Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on Mobilising Information and Communication Technologies to facilitate the transition to an energy efficient, low carbon economy - Impact assessment {COM(2009) 111 final} {SEC(2009) 268} {SEC(2009) 270}
Date: 2009-03-12
Institutions: European Commission
Subjects: carbon, energy policy, environmental protection, information technology, telecommunications

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 12.3.2009 
SEC(2009) 269 

COMMISSION STAFF WORKING DOCUMENT 

Accompanying document to the 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

on Mobilising Information and Communication Technologies to facilitate the transition 
to an energy efficient, low carbon economy  

IMPACT ASSESSMENT 

{COM(2009) 111 final} 
{SEC(2009) 268} 
{SEC(2009) 270} 

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TABLE OF CONTENTS 
SUMMARY OF CHANGES SINCE ORIGINAL SUBMISSION ...................................... 4 

1. 

1.1. 

1.2. 

2. 

Background, context and consultation ......................................................................... 5 

Background and context............................................................................................... 5 

Consultation and expertise ........................................................................................... 6 

Problem definition and rationale for intervention........................................................ 7 

2.1.  What is the problem and what are the causes?............................................................. 7 

2.2. 

2.3. 

2.4. 

3. 

3.1. 

3.2. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

4.5. 

5. 

5.1. 

5.2. 

5.3. 

Problem focus of this Impact Assessment ................................................................. 14 

Existing policy responses to challenges..................................................................... 14 

Justification for EU intervention – subsidiarity and EU added value........................ 16 

Objectives................................................................................................................... 17 

Operational objectives................................................................................................ 17 

Consistency with other EU policies and objectives ................................................... 18 

Policy options............................................................................................................. 18 

Option 1: No further EU action.................................................................................. 18 

Option 2: Stronger collaboration and partnership within existing frameworks    - 
highlighted in a second Communication.................................................................... 20 

Option 3: Commission Recommendation on mobilising ICT to facilitate the 
transition to an energy-efficient, low-carbon economy ............................................. 21 

Option 4: Regulatory or legislative measures ............................................................ 22 

Summary of main elements of Options 1, 2 and 3..................................................... 23 

Analysis of Potential Impacts and Comparison of Options ....................................... 24 

Assessment of Option 1: No further action at the EU level....................................... 24 

Assessment of Option 2: Stronger collaboration and partnership within existing 
frameworks................................................................................................................. 25 

Assessment of Option 3: Recommendations on partnership initiatives, 
interoperability and best practices.............................................................................. 26 

5.4. 

Comparison of Options .............................................................................................. 27 

6. 

6.1. 

6.2. 

6.3. 

Sub-options under the Preferred Policy Instrument ................................................... 29 

Description of Sub-options ........................................................................................ 29 

Assessment of Sub-options ........................................................................................ 31 

Comparison of Sub-options ....................................................................................... 33 

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7. 

Evaluation and monitoring......................................................................................... 35 

Annex I .................................................................................................................................... 36 

Annex II.................................................................................................................................... 39 

Annex III .................................................................................................................................. 45 

Annex IV .................................................................................................................................. 47 

Annex V ................................................................................................................................... 48 

Annex VI .................................................................................................................................. 49 

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SUMMARY OF CHANGES SINCE ORIGINAL SUBMISSION 

1)  In  their  opinion  of  27  October  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  ongoing  developments  in  the  baseline  and  clarify  in  which 

respects current policy instruments are inadequate 

•  The report should specify the concrete 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  hearing,  was  that  the  document  should  be  written  in  a 
more clear and non-technical 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 definition section (2.2) explains 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 energy efficiency is still largely unexploited on 
a mass scale. Also, while the current regulation in the area focuses on individual products or 
components,  ICT  can  provide  a  systemic  view  of  energy  use  and  provide  tools  for  better 
visibility,  measurement,  control  and  management  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 policy initiatives under the reviewed Energy Efficiency Package1 
form  part  of  the  baseline  Option  1  (see  Section  4.1)  together  with  the  existing  voluntary 
commitments,  agreements  and  initiatives  undertaken  by  industry,  cities  and  regions. 
Assessment  of  Option  1  addresses  the  question  why  these  initiatives,  while  they  are  very 
valuable  and  go  in  the  right  direction,  are  unlikely  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 clear description of options 1, 2 and 3 and a more 
detailed assessment of possible sub-options under the Option 3. This approach has allowed a 
more  rigorous  appraisal  of  the  concrete  measures  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 assessment of all options 
and sub-options. It remains mainly qualitative and 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, some 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 points in graphs and tables.  

1 COM (2008) 772 Communication Energy Efficiency: delivering the 20% target 

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2) Following the resubmission of the revised 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 and under the preferred option 

•  The report should specify the main actions that the Commission will take to support 

the implementation of the Recommendation 

• 

In  terms  of  procedure  and  presentation,  Section  4,  Section  5  and  Section  6  of  the 
report could be reduced in length and avoid duplication 

The present redrafted version addresses the comments of the Board in the following manner: 

As regards the first point, the risk of not achieving the 20% target in energy saving has been 
clarified  by  making  explicit  reference  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  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". Annex 1 to this Communication 
contains  the  list  of  the  measures,  with  the  respective  contribution  in  percentage  points.  It  is 
clear that the mentioned 13% is not a static number 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 measures 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  target,  "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  certain  domains  and  areas  of  activity.  It  is  worth  noting  that  the 
Recommendation  aims  precisely  to  have  a  decisive  contribution  towards  making  energy 
efficiency gains more accurately measurable. Nevertheless, according to the studies available, 
ICT-enabled  improvements  would  represent  a  saving  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 contains a brief description of the actions that 
the  Commission  intends  to  develop  in  order  to  create  the  best  conditions  for  the  full 
acceptance of and compliance with the 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 useful at this stage.  

1. 

BACKGROUND, CONTEXT AND CONSULTATION  

1.1. 

Background and context  

This  Impact  Assessment  accompanies  a  proposal  for  measures  to  realise  energy-efficiency 
improvements  across  the  EU  economy  by  unlocking  the  potential  for  faster  development, 

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deployment  and  take  up  of  relevant  innovations  in  information  and  communication 
technology systems and services.  

On  13  May  2008,  the  Commission  adopted  a  first  Communication  on  ICT  for  energy 
efficiency2 and drew attention to the potential for additional energy-efficiency improvements 
in  ICT  use,  and  through  ICT-enabled  innovations.  This  Communication  initiated  a 
consultation and partnership-building process with a view to identifying opportunities for EU 
measures,  quantifying  their  potential  cost  and  energy-efficiency  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  extensive  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 the 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 initiatives already in place and in preparation; 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 taken 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 energy efficiency policy framework. 

The Impact Assessment also references the results of a number of studies, notably a study by 
BioIntelligence4  commissioned  by  DG  Information  Society  and  Media,  and  the  Smart2020 
report5, commissioned by the Global eSustainability Initiative (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  launched  on  20  May  2008  using  the  Commission’s 
Interactive Policy-making tool (IPM). It closed on 21 July. Wide visibility was given to the 
consultation through the i2010 High-level group and the Advisory Group, and at a workshop 
hosted  by  the  Committee  of  the  Regions  on  26  May.  Over  400  responses  were  received. 
Around  half  of  the  respondents  represented  professional  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 Assessment. In general, the results of the public 
the  Commission's 
consultation  confirmed  and  supported 

the  direction 

taken 

in 

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  

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Communication  of  13  May  and  provided  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 responsible for Information Society policies 
in the Member States and EEA countries) on 18  November. 

It  included  representatives  of  the  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 opportunity areas: Buildings, Lighting and Photonics, 
Manufacturing,  Smart  Grids,  Road  Transport  and  Structural  Change.  The  input  from  these 
groups  and  from  Members  of  the  Advisory  Group  has  been  compiled  into  a  report  by  an 
independent rapporteur and endorsed by the all group members. 

