REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Progress report on the application of Directive2006/32/EC on energy end-use efficiency and energy services and on the application of Directive 2004/8/EC on the promotion of cogeneration based on a useful heat demand in the internal energy market.
Date: 2014-01-08
Institutions: European Commission
Subjects: building insulation, energy consumption, energy efficiency, energy production, energy saving, energy use













EUR-Lex - 52013DC0938 - EN











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52013DC0938

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Progress report on the application of Directive2006/32/EC on energy end-use efficiency and energy services and on the application of Directive 2004/8/EC on the promotion of cogeneration based on a useful heat demand in the internal energy market. /* COM/2013/0938 final */









REPORT FROM THE COMMISSION TO THE
EUROPEAN PARLIAMENT AND THE COUNCIL
Progress report on the application of
Directive2006/32/EC on energy end-use efficiency and energy services and on the
application of Directive 2004/8/EC on the promotion of cogeneration based on a
useful heat demand in the internal energy market.
Introduction 
Directive 2006/32/EC[1] on energy end-use
efficiency and energy services (the Energy Services Directive or the ESD) aims
at making the end use of energy more economic and efficient by establishing
indicative targets, incentives and the institutional, financial and legal
frameworks needed to eliminate market barriers and imperfections which prevent
efficient end use of energy. It also aims at creating the conditions for the
development and promotion of a market for energy services and for the delivery
of energy-saving programmes and other measures aimed at improving end-use
energy efficiency. 
The Energy Services Directive applies to
the distribution and retail sale of energy, the delivery of measures to improve
end-use energy efficiency, with the exception of activities included in the EU
Emissions Trading Scheme (ETS) and, to a certain extent, the armed forces. It
targets the retail sale, supply and distribution of extensive grid-based energy
carriers, such as electricity and natural gas as well as other types of energy
such as district heating, heating oil, coal and lignite, forestry and
agricultural energy products and transport fuels.
In accordance with Article 14(2) of the ESD,
the Member States were required to prepare a second Energy Efficiency Action
Plan (EEAP) and to notify it to the Commission no later than 30 June 2011[2].
On the basis of the EEAPs, Article 14(5) of
the ESD required the Commission to assess the extent to which Member States had
made progress towards achieving their national indicative energy saving targets
This Report, therefore, concludes the
Commission's assessment and reporting on the second EEAPs in response to its
obligation under Article 14(5) of the ESD. It comes later than foreseen as not
all Member States had submitted their EEAPs in accordance with the deadline set
out in the ESD. 
High-efficiency cogeneration offers
considerable potential to achieve energy savings in the EU, as the heat
produced by power generation is not wasted but also used. This potential has
not yet been fully realised. Directive 2004/8/EC[3]
on the promotion of cogeneration based on a useful heat demand in the internal
energy market (the CHP Directive or the Cogeneration Directive) aims to
facilitate the installation and operation of cogeneration facilities in order
to save energy and combat climate change. The CHP Directive should, in the
short term, make it possible to consolidate existing cogeneration installations
and promote new plants, and in the longer term, create the necessary framework
for high efficiency cogeneration to reduce emissions. 
In accordance with Article 10 of the CHP
Directive, Member States were required to publish a report with the results of
the analysis and evaluations carried out in relation to the guarantee of origin,
to the national potential for high-efficiency cogeneration and to the existing
legislative and regulatory framework related to cogeneration.
In accordance with Article 11 of the CHP
Directive, the Commission is required to report periodically on the progress
towards the CHP Directive's goals. This Report complies with this requirement. It
comes later than foreseen as not all Member States had submitted their reports
in accordance with the deadline set out in the CHP Directive. 
It should be noted that the ESD and the CHP
Directives will be almost entirely repealed by the Energy Efficiency Directive
(the 'EED')[4]
with effect from 5 June 2014. However, the obligation to set a target under
Article 4 of the ESD will not be repealed until 1 January 2017.
This Report is accompanied by a Staff
Working Document (SWD(2013) 541 final), which gives details of the application
of both the Energy Services Directive and the Cogeneration Directive by the
Member States, and evaluates progress in energy efficiency in energy supply and
in end-use consumption. A detailed analysis of each Member States' EEAP is also
given. 
