COMMISSION STAFF WORKING DOCUMENT Monitoring progress towards the Energy Union objectives - Concept and first analysis of key indicators Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK State of the Energy Union
Date: 2015-11-18
Institutions: European Commission, Secretariat-General
Subjects: competitiveness, economic and social cohesion, electrical energy, energy policy, gas, innovation, reduction of gas emissions, regional cooperation, single market

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 18.11.2015  SWD(2015) 243 final   COMMISSION STAFF WORKING DOCUMENT Monitoring progress towards the Energy Union objectives - Concept and first analysis of key indicators Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK State of the Energy Union {COM(2015) 572} {SWD(2015) 208 à 209} {SWD(2015) 217 à 242}  
 
 
Monitoring progress towards the Energy Union objectives –  
Concept and first analysis of key indicators 

1. 

INTRODUCTION ........................................................................................................................... 4 

2.  METHODOLOGY .......................................................................................................................... 5 

2.1. 
2.2. 

OVERALL APPROACH .......................................................................................................................... 5 
DEFINITION AND RATIONALE FOR THE SELECTED INDICATORS ..................................................................... 6 
2.2.1.  Macroeconomic relevance of the energy sector ..................................................................... 6 
2.2.2. 
Energy security, solidarity and trust ....................................................................................... 7 
2.2.3.  A fully integrated internal energy market ............................................................................... 9 
2.2.4. 
Energy efficiency and moderation of demand ...................................................................... 12 
2.2.5.  Decarbonisation .................................................................................................................... 13 
2.2.6.  Research, innovation and competitiveness ........................................................................... 14 
Research and innovation ........................................................................................................... 14 
Competitiveness: EU and major trading partners' energy prices and costs developments ....... 16 
Cohesion Policy investments supporting the Energy Union .................................................. 16 
SUMMARY ..................................................................................................................................... 17 
2.3.1. 
The selected scoreboard indicators ....................................................................................... 17 
2.3.2.  Areas for additional work in preparing and selecting key indicators .................................... 18 

2.2.6.1. 
2.2.6.2. 

2.2.7. 

3. 

DESCRIPTIVE ANALYSIS ............................................................................................................... 19 

MACROECONOMIC RELEVANCE OF THE ENERGY SECTOR .......................................................................... 19 
3.1.1.  Value Added and Employment .............................................................................................. 19 
Consumer Prices .................................................................................................................... 22 
3.1.2. 
Energy and transport related taxes ...................................................................................... 24 
3.1.3. 
ENERGY SECURITY, SOLIDARITY AND TRUST ........................................................................................... 25 
Import dependency ............................................................................................................... 25 
3.2.1. 
Supplier concentration index ................................................................................................ 26 
3.2.2. 
Contribution of renewables to energy security ..................................................................... 27 
3.2.3. 
3.2.4.  Net trade balance of energy products .................................................................................. 29 
Security of gas supply ............................................................................................................ 29 
3.2.5. 
Security of electricity supply .................................................................................................. 30 
3.2.6. 
A FULLY INTEGRATED INTERNAL ENERGY MARKET .................................................................................. 31 
Electricity interconnection capacity ...................................................................................... 31 
Concentration on wholesale markets ................................................................................... 32 
EU energy market coupling and convergence in wholesale prices ....................................... 33 
Prices developments on EU electricity markets ......................................................................... 33 
Price developments on EU gas markets ..................................................................................... 35 
3.3.4.  Retail market functioning ..................................................................................................... 37 
3.3.5. 
Electricity tariff deficits ......................................................................................................... 41 
3.3.6.  Vulnerable consumers ........................................................................................................... 42 
ENERGY EFFICIENCY AND MODERATION OF DEMAND .............................................................................. 44 
Evolution of primary and final energy consumption ............................................................. 44 
Primary energy intensity of the economy ............................................................................. 45 
Energy intensity of industry .................................................................................................. 47 
Energy intensity in the residential sector .............................................................................. 48 
Energy efficiency in transport ............................................................................................... 49 
DECARBONISATION ......................................................................................................................... 52 

3.4.1. 
3.4.2. 
3.4.3. 
3.4.4. 
3.4.5. 

3.3.1. 
3.3.2. 
3.3.3. 

3.3.3.1. 
3.3.3.2. 

3.5.1.  Monitoring greenhouse gas emission reductions in the non-Emission Trading Systems 
sectors  52 
3.5.2.  Monitoring other greenhouse gas emission reductions developments ................................ 52 
Greenhouse gas intensity of the economy ................................................................................ 52 
Greenhouse gas emissions per capita........................................................................................ 53 
Sectoral share of greenhouse gas emissions ............................................................................. 54 
Share of emissions within the Emissions Trading System in total greenhouse gas emissions ... 55 
3.5.3.  Renewable energy developments ......................................................................................... 55 
Overall renewables developments ............................................................................................ 56 
Renewable energy in electricity ................................................................................................. 58 

3.5.2.1. 
3.5.2.2. 
3.5.2.3. 
3.5.2.4. 

3.5.3.1. 
3.5.3.2. 

2.3. 

3.1. 

3.2. 

3.3. 

3.4. 

3.5. 

 
 
3.6. 

3.5.3.3. 
3.5.3.4. 
3.5.3.5. 

3.6.1.1. 
(a) 
(b) 
3.6.1.2. 

Renewable energy in heating and cooling ................................................................................. 60 
Renewable energy in transport ................................................................................................. 60 
Renewable energy deployment at local level ............................................................................ 62 
RESEARCH, INNOVATION AND COMPETITIVENESS ................................................................................... 62 
3.6.1.  Research and innovation ....................................................................................................... 62 
Investments in R&D ................................................................................................................... 62 
Public support to R&D .......................................................................................................................... 63 
Corporate R&D in low-carbon technologies ......................................................................................... 66 
Innovation trends in low-carbon and sustainable energy sectors ............................................. 67 
Energy prices and costs in a global perspective .................................................................... 71 
3.6.2.1. 
EU and major trading partners energy price developments ...................................................... 72 
(a)  Wholesale electricity prices ................................................................................................................. 72 
(b)  Wholesale gas prices ............................................................................................................................ 73 
Retail prices paid by industrial users .................................................................................................... 74 
(c) 
EU and major trading partners energy cost developments ....................................................... 75 
3.6.2.2. 
COHESION POLICY INVESTMENTS SUPPORTING THE ENERGY UNION .......................................................... 77 

3.6.2. 

3.7. 

4. 

ANNEX: ...................................................................................................................................... 80 

4.1. 
4.2. 