The  European  Parliament  responded  to  the  invitation  in  the  previous  Communication  and 
adopted an own initiative resolution 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  Commission  Communication  on  energy  efficiency9,  most  Member 
States are so far not on  the  right track to achieve the 20% energy efficiency 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.  

in 

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 
the  Commission  Communication  on  energy  efficiency  will 
undoubtedly contribute to energy efficiency improvements but does not give a guarantee that 
the  proposed  measures  alone  will  be  sufficient  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  States  are  implementing  the  legislation  and  it  is  therefore 
too  early  to  assess  the  full  impacts  of  such  legislation.  Nevertheless,  it  is  clearly  stated  that 
“The  energy  saving  potential  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  economy.  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  American  electronics  Association  (AeA))  and  the  Global 

eSustainability Initiative (GeSI) 

9 COM (2008) 772 Communication Energy Efficiency: delivering the 20% target 

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In  addition,  it  has  been  noted  that  the  quantitative  information  relating  to  energy-efficiency 
gains  achieved  and  achievable  through  ICT  is  often  inconsistent,  relying  on  incomplete 
baseline  data  and  varying  methodologies. It is a major barrier to understanding energy end-
use  and  a  serious  hurdle  for  policies  aiming  to  deliver  energy-efficiency.  While  the 
Commission  is  taking  steps  to  address  this  challenge,  ICT  can  nevertheless  make  an 
invaluable contribution to improving the reliability and comparability of data, beginning with 
its  own  processes.  The  data  and  information  acquired  can,  in  turn,  be  used  to  assess,  in  a 
transparent  and  verifiable  way,  its  application  to  increasing  energy  efficiency  across  all 
economic and civic sectors. 

ICT-based innovations represent this 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 efficient, 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 achieve 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  research  and  development  but  many  of  the 
available and cost-effective technologies are (or can be made) commercially 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  bulbs,  electric  equipment  in 
stand-by  mode,  televisions,  etc.)  but  the  overall  energy  savings  depend  also  on  how  the 
equipment  is  used,  how  energy  consumption  in  a  system  (a  building,  logistics  chain, 
manufacturing  process,  a  household,  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  intervention  would  be  necessary  or  not.  First  and  foremost,  mass 
deployment of any new technology or tool takes time. Big technological revolutions happen 
in  several  stages  and,  from  historical  experience,  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 consumption 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  anyway  as  energy  prices 
increase  and  traditional  sources  of  energy  become  scarcer.  However,  there  is  a  high 
probability that these developments may not happen on a mass scale in the time-frame of the 
2020 targets.  

It  is  therefore  pertinent  to  ask  what  the  obstacles  are  that  hinder  faster  deployment  of  ICT-
based  innovations  for  energy  efficiency  in  the  short  to  medium  term,  how  these  obstacles 
could be removed and whether some form of public intervention can play a catalyzing role in 
this process.  

The initiating Communication, the subsequent consultations, external studies and this Impact 
Assessment focus on three distinct areas of opportunity and related challenges:  

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•  Energy efficiency in the ICT sector itself 

• 

ICT-enabled energy efficiency in major energy-using sectors 

•  Energy  efficiency  in  the  economy  at  large  (consumers,  businesses,  communities, 

public administrations) 

Energy efficiency in the ICT sector itself 

ICT  equipment  and  infrastructures  use  electricity  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  contributing  to  significant 
improvements  in  energy-efficiency  and  reductions  in  carbon  emissions.  However,  as  the 
range and penetration of ICT devices and services 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, representing 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  achieve  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 footprint; this includes its supply chain. 

The following main obstacles to reducing energy use in the ICT sector can be identified:  

-  Absence  of  commonly  agreed  measurement,  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  annex  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.  Baseline  years  do  not  always 
concur. There are different profiles within the sub-sectors of the industry itself. Chip 
manufacturers  face  much  different  challenges  in  controlling  energy  costs  than  do 
software  companies,  for  example.  In  the  absence  of  commonly  agreed  measurement 
methodologies  and  tools,  there  is  a  real  risk  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  legitimacy,  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  replacing  or  installing  equipment,  but  in 
rethinking processes and systems and redesigning them on more energy efficient and 
sustainable patterns. This requires up-front investments for which the business case is 
not always clear - especially 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 applications is still rather low and clearly 
at  the  "early  adopter"  stage.  Reasons  for  this  include  insufficient  awareness  of  these 
technologies; uncertainty about the effectiveness and durability of the new technology 

10 BioIntelligence study 
11 SMART2020 

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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  -  especially  in  the  case  of  buildings  and  smart 
metering13:  without  these  issues  being  addressed  it  is  possible  that  deployment  in 
certain  cases  would  result  in  encouraging  supplier  "lock-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  measures  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 would represent a saving 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. A fuller analysis, sector by 
sector, is to be found in Annex II.   

The main obstacles to reducing energy use in these sectors through ICT tools and services are 
the following:  

-  Absence  of  commonly  agreed  measurement,  quantification  and  management 
methodologies  and  tools,  particularly  for  complex  systems:  Similarly  to  the  ICT 
sector, this obstacle impedes widespread take-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  and  the  development  of  new 
partnerships  between  the  ICT  solutions  providers  and  the  client  sectors.  These 
partnerships remain rather fragmentary and under-developed.  

-  Lack of awareness and visibility of information: Precise information 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  taking  of  better  informed  business  decisions 
which fully take into account the growing importance of energy costs. Where clarity 
and visibility of actually energy usage is absent, it become very difficult to deploy ICT 
(and other) solutions to exploit energy savings potential to the maximum – either by 

12  A  "lock  in"  situation  can  result  for  ICT  users  if  substitute  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  system,  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 ICT-footprint under the eco-scenario to 2020, and the 
Report by the American Council for an energy-efficient economy for the AeA estimates up to a 10-times 
saving: http://www.aeanet.org/EUenergy 

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isolating  particular  energy  inefficient  processes  or  by  more  fully  re-engineering 
business practices.  

- 

Investment problem: The problem of up-front investment has been already explained 
above.  This  problem  is  further  exacerbated  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  where  those  who  might  invest  in  particular  energy  efficiency 
measures are not those who would be the direct beneficiary of any resultant savings.  

- 

Interoperability and standardisation issues, slow innovation adoption 

-  Other  obstacles:  For  example,  lack  of  skilled  technicians  and  IT  specialists  in  some 
sectors who would be able to integrate energy 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  changes  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 evolution is directed towards energy-efficient growth and the realisation 
of a sustainable information society15. If ICT sector can manage its own energy footprint and 
enable  the  reduction  in  the  often  complex  systems  in  the  energy-using  sectors,  it  can 
ultimately facilitate a major behavioural change in the whole economy.  

The key obstacles preventing a structural 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 information about energy use: Citizens, businesses, 
cities  and  public  administrations  need  access  to  ubiquitous,  systematic  and  near  real 
time information about the magnitude, sources and efficiency profiles of their energy 
use to be able to make energy efficient choices. However, such access is not generally 
available. This results in a lack of "empowerment" to act.  

In the case of citizens, real time feedback alone to consumers on their rate of energy 
consumption  has  been  shown  to  lead  to  dramatic  behaviour  changes16.  The 
introduction  of  smart  metering  would  not  only  provide  real-time  information  to 
consumers  but  also  the  possibility  of  enabling  better  management  and  control  of 
electricity  consumption  by  users  and  suppliers.  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  footprint.  Cities,  for  example,  represent 
more than 75% of total energy use and are extremely complex and multi-dimensional 
physical, social and economic structures. Local 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) Project, Finnish Environment Institute, and others 

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to  directly  influence  their  own  consumption  and  that  of  those  businesses  and 
households located on their administrative territory. These include the public buildings 
and  public  spaces  constructions,  renovations,  and  in  many  cases,  public  utility 
networks  transportation  systems.  The  energy  efficiency  imperative  now  makes  it 
necessary  to  adopt  a  systemic  approach  to  all  aspects  of  urban  planning,  operations 
and  service  provision.  Energy  use  patterns  and  profiles  are  not  currently  visible  to 
users and decision makers because sophisticated 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 procurement. However, they focus on national 
administration level. Mandatory Public Procurement criteria would still apply only to 
certain  equipment  types.  There  is  however  significant  potential  for  green  public 
procurement  also  at  the  regional  and  local  level  and  in  big  private  businesses.  