Implementing
Directive 2006/32/EC on energy end-use efficiency and energy services
The Energy Services Directive required
Member States to fix and aim to achieve a national indicative energy savings
target for 2016 of at least 9% of final energy[5].
Most of its provisions have been replaced by more precisely detailed provisions
in the EED. However, the requirements related to the 9% target will not be
repealed until 2017. Although the calculations and methodology are very
different, the ESD target should be seen as a step towards the EU achieving its
more ambitious target of a 20% reduction in energy consumption by 2020. 
The Directive requires that Member States
report on their main adopted and planned energy efficiency measures in their
EEAPs. In general, taking into account their comprehensiveness, level of
description of national policy measures and coverage of key sectors, the
overall quality of the second EEAPs submitted by the Member States in 2011-2012
under the framework of the ESD was much higher than that of the first EEAPs,
which were submitted in 2007-2008. This was also reflected in the energy
savings expected to be achieved due to the implementation of new measures
included in the second EEAPs.
As the focus of the ESD is on savings in
energy end-use and energy services – excluding, as specified, most energy
efficiency measures on the supply side and measures to improve the energy
efficiency of participants in the ETS – many of the second EEAPs provide
details of activities undertaken or planned to improve the energy efficiency of
energy supply. Moreover the EEAPs describe a variety of energy efficiency
improvement measures beyond energy services.
Buildings represent the largest single
share of energy savings potential in the EU and achieving energy efficiency
improvements in the sector is a priority target for the Member States. Almost
all the Member States reported, in their second EEAPs, measures covering both
new and existing buildings as well as residential and tertiary buildings[6]. The savings achieved
by building regulations and actions make up a significant part of total
national savings, with some including early savings resulting from regulations
implemented since 1995. As in the first reporting period, the residential
sector is a key feature of the second EEAPs as well, with extensive building
renovation programmes reported by 17 of the Member States.
Some Member States include in their savings
calculations of the effects of specific EU legislation on energy efficiency,
such as implementing regulations relating to Ecodesign and Energy labelling.
In terms of financing energy saving measures,
the use of EU funds as well as revenues from the sale of Assigned Amount Units
(AAUs) under the Kyoto Protocol have been reported by a number of Member States[7]. At the same time,
efforts to increase the involvement of the private sector in the financing of
energy efficiency improvements are on the rise throughout the EU.
The number of promising horizontal measures
has increased from the first to the second reporting period. In line with this,
energy savings obligations now form a key part of efforts to encourage
accelerated rates of energy savings. Established white certificate schemes[8]were reported as being
already operational in five Member States. Two Member States report in their
second EEAP the upcoming introduction of such schemes. Energy Services Companies
('ESCOs') remain a further key area of financing energy efficiency in the EU.
In line with this, a number of Member States indicate the provision of model
contracts for energy services, the introduction of legislation or the removal
of legal barriers to open energy services in the public sector to ESCOs. At the
same time, as it was observed in the first reporting period, many of the ESCO
related measures reported contain little detail about concrete actions to be
undertaken. 
Total final energy savings for 2010 as
declared by the Member States were approximately 59 Mtoe (million tonnes of oil
equivalent). This figure is around 35% higher than the sum of the intermediate
energy savings targets that had been set by the 27 Member States in their first
EEAPs, which were submitted in 2008. Declared intermediate savings levels range
from 1.8% of reference consumption in Lithuania to nearly 9% in Germany and Sweden where the ESD indicative target for 2016 has effectively been reached at the end
of the intermediate period.
Total final energy savings of around 132
Mtoe are forecast for 2016[9],
well in excess of the 9% indicative target of approximately 89 Mtoe. Spain and Germany forecast the highest levels of savings, while four Member States quantify 2016 savings
that are lower than 9% of their reference energy consumption. When comparing
the savings figures of Member States, however, it is important to consider the
methods used to calculate savings and not just the declared and forecast
savings levels. A number of different approaches were used to quantify the
savings. Accordingly, the numbers presented below in table 1 can only serve as
a rough indicator of the actual EU saving impact. The national approaches are
examined in more detail in the accompanying Staff Working Document.