SCOREBOARD OF SELECTED INDICATORS .............................................................................................. 80 
DEFINITION AND SOURCES FOR SELECTED INDICATORS ............................................................................ 83 
4.2.1.  Macroeconomic relevance of energy sector ......................................................................... 83 
4.2.2. 
Energy Security, solidarity and trust ..................................................................................... 83 
4.2.3.  A fully-integrated internal energy market ............................................................................ 84 
Energy Efficiency and moderation of energy demand .......................................................... 86 
4.2.4. 
4.2.5.  Decarbonisation .................................................................................................................... 87 
4.2.6.  Research, innovation and competitiveness ........................................................................... 88 
4.2.7 Cohesion Policy investments supporting the Energy Union ........................................................ 89 
FIGURE 1: VALUE ADDED OF THE ENERGY SECTOR - PERCENTAGE OF GROSS VALUE ADDED (TOTAL ECONOMY) IN 2012 .......... 19 
FIGURE 2: TURNOVER OF ALL RENEWABLE ENERGY SECTORS (% GDP 2013) ................................................................ 20 
FIGURE 3: EMPLOYMENT IN THE ENERGY SECTOR – PERCENTAGE OF TOTAL EMPLOYMENT IN 2012 ................................... 20 
FIGURE 4: EMPLOYMENT OF ALL RENEWABLE ENERGY SECTORS IN THE EU .................................................................... 21 
FIGURE 5: EMPLOYMENT OF ALL RENEWABLE ENERGY SOURCES SECTORS - 2013 (PER 1000 INHABITANTS) ........................ 22 
FIGURE 6: CONSUMER PRICE INFLATION (%) ACROSS THE EU IN 2014 ........................................................................ 23 
FIGURE 7: HARMONISED INDICES OF CONSUMER PRICES (HICP) IN EU28 AND ITS ENERGY COMPONENTS' EVOLUTION (%) ... 23 
FIGURE 8: ENERGY AND TRANSPORT RELATED TAXES IN THE EU, % OF GDP, 2012 ........................................................ 24 
FIGURE 9: IMPORT DEPENDENCY (% OF NET FOSSIL FUEL IMPORTS IN GROSS INLAND CONSUMPTION AND BUNKERS, BASED ON 

TONNES OF OIL EQUIVALENT) FOR EU MEMBER STATES ................................................................................... 25 
FIGURE 10: SHARE OF PURCHASES OF NATURAL URANIUM BY EU UTILITIES BY ORIGIN, 2013 (%) ..................................... 26 
FIGURE 11: AGGREGATE (GAS, OIL, AND COAL) COUNTRY SPECIFIC CONCENTRATION INDEX .............................................. 27 
FIGURE 12: RELATIVE REDUCTION OF GROSS INLAND CONSUMPTION OF FOSSIL FUELS ..................................................... 28 
FIGURE 13: NET TRADE BALANCE OF ENERGY PRODUCTS - % OF GDP .......................................................................... 29 
FIGURE 14: MEMBER STATES' POSITION AS REGARDS THE N-1 CRITERIA (2015) ........................................................... 30 
FIGURE 15: ELECTRICITY INTERCONNECTION CAPACITY (% OF TOTAL GENERATION CAPACITY) - 2014 ................................. 31 
FIGURE 16: MARKET CONCENTRATION IN POWER GENERATION CAPACITY IN EU MEMBER STATES .................................... 32 
FIGURE 17: MARKET CONCENTRATION IN MEMBER STATES' WHOLESALE GAS MARKETS .................................................. 32 
FIGURE 18: DIFFERENCE BETWEEN THE HIGHEST AND THE LOWEST REGIONAL WHOLESALE ELECTRICITY PRICE ....................... 33 
FIGURE 19: COMPARISON OF AVERAGE WHOLESALE BASELOAD ELECTRICITY PRICES, FIRST QUARTER OF 2015 ..................... 34 
FIGURE 20: WHOLESALE DAY-AHEAD GAS PRICES ON GAS HUBS IN THE EU.................................................................... 35 
FIGURE 21: COMPARISON OF EU WHOLESALE GAS PRICE ESTIMATIONS ........................................................................ 36 
FIGURE 22: COMPARISON OF EU WHOLESALE GAS PRICES IN THE SECOND QUARTER OF 2015 .......................................... 37 
FIGURE 23: ANNUAL SWITCHING RATES FOR HOUSEHOLDS ON RETAIL ELECTRICITY MARKETS - 2013 AND AVERAGE 2008-2013
 ............................................................................................................................................................ 38 
FIGURE 24: ANNUAL SWITCHING RATES FOR HOUSEHOLDS ON GAS RETAIL MARKETS - 2013 AND AVERAGE 2008-2013 ....... 38 
FIGURE 25: CONCENTRATION ON RETAIL ELECTRICITY MARKETS .................................................................................. 39 
FIGURE 26: CONCENTRATION ON RETAIL GAS MARKETS ............................................................................................. 39 
FIGURE 27: ELECTRICITY SMART METER PENETRATION RATE ACHIEVED IN HOUSEHOLDS (%) – 2013 ................................. 40 
FIGURE 28: PERCENTAGE OF POPULATION AT RISK OF ENERGY POVERTY ........................................................................ 42 
FIGURE 29: SHARE OF ENERGY PRODUCTS IN HOUSEHOLDS' EXPENDITURE, AS USED FOR THE CALCULATION OF HICP ............ 43 
FIGURE 30: EVOLUTION OF EU28 PRIMARY AND FINAL ENERGY CONSUMPTION ............................................................ 44 
FIGURE 31: PRIMARY AND FINAL ENERGY CONSUMPTION PER MEMBER STATE IN 2013 (2005 = 100) ............................. 45 

2 

 
FIGURE 32: AVERAGE ANNUAL GROWTH OF GDP  AND AVERAGE PRIMARY ENERGY CONSUMPTION DEVELOPMENTS IN % IN THE 
PERIOD 2005-2013 ................................................................................................................................. 46 
FIGURE 33: 2005-2013 AVERAGE IMPROVEMENT RATE OF PRIMARY ENERGY INTENSITY IN % ......................................... 47 
FIGURE 34: ENERGY INTENSITY FOR INDUSTRY ......................................................................................................... 47 
FIGURE 35: FINAL ENERGY CONSUMPTION PER M2 (KOE/M2) .................................................................................... 48 
FIGURE 36: 2005-2013 AVERAGE ANNUAL CHANGE OF FINAL ENERGY CONSUMPTION IN  TRANSPORT IN % ....................... 50 
FIGURE 37: FINAL ENERGY CONSUMPTION IN THE TRANSPORT SECTOR OF EU28 ............................................................ 50 
FIGURE 38: AVERAGE CO2 EMISSIONS FROM NEW PASSENGERS CARS ........................................................................... 51 
FIGURE 39: GAP BETWEEN GREENHOUSE GAS EMISSIONS IN THE NON-ETS SECTOR AND TARGETS ..................................... 52 
FIGURE 40: GREENHOUSE GAS INTENSITY OF THE ECONOMY, 2013 ............................................................................. 53 
FIGURE 41: GREENHOUSE GAS EMISSIONS PER CAPITA, 2013 .................................................................................... 53 
FIGURE 42: SHARE OF GREENHOUSE GAS EMISSIONS BY ECONOMIC SECTOR, 2012 ......................................................... 54 
FIGURE 43: SHARE OF EMISSIONS WITHIN THE ETS IN TOTAL GHG EMISSIONS .............................................................. 55 
FIGURE 44: SHARE OF ENERGY FROM RENEWABLE ENERGY SOURCES IN GROSS FINAL ENERGY CONSUMPTION ...................... 56 
FIGURE 45: MEMBER STATES’ GROWTH IN TOTAL GROSS FINAL ENERGY CONSUMPTION (TOTAL; RES) AND RES SHARES 

