasureshavehadachancetoprovethemselves,
because:
-fuelefficiencyisanimportantsellingpointandEuropean
vehiclesgenerallycomparewellwiththeircompetitors in
worldmarketstoday}
-Europeanmanufacturers seemtobewellawareoftheneed,
incompetitivemarkets,toobtainfurtherimprovements in
fuelefficiency,anditisknownthatimportantdevelop­
menteffortsareinprogress.
Inthelongrun,however,stringentmandatorymeasurescanonly
beavoidediftheindustrycanshowsignificantachievements
asaresultofitsownefforts.Inthissituation,bothgovern­
mentandindustrywillbenefitfromthenegotiationofvoluntary
butrealit-wic,indicativetargetsinfuelefficiencywhich
takeaccounvQfenergysavingpolicy,oftherapidimprovement
infueleffic:^ciesthatcompetitorsintheUnitedStatesand
elsewhereexpe^>tobeachieving,andofpossibledevelopments
inlegislationv>protect .»\eenvironment .
Toenablepropercou\-xrisonscoringthemonitoringofsuch
targets,anearlyagreementisv^dedatCommunitylevelona
standardwayofmeasuringfuelco\AUnp-tionfwithregardtothe
characteristics ofuseofeachkina\j >vehicle.TwoMember
States(PranceandtheUnitedKingdom^,-wealreadyadopted
standardmeasurementmethodsdevelopedb>atGeneva,as
thebasisforcalculation.TheFederalRepuWicofGermany
intendstoencouragetheuseofthesamemethoaonavoluntary
basis.ThesemattersarebeingexaminedbytheGroupofvexpert
l)GroupedeRapporteursPollutionatmosphérique (RapporteursGrouponAtmosphericPollution) ,

-14-
on"Motor Vehicles ".
4.4.3 .Under theheading oflegislative requirements ,this section
should conclude with afewbrief remarks concerning therational
production and use ofheat and power .
Three important legislative obstacles need tobeconsidered .First ,
thestatutory duties placed onmany utilities canimpede the
rational production anduseofheat andpower .Thus forexample ,
electricity utilities often have astatutory requirement which is,
insome form orother ,tomeet thedemand forelectricity atleast
cost .
Secondly ,when distribution networks and theproduction facilities
areunder unified ownership ,this cancreate asituation inwhich
every "outside "producer whowishes tointeract with thedistribu­
tion network isseen ,essentially ,asafactor disturbing the .
efficient management ofthesystem ,andtreated accordingly .
Thirdly ,theinitial capital cost andplanning implications of
district heating schemes mean that their conception and instal­
lation isbest done intheclosest co-ordination with urban planning
procedures .Inthose countries where urban planning authorities do
nothave atradition ofinvolving themselves indistrict heating
schemes ,orareexpressly prevented from doing sobylaw ,an
important obstacle iscreated tothedevelopment ofsuch schemes .
1

4.5 .I».formatton *y^uc*tion
X ,
Jvformation r/1"-education reinforce price incentives tosave energy ,
and inth*longer term ,canhelp topromote social values conducive
toanev-rgy-conserving society .
•Most Member States have supported important programmes ofpublicity
"about energy saving .Itisimportant ,however ,tosustain theeffort ,
since thelesson isquickly unlearnt unless constantly repeated .More
discipline hasalso tobeobserved inpublic and privately-sponsored •
publicity tending toencourage energy consumption ,ifthis isnot to
undermine efforts toencourage energy-conscious behaviour .
More fundamentally ,greater efforts should nowbemade intheschools
toeducate future generations tobemore energy conscious athome asat
work ;andinun?-^ersities andtechnical colleges ,tore–educate those
inprofessions andtrades toailopt themulti-disciplinary approach which
isnecessary .
New lines ofaction for the Community 'senergy saving programme
Much that hasbeen described intheprevious section must betheresponsibility
ofMember States *ownprogrammes .However ,itisinthecommon interest that
Member States allcontribute totheachievement ofpolicy guidelines
established fortheCommunity asawhole .Co-ordination atCommunity level
and ,where necessary ,specific ".ommunity actions ,cancontribute tobetter
results than Member States' prog^aoue ,^jnsome cases ,itcanavoid conflicts
between Member States' objectives or states 'measures -^dotner
Community objectives ,suchasthefree circ.\}svfciv /Xi-yffc,.~»3s andservices aii
the conditions ofcompetition .
TheCommunity programme should include :
–commitments taken bytheMember States collectively ,including monitori g
ofresults ;
–co-ordination ofMember States' policies ,exchanges ofinformation
experience ,andtherapid dissemination throughout theCommunity ofthe
best practices ;
–specific Community actions .