As the above
overview of progress in energy efficiency in the EU indicates, various positive
developments occurred between the first and second round of reporting under the
ESD. The widespread use of the guide and template provided by the Commission
has contributed to the overall improved quality of the EEAPs. However, a number
of Member States could improve their reporting even further by providing more
detail on measures and their concrete implementation, as well as by clarifying
methodologies used to quantify energy savings. The second round of reporting
indicates that there is still space for improving information provision in the
EEAPs to demonstrate whether and how Member States can reach the energy savings
target.
Table 1: EEAP final energy saving targets
and forecasts for 2016 and declared savings for 2010 
   || 2010 target final energy savings (primary equivalent in italics) || 2010 declared final energy savings (primary equivalent in italics) || 2016 forecast final energy savings (primary equivalent in italics) 
 Member State || Mtoe || % of reference consumption || Mtoe || % of reference consumption || Mtoe || % of reference consumption 
 Austria || 0.428 || 2.0% || 1.180 || 5.5% || 1.874 || 8.8% 
 Belgium || 0.789 || 3.0% || 1.301 || 4.9% || 2.985 || 11.4% 
 Bulgaria[10] || 0.209 || 3.0% || 0.305 || 4.4% || 1.066 || 15.3% 
 Cyprus[11] || 0.060 || 3.3% || 0.066 || 3.6% || 0.191 || 10.4% 
 Czech Republic[12] || 0.355 || 1.8% || 0.532 || 2.7% || 1.596 || 8.2% 
 Denmark || 0.449 || 3.0% || 0.664 || 4.4% || 1.285 || 8.6% 
 Estonia || 0.061 || 2.3% || 0.079 || 3.0% || 0.213 || 8.1% 
 Finland || 0.507 || 3.0% || 1.040 || 6.1% || 2.123 || 12.5% 
 France || 5.000 || 3.8% || 5.159 || 3.9% || 18.000 || 13.5% 
 Germany || 12.181 || 6.1% || 17.937 || 9.0% || 33.868 || 17.1% 
 Greece[13] || 0.439 || 2.8% || 0.794 || 5.1% || 1.415 || 9.0% 
 Hungary || 0.152 || 1.0% || 0.293 || 1.9% || 1.371 || 9.0% 
 Ireland || 0.559 || 4.5% || 0.523 || 4.2% || 1.576 || 12.6% 
 Italy || 3.066 || 2.7% || 4.102 || 3.6% || 10.880 || 9.6% 
 Latvia || 0.006 || 0.2% || 0.294 || 8.8% || 0.299 || 9.0% 
 Lithuania || 0.054 || 1.5% || 0.067 || 1.8% || 0.341 || 9.4% 
 Luxembourg || 0.045 || 2.7% || 0.128 || 7.6% || 0.238 || 14.1% 
 Malta || 0.011 || 3.0% || 0.014 || 3.8% || 0.033 || 9.0% 
 The Netherlands || 0.978 || 2.0% || 2.278 || 4.7% || 6.416 || 13.1% 
 Poland || 1.021 || 2.0% || 3.037 || 5.9% || 5.779 || 11.3% 
 Portugal || 0.344 || 1.9% || 0.662 || 3.6% || 2.240 || 12.2% 
 Romania[14] || 0.940 || 3.0% || 2.222 || 7.1% || 2.800 || 9.0% 
 Slovakia || 0.224 || 3.0% || 0.668 || 9.0% || 0.671 || 9.0% 
 Slovenia || 0.102 || 2.5% || 0.101 || 2.5% || 0.591 || 14.5% 
 Spain[15] || 2.179 || 3.0% || 4.720 || 6.5% || 13.126 || 18.1% 
 Sweden || 2.003 || 6.3% || 2.846 || 9.0% || 4.626 || 14.6% 
 The United Kingdom || 11.737 || 9.0% || 8.547 || 6.6% || 17.816 || 13.7% 
The levels of overall achieved and forecast
savings in the second EEAPs are higher than other indicators of energy
efficiency improvement rates. According to the second EEAPs, Member States that
use mostly top-down indicators declare an energy efficiency improvement of 6.6%
for the 3-year intermediate period (2007-2010), or an average annual
improvement of over 2.1% of reference consumption. This figure is in contrast
with the average rate of final energy intensity reduction of around 1.2%
recorded for the years 2000-2009 by the Odyssee project[16]. The significant
increase in the rate of annual improvement apparent from the EEAPs may not be
fully accounted for by an increase in policy activity, but also by additional structural
and statistical factors as well as data inconsistencies and overlaps when aggregating
the impacts of various national measures.