BETWEEN 2005 AND 2013 ........................................................................................................................ 57 
FIGURE 46: SHARE OF ENERGY FROM RENEWABLE ENERGY SOURCES IN ELECTRICITY GENERATION ...................................... 58 
FIGURE 47: EU RENEWABLE ELECTRICITY GENERATION IN 1990-2013 ........................................................................ 59 
FIGURE 48: SHARE OF ENERGY FROM RENEWABLE ENERGY SOURCES IN HEATING AND COOLING ........................................ 60 
FIGURE 49: SHARE OF ENERGY FROM RENEWABLE ENERGY SOURCES IN TRANSPORT ........................................................ 61 
FIGURE 50: RESIDENTIAL PV CAPACITY .................................................................................................................. 62 
FIGURE 51: SHARE OF ENERGY AND ENVIRONMENT IN TOTAL PUBLIC CIVIL R&D SPENDING .............................................. 63 
FIGURE 52: PUBLIC R&D INTENSITY SUPPORT TO ENERGY (R&D BUDGET/ GDP, 2011-2013) ....................................... 64 
FIGURE 53: SPLIT OF PUBLIC SUPPORT TO R&D IN VARIOUS ENERGY FIELDS (2005 – 2012) ............................................ 65 
FIGURE 54: SPLIT IN PUBLIC R&D SUPPORT IN VARIOUS ENERGY FIELDS - INTERNATIONAL COMPARISON, 2011 ................... 66 
FIGURE 55: ABSOLUTE INVESTMENT FROM THE CORPORATE SECTOR IN R&D PER TECHNOLOGY AND COUNTRY FOR 2011. .... 67 
FIGURE 56: ABSOLUTE FIGURES AND RELATIVE CONTRIBUTION OF NATIONAL, EU AND CORPORATE FUNDING TO R&D FOR THE 

NINE TECHNOLOGIES EXAMINED IN THE YEAR 2011. ........................................................................................ 67 
FIGURE 57: NUMBER OF LOW-CARBON TECHNOLOGY PATENT APPLICATIONS, PER MILLION INHABITANTS, 2011, ................. 68 
FIGURE 58: GEOGRAPHIC DISTRIBUTION OF THE TOP 10 MOST PROMINENT INDUSTRY AND ACADEMIC PLAYERS AND THE 

FREQUENCY THAT THEY APPEAR IN 100 ENERGY PRIORITIES............................................................................... 69 

FIGURE 59: EVOLUTION OF LEVELISED COSTS OF ELECTRICITY GENERATION BROKEN DOWN BY KEY COST COMPONENTS FOR 

SELECTED REPRESENTATIVE TECHNOLOGIES FOR THE PAST, PRESENT AND FUTURE .................................................. 70 
FIGURE 60: GLOBAL TRENDS IN RENEWABLE ENERGY INVESTMENTS, BY REGION ............................................................. 71 
FIGURE 61: GLOBAL TRENDS IN RENEWABLE ENERGY INVESTMENTS, BY SECTOR ............................................................. 71 
FIGURE 62: WHOLESALE ELECTRICITY PRICES IN THE US, JAPAN, IN COMPARISON TO THE EUROPEAN COMPOSITE AVERAGE 

(PEP) .................................................................................................................................................... 72 
FIGURE 63: INTERNATIONAL COMPARISON OF WHOLESALE GAS PRICES ......................................................................... 74 
FIGURE 64: ELECTRICITY END-USER PRICES PAID BY INDUSTRIAL CUSTOMERS (WITHOUT VAT AND REC. TAXES, SECOND HALF OF 

2014) ................................................................................................................................................... 75 

FIGURE 65: GAS END-USER PRICES PAID BY INDUSTRIAL CUSTOMERS (WITHOUT VAT AND REC. TAXES, SECOND HALF OF 2014)

 ............................................................................................................................................................ 75 
FIGURE 66: REAL UNIT ENERGY COSTS (% OF VALUE ADDED) IN THE MANUFACTURING SECTOR (EXCL. REFINING) .................. 76 
FIGURE 67: CONTRIBUTION TO ANNUAL GROWTH RATE 2000-2009 – MANUFACTURING EXCL. REFINING) ........................ 77 
FIGURE 68: SHARE OF THE NATIONAL ERDF AND CF ALLOCATIONS TO ENERGY-RELATED ENERGY UNION AREAS OUT OF THE 

TOTAL COHESION POLICY ALLOCATIONS FOR THE 2014-2020 PERIOD ................................................................ 78 
FIGURE 69: SHARE OF THE NATIONAL ERDF AND CF ALLOCATIONS TO TRANSPORT-RELATED ENERGY UNION AREAS OUT OF THE 
TOTAL COHESION POLICY ALLOCATIONS FOR THE 2014-2020 PERIOD ................................................................ 79 

3 

 
 
 
 
1. 

INTRODUCTION 

The Energy Union aims to ensure that European consumers – households and businesses 
–  have  secure,  affordable,  competitive  and  sustainable  energy.  It  is  made  up  of  five 
closely related and mutually reinforcing dimensions, progress against which should also 
be measured through key indicators. 

This  Staff  Working  Document  presents  a  concept,  methodological  approach  and  first 
analysis for setting up such key indicators for the Energy Union. It includes a proposal as 
regards concrete  indicators  to  monitor  and  assess  progress towards  meeting  the  Energy 
Union objectives.  

This  Staff  Working  Document  will  be  the  basis  for  further  exchanges,  which  will  be 
taken  forward  over  the  next  months.  The  selection  of  indicators  can  therefore  further 
evolve in the future to take account of new or better indicators being made available or 
suggested to address the issues at hand.  