-16-
5.1 .Energy saving objectives
5.1.1 .Targets for1985 have been established andconfirmed onvarious
occasions bytheCouncil ofMinisters ortheEuropean Council .
New medium-term objectives should beadopted for 1990 .The Com­
mission proposes theobjective ofreducing theratio between the
rate ofgrowth ingross energy consumption andtherate ofeconomic
growth progressively below 0.7hy1990 .
Taken together with theobjective already adopted bytheEuropean
Council inJuly 1978 tolimit theabove ratio to0.8by1985 ?this
could mean ,ifthesame rate ofeconomic growth isassumed asthat
underlying forecasts made bytheMember States ,that energy con­
sumption intheCommunity would besome 20m.t.o.e .less than is
nowforecast for1985 ?andatleast 80m.t.o.e .below what isnow
forecast for 1990 .
Quantified sector targets ,adopted onaCommunity basis ,arenot '
proposed atthis stage "because ofthedifferences between Member
States' structures ofenergy consumption ,andtherelative lack of
experience inmaking statistical estimates ofindividual contribu­
tions totheachievement ofCommunity targets .Itisintended to
re-examine this idea later .
5.1.2 .Medium andlong-term energy saving targets only make sense if
they canbetranslated inJ0immediate action .Theaim ofthe
Community programme must betomaintain asteady progress ,each
year building ontheyear before .Toreach theobjectives
established for1985 »average annual savings ofmore than itfoof
total primary energy requirements should beachieved onapermanent
basis .
Therefore acommitment should bemade byallMember States to
adopt ,by1980 .energy saving programmes with comparable effects ,
with dueregard fornational differences . '
Appropriate energy pricing practices areanessential part ofsuch
energy saving programmes .Therefore ,itisalso proposed that
• ••
4

-17-
arerruiar review ofMember States' energy pricing practices should
beinstituted ,based ontheconsiderations developed insection
4.1 .above .
5.1.3 .Theabove commitment should beadopted formally bytheCouncil of
Ministers .Itwould constitute ageneral guideline forMember
States ,buteach country isfree toadopt thebalance between
sectors andbetween policy instruments which best suits itsneeds
andsituation .Apossible outline ofabasic energy saving pro­
gramme isgiven inAnnex 3.
Many ofthemeasures included inthebasic energy saving programme
arealready covered byinitiatives (recommendations ordirectives )
approved bytheCouncil ofMinisters .However ,thedegree of
implementation differs considerably "between Member States .
5.1.4 *Aregular anddetailed series ofstatistical indicators should
also bedeveloped ,asatool fortheevaluation ofprogress
towards common targets .Itisrecognized that such indicators
should always beinterpreted with great caution ,especially when
international comparisons are ,involved .They remain ,nevertheless ,
avaluable basis for discussion .
5.2 .Co-ordination and exchange ofinformation
AlloftheMember States' energy saving programmes ,even those that are
more advanced ,arereally still inthemaking .Theexchange ofinforma­
tion cannotonly enable abetter understanding ofthedegree ofcon­
vergence ofnational policies ,but ,equally important ,canalso provide
avaluable pointer todifficulties andways toresolve them ,drawing on
practical experience .
Co-ordination should ,however ,bedirected toareas where acommon
analysis canhelp theconvergence ofMember States' policies andproduce
significant benefits fortheCommunity as4awhole .
TheCommission intends that theco-ordination andexchange ofinformation
should beconcentrated onfundamental issues ,such asthose described in
section 4ofthis paper ,that areofconcern tomany orallMember States
•0/••