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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 lead to the observable problems 

P 
R 
O 
B 
L 
E 
M 
S 

O
B
S
T
A
C
E
L
E
S 

Speed of energy efficiency improvements 

ICT  solutions  for  energy  efficiency  not 
used on a mass scale  

ICT sector and its own energy use 

Limited  use  of  ICT  solutions  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 

Upfront  investment  and  principle  agent 
problems 

commonly 
quantification 

agreed 
of 
Absence 
measurement, 
and 
management  methodologies  and  tools, 
particularly 
systems; 
greenwashing 

complex 

for 

Interoperability  and  standards,  risk  of 
lock-in 

Limited 
procurement 

use 

of 

green 

public 

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2.2. 

Problem focus of this Impact Assessment 

This proposal on its own cannot eliminate all the above mentioned  problems; 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  energy,  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  both  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 capabilities in respect of energy use. This is the 
area where ICT can provide its most useful contribution not only in the ICT sector itself but 
also in other sectors of the EU economy. The impact assessment will also attempt to address 
the  related  issue  of  fragmentation  and  under-development  of  partnership  initiatives  between 
the ICT sector and other sectors and thus indirectly address the problem of technology fear, 
slow innovation adoption and interoperability. 

2.3. 

Existing policy responses to challenges 

It is important to recognise that the existing regulatory and non-regulatory measures at the EU 
and Member State level undoubtedly contribute to a more energy efficient economy but the 
ICT  sector,  through  application  of  innovative  ICT  solutions  for  measurement  and 
management of energy consumption, 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  implementation.  The  last  Communication  on  energy 
efficiency22  clearly  states  that  there  is  a  real  risk  of  falling  short  of  the  global  target  of 
20%  energy  savings  by  2020.  Furthermore,  none  of  these  instruments  requires  any 
"intelligence" to be added to the metering 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 security of electricity supply and infrastructure investment 
22 COM (2008) 772 Communication Energy Efficiency: delivering the 20% target 

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•  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  stand-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  particular  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 requirements concerning new 
buildings  and  buildings  that  undergo  major  renovation  (energy  performance  certificates, 
regular  inspection  of  heating  and  air-conditioning  systems,  etc.).  ICT  can  facilitate 
implementation  of  this  directive  and  enable  even  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,  continuous  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’ environmental  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  Industrial  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  expansion  of  eco-innovations  and  to  their  full 
uptake  by  other  sectors  and  not  least  in  facilitating  and  promoting  environmental 
performance in SMEs through customized advice. 

•  The  EU  Green  Public  Procurement  (GPP)  framework  is  a  continuous  platform  for 
exchange  including  mandatory  eSTAR  criteria  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  Regulation  that  requires  EU  institutions  and  central 
Member State government authorities to use energy efficiency criteria no less demanding than those defined 
in the ENERGY STAR (US) programme when purchasing office equipment: 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 

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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  understanding  that  the  problem  is  urgent  and  that  all 
means need to be mobilised and mobilised quickly 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 enough. Under these conditions, common efforts at 
the  European  level  are  necessary  and  can  facilitate  the  emergence  of  the  framework 
conditions for economies to integrate energy efficient  solutions in  production 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 institutions have a role to play in providing 
independent platforms for exchange for stakeholders and assuming the crucial leadership role. 
In the current context there have been explicit calls from industry for EU leadership.  

Economies  of  scale  and  scope:  European  co-ordination  could  offer  synergies  between 
actions  at  Member  State  and  regional  levels.  As  shown  by  the  evaluation25  of  the  National 
Energy  Efficiency  Action  Plans,  there  are  significant  variations  among  Member  States  in 
preparedness  and  ability  to  take  action.  Therefore,  sharing  replicable  solutions  and  building 
on each others' work and experience can be beneficial. The need for sharing best practices and 
reflecting  on  and  possibly  undertaking  common  measures  has  been  confirmed  by  the 
representatives  of  the  Member  States  participating  in  the  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  areas  (e.g.  metrics  for  efficiency  or 
calculation of carbon footprints for comparability among Member States) and standards (for 
reducing equipment cost and enhancing interoperability) would increase the transparency of 
cross-border flows of products and services.  

ICT  solutions  will  not  only  improve  energy  efficiency,  they  will  also  stimulate  the 
development of a large leading-edge market for ICT enabled energy-efficiency technologies 
and  software  that  will  foster  the  competitiveness  of  European  industry  and  create  new 
business  opportunities.  Therefore  providing  public  incentives  and  the  right  framework 
conditions for the take-up of innovative ICT enabled energy efficiency technologies will be of 
the  utmost  importance  and  will  ultimately  support  the  core  strategic  goals  of  European 
industrial, environmental and research policy. 

25

http://www.energy-efficiency-watch.org/fileadmin/eew_documents/Documents/Results/EEW_Press_Release_1_-_June_2008.pdf 

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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 energy 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 ICT in order to contribute to the Action Plan for 
Energy  Efficiency  and  the  Sustainable  Consumption  and  Production  Action  Plan  through 
wider and faster take-up of ICT-based innovations both within the 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 energy-efficient, low-carbon information society. 

The  global  objective  can  be  translated  into  three  specific  objectives  tackling  the  key  areas 
where progress can be made. The following three specific objectives have been identified:  

−  Address energy use and emissions reductions in the ICT sector itself 

−  Address the potential of ICT for energy efficiency across major energy using sectors 

−  Encourage  an  enduring  shift  in  the  behaviour  of  consumers,  businesses  and 

communities 

The  section  below  provides  more  detail  on  each  of  these  objectives,  linking  them  back  to 
relevant  sections  in  the  problem  definition  and  splitting  them  further  into  more  detailed 
operational objectives.  

3.1. 

Operational objectives  

Address energy use and emissions reductions in the ICT Sector itself 

As  explained  in  the  problem  definition,  the  ICT  sector  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  innovation  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  initiatives  aiming  at  establishing  common  energy 
efficiency measurement methods, metrics, benchmarks and improved 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 efficiency in major energy using sectors  

Businesses  in  all  sectors  of  the  economy  need  to  start  becoming  aware  of  the  need  to 
visualise,  measure  and  quantify  energy  cost  and  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-condition for running automation tools and simulation 
design  software.  The  operational  objectives  under  this  heading  therefore  focus  on  tackling 
those problems:  

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•  Encourage  ICT  solutions  providers  in  partnering  with  energy  using  sectors  in  order  to 

provide solutions based on commonly adopted methodologies. 

•  Promote  the  use  of  measuring,  management,  control,  design  and  reporting  ICT  tools  in 

major energy using sectors 

Encourage an enduring shift in the behaviour consumers, businesses and communities  

Energy efficiency has started to become an issue beyond the political 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  enable  this  change:  change  in  awareness  leading  to  change  in 
behaviour. Pioneer, regional and local 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  exploiting  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  intended  to  be  complementary  to  and  consistent  with  the 
Union’s Climate and Energy policy, the Sustainable Development Strategy (SDS) and Lisbon 
goals. They are in the mainstream of Information Society Policy generally and especially the 
mission  to  encourage  the  widespread  availability  and  accessibility  of  ICT-based  services, 
especially those that have the greatest impact on the quality 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  policies  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 complementary to those of the other EU policies.  

4. 

POLICY 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 policy 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 effectiveness 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  intervention  frameworks,  by  business  or  civil  society 
beyond those taken up to early 2009. As presented in Section 2.3 of this impact assessment, 

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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 the problems identified in this impact assessment. It is assumed in this 
option that these initiatives will continue and that the relevant EU directives 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  interventions  already  in  place  or  proposed,  there  are  a  number  of 
voluntary  agreements  and  commitments  ongoing  driven  by  various  industry  groups  and 
associations as well as regional, local city and even international initiatives. These voluntary 
initiatives are listed below:  

•  Voluntary initiatives in the ICT sector: 

o  Climate savers computing initiative (Intel, HP and others)26 
o  GeSI – Global eSustainability Initiative27 
o  AeA, American Electronic Association "Helping the EU achieve its 20% targets" 
o  EICTA,  European  Information  and  Communications  Technology  Association  "High 

Tech, Low Carbon Economy" 

o  BASDA and AFDEL (business application software developers associations in the UK 

and France) "green charter" initiatives 

o  Cisco and others "Connected Urban Development" 
Besides these voluntary initiatives by different industry groups, concrete commitments of 
some  individual  companies  in  the  ICT  sector  exist,  as  documented  in  the  Smart2020 
study. Annex V of this impact assessment presents these individual commitments.  