In  its  Communication  on  the  2030  Climate  and  Energy  Framework,  the  European 
Commission  proposed  to  develop  a  set  of  key  indicators  in  order  to  measure  progress 
towards  a  more  competitive  and  secure  energy  system  in  a  2030  perspective  and  get  a 
facts base for policy action over time.  

A  meaningful  specification  of  these  indicators  is  crucial  for  their  policy  relevance  and 
future  development  of  potential  accompanying  measures.  Discussions  with  Member 
States in the Energy Council showed that the list of indicators made in the 2030 Climate 
and  Energy  Framework  would  benefit  from  selected  amendments  and  from  being 
extended by further key objectives in the context of the Energy Union. 

The March European Council provided a first orientation by Member States regarding a 
possible  prioritisation  among  the  indicators.  According  to  the  Council  conclusions, 
affordable  energy  prices  and  industrial  competitiveness,  security  of  supply  and  the 
development  of  interconnections  are  key  parameters  for  ensuring  a  coherent  European 
energy and climate policy until 2030.  

The Annual State of the Energy Union is an opportunity to monitor and assess progress 
as regards Energy Union targets and objectives. In fact, systematic monitoring with key 
indicators  is  needed  to  assess  progress  over  time  and  to  provide  a  factual  base  for 
potential policy response. 

The  indicators  should  form  the  basis  (i)  for  assessing  the  specific  impacts  of  the  2030 
climate  and  energy  policy  targets  and  (ii)  for  a  more  holistic  assessment  of  progress 
towards  a  competitive  and  secure  energy  system,  as  enshrined  in  the  Energy  Union 
Strategy objectives.  

This  need  was  confirmed  by  the  European  Council  conclusions,  stating  that  the 
governance  system  should  step  up  the  role  and  rights  of  consumers,  transparency  and 
predictability for investors, inter alia by systematic monitoring of key indicators. 

4 

 
 
 
2.  METHODOLOGY 

2.1.  Overall approach 

The selected key indicators aim to transparently inform on past developments, including 
potential discrepancies with Energy Union objectives, while allowing for the anticipation 
of  future  trends  and  potential  impacts  of  policy  options.  This  way,  inconsistencies 
between  market  and  policy  developments  and  overall  objectives  can  be  detected  at  an 
early stage, allowing for swift implementation of response measures at EU and Member 
State level.  

As  part  of  the  kick-start  of  the  implementation  phase  of  the  Energy  Union  Strategy, 
country  factsheets  have  been  prepared,  relying  on  a  series  of  indicators  available  at 
Member State level for each dimension of the Energy Union.  

Building  on  this  initial  work,  this  Staff  Working  Document  complements  the  Member 
State  specific  analysis  by  providing  a  cross-country  assessment  approach.  For  each 
Energy  Union  dimension,  a  factual  snapshot  of  the  situation  across  the  EU  and  its 
Member States is provided.  

Given the wide array of issues to be considered,  the analysis combines a specific focus 
on  some  key  indicators,  summarised  in  a  scoreboard,  together  with  complementary 
indicators  or  analysis  along  the  five  dimensions  of  the  Energy  Union,  as  well  as 
considerations  on  the  macroeconomic  relevance  of  the  energy  sector  and  on  the  use  of 
EU  funds  towards  Energy  Union  objectives.  The  proposed  indicators  allow  assessing 
progress vis-à-vis: 

1.  Energy  security:  monitoring  the  relative  dependency  of  EU  Member  States  to 
specific energy sources and/or trading partners as well as the overall reliability of 
the energy system (i.e. its overall ability to supply energy without interruption). 

2.  Internal  energy  market:  monitoring  progress  of  developing  the  EU  internal 
energy  market  in  terms  of  competition,  cross-border  trade  and  consumer 
empowerment.  

3.  Energy  efficiency:  monitoring  progress  in  terms  of  energy  savings  and  energy 
intensity  improvements  at  macroeconomic  and  sectoral  level,  including  for 
transport. 

4.  Decarbonisation:  monitoring  progress 

towards  greenhouse  gas  emission 

reductions, renewable energy and greenhouse gas intensity developments. 

5.  Research,  innovation  and  competitiveness:  monitoring  research,  development 
and innovation activity; monitoring EU energy prices and costs differentials with 
main trading partners.  

No  scoreboard  can  on  its  own  provide  a  comprehensive  assessment  of  progress  made 
towards Energy Union targets and objectives. Some issues, such as market integration or 
interconnections, are pan-European by nature and  must  rely  on data and  information  at 
regional  or  even  EU  level.  In  addition,  some  policy  goals  do  not  easily  translate  into 
quantitative  objectives  and,  as  such,  require  additional  qualitative  assessment.  Finally, 
there  are  areas  with  some  data  constraints  where  additional  indicators  will  need  to  be 
developed over time.  

5 

 
Therefore,  this  Staff  Working  Document  highlights,  where  relevant,  areas  where:  i/ 
regional  or  EU-wide  indicators  and  analysis  is  needed;  ii/  qualitative  assessment  is 
essential in addition to quantitative indicators; and iii/ additional indicators would need to 
be developed and/or more systematically collected across EU Member States.   

2.2.  Definition and rationale for the selected indicators 

The objective is to present in a synthetic manner latest data and recent changes for most 
relevant  issues  in  each  one  of  the  five  dimensions  of  the  Energy  Union.  For  each 
dimension,  a  limited  number  of  indicators  are  selected  for  inclusion  in  the  overall 
scoreboard. In addition, complementary indicators are also  presented to provide a more 
comprehensive assessment for each Energy Union dimension. Beyond the Energy Union 
dimensions as presented in the Energy Union Strategy, information is also collected on 
the  macroeconomic  relevance  of  the  energy  sector,  and  on  the  use  of  EU  funds  for 
Energy Union objectives.  

2.2.1.  Macroeconomic relevance of the energy sector 

The Energy  Union  is  calling for a  significant  transformation of  the energy sector1 over 
the next decades that will impact the European economy as a whole and for which proper 
monitoring at macro-economic level is required.  

On  its  own,  the  energy  sector  is  a  sizeable  industrial  sector  and  source  of  wealth  and 
employment. Significant investments are expected in the context of the decarbonisation 
of  the  energy  sector  not  only  to  replace  the  ageing  EU  energy  infrastructure  by  low 
carbon technologies and smart and efficient appliances, but also to develop new energy 
services that will transform the energy market. These investments are expected to create 
economic value and jobs, while re-structuring the current energy sector. To monitor these 
effects,  the  Value  Added  and  Employment  of  the  energy  sector  indicators  are  used,  as 
they  measure  the  wealth  creation triggered  by  capital  expenditure  in  the  energy  market 
both in monetary and labour terms. 