I
-18-
5.2.1 .Awhole range ofCommunity recommendations cover energy savings
inbuildings .They include procedures forreview .These procedures
will provide theappropriate framework onwhich tobase theco­
ordination andexchange ofinformation atthelevel oftheCom­
munity .TheCommission 'sservices will develop their approach in
this field with regard totheviews expressed earlier inthis
paper ,andtothetexts oftherecommendations adopted bythe
Council ofMinisters .
5.2.2 .Inthe industrial field acomparative analysis will becarried
outoftheexperience inoperation ofthedifferent national
schemes ,offering various forms ofincentive forenergy saving
investments .This analysis should help toidentify themost cost-
effective measures andcould ,help public authorities allocate
scarce public funds .
5.2.3 .Furthermore thefeasibility ofdeveloping aEuropean technology
data bank will be'examined ,pooling atEuropean level the
experiences obtained byMember States intheapplication ofenergy
saving technology anddesign toboth buildings and selected equip­
ment .Theinformation could beavailable asapublic service to
architects ,engineers ,andother interested professions and
businesses .However ,itwould beanunmanageable task iftackled
onallfronts simultaneously .Inthebeginning itwill "bebest
torestrict theenquiry tonewandexisting buildings inresidential
andoffice use ,andtotnaresults ofnational andCommunity
demonstration programmes inthefield ofenergy saving .
5.2.4 .Asregards therational production anduse ofheat andpower ,the
Commission 'sservices will continue their review ofMember States'
measures with theaidofMember States' experts ,intheframework
oftherecommendation adopted bytheCouncil . ,
'5.3 .New specific Community actions
5.3.1 .There areanumber ofspecific Community actions already inplace
(seeAnnex 4)oralready foreseen (anewCommunity R&D programme ,
asecond directive onheat generators ,further implementing
directives forthelabelling ofdomestic appliances ).Inthis

*
-19-
section ,new specific actions atthelevel oftheCommunity will
beproposed .
5.3.2 .Motor vehicles :There must beclose co-ordination between Member
States' policies andacertain degree ofacommon action ,since
about one-quarter oftheautomobiles produced intheCommunity
areexported toother Member States ,andafurther one-quarter
orsoare exported toThird Countries .
Therefore ,discussions should now begin inaCommunity framework
with theautomobile industry ,taking account oftheprogress already
made insimilar discussions conducted byMember States ,concern­
"ing the fixing ofvoluntary indicative targets for the fuel
consumption ofmotor cars and light vans .The discussions should
beconducted with aview toanearly decision onthefixing of
such targets .
Thework already undertaken bytheexisting group ofexperts ,to
determine anacceptable method formeasuring fuel consumption ,
which takes into account the structure oftheEuropean market ,
,will beaccelerated .Ongoing work onfiscal aspects should also
becompleted bymid-197 9•
5.3.3 .Standards :TheCommission ,with theaidoftheMember States ,
intends tomake every effort toaccelerate thework ofinter­
national bodies concerned with measurement standards related to
energy consumption .Priority will begiven tostandards related
totheimplementation ofthedirectives onheat generators and on
information labelling ofdomestic appliances .
5.3.4 .Higher standards fornewbuildings will beexamined according to
theapproach described insection 4»4»1 *above . t

Annex1
BasicEnergy-saving Measures:Comparison January1979withJuly1975
A.THERMALINSULATIONΒ D DK F IT NL IRL IUK L
j|757975797579757975797579757975797579
1)NewBuiIdings
Revisedbuildingregulationsi
(compulsory )residentialχ ΧXΧX X XXX]
mdustry χ X X XX
office <"(D x x X X
otherχ ΧX X
Régulationsformonitoring andcontrol
systemsinmultioccupied buildings χ x X
2)ExistingBuildingsi
Publicitycampaigns χ χ XXXX .XXXXX X
Advicecentres-grantsforexpertiseI
X
•Aidsforretrofitting-residential χ XX XXX XX •XXj
-industrial'·χ XX
-other χ%
XX
Exemplarypublicbuildingsprogramme
Iχ X1 .Xχχ
B.HEATINGSYSTEMS *
*S
Mandatoryinstallation standards x χ XΧXxx X
Aidstoapprovedworktoimprove
orreplaceheatingsystems χXX
A I
Mandatorycontrolofservicingof xx x XXI
IX
heatingsystem
I
(1)Publicbuildingsonly
iν