•  Voluntary initiatives at the regional, 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  within  the  i2010  policy  framework  and  the  EU 
programmes  for  research  to  support  the  realisation  of  energy  efficiency  gains  through  ICT-
based innovations. For example the ENERGYSAFE project in the 6th Framework Programme 
as  well  as  other  research  actions  in  the  IST  Thematic  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 
Programme29 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  wider  participation.  Participants  in  the  Climate  Savers 
Computing  Initiative,  computer  and  component  manufacturers  commit  to  producing  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 

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The  OECD,  EPC,  CEPS  have  all  prioritised  ICT  for  energy  efficiency  in  their  work  from 
2008  onwards.    The  ITU,  CEN,  CENELEC  are  also  increasingly  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 partnership 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  States  and  local  authorities,  and  partnerships 
between  different  business  sectors  and  in  Public-private  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 procurement 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 include in particular:  

•  The  ICT  Thematic  Priority  in  the  Framework  Programme  and  the  ICT  Policy  Support 
Programme (ICT PSP) within the Competitiveness and Innovation Programme (CIP):  

o  Across  the  sectors  of  application  and  for  real-time  monitoring  of  energy-use, 
provisions  could  be  made  in  the  7th  FP  and  in  the  ICT  PSP  of  the  CIP  to  establish 
interoperation protocols for networked systems of ICT-enabled energy-use monitoring 
and management, and to support large-scale demonstrations 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 initiatives for improved energy-efficiency in 
complex  ICT  systems  and  services,  RTD  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 themes 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  initiative  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.  

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o  Research  support  could  be  used  to  develop  consensus  on  protocols  for  energy-use 
monitoring at city and regional-level, and to demonstrate ICT-based 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-ordination  possibilities  of  existing  policy, 
research  and  innovation  frameworks  and  formulate  actions,  wherever  possible  into 
recommendations to a wider range of stakeholders including  to the  ICT sectors,   industries, 
Member  States,  regional  and  local  authorities  and  cities.  The  Recommendation  would  be 
accompanied  by  supporting  measures  which  the  Commission  can  put  in  place  in  order  to 
facilitate  implementation  of  the  recommendations  and  complement  actions  of  other 
stakeholders  by  its  own  actions  and  guidance.  These  supporting  measures  would  be 
highlighted in an accompanying Communication.   

Under  this  option,  the  Commission  would  propose  to  address  stakeholders  in  the  three  key 
areas identified in the problem definition:  

-  A  set  of  recommendations  addressed  to  the  ICT  sector  in  order  to  measure,  control  and 
manage its own energy footprint and encourage it to take a leading role in promoting energy 
efficient solutions in other sectors. 

- A set of recommendations addressed to the ICT sector to establish partnerships with other 
major energy-using sectors, i.e. buildings and lighting, manufacturing, logistics and transport 
and electrical power grids. Recommendations could 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 structural 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 their local and regional authorities. The key idea 
would  be  to  help  “empower”  businesses,  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 and control their energy consumption.  

The accompanying Communication would address the following issues:  

-  Use  of  regional  funds  for  measures  supporting  energy  efficiency  and  sustainability.  As 
regional  funds  can  be  used  for  ICT  infrastructures,  innovation  and  energy  efficiency,  the 
Commission  would  complement  the  recommendations  to  the  local  and  regional  authorities 
with a practical guidance on how local and regional authorities can exploit ICT and develop 
that guidance in collaboration with the Committee 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.  

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- Support the implementation of the recommended measures. The Commission would act as a 
facilitator of discussions 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 the Explanatory Memorandum that accompanies the 
Recommendation, the Commission will kick-start the 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  collaboration  between  public  and  private 

stakeholders, where necessary, to reach the required objectives; 

–  Ensure the monitoring and follow-up of the Recommendation as well as the assessment of 
the progress of the sectors involved against the recommended measures and any relevant 
targets set; 

–  Explore  the  possibilities  of  creating  a  European  web  portal  that  will  serve  as  an  open 
information  and  communication  platform  for  the  exchange  of  best  practices,  knowledge 
and experience on the use of ICT for energy efficiency purposes. 

The Commission will make the review exercise proposed in the Recommendation in 2012 and 
publish its results.  

In  addition,  the  Commission  will  continue  to  propose  that  related  research  be  financially 
supported via its various programmes. 

4.4. 

Option 4:  Regulatory or legislative measures 

There  have  been  no  calls  for  option  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 constrain developments in a highly innovative field. 

Beyond  the  regulatory  measures  already  undertaken  or  planned  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  regulation  (it  is  not  possible  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  areas.  However,  and  in  accordance  with  the 
Commission's general standardisation policy whereby this task is devolved 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  initiative  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 

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or  equipment  level  energy  efficiency  improvements.  As  every  sector,  system  and  context  is 
different, regulation cannot be generalised.  

- Many of the above mentioned markets are still immature and regulation could interfere with 
potentially favourable technological and market developments by constraining them.   

- Any legislative action initiated now would be too slow to impact the market; at least 1 year 
for legislative process and another 2 for transposition. 

- Finally, attempting to make ICT systems for energy efficiency mandatory in Member States' 
public  procurement  would  (if  successful)  likely  lead  to  the  undesirable  result  of  depriving 
Member  States  of  the  flexibility  of  a  case  by  case  assessment.  Pre-commercial  public 
procurement  and  lead  markets  are  opportunities  and  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 

Strengthened focus on energy efficiency 

Recommendation  to  the  ICT  industry  to 

national  level  and  legislative  proposals 

in  the  Framework  Programme  and  the 

agree  on  common  methodologies  and 

and initiatives in the pipeline 

CIP (large-scale pilots, exchange of best 

tools  for  measuring  and  controlling  their 

practice, codes of practice) 

own energy footprint 

Voluntary  industry  initiatives  in  the  ICT 

sector 

Closer  partnership  of  business,  regions 

Recommendations to the ICT industry to 

and  governments  under  a  new  i2010 

establish  partnerships  with  key  energy 

No  or  very  limited  partnerships  across 

flagship 

sectors  

Some  regional  and  local/city  voluntary 

initiatives 

Continuation  of  initiatives  under  the  FP 

and CIP 

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 

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5. 

ANALYSIS OF POTENTIAL IMPACTS AND COMPARISON OF OPTIONS  

5.1. 

Assessment of Option 1: No further action at the EU level  

With  respect  to  the  policy  interventions  already  in  place  or  proposed  at  the  EU  level,  it  is 
reasonable  to  assume  –  in  line  with  the  assessment  made  in  their  respective  impact 
assessments  –  that  they  will  strongly  contribute  to  improvements  in  energy  efficiency  and 
more specifically to the global energy saving target of 20% by 2020. However, there is a risk 
that the full potential of significant energy efficiency benefits will not be realised because, as 
noted earlier:  

–  The  enabling  nature  of  ICT  is  not  explicitly  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 measurement 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  initiatives  of  the  Commission,  Member  States  and  other  public 
authorities.  However,  it  can  be  reasonably  assumed  that  a  number  of  key  problems  will 
remain:   

–  Homogeneity: Industry associations and civil society groups tend to be rather homogenous 
in their stakeholder participation. As pointed out in the problem section; cross disciplinary 
(engineers, users) and cross industrial (ICT and other industries) contacts and dialogue are 
a  necessity  if  ICT  deployment  for  energy  efficiency  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 being 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  initiatives  less  effective.  In  an  explicit  recognition  of  this 
shortcoming there have been calls from these groups for leadership31.  

–  Economies  of  scale  and  scope:  Worthy  initiatives  at  the  European  and  worldwide  level 
need coordination to share information, experience  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  computing  initiative  have  measurable  but  limited 
impact. The major framework for voluntary commitments to improve energy-efficiency at 
the  equipment  (rather  than  system  or  even  systemic  levels)  is  Energy  STAR,  and  the 

31  European  Information  and  Communications  Technology    Association  –  EICTA,  American  Electronics 

Association – AeA,  Global eSustainability Initiative - GeSI 

32 http://re.jrc.ec.europa.eu/energyefficiency/  

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European eSTAR programme52, whose success is due, in considerable part, to legislative 
backing and consequent near universal acceptance.   