The Value Added of the energy sector calculates the value added generated by the supply 
of electricity, gas, steam and air conditioning2 over the total value added of the economy. 
Value  added  refers  to  the  value  of  goods  and  services  produced,  less  the  value  of 
consumption of intermediate inputs. 

The Employment in the energy sector indicator covers all persons engaged in the supply 
of electricity, gas, steam and air conditioning. Employed persons are either employees or 
self-employed. 

In addition, energy prices are a significant cost element for businesses3, and energy bills 
represent  an  important  item  of  the  household  budget.  In  this  context,  the  Consumer 
Prices Index is used to give an indication of the relative contribution of energy to price 
increases. The Harmonised Indices of Consumer Prices (HICPs) indicator measures the 
change over a year of the prices of consumer goods and services acquired by households. 
In  this  exercise,  it  measures  the  relative  contribution  of  energy  to  inflation  for  the 
countries and country groups for which it is produced. 

1   Mining and refineries are not included in the scope of the definition of the energy sector used for this 

section. 

2   This includes electric power generation, transmission and distribution, manufacture of gas, distribution 

of gaseous fuels, steam and air conditioning supply, and is based on Eurostat terminology.  

3   See below indicators on competitiveness. 

6 

 
                                                 
This  set  of  indicators  provides  only  a  high  level  overview  of  the  place  of  the  energy 
sector  in  the  economy.  It  is  based  on  traditional  sectoral  classification  which  does  not 
include  equipment  manufacturing  and  does  not  always  capture  the  emergence  of  new 
sectors in energy equipment and energy services. It will need to be complemented in the 
future by more detailed indicators that monitor the macro-economic variables at the level 
of  the  main  components  of  the  energy  value  chain  and  that  are  able  to  capture  the 
heterogeneity  of  the  impact  of  the  energy  transition  across  the  EU  economy  and 
continent.  In  particular,  there  is  a  need  to  better  assess  the  impacts  of  renewable  and 
energy efficiency policies on net employment and the distributional effects of the energy 
transition  across  sectors  and  countries.  For  the  time  being,  additional  information  is 
presented in the next chapter on the (direct and indirect) employment and turnover in the 
renewables energy sector.  

A specific focus is also put on the energy and transport related taxes. The ratio between 
energy  and  transport  taxation  and  GDP  is  often  used  to  provide  indication  on  whether 
and  to  which  extent  tax  instruments  are  used  to  incentivise  economic  operators  to 
decrease energy consumption and reduce emissions. 

2.2.2.  Energy security, solidarity and trust 

Much progress has been made in the last few years to enhance Europe's energy security. 
Despite these achievements, Europe remains vulnerable to energy supply shocks. Energy 
security is therefore a permanent priority and at the centre of the Energy Union strategy. 

In  particular,  the  2030  Climate  and  Energy  Framework  referred  to  the  need  to  monitor 
the diversification of energy imports and the share of indigenous energy sources used in 
energy consumption over the period up to 2030. 

S1:  Net  import  dependency4:  this  indicator  measures  the  level  of  net  imports 
divided  by  gross  inland  consumption  and  bunkers  (i.e.  what  is  consumed  and 
stored in a country or region over a year).  

This indicator on its own cannot capture all determinants of the vulnerability of Member 
States and the EU to energy supply shocks. In particular, it does not provide information 
on the degree of diversification of import sources, as well as on the relative significance 
of various import and fuel sources in the energy mix.  

Therefore,  a  country  specific  supplier  concentration  index  (SCI)  is  used  in  this  Staff 
Working Document to complement the analysis on energy security across the EU and its 
Member States5. A country-specific supplier concentration index by fuel is computed as 
the sum of squares of the quotient of net positive imports from a partner to an importing 
country  (numerator)  and  the  gross  inland  consumption  of  that  fuel  in  the  importing 
country  (denominator).  Smaller  values  of  SCI  indicate  larger  diversification  and  hence 
can be seen as a proxy for lower risk to energy supply shocks. All else equal, SCIs will 
be lower in countries where net imports form a smaller part of energy consumption. They 
will also be lower in a country using a well-balanced source of imports. Hence, even if 
SCIs are often correlated with the commonly used metric of net import dependency, they 
also  provide  additional  insight  on  the  level  of  diversification  in  import  sources  and  the 

4   Net  import  dependency  as  it  is  defined  above  may  reach  values  above  100%  in  certain  cases.  This 

indicator is taken from Eurostat database, table [tsdcc310].  

5   This  indicator  was  notably  used  in  the  in-depth  study  accompanying  the  European  Energy  Security 

Strategy, COM(2014)330  

7 

 
                                                 
relative importance of a given fossil fuel in the country's energy mix. For each country, 
the following index is presented: 

S2: Aggregate country-specific Supplier Concentration Index looking at total 
fossil  fuel  imports  to  a  country  from  outside  of  the  European  Economic  Area 
(EEA), thus disregarding flows within the EEA area in the volume of imports of a 
Member State6.  

Imports  of  uranium  and  nuclear  fuels  are  not  included  in  the  energy  imports  statistics 
used to compute the above-mentioned indicators. Hence, complementary information is 
provided in the next  chapter  on  import routes for uranium and  nuclear fuels.  Similarly, 
aggregated information is provided on trade patterns of petroleum products.  

In addition to indicators measuring the relative imports of a country as compared to gross 
inland  energy  consumption,  it  is  useful  to  add  an  assessment  of  the  impacts  of  energy 
import  bills  in  a  macroeconomic  perspective.  An  indicator  is  therefore  used  which 
measures  net  import  energy  bills  divided  by  the  GDP  of  a  given  country.  As  such,  the 
lower the indicator (in absolute terms), the less vulnerable the economy of a country is to 
energy price shocks.  

The  Energy  Union  Strategy  also  calls  for  specific  attention  to  security  of  gas  and 
electricity  supply.  Regarding  gas,  an  important  element  to  consider  is  how  robust  and 
resilient the  gas  system  is  in  the  event  of  a  disruption  of  the  largest  infrastructure  (e.g. 
pipeline, storage, production facility).  

S3:  N-1  rule  for  gas  infrastructure:  The  so-called  N-1  is  an  indicator  of 
infrastructure  adequacy  as  it  tests  the  resilience  of  the  system  ensuring  that  gas 
demand on extremely cold days can be covered even if the largest infrastructure 
fails7.  

Regarding electricity, attention should be paid to the overall resilience of the electricity 
system. This means looking into the following aspects:  

  Adequacy,  i.e.  the  ability  of  the  electricity  system  to  supply  the  aggregate 

electricity demand; 

  Security,  i.e.  the  ability  of  the  electricity  system  to  withstand  external 

perturbations (due to natural/accidental and malicious events) 

  Quality,  i.e.  the  ability  of  the  electricity  system  to  ensure  continuity  of  supply, 
both  in  the  technical  sense  (by  ensuring  voltage  quality)  and  in  the  commercial 
sense  (which relates  to the speed and accuracy with  which  commercial requests 
are being dealt with).    