Member States using mostly bottom-up or
measure-specific methods to determine their declared savings values show savings
of 5.1% of reference energy consumption up to 2010. This figure also looks high
considering that, unlike the top-down methods, bottom-up figures should exclude
autonomous savings, although they do incorporate some early savings. . There is
also a certain risk of double-counting where the same kWh saved may have been
triggered by several policy measures. 
Table 2:
Overview of supply-side measures contained in the second EEAP[17]
 Member State   || Measures addressing electrical transmission and distribution losses || Measures promoting high efficiency cogeneration || Measures prioritising other high efficiency generation plants, including wind, PV || Measures to encourage district heating or improve its efficiency || Measures to promote load management || Measures to promote or develop smart grids || Measures addressing the efficiency of the supply of oil and gas || Voluntary Agreements encouraging supply-side savings || Measures aimed at promoting greater competition among suppliers 
 AT ||   || X ||   || X ||   ||   ||   ||   ||   
 BE ||   || X[18] ||   ||   ||   ||   ||   ||   ||   
 BG || X || X ||   || X ||   || X ||   ||   ||   
 CY || X || X || X ||   ||   ||   ||   ||   ||   
 CZ ||   || X || X || X ||   ||   ||   ||   ||   
 DK || X ||   ||   || X[19] ||   ||   || X || X ||   
 EE || X || X ||   || X ||   ||   || X ||   || X 
 FI ||   ||   ||   ||   ||   ||   ||   || X ||   
 FR ||   ||   ||   ||   ||   || X ||   ||   ||   
 DE ||   || X[20] ||   ||   ||   ||   ||   ||   || X 
 GR || X || X || X || X ||   ||   ||   ||   ||   
 HU ||   ||   ||   || X ||   ||   ||   ||   ||   
 IE || X ||   || X ||   || X || X ||   || X || X 
 IT || X || X || X ||   ||   || X ||   ||   ||   
 LT || X || X || X || X ||   || X || X ||   ||   
 LV ||   || X ||   ||   ||   ||   ||   ||   ||   
 LU ||   || X ||   ||   ||   ||   ||   ||   ||   
 MT || X || X ||   ||   ||   || X ||   ||   ||   
 NL ||   || X ||   ||   ||   ||   ||   ||   ||   
 PL || X ||   ||   || X ||   || X ||   ||   ||   
 PT ||   || X ||   ||   ||   ||   ||   ||   ||   
 RO ||   ||   ||   ||   ||   ||   ||   ||   ||   
 SK ||   || X ||   ||   ||   ||   ||   ||   ||   
 SI ||   || X || X || X ||   || X ||   || X ||   
 ES ||   || X || X ||   ||   ||   ||   ||   ||   
 SE ||   ||   ||   || X ||   || X ||   ||   ||   
 UK ||   ||   ||   ||   ||   || X ||   ||   ||   
Implementing
Directive 2004/8/EC on the promotion of cogeneration 
High-efficiency cogeneration (defined as
the simultaneous generation in one process of thermal energy and electrical
and/or mechanical energy) has significant potential in terms of saving energy,
but is largely untapped within the EU. The objective of the CHP Directive is therefore
to establish a transparent common framework to promote and facilitate the
installation of cogeneration plants. In the short term, the Directive should
make it possible to consolidate existing cogeneration installations and promote
new plants. In the medium to long term, the Directive should create the necessary
framework for high efficiency cogeneration to reduce emissions of CO2 and other
substances and to contribute to sustainable development.