Cost of implementation 

For Option 1, the additional cost of implementation 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 very 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 the 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 collaboration and partnership within existing 
frameworks 

One advantage of Option 2 is that the frameworks for support to collaboration in RTD and in 
CIP  Pilot  projects  to  demonstrate  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 current 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  could  be  available  beyond  2015.  The 
focus  of  collaborative  ICT-RTD  in  the  period  2009-2010  has  already  been  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. There will therefore be little impact on real-world deployment of 
the results of  new collaborative RTD until after 2015, and it is therefore unlikely that RTD 
can contribute to the operational goals in Section 3 in the short to medium term.  

The  operational  objectives  also  concern  market  deployment  initiatives  and  require  the 
participation  of  non-research  organisations.  Indeed  they  require  the  broadest  possible 
stakeholder  participation.  The  Commission  could  take  a  role  of  coordinator;  however 
resources  would  not  allow  working  intensively  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.   

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Member States and existing constituents, it is restricted 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  implementation  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 efficiency awards and other actions for increased 
visibility  of  the  results  of  research  undertaken  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 however 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  the  future  work  programmes  would  have  to  put 
more  emphasis  on  this  field.  This  can  be  challenging  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 solutions 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:  Recommendations  on  partnership 
interoperability and best practices  

initiatives, 

The  advantages  of  Option  3  are  that  the  scope  of  recommendations  could  more  accurately 
reflect  the  operational  objectives  as  developed  in  section  3.  Recommendations  would 
encourage  those  stakeholders  that  are  ready  and  willing  to  institute  change  i.e.  provide  a 
stronger political signal and visibility 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 awareness and knowledge about the cost and energy 
saving  potential  of  certain  ICTs,  not  to  mention  consumer  pressure.  In  comparison  with 
Option 2, the clear political signal represented in the use of the Recommendation instrument 
and  consequent  higher  visibility  could  be  expected  to  better  catalyse  the  objective  of 
accelerating change in the timeframe envisaged. 

By  focusing  on  co-ordination,  partnership  building  and  deployment  of  ICT  tools,  Option  3 
can be implemented faster than Option 2, given the 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 scores 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  

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–  Catalyze  on  the  fact  that  the  consultation  has  indicated  the  readiness  of  several  major 

stakeholder groups to take initiatives within a policy framework at EU-level. 

–  Reinforce various business-led and city-regional partnership initiatives that exist, provide a 

strong political signal and 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 the 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 involvement of the Commission 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, building partnerships across sectors and agreeing on 
the  common  methodologies  and  tools  for  measurement,  exchanging  best  practice,  etc.  This 
cost  is  relatively  insignificant  and  certainly  manageable  for  the  parties  involved.  Secondly, 
there  is  the  cost  of  the  ICT  tools  themselves:  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. Thirdly, there is a certain amount of 
up-front  cost  in  restructuring  and/or  behavioural  change  that  will  have  to  occur  if  energy 
consumption is to be reduced in any significant 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.  The  Recommendation  is  meant  to  facilitate 
achievement of those targets and is not at the origin of those targets. It would, therefore, be 
incorrect to attribute the cost of restructuring to the 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 outline 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  achieving  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  preferred  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 

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The extent to which the global, specific and operational 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 administrations commit to 
take  action.  The  scope  and  strength  of  commitment  of  stakeholders  are  therefore  very 
important  criteria  of  success  of  this  initiative.  The  preferred  option  should  be  enabling  and 
catalyzing change rather than imposing it through 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/measures. If the actions are to contribute to the 2020 energy 
efficiency  goals  and  complement  the  Commission  Action  Plan  for  Energy  Efficiency  in  a 
useful  and  timely  manner,  it  is  important  that  there  is  a  strong  potential  to  achieve  the 
operational objectives in a relatively short term.  

The  criterion  “cost  of  implementation”  also  forms  an  integral  part  of  the  assessment  of 
options  to  avoid  disproportionate  implementation  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 implementation 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 

Policy Option 3 

Stronger collaboration and partnership 
within existing frameworks 

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 

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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 involves 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  reasonable  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 efficient technologies should continue and should 
be even intensified to the extent possible. However, given the urgency and 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 involving wider range of stakeholders and realisable 
in the short term is available.  

Therefore, Option 3 can be identified as the preferred 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  stakeholder  base,  it  would  be  focused  on  issues  that  can  be 
implemented in a short to medium-term, it would focus on the three main areas outlined in the 
problem definition and it would be accompanied by supporting Commission actions outlined 
in a Communication. This section presents a list of concrete recommendations that could be 
envisaged, assesses and compares them and draws a final set of recommendations that could 
best achieve the given objectives.  

EN 

29 

   EN 

 
The following specific recommendations could 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 the ICT industry develop roadmaps by 2010 
for  the  reduction  of  its  energy  use  and  carbon  emissions  and  commit  itself  to 
ambitious and transparent targets for this reduction.  

3.  The Commission could recommend a specific quantitative 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 the global 2020 energy efficiency target.  

4.  Given the international nature of the ICT industry and the often complex supply chain 
relationships,  the  Commission  could  recommend  that  the  ICT  industry  collaborate 
with  international  suppliers  in  order  to  develop  new  energy  efficiency  and  carbon 
reduction strategies and make sure that existing 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  only  on  some  of  the  key  energy  using 
sectors  where  major  savings  could  be  realised  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  would  recommend  that  the  ICT  sector  forms  partnerships 
with these sectors so that their tools are based on common methodological approaches 
for measurement and reporting of energy consumption, already being prescribed under 
the Directive on the Energy Performance of Buildings34 and the Freight and Logistics 
Action Plan35. 

6.  A recommendation could be made to the electricity sector to accelerate investment in 
automated  customer  communications  and  accelerate  the  roll-out  of  smart  meters  and 
real time energy consumption displays to households.  

7.  The Commission could recommend that Member 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  order  to  encourage  a  shift  in 
behaviour of consumers, businesses and communities in the economy at large:  

34 
35 

Directive 2002/91EC; www.buildingsplatform.org 
COM (2007) 607 final 

EN 

30 

   EN 

 
                                                 
9.  A  recommendation  could  be  made  that  companies,  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  retailers  and  others  deploy  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  cities  and  regions  through  the  aegis  of 
Member State regional and public authorities take the lead in establishing multi-sector 
partnerships to adopt a systemic view of their operations and deploy ICT systems to 
monitor, manage and control energy usage36.  

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  assist  local  and  regional  authorities  in  their 
efforts to leverage the green public procurement 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 

ICT sector 

Costs 

Risk of non-compliance 

1 

Building  partnerships  within  the  ICT 

Low  cost  of  establishing  voluntary 

Low;  many  stakeholders  have 

industry 

agreements and codes of conduct 

already 

asked 

for 

some 

common measurement tools  

lower risk of “greenwashing” 

leadership 

from 

the 

Commission 

Concrete  commitments 

for  energy 

Cost  of  adapting  the  ICT  tools  and 

Some  companies  may  be 

savings  based  on  commonly  agreed 

methodologies 

reluctant to commit to ambitious 

methodologies and targets 

Cost  of  restructuring  (partly  or  entirely 

targets 

2 

Lower energy consumption and carbon 

offset  by  the  benefits  of  lower  energy 

emissions  from  the  ICT  sector  in  the 

bill) 

short- to mid-term 

Lower energy bills for ICT businesses 

Benefits  from  concrete  energy  savings 

Potentially  high  cost  for  some  sectors 

Imposed  targets,  not  agreed  by 

if ICT sector implements the targets 

within the ICT industry where the targets 

the  industry,  therefore  high  risk 

Easier to monitor progress towards the 

were too ambitious 

of  non-compliance.  Risk  of 

3 

global 2020 targets 

“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 

31 

   EN 

 
 