At  this  stage,  there  are  no  commonly  agreed  standards  or  indicator  which  would  allow 
for a monitoring of the overall resilience of the electricity systems throughout Europe on 
a comparable basis. This issue is therefore not further investigated in this Staff Working 
Document8.   

6   Norway is the only EEA country exporting significant volumes of gas and oil to the EU. 
7   Regulation (EU) No. 994/2010 obligates Member States to fulfil the N-1 standard. 
8   Section 2.3.2 presents a summary assessment of indicator's availability and potential additional needs 

for each Energy Union dimension. 

8 

 
                                                 
Regarding the specific issue of generation adequacy however, the European Network of 
transmission  system  operators  for  electricity  (ENTSO-E)  is  mandated  under  EU 
legislation  to  publish  a  yearly  pan-European  seasonal  and  a  long  term  adequacy 
assessment.  These are known as the Summer/Winter Outlook Reports, and the Scenario 
Outlook  and  Adequacy  Forecast  (SO&AF)  respectively.  Although  there  is  a  need  to 
further improve the existing methodology used by ENTSO-E, with in particular in mind 
the design of a common set or menu of indicators to measure generation adequacy, it is 
still possible at this stage to report on some of these considerations.  

Finally, security of supply considerations also relate to emergency oil stocks, as the main 
instrument to be  used in case of a supply  disruption. A statistical summary of Member 
States' oil stocks is presented in the Staff Working Document: "Overview of emergency 
oil stock in the European Union"9.  

2.2.3.  A fully integrated internal energy market 

The 2030 Climate and Energy Framework mentioned the need to monitor:  

  Deployment  of  smart  grids  and  interconnections  between  Member  States,  with 
particular urgency between those that are further away from meeting the already 
level  of  electricity 
agreed  objective  for  Member  States 
interconnections  equivalent  to  or  beyond  10%  of  their  installed  production 
capacity.  This  includes  the  electricity  interconnection  target  of  15%  between 
Member States for 2030.  

to  ensure  a 

 

Intra-EU  coupling  of  energy  markets,  building  on  the  liberalisation  of  gas  and 
electricity markets achieved already by EU legislation.   

  Competition  and  market  concentration  on  wholesale  and  retail  energy  markets 
both  at  the  national  and  (for  regions  with  functioning  coupling)  at  the  regional 
level. 

the 

selected 

interconnections, 

indicator  measures 

Regarding 
the  electricity 
interconnection capacity, as % of installed capacity. No specific indicator is used in this 
Staff  Working  Document  as  regards  gas  interconnections,  but  the  N-1  rule  for  gas 
infrastructure  presented  above  offers  a  good  proxy.  In  addition,  the  state  of 
implementation  of  Projects  of  Common  Interest  (for  gas  as  well  as  for  electricity) 
remains highly relevant and important to monitor. Regarding deployment of smart grids, 
no readily available indicator could be identified and this will therefore require additional 
work.  

S4:  Electricity  interconnection  capacity:  this  indicator  divides  the  electricity 
interconnection capacity of a given Member State by its total generation capacity.  

This  indicator  could  be  complemented  with  additional  or  more  refined  analysis,  for 
instance  taking  account  of  peak  capacity  rather  than  overall  capacity,  or  also  better 
capturing the impact of intermittent renewable energy on the need for interconnections.  

Competition and market concentration on wholesale energy markets can be monitored at 
Member State level. The following indicators are considered:  

9   SWD(2015)405 

9 

 
                                                 
S5: Market concentration index for power generation: this indicator is based 
on  the  Herfindahl  Hirschman  Index  (HHI)  and  is  defined  as  the  sum  of  the 
squared  market  shares  of  the  three  largest  electricity  generation  companies 
measured in percentages of total installed capacity, with 10,000 corresponding to 
a monopoly. 

S6:  Market  concentration  index  for  wholesale  gas  supply:  this  indicator  is 
based on the Herfindahl Hirschman Index (HHI) and is defined as the sum of the 
squared  market  shares  of  the  wholesale  gas  supply  companies  measured  in 
percentages  of  total  wholesale  gas  supply,  with  10,000  corresponding  to  a 
monopoly.  

The  above  two  indicators  provide  indications  as  regards  the  degree  of  competition  on 
wholesale  energy  markets.  The  lower  the  values,  the  higher  the  degree  of  potential 
competition is.  

Implementing  the  internal  energy  market  objectives  of  the  Energy  Union  also  means 
considering  additional  elements  than  market  concentration  at  Member  State  level.  It  is 
for instance important to monitor wholesale gas and electricity price developments across 
Member States.  

S7:  Wholesale  electricity  prices:  this  indicator  presents  electricity  prices  as 
available on wholesale markets, based on data and methodology developed in the 
European Commission's Quarterly Reports on European electricity markets.  

S8: Wholesale gas prices: this indicator presents an average of annual gas prices 
for  a  country,  based  on  data  and  methodology  developed  in  the  European 
Commission's Quarterly Reports on European gas markets10.   

However, there are some limitations with the use of such prices as part of the monitoring 
exercise.  As  regards  gas,  available  price  data  are  not  fully  comparable  across  Member 
States,  as  for  some,  hub  prices  can  be  used  while  for  most  of  the  others,  estimates  of 
average  import  prices  are  used.  Moreover,  beyond  individual  price  developments,  it  is 
also  essential  to  monitor  potential  convergence across  European  prices.  This  is  why  an 
additional  analysis  is  provided  on  the  intra-EU  coupling  of  energy  markets.  Hence, 
evidence  is  presented  in  the  next  chapter  on  energy  price  convergence  and  on  energy 
flows across borders. Still, there is a need to reflect on the potential need for additional 
indicators and/or analysis on regional integration.   

Regarding retail energy markets, the two indicators below are good proxies to assess the 
degree of empowerment of consumers on retail energy markets, and whether they have 
the option of switching retailers and/or exercise this option in order to benefit from better 
conditions. 

S9:  Annual  switching  rates  on  electricity  retail  markets:  this  indicator 
measures  the  percentage  of  final  electricity  consumers  changing  suppliers  in  a 
given year.  

S10: Annual switching rates on gas retail markets: this indicator measures the 
percentage of final gas consumers changing suppliers in a given year. 