Under the CHP Directive Member States were
required to analyse their national potential for high-efficiency cogeneration,
to evaluate barriers and administrative frameworks and to assess the
reliability of the guarantees of origin system (Article 10(1) of the CHP
Directive). Every four years starting from 21 February 2007, Member States had
to evaluate the progress made in increasing the share of high-efficiency
cogeneration (CHP) in energy provision. Member States had to publish 2nd
national progress reports by 11 October 2011, and the Commission is required to
review the application of the CHP Directive on the basis of those reports. All
Member States complied with the obligation to analyse their national
cogeneration potential and the barriers to achieve this potential and to
evaluate their administrative frameworks, including the guarantees of origin
system. All Member States have also submitted the first and the second progress
reports as required under the CHP Directive although with some delays. To
facilitate reporting and to provide comparable information for evaluation, the
Commission provided non–compulsory templates and questionnaires to Member States, but not all Member States used these questionnaires or the templates or filled
them out completely. This has led to divergences in quality, completeness and
methodology. Information provided in the national reports about progress in
increasing the share of high-efficiency cogeneration is therefore often not
comparable and of varying degrees of detail and comprehensiveness. This is also
true of the national analyses of potential.
Although the CHP Directive has been
transposed into national legislation, in some Member States the guarantees of
origin system or the calculation methodologies for the quantity of electricity
from high-efficiency cogeneration were still not fully operational in 2010 or
little used in practice. National grid system rules regarding connection and
access to the grid for high-efficiency cogeneration have been implemented in
various ways and show great divergence. Although there has been progress in
making grid rules objective and transparent, connection scheduling and charging
conditions are often still complex and burdensome, especially for distributed
cogeneration. 
Member States also had an obligation to
assess barriers to cogeneration. Member States identified fuel prices, heating
and cooling demand, the complexity of the law, lack of promotion and access
rules to electricity grids as the most common barriers to cogeneration. Other
important barriers were economic risk, uncertainties due to the Emissions
Trading System, the lack of (heat) infrastructure and financial resources, the
lack of awareness and immaturity of certain technologies.
In their second progress reports, most
Member States provided information on their support schemes for cogeneration,
although this information was not legally required. Feed-in tariffs, price
premiums or a guaranteed purchase price for cogeneration were the most frequent
form of support in the reporting period (up to 2010), used in seventeen Member
States. These price support mechanisms were coupled with capital grants in fifteen
Member States. Energy and business tax exemptions and accelerated fiscal
allowances were also used in many Member States. Some Member States combined
several support mechanisms, such as certificates coupled with quota systems (four
Member States). The scope, conditions and duration of national support schemes
varied greatly. Support schemes often addressed a specific segment of
cogeneration, e.g. selected by fuel, such as biomass, or capacity, e.g. below
10 MW[21].

Progress in increasing the share of
high-efficiency cogeneration remained limited since the entry into force of the
CHP Directive in 2004. The share of CHP in gross electricity generation in the
EU-27 increased from 10.5% in 2004 to 11.2% in 2011. In absolute terms,
electricity generation from CHP has increased by 38 TWh[22]: from 337 TWh in 2004
to 375 TWh in 2011. 
On the basis of the national reports
submitted pursuant to Article 10 of the CHP Directive, which reflect the
situation until 2010 with a focus on the period from 2008 onwards, the overall
evolution of electricity production from high-efficiency cogeneration show a
great variety across Member States. 
There was a slight decline in total
generation from CHP in 2009, especially in industry, probably due to the
economic downturn, followed by a rebound in 2010. From 2008 to 2009, electrical
capacity has increased but electricity production decreased, showing an
underutilisation of capacity. Heat production from cogeneration is stabilised
with no decline registered, and overall, there has been steady growth since
2004. A moderate increase is primarily due to the increase in district heating
in the residential, commercial and services sector.
The share of cogeneration in (thermal) heat
production varies from over 30% in Sweden (40%), Bulgaria (33%), Czech Republic (33%) and Estonia (31%) to below 1% in Greece, Malta and Cyprus. There has been a consistent increase in the use of natural gas in this period from
39% to 48% as fuel for cogeneration, while coal and lignite have shown a
declining trend from 35% to 21%. Biomass and biogas show an overall growing
trend from 9% in 2005 to 15% in 2010. The most common technology is still steam
condensing extraction turbine but this is steadily decreasing from 40% in 2005
to 36% in 2010, while the share of gas combined cycle turbines is growing (from
23% in 2005 to 29% in 2010). Overall while the share of high-efficiency
cogeneration in the electricity market has increased, progress remained
limited, reaching only 12% in the share of electricity production instead of
the economic potential of 21% identified by the Member States in their national
potential analysis[23].