                                                 
Strengthened international co-operation 

Cost  of  building  partnerships  and 

Relatively 

low,  will  depend 

in 

the  area  of  energy  efficiency, 

developing strategies 

partly 

on  willingness 

of 

4 

increased  potential  to  achieve  more 

savings  throughout  the  whole  supply 

chain 

ICT and Energy-using sectors 

international  partners 

in 

the 

supply chain  

Strong  commitments,  visibility  and 

Low  and  manageable.  For  most 

Low  risk  of  non-compliance  as 

leadership 

from  stakeholders  who 

stakeholders  in  these  sectors  the  cost 

these 

sectors 

indicated 

already showed willingness to act upon 

will  be  lower  than  the  benefits  (e.g. 

readiness 

to  act  upon 

the 

5 

the recommendation. New partnerships 

better  managed  energy  use  in  logistics 

recommendations 

between  the  ICT  sector  and  other 

means  direct  savings  of  operational 

sectors.  Common  measurement  and 

costs) 

quantification capabilities 

Potential  to  deliver  high  visibility  and 

Involves  up-front  costs  and  is  likely  to 

High  risk  of  non-compliance; 

real  opportunities 

for  encouraging 

be difficult to implement technically in a 

not feasible at the early stage of 

6 

behavioural 

change 

and 

better 

short  term  without  commonly  defined 

energy  markets 

liberalisation 

management  of  energy  but  in  mid-  to 

specifications and standards 

where  there  is  uncertainty  with 

long-term perspective 

Less  ambitious 

than  Option  6  but 

Low cost 

creates  the  necessary  conditions  for 

7 

roll-out  of  smart  meters.  Enabling 

rather  than  “command  and  control” 

approach 

respect  to  the  evolution  of  the 

energy markets 

Relatively 

low 

risk  of  non-

compliance  but  depends  on 

Member  States 

and 

the 

progress must be monitored 

Highly  ambitious  but  difficult  to  realise 

High 

up-front 

costs 

for 

some 

High  risk  of  non-compliance. 

the  benefits  of  energy  savings  without 

stakeholders  in  some  sectors  may  be 

Risk  of 

“regulatory 

failure” 

8 

common  methodologies  and  ICT  tools 

disproportionate 

in place to enable those savings 

(setting 

targets  when 

the 

quantification and measurement 

issue is not solved yet and very 

different sectors are involved) 

Economy at large 

9 

10 

Better  information  for  the  consumer, 

Difficult to implement on a mass scale in 

High  risk  of  non-compliance 

high  visibility  and  traceability  of  energy 

the short term.  High cost of determining 

(with the exception of a few first 

consumption and carbon footprint 

the total energy and carbon footprint for 

movers  who  are  already  doing 

some products and services  

it) 

Highly  ambitious.  Similar  to  Option  11, 

Similar  to  Option  11;  involves  cost  of 

High  risk  of  non-compliance, 

high  visibility  empowering  consumers 

labelling 

to  make  informed  choices.  A  strong 

political  signal  for  the  first  movers  and 

existing voluntary initiatives.  

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.   

Increased  visibility  and  an  opportunity 

Increased  costs  for  energy  providers;  a 

High risk of non-compliance 

for consumers and businesses to better 

detailed impact assessment of concrete 

11 

manage their energy consumption  

implications  would  need  to  be  carried 

out,  a  review  of  energy  legislation  may 

be necessary 

Opportunities 

for  new  partnerships. 

Cost  of  developing  energy  efficient 

High  commitment 

from 

first 

12 

Common 

tools 

for 

energy 

strategies  and  implementing  ICT  tools, 

movers  and  most  progressive 

measurement  and  management  of 

cost  of  energy  accounting.  Relatively 

cities.  Risk  of  some  reluctance 

EN 

32 

   EN 

 
energy  consumption  for  cities,  regions 

low and manageable.  

and  budget  constraints  for  slow 

and public administrations.  Opportunity 

to  identify  new  energy  savings  within 

the complex systems  

adopters.  

Systematic  green  procurement  at  the 

No additional cost or very limited cost of 

Depends  on  implementation  in 

regional  and  local  level  would  bring 

implementation  

13 

significant  positive  impacts  in  terms  of 

a  more  systemic  approach  to  energy 

use  in  the  public  sector,  more  energy 

savings and increased accountability 

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  the  recommendations  differ  in  the  level  of  their 
ambition,  the  costs  involved  and  risks  and  uncertainties  related  to  possible  non-compliance. 
Some recommendations would be highly beneficial from the perspective of the consumer or 
the overall energy efficiency target but would involve high costs for some businesses in the 
short  term  or  would  be  difficult  to  implement  because  common  methodologies  and 
measurement tools are not yet in place.  

6.3. 

Comparison of Sub-options   

In order to summarize the assessment and compare the 13 possible sub-options for concrete 
recommendations, the following five criteria are used:   

–  Potential for energy savings  –  for  most  measures,  concrete energy savings represent an 
indirect  but  desired  effect/result  of  their  implementation.  They  depend  on  many  factors 
including  the  commitment  of  stakeholders  and  costs  of  implementation.  Therefore,  this 
criterion assesses only the potential for energy 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 cost of a measure (e.g. the cost of building partnerships and 
developing  the  tools)  and  indirect  cost  that  can  be  reasonably  attributed  to  the  measure 
(e.g. cost of some restructuring needed to meet a specific quantitative target for a sector) 

–  Risks/uncertainties – as mentioned above, these are related 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 criterion which takes into account the results 
of the previous four criteria. For example, if the potential for 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 

33 

   EN 

 
Options  

l
a
i
t
n
e
t
o
p
s
g
n
i
v
a
s
y
g
r
e
n
E

n
o
i
t
a
t
n
e
m
e
l
p
m

i

f
o
d
e
e
p
S

n
o
i
t
a
t
n
e
m
e
l
p
m

i

f
o
t
s
o
C

s
e
i
t
n
i
a
t
r
e
c
n
U
/
s
k
s
i
R

s
s
e
n
e
v
i
t
c
e
f
f
e
l
l
a
r
e
v
O

1. Common methodologies and tools in the ICT 
sector 

2. Roadmaps for energy use reduction to be 
presented by the sector 

high 

medium 
to high 

high 

high 

3. Quantitative targets for energy use reduction  

high 

medium 

4. International collaboration within the supply chains  medium 

high 

5. Focus on logistics, buildings and smart meters, 
adoption of common tools 

6. Accelerate investment and roll-out of smart meters 
in the electricity sector 

7. Common functional specifications and a 
timeframe for the roll-out of smart metering 

8. Quantitative targets for key energy using sectors 

9. Track, identify and reveal energy and carbon 
footprint of products and services  

10. Machine-readable energy labelling systems 

11. Billing on a monthly basis 

12. Partnership of cities and regions with ICT to 
deploy ICT tools and disclose their energy use 

13. Encourage green IT procurement at regional and 
local level 

high 

high 

medium 
to high 
high 

medium 

medium 
to high 

medium 
to high 

high 

high 

high 

low 

low 

low 

low 

low 

low 

low 

high 

low to 
medium 

medium 
to high 

low 

low 

medium 

high 

high 

low 

low 

low 

medium 
to high 

high 

high 

high  medium

medium 
to high 
low 

low 

high 
medium 
to high 

high 
medium 
to high 

high 

high 

low 

medium 
to high 

high 

low 

medium 

low 

low 

medium 
to high 

low to 
medium 

low 

high 

high 

low 

medium 

high 

The comparative table reveals that the overall effectiveness of some recommendations is low 
for  various  reasons:  some  of  them  represent  a  more  “command  and  control”  approach  (e.g. 
setting  detailed  quantitative  targets  for  sectors)  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  catalyzing  change,  rather  than  imposing  strict  targets.  It  is 
therefore  assumed  that  sub-options  of  a  more  “enabling”  nature  with  limited  cost  of 
implementation  and  some  stakeholder  commitment  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  Recommendation,  together  with  the  accompanying 
measures outlined in section 4.3.   

EN 

34 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
7. 

EVALUATION AND MONITORING 

The  preferred  option  does  carry  a  certain  risk  of  non-realisation  irrespective  of  how 
committed certain sectors, cities and businesses appear 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  immediately  and  a  comprehensive  evaluation  will 
carried out in 2012.  