10   The European Commission's Quarterly Reports on European gas and electricity markets are available 

here: https://ec.europa.eu/energy/en/statistics/market-analysis  

10 

 
                                                 
The next chapter's analysis also includes more specific considerations on competition at 
retail level. In addition, some information is also collected and presented as regards smart 
metering.  Smart  metering can  positively affect consumers'  engagement with  the market 
and ultimate energy consumption. More specifically, two indicators are used measuring 
the  percentage  of  final  electricity  and  gas  household  consumers  equipped  with  a  smart 
meter. 

A  broader  set  of  indicators  could  also  be  considered  to  monitor  energy  retail  market 
functioning11,  in  areas  such  as  customer  satisfaction,  market  condition  or  distribution 
system  operator  services.  Many  national  regulators  are  indeed  analysing  these  various 
areas but no source could be identified covering in a consistent manner  such indicators 
and analysis across all EU Member States. 

Developing the Energy Union also means better protecting vulnerable consumers against 
energy poverty risk. Estimating energy poverty depends on the definition given. As there 
is no single agreed definition at EU level, it is difficult to identify the most appropriate 
indicator.  Still,  a  variety  of  factors  contribute  to  energy  poverty,  which  includes  high 
energy  bills,  low  income  and  poor  energy  efficiency  of  the  building  envelope12.  A 
composite  indicator  is  used  to  cover  these  various  factors.  It  is  based  on  the  only 
indicators currently available across the EU:  

S11:  Energy  poverty  index:  this  indicator  calculates  the  average  of  the 
percentage of households in a given year: i/ facing arrears on utility bills; ii/ who 
are  unable  to  keep  their  home  adequately  warm;  iii/  and/or  living  in  dwellings 
with  leakages  and  damp  walls13.  It  is  based  on  the  information  collected  by 
Eurostat  in  the  EU  Statistics  on  Income  and  Living  Conditions14.  The  share  of 
population  with  arrears  in  accounts  provides  some  insights  into  energy 
affordability.  The  ability  to  keep  the  home  adequately  warm  can  inform  on  the 
need to constrain spending on heating. Dwellings with leakages and damp walls 
provide some indication of building quality. The higher the value of the indicator, 
the most significant energy poverty issues are expected to be in a given Member 
State.  

In addition to the energy poverty index, information is presented in the next chapter on 
the  estimated  share  of  energy  products  in  total  households'  expenditures,  as  used  by 
central  banks  to  calculate  inflation.  This  is  useful  additional  information  as  regards 
potential vulnerabilities to e.g. energy price shocks.  

11   See 

for 

instance 

suggestions 

for  European  Energy  Regulators: 
the  Council 
http://www.ceer.eu/portal/page/portal/EstoniaR_HOME/EstoniaR_CONSULithuania/CLOSwedenD%
20PUBLIC%20CONSULithuaniaAustriaIONS/CUSTOMERS/GGP%20retail%20market%20monitori
ng  

by 

12   A more detailed discussion on energy poverty and relevant proxies to measure it  can be found here:  
https://ec.europa.eu/energy/sites/ener/files/documents/INSloveniaGHT_E_Energy%20Poverty%20-
%20Main%20Report_FinlandNAL.pdf.  

13   Some studies argue on the need to include an additional indicator, on the ability to keep comfortably 
See: 

cool. 
https://ec.europa.eu/energy/sites/ener/files/documents/INSloveniaGHT_E_Energy%20Poverty%20-
%20Main%20Report_FinlandNAL.pdf  

14   For  more  information,  see  here:  http://ec.europa.eu/eurostat/web/microdata/european-union-statistics-

on-income-and-living-conditions  

11 

 
                                                 
2.2.4.  Energy efficiency and moderation of demand 

The  first  element  to  monitor  concerns  primary  energy  consumption  at  Member  State 
level. 

S12:  Primary  energy  consumption  (2005  =  100):  this  indicator  monitors  the 
evolution of primary energy consumption15 in EU Member States, using 2005 as 
the base year.  

In  addition,  information  is  also  provided  on  final  energy  consumption  developments. 
Measuring  progress  in  terms  of  energy  efficiency  also  requires  monitoring  energy 
intensity  developments.  It  allows  assessing  energy  consumption  in  view  of  other 
macroeconomic considerations, such as GDP, value added changes or population growth. 
Energy  efficiency  must  also  be  considered  at  sectoral  level,  and  therefore  indicators 
monitoring  energy  intensity  developments  in  the  residential  and  industrial  sectors  are 
taken into account. The following indicators are selected:  

S13: Primary  energy  intensity of the  economy: this  indicator  divides primary 
energy consumption by GDP at constant 2010 prices in a given year. It measures 
the energy intensity of the economy and can capture changes over time in terms 
of decoupling energy consumption from economic growth. The lower the value, 
the  more  energy  efficient  the  overall  economy  is.  This  indicator  does  not  make 
corrections for differences in climate conditions.  

S14:  Final  energy  intensity  in  industry:  this  indicator  divides  final  energy 
consumption16 in the industry (including construction) sector by total gross value 
added for industry, buildings and construction sectors (at constant 2010 prices). It 
measures  the  energy  intensity  of  the  industrial  sector  and  therefore  can  reflect 
both  potential  specialisation  in  energy  intensity  sectors  and  effort  in  decoupling 
industrial growth from energy consumption.  All else equal, the  lower the value, 
the  most  energy  efficient  the  industrial  sector  is.  However,  this  indicator  could 
also  be  refined  by  also  measuring  final  energy  consumption  per  amount  of 
physical  output,  so  as  to  e.g.  capture  potential  changes  in  the  industrial  value 
chain which are not easily observable by comparing energy consumption to value 
added.  

S15:  Final  energy  consumption  per  square  meter  in  residential  sector, 
climate corrected: this indicator measures energy consumption in buildings, and 
can  inform  on  the  relative  efficiency  of  the  buildings  stock  and  of  energy 
equipment.  When  the  value  of  the indicator  decreases,  it  can  be  considered  that 
the buildings sector becomes more energy efficient. 

In  addition  to  the  above-mentioned  indicators,  it  might  also  be  relevant  to  monitor  the 
uptake  of  energy  efficient  equipment.  However,  indicators  on  e.g.  market  diffusion  of 
efficient heating or efficient appliances remain scarce17 and could not be compiled in the 
context of this Staff Working Document. 