Conclusion
In practice implementation of the ESD has
resulted, above all, in measures targeting energy end use, for example,
programmes to refurbish and renovate buildings. Member States' EEAPs indicate
high levels of final energy savings achieved up to 2010 and suggest that the 9%
indicative target for 2016 will be comfortably exceeded by most Member States.
This is encouraging and shows that Member States' commitment pays off in terms
of energy saving. The progress achieved should be maintained in views of
achieving the EU's ambitious 2020 energy savings target of 20%, and the
concrete transposition and implementation of the EED, a key instrument to
achieving that target. 
In terms of the CHP Directive, the overall
evolution of electricity production from high-efficiency cogeneration shows a
moderate increase primarily due to the increase in district heating in the
residential, commercial and services sectors. There has been steady growth in heat
production from cogeneration been since 2004.
Proposals for additional measures or
amendments to either the ESD or CHP Directive are not considered appropriate at
this time. This is because both Directives will be repealed and have been
replaced by the EED, which has taken over their provisions and strengthened the
obligations placed upon the Member States.
[1]               OJ L 114, 27.4.2006, p.64
[2]               Although Croatia submitted an EEAP in April 2013, it
was not required to do so under the ESD as the obligation occurred before Croatia's accession to the EU.
[3]               OJ L 52, 21,2,2004, P. 50
[4]               Directive 2012/27/EU on energy efficiency, OJ L 315,
14.11.2012, p.1
[5]               Annex I to the Directive specifies that Member States
should calculate their target referring to their average annual final inland
energy consumption for the most recent five year period previous to the
implementation of this Directive. 
[6]               See section 3.2 of Accompanying SWD(2013) 541 final on Progress Report on
energy efficiency in the European Union
[7]               See Section 4 of Accompanying SWD(2013) 541 final
[8]               These are certificates issued by independent
certifying bodies confirming the energy savings claims of market actors as a
consequence of energy efficiency improvement measures (Article 3(s) ESD)
[9]               See section 4.9 and table 10 of Accompanying
SWD(2013) 541 final
[10]             2016 figures for Bulgaria represent the bottom-up
savings totals given in the EEAP.
[11]             Figures for Cyprus, Ireland and the Netherlands are shown in Primary Energy Equivalent. As the ESD does not specifically define
"primary" or "final" energy savings, the Member States have
submitted figures based on their definitions.
[12]             The Czech Republic does not clearly state intermediate
savings achieved. The 2010 figure shown above is one third of the forecast
figure for 2016.
[13]             To account for recessionary influences, Greece adjusted a very high interim savings figure given by top-down methods to have a more
realistic range of likely savings achieved. The 2010 figure shown here
represents the low end of the range. No clear forecast of energy savings in
2016 exists. The value shown assumes that the 9% indicative target is achieved.
[14]             No savings forecast given for 2016 for Romania. 2016 figure shown represents the 9% ESD indicative target.
[15]             The calculation of the 9% ESD target for Spain is unclear from the EEAP.
[16]             EU-funded project on energy efficiency indicators
(http://www.odyssee-indicators.org/) using top-down methodologies similar to
the methodologies used in the second EEAPs by many Member States.
[17]             The table is of a descriptive nature only to show that
Member States have been taking different types of measures in their second
EEAPs. The number of crosses is not linked to the comprehensiveness or quality
of the measures included in the second EEAP. 
[18]             Separate measures for Wallonia, Flanders and Brussels regions.
[19]             Measure or strategy mentioned but no detail provided.
[20]             CHP measures described in the
EEAP focus mainly on end-use or micro-CHP installations.
[21]             Megawatts.
[22]             Terawatt hours.
[23]             Annex X to the Impact Assessment for the Energy
Efficiency Directive, (SEC(2011) 779 final)