The  Commission  will  be  in  charge  of  monitoring  progress  and  providing  a  report  on  the 
implementation and impacts of the Recommendation. Member States will be asked to inform 
the Commission of actions taken in response 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 change 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 monitoring 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 engaged in addressing energy use and emissions 
in  benchmarking,  strategy  elaboration  and 

in  particular  progress 

reductions  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 efficiency 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 intent by the ICT sector associations to agree on common methodologies and 
metrology tools, received within 6 months of adoption of the recommendation 

-  Status  of  standardisation  activities  with  respect  to  the  common  methodologies  and 
metrology tools in the ICT sector and in other sectors 

- Common functional specifications for smart meters by 2011 

- Roadmaps containing highly ambitious, quantitative targets for increasing energy efficiency 
presented by the ICT sector by 2010 

- Common measurement and reporting formats for energy consumption and carbon emissions 
of the processes and services presented by the logistics sector by 2012 

-  ICT  solutions  in  the  buildings  and  construction  sector  commonly  adopted  in  partnership 
with the ICT sector 

EN 

35 

   EN 

 
Annex I 

Extended Analysis of Energy use of ICT equipment and services 

ICT  equipment  and  infrastructures  use  electricity  as  their  primary  form  of  energy,  and 
represent  some  8%  of  the  total  electricity  consumption  in  EU  27.  Equipment,  such  as  PCs, 
mobile phones and the communications infrastructures 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 communications 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-footprint  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 consumption in 2020 will be consumed by ICT.  

BAU Scenario Annual Electricity Consumption of ICT (in TWh/a)

h
W
T
n

i

n
o
i
t
p
m
u
s
n
o
C
y
t
i
c
i
r
t
c
e
E

l

l

a
u
n
n
A

450

400

350

300

250

200

150

100

50

0

Cellular 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

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Energy-efficiency appears to be still sub-optimal 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  becoming  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 energy-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 

36 

   EN 

 
 
 
 
 
 
                                                 
systems, such as data-centres, is a combination of heating/cooling, lighting 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-efficiency.  Mobile  telephones  have  become  100-times  more 
energy-efficient in the last 20 years, 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 under the eco-Design of energy-using Products 
Directive42. 

Demand-side  pressure  for  greater  energy-efficiency  is  also  growing.  The  dominance  of 
energy-efficiency characteristics in advertising for ICT systems demonstrates the strength of 
customer  interest.  Public  administrations  are  now  major  purchasers:  Energy-use  by  ICT-
systems for e-Government and public administration is now a significant part of the energy-
footprint  of  Governments.  Several  Member  States  have  developed  “Green  IT”  procurement 
strategies43 and Regulation (EC) No 106/2008 of the European Parliament and of the Council 
of  15  January  2008  on  a  Community  energy  efficiency  labelling  programme  for  office 
equipment makes the use of the underlying requirements of the (voluntary) Energy Star label, 
mandatory  for  central  government  authorities  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  Total  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 almost half the consumption of those purchased 
through the last procedure prior 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  performance  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 Association (EICTA), April 2008. www.eicta.org 

42 Member States endorse Commission proposal to reduce standby electricity consumption 

http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1117&format=HTML&aged=0&language=E
N&guiLanguage=en 

43 Notably Sweden, Denmark, Norway and 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 

37 

   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  are  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  increased  electrical  power  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-capacity data-centres46. 

The  major  obstacles  to  faster  improvement  in  energy-efficiency  of  ICT  equipment  and 
services appear to be:  

The  speed  of  energy  efficiency  improvements:  Though  many  improvements  have  been 
implemented at the level of individual devices, 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 energy efficiency criteria for individual 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 majority 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  organisations  IT  infrastructure 
efficiency as well as performance. 

44 the BioIntelligence study 
45 "Virtualisation", consolidation and re-location of datacentres; strengthened voluntary initiatives and codes of 

conduct; Green Public procurement and more focused RTD 

46 SMART2020 report 
47 Are those when energy efficiency improvement does not translate in aggregate saving but energy usage is 

transferred elsewhere.  

48 COM(2007) 799 

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Annex II 

Detailed Analysis of ICT-enabled improvements in existing key energy-using activities 

Buildings and lighting 

Buildings  use  about  40%  of  energy  and  represent  a  similar  proportion  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  improve  the  control  and  management  of 
heating,  ventilation,  air  conditioning,  lighting,  and  other  energy-hungry  devices.  Recent 
developments  in  nanotechnology  (e.g.  windows,  surfaces),  sensor/actuator  technology, 
wireless communication technology, and data processing and control offer new opportunities 
to embed networked ICT sensors and controls. This assessment addresses three main areas of 
opportunity:  

Heating,  ventilation  and  cooling  (HVAC)  and  water-heating  represents  over  40%  of 
residential electrical power use. However, there 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  residential  property  and  20-30%  in  commercial 
buildings51.  The  SMART2020  report  indicates  that  better  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-controlled “mirror-films” 
on windows17. 
Lighting  represents  about  14%  of  EU  electrical  power  use  in  the  EU52  and  about  19% 
globally53. Most domestic lighting still 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  longer  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 life (10,000-50,000 hours) and could cut energy use by a further 
30-50%  compared  with  compact  fluorescent  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  washing  machines,  dishwashers,  refrigerators  and 
ICT/consumer electronics) represents about 40% of electrical power use in homes in the EU. 

49 http://www.odyssee-indicators.org  
50  Emerging  Trend  Update  3.  The  Role  of  ICT  as  Enabler  for  Energy  Efficiency  EPIS  Work  Package  1  – 

Deliverable 1.3 ETU. JRC 

 51 The lower estimates from the BioIntelligence report, p 150-153; 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  

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Their energy efficiency is addressed in the Directives on energy and end-use efficiency and 
energy-services,  and  energy-labelling  of  household  products.  The  Intelligent  energy-Europe 
Programme  accelerating  uptake  and  promotion  of  energy-efficiency.  Embedded  ICT 
processors in such equipment already make a significant contribution to improved efficiency. 
Embedded intelligence and networked controls could enable further improvements. 

The combination of these innovations, even on current 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.  However,  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 systems-based view of buildings59. 

Additionally,  there  is  a  lack  of  incentives  for  architects,  builders,  developers  and  owners  to 
invest in smart building technology from which they will not benefit, and an unclear business 
case and absence of business models supporting/promoting 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 (the 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  decisions  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  consultation  has  identified  energy-use  and 

57 BioIntelligence. In fact the accelerated "eco-strategy" is essentially confined to assuming increased consumer 
information to promote "vale efficiency" and life cycle costs of product purchases, 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  solar  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.  

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opportunities 
manufacturing, process industries and services. 

for  savings 

in 

four  sectors:  discrete  manufacturing,  semiconductor 

ICT  could  play  a  significant  role  in  motor-systems  and  industrial-process  optimisation 
[SMART2020]. Motors use about 70% of the electrical power in industry: However, 88% of 
the motor drives are not electronically controlled. 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  energy  savings  of  10-50%  [COMPR  AIR]:  Research  suggests 
information,  decision-making  and 
that  an  awareness-raising  programme 
measurement  guidelines  could  reduce  electricity  consumption  by  almost  17  %.  In  the 
electronic  sector,  the  World  Semiconductor  Council  has  set  a  target  to  reduce  normalised 
electricity consumption by 30% from 2001 to 2010 [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-based  catalysis  could  lead  to 
efficiency gains of up to 50%. Model-based synthesis concepts could lead to efficiency gains 
of up to 20%, and process modelling could lead to energy efficiency improvements of around 
5%. 

involving 

The main obstacle to the realisation of these opportunities appears to be the lack of real-time 
information  on  energy-use:  To  optimise  and  operate  an  efficient  factory,  energy  has  to  be 
measured locally and in real time. Developments in microelectronics and embedded systems 
make it possible for networked embedded devices to provide real time feedback. Embedded, 
smart  components  and  systems,  sensor/actuator  networks  and  control  algorithms  can 
exchange  data  between  the  automation  system  and  the  enterprise  resource  planning  system. 
Advanced systems are needed to monitor the state of production, the health of the plant, and 
life-cycle  information.  Advanced  scheduling  algorithms  can  reduce  the  time  required  to  re-
tool  or  re-arrange  production  lines,  and  ICT-driven  optimised  production  planning  could 
allow scheduling of energy intensive tasks to avoid high impact peak loads. One major food 
processor has realised 9% energy-savings by setting up an energy-monitoring system61. 