.TRANSPORT
Information campaigns
Standard mileage tests offueluse:
Control ofpublicity
,INDUSTRIAL PROCESSES
Information campaigns
Aids foradvice andexpertise for
small andmedium-sized businesses
Aids tosupport demonstration
projects andtechnical risks
Other investment aids
.DOMESTIC ALLIANCES
Standf 'dconsumption tests :labelling
B^.IIONAL PRODUCTION ANDUSEOFVJSL
'ANDPOWER
Measures toencourageco-operstion
between public utilities andauto
producers
(2>Nomajor initiatives werenecessaryOK F IT NL IRL
757975797579 j75797579XXX jX X X
X X
X
χ χ
(2)(2)X
X
X X
X XX
XX
XUK
75 - 79L
75 79

ANNEX 2
PUBLICSECTORBUDGET1978:ENERGYSAVINGPROGRAMMES
CmEUA)
Β 0 DK FIIRL L NL UKTOTAL
EUR-9EEC
Budget
!
1.GeneralInformation
Campaignsmm4.40.32.3 0.4 1.54.213.1
2.Renovationof
existingbuildings288 410.35 3535:-399-4
3.Aidstoinvestment
inindustry«w232934 27 8121
4.Demonstration .
projectsmm20C1)58 -13374
5.Researchand
development
6.Other4
mm33 342
tm100.2
M15
3(1)40
30C2>147.2
354
TOTALI
l
'4
i368.478.386.7 100.6 84.5120.2 .752,7*L_!_
Totalpert^o.e.ofgross
energyconsumptionin1978
(WA/ioe)/Α\Λ-ί^.IΊ"""ίΓιν""II.11I0.09
I
'.1.!■1's
1.373.760.460.070.07!
_-A....1.1
2«««tA#»0.56j
.^Mamko*|0-19
Ç+a+PS'
(2)Principallyenergysavinginpublicbuildings.
(3)Noestimateprovidedforthevalueoftax
reductions,accelerateddepreciation .energyprogrammesApnt1978.
Repliestoquestionnairecirculaled
byDGIV25/8/1?78.
Workofgroupsofexperts.

Outline ofabasic programme for saving energy .
recommended toevery Member State oftheEuropean Community
Energy pricing practices
J
Energy pricing practices should reflect thefollowing principles :
(i)Taxes onenergy should bemaintained oreven increased toreflect
the scarcity ofenergy asafactor ofproduction .
(ii)Biergy prices should belinked tothelongmmcosts ofreplacing
anddeveloping energy resources *
(iii)Energy prices inthemarket should "besubject tothegreatest possible
degree oftransparency .Publicity about energy prices ,and the costs
andconsumption ofequipment using energy should bedeveloped aswidely
aspossible .
.Specific measures toencourage the rational use ofenergy
1.Energy saving inthe home
-Asubstantial upward revision inmandatory thermal performance
requirements fornewbuildings andheating systems ;
-Regulations toensure individual metering andbilling andcontrol
ofheating systems inmulti-occupied buildings ;
-Performance standards andcontrol ofservicing ofheating systems ;
-Publicity campaigns andadvice centres forenergy saving inthehome ;
-Financial aids forretrofitting asnecessary existing houses ,an
exemplary programme foidwellings inpublic ownership ;
-Labelling toindicate the -wergy consumption ofdomestic appliances .
2.Ener.^y saving inindustry
-Requirements forenergy audits ,especially inindustries consuming
large volumes ofenergy ;

Annex3
-2-
-Financialaidsforadviceandexpertiseforsmallandmedium-sized
businesses ,publicitycampaigns;
-Financialaids,taxcreditstosupportinvestmenttosaveenergy;
-Financialaidstopromotethecommercialization ofnewtechnologies ,
equipment,designsforenergysaving(demonstrationprojects).
3.Knerfcysavin/rinoffices,commerce
-Anexemplarypublicsectorprogramme }
-Mandatorybuildingcodesfornewoffices;
-Performance standardsandcontrolofservicingofheating,cooling
andventilation systems.
4.Kncrpysavingintransport
-Information andpublicitycampaigns:
i
-Implementing standardtestsoftheefficiencyoffueluse,and
publicity;
-Discussions withindustryonvoluntarytargetsfortheefficiencyof
fueluseofnewcars.
5.Energyproduction
-Measurestoencouragetherationalproduction anduseofheatandpower.
6.Information andeducation
-Sustainedprogrammesofpublicityaboutenergysaving;
-Educational programmesinschools,technicalcollegesanduniversities
andforprofessional retraining.
7•Sustainedeffortsinresearch,development anddemonstration

Annex 4
List ofCommunity Guidelines andSpecific Measures
already adopted inthefield ofEnergy Saving
A.GUIDELINES
Conclusions ofthemeeting ofHeads ofState andofGovernment ofthe
European Community ,Paris 12-13 March 1979
Conclusions ofthemeeting ofHeads ofState and ofGovernment ofthe
European Community .Bremen 6and 7July 1978
O.J.c289/19.12.1975
Council Resolution concerning thefixing ofashort-term objective for
energy savings in1976/7
O.J.c153/99.7.1975
Council Resolution concerning thefixing ofashort-term objective for
reducing oilconsumption
O.J. C153/59.7.1975
Council Resolution of17December 1974 onaCommunity action programme
ontherational utilization ofenergy
B.SPECIFIC MEASURES
O.J.
Council Directive of14May 1979 on "theindication "bylabelling ofthe
energy consumption ofhousehold appliances
O.J.
Council Directive of14May1979 applying toelectric ovens directive
79//EEContheindication bylabelling oftheenergy consumption
ofhousehold appliances
O.J. L37,79/167/ECSC ,EEC ,Euratom
Council Recommendation of5February 1979 »onthereduction ofenergy
requirements forbuildings intheCommunity
O.J. L158
Council Regulation (EEC)No1303/78ofJune 1978 onthegranting of
financial support fordemonstration projects inthefield ofenergy saving
O.J. L52,78/170/EEC
Council Directive of13February 1978 ontheperformance ofheat generators
forspace heating andtheproduction ofhotwater inneworexisting non­
industrial buildings andontheinsulation ofheat anddomestic hotwater
distribution innewnon-industrial buildings
••/« •

Aqm r4
-2-
O.J. L295 ,77/712/EEC
Council Recommendation of25October 1977 ontheregulating ofspace
heating ,theproduction ofdomestic hotwater andthemetering ofheat
innew buildings
O.J. L29r»77/713/EEC
Council Recommendation of25October 1977 ontherational use ofenergy
inindustrial undertakings
O.J. L295 ,77/714/EEC
Council Recommendation of25October 1977 onthe creation intheMember
States ofadvisory bodies orcommittees topromote combined heat and
power production and the exploitation ofresidual heat
O.J. L140,76/492/EEC
Council Recommendation ofMay1976 ontherational useofenergy by
promoting thethermal insulation ofbuildings
O.J. L140 ,76/493/EEC
Council Recommendation of4May1976 ontherational useofenergy in
.theheating systems ofexisting buildings
O.J. L140 ,76/494/EEC
Council Recommendation ofMay 1976 ontherational use ,through better
habits ,ofenergy consumed byroad vehicles
O.J. L140 ,76/495/EEC
Council Recommendation of4May1976 ontherational use ofenergy in
urban passenger transport
O.J. L140,76/496/EEC
Council Recommendation of4May 1976 ontherational useofenergy for
electrical household appliances
O.J. L231/1,75/510/EEC
Council Decision of22August 1975 adopting anenergy research and
development programme