In  addition,  machine  tools  are  a  major  energy-user.  However,  energy  efficiency  of  machine 
tools  remains  largely  un-documented.  The  machine  tool  sector,  which  is  typically 
characterised by SMEs, lacks the incentives and expertise to significantly improve the energy 
efficiency  performance.  Coordinated  action  is  needed  at  machine  level,  systems  level  and 
infrastructure  level.  The  end-users  of  machine  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  wireless  networks  to  interconnect  equipment  and 
plant-management systems are not yet standardised. 

Transport and logistics 

Transport systems represent about 30% of energy end-use, and numerous opportunities exist 
for  improvements  in  energy-efficiency  and  rationalisation  of  transport  logistics:  More 
efficient vehicles, road telematics for route guidance, 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 

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to cutting emissions by 200 MtCO2e) in the EU alone, and over 3000 TWh/a (or 1.5GtCO2e) 
worldwide62. 

In  relation  to  manufacturing  activities,  it  has  been  estimated  that  ICT-optimised  logistics 
could  also  enable  a  16%  reduction  in  transport  emissions  and  a  27%  reduction  in  storage 
emissions  globally  [SMART2020].  These  improvements  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  these  opportunities  are  the  fragmentation  of  the 
market, the lack of standards and the lack of systems for freight exchange and a lack of data 
and the complexity of logistical systems63. 

Electrical power grids 

Energy generation and distribution uses one third of all primary energy. The architecture and 
management  of  energy  distribution  and transmission relies on  a technology 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 electronic meters, software and other tools which, once 
connected trough the internet or into a network allows power to be provided and shared more 
efficiently,  reducing  the  need  for  peak  capacity,  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  efficiency  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  display  of  energy-use,  link  to  an  onsite  Energy 
Management  Systems,  and  via  a  communication  network  to  the  energy  company  for 
monitoring and billing (Automated Meter Reading, AMR). However, smart meters also offer 
customers  more  accurate  real-time  bills;  information  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. The EU directive on energy end-use efficiency 
and  energy  services,  however,  requires  the  installation  of  individualised  meters  that  can 
inform end-users about their actual energy consumption. Some initiatives have already been 
taken  by  some  Member  States  and  companies.  Amongst  others65  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 meters by automated meter-reading systems.  

62 SMART2020 
63 Logistics: sustainability champion or laggard? ELUPEG: www.supplychain-consulting.com 
64 www. Leonardo-energy.org 
65

http://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 

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Real-time feedback to users has shown reductions 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-use  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  conservation  effect  and  critical  Peak  load  shifting 
(summer) by 5.7% - 25.4%68. According  to the  Smart  2020 report, 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  metering”:  According  to  the  French  regulator,  the 
implementation  of  smart  metering  could  increase  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  billing  of  customers;  improved  energy  network  management;  the 
facilitation of energy efficiency measures; improved customer services, and reduction in costs 
of  pre-payment  meters.  IBM  conducted  an  international  survey70  of  1900  households 
highlighting  also  the  attitude  changes  smart  metering  induces  in  people  vis-à-vis  energy 
efficiency.  

Only  a  combination  of  technologies  can  deliver  large-sale  smart  metering:  Embedded 
computer  systems  in  smart  meters  and  appliances,  connected  by  broadband  access;  Power 
Line  Communications,  optical  fibres  or  wireless  technologies71.  Various  protocols72  can 
provide connectivity in the customer premises. However, all these combinations and options 
will  need  to  interoperate,  and  common  standards  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 marking’, giving them free movement throughout the 
European  Community.  The  Commission  has  recently  issued  a  standardisation  mandate74  for 
utility meters.  

In  addition,  a  key  obstacle  is  the  rapid  technology  change  in  communication  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_project_final_report_pnnl17167.pdf 
68 http://www.oeb.gov.on.ca/documents/cases/EB-2004-0205/smartpricepilot/OSPP%20Final%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 

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whilst communication technologies are changing very rapidly and may have a much shorter 
lifecycle. 

Establishing  an  entirely  smart  grid  is  also  a  very  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.  

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Annex III 

Examples of ICT-enabled Structural Change 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 material-intensive economy in two ways: 

Firstly,  by  helping  us  to  monitor  and  understand  the  processes  in  the  environment  much 
better; this will hopefully lead to a higher level of awareness and more effective governance 
of our interaction with the environment, i.e. the mass and energy flows between society and 
ecosystems at the local, regional and global levels (environmental 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 structures and almost 
decoupled  from  mass  and  energy  turnover,  while  consumption  is  focused  on  services  and 
almost decoupled from traditional ownership of physical goods (structural dematerialization).. 
What is needed from the standpoint of sustainability 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.” 

n
n
o
o
i
i
t
t
a
a
v
v
o
o
n
n
n
n

I
I

Conceptual framework for ICT and Sustainability developed by Prof. Hilty at EMPA 

Dematerialisation  and  virtualisation  have  already  had  direct  impacts  on  the  utilisation  of 
energy; through reducing the energy costs related physical manufacturing (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 low-energy alternatives (such as eCommerce, eGovernment and 
video-conferencing)  could  save  about  1000  TWh/a  by  2020  worldwide;  about  1-2%  of 
energy-use  (equivalent  to  about  500  MtCO2e  emissions),  comparable  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 

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500 TWh/a by reduced commuting and office-space. Tele-and video-conferencing could also 
replace  5-20%  of  global  business  travel.  For  the  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 services. Over 75% of businesses, 65% of schools 
and 45% of doctors have broadband connections. Over 80% of basic 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 this 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 

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Annex IV 

Some Investment Figures 

1. 

"Smart Meters" 

Before quantifying "gross cost" of smart meters it is as well to consider the understanding of 
"smart". 

A simple "energy use display" which can be carried around a house or business premises and 
communicated wirelessly to a "non invasive" sensor 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 power usage i.e. there is no additional functionality. However this 
"visibility"  element  is  clearly  non-negligible  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, audible warnings of peak load (and charging) 
times and feed-in enabling for "consumers" who also generate. 

Prices for these meters run to about 100 Euros per 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 would need to be not only smart but be capable 
of switching between energy "service providers" both for supply and generation purposes and 
would therefore need to be "non-proprietary and open". 

 The Business Case varies according to the competitive 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 was globally profitable, with a rate of return between 8 and 22 
percent on average over 5 years. 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  distributor  was  negative.  A  Dutch  study82  came  to  a  similar 
conclusion; the investment would have a positive net present value.    

81 Comparatif international des systèmes de télé-relève ou de télégestion et étude technico-économique 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 for households: Cost and Benefits for the Netherlands 

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Annex V 

ICT Sector - Reduction Target Issues 

The Smart 2020 Study, Annex 4 illustrates the existing 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 complicates the ability to measure against the EU 
baseline. It also illustrates that many ICT businesses are not, currently, 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 

Energy 
efficiency only 

(Energy 
reduction only) 

US CO2 only 

BT 

Vodafone Plc 

Telecom Italia 

HP 

Deutsche telecom 

Ericsson 

France Telecom 

Intel 

Sun Microsystems 

Bell canada 

Dell 

Alcatel–Lucent 

Motorola 

Nokia 

EU 

80 

50 

30 

25 

20 

20 

20 

20 

20 

15 

15 

10 

6 

6 

20 

US Interim 

To 1990  level 

US Long term 

80 

1996 

2006 

2007 

2005 

2006 

2006 

2006 

2007 

2002 

? 

? 

2007 

2000 

? 

1990 

1990 

2020 

2020 

2020 

2008 

2010 

2020 

2008 

2020 

2012 

2012 

2012 

2012 

2010 

2010 

2012 

2020 

2020 

2050 

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   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 Reduction (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 methodological targets as the CAER covers effort not specifics. 
• Interestingly the baseline date (1990? 2006?) is actually unimportant 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 

EN 

49 

   EN