Regarding  transport-related  issues,  which  are  covered  under  the  same  heading  than 
energy efficiency in  the Energy  Union Strategy,  specific energy intensity for passenger 

15   Primary energy corresponds to the Gross Inland consumption minus final non-energy consumption 
16   Final energy consumption covers all energy supplied to the final consumer for all energy uses. 
17   See for instance http://www.indicators.odyssee-mure.eu/market-diffusion.html  

12 

 
                                                 
and freight transport would be necessary to provide an in-depth analysis of the evolution 
of  energy  efficiency  in  transport.  These  two  indicators  correspond,  respectively,  to  the 
energy used (expressed in ton of oil equivalent) per passengers- kilometres and tonnes- 
kilometres  travelled  within  a  Member  State.  Therefore  the  lower  the  value,  the  more 
energy efficient the transport sector is. Currently, Member States do not provide Eurostat 
with  the  split  of  final  energy  by  passenger  and  freight  transport  and  the  traffic  activity 
expressed  in  passenger-kilometres  and  tonne-kilometres  cannot  be  aggregated.  In 
addition,  it  is  problematic  to  calculate  intensities  due  to  the  fact  that  final  energy 
consumption in transport is based on fuel sold rather than on fuel used within a Member 
State. Also, the methodology followed for reporting the traffic activity for passenger and 
freight  transport  does  not  always  follow  the  territoriality  principle,  which  renders  the 
calculation of the intensity indicators even more difficult.  

Furthermore,  in  addition  to  pure  energy  efficiency  considerations,  information  is  also 
collected  as  regards  decarbonisation  in  the  transport  sector.  The  following  indicator  is 
proposed.  

S16:  Average  CO2  emissions  from  new  passengers  cars:  this  indicator 
measures the average CO2 emissions from new passengers cars sold in a country 
in  a  given  year,  in  order  to  observe  progress  towards  an  energy-efficient, 
decarbonised  transport  sector.  As  such,  it  provides  indications  as  regards 
developments  of  a  low-carbon  fleet  of  passenger  cars.  The  lower  the  value,  the 
less carbon intensive new sold cars are, leading to a general improvement of the 
fuel economy. It could also be complemented with an additional indicator on the 
average CO2 emissions from new light commercial vehicles (vans). A long-term 
target of 95 g CO2/km to apply to the average new fleet from 2021 and of 147 g 
CO2/km  applicable  from  2020  has  been  set  for  passenger  cars  and  for  light 
commercial vehicles respectively. 

More  indicators  on  e-mobility  and  deployment  of  hybrid  cars,  as  well  as  on  the 
availability  of  alternative  fuels  and  related  infrastructure  should  be  included  in  this 
analysis.  However,  at  the  current  state,  the  data  available  is  very  fragmented  across 
community-based  websites  and  data  observatories,  some  important  data  is  missing  or 
there are concerns regarding its reliability. 

2.2.5.  Decarbonisation 

The  decarbonisation  dimension  of  the  Energy  Union  is  very  much  driven  by  efforts 
towards  meeting  the  EU  and  Member  States  greenhouse  gas  emissions  reduction  and 
renewable  energy  objectives.  In  particular,  the  EU  Emission  Trading  System  (ETS) 
constitutes the key instrument for limiting greenhouse gas (GHG) emissions in the power 
sector, energy intensive industries and aviation in the EU. While the EU ETS provides an 
EU-wide cap, the Effort Sharing Decision (ESD) sets national binding targets to be met 
through mitigation action in the non-ETS sectors (transport, buildings, small businesses 
and  services,  agriculture  and  waste).  The  following  indicators  are  used  to  monitor 
progress in the sectors not covered by the EU-ETS:  

S17: Gap between greenhouse gas emissions projections and target in 2020 in 
the non-Emission Trading System sectors. This indicator monitors progress of 
each  Member  State  towards  its  EU-2020  GHG  emission  target.  The  projections 
for  the  year  2020  in  the  non-ETS  sectors  are  estimated  by  the  Member  States 
taking  into  account  existing  measures.  The  EU-2020  target  is  set  by  the  Effort 
Sharing  Decision  (ESD),  which  provides  national  binding  targets  from  2013  to 
13 

 
2020 for each Member State. The gap is expressed as a percentage of base year 
emissions (2005). 

S18:  Gap  between  latest  proxy  inventory  of  non-Emission  Trading  System 
greenhouse gas emissions and targets. This indicator measures the gap between 
the latest approximated inventory emissions available and its respective non-ETS 
target expressed as a percentage of base year emissions (2005).   

S19:  Share  of  renewable  energy    in  percentage  of  gross  final  energy 
consumption:  this  indicator  monitors  progress  towards  renewable  energy 
developments.  

The  overall  renewable  energy  (RES)  share indicator  is  complemented  with  information 
regarding RES share developments at sectoral level, namely in electricity, transport and 
heating  and  cooling  sectors.  Analysis  is  also  provided  on  RES  initiatives  and 
developments  at  local  level.  Additional  indicators  on  regional  integration  of  renewable 
energy could be developed in the future.  

Beyond the information provided on GHG emissions in the non-ETS sector and on RES 
developments,  data  is  also  collected  on  other  variables  related  to  decarbonisation.  In 
particular:  

S20:  Greenhouse  gas  intensity  of  the  economy:  this  indicator  represents 
Member  States'  emissions  relative  to  Gross  Domestic  Product.  A  lower  value 
indicates that a particular economy is less carbon intensive. 

Additional  information  is  also  provided  regarding  GHG  emissions  per  capita,  share  of 
GHG emissions for the different sectors, and share of emissions covered by the EU ETS 
with respect to the total GHG emissions in each Member State. Further analysis is also 
provided on key sectorial aspects of the decarbonisation agenda, such as transport-related 
emissions under the section on energy efficiency and transport.  

2.2.6.  Research, innovation and competitiveness 

2.2.6.1.Research and innovation 

The  2030  Climate  and  Energy  Framework  refers  to  the  need  to  monitor  technological 
innovation  (R&D  expenditure,  EU  patents,  competitive  situation  on  technologies 
compared to third countries). In addition, the Energy Union Strategy recalls the objective 
of the EU to become the world's number one in renewable energy.  

The transition to a low-carbon economy requires the development and implementation of 
new technologies. Such technologies will emerge via an innovation process, starting with 
R&D spending followed by innovation and deployment. Unfortunately, lack of available 
data does not yet allow properly monitoring all dimensions of the innovation process 

In  the  coming  years,  more  accurate  data  and  analysis  will  be  channelled  through  the 
monitoring mechanisms embedded in the Integrated Strategic Energy Technology (SET) 
Plan18,  where  it  is  proposed  to  monitor  annually  on  the  level  of  investment  in  research 
and  innovation  (both  private  and  public  sector),  trends  in  patents,  and  the  number  of 
researchers active in the energy sector. Participation of Member States in  joint actions 

18   C(2015) 6317 final 

14 

 
                                                 
will also be monitored, including through contractual Public Private Partnerships (cPPPs) 
or Joint Technology Initiatives. 

For  now,  some  indicators  are  provided,  based  on  available  data,  mostly  focusing  on 
public  R&D  spending  and  patent  applications.  They  are  complemented  with  additional 
analysis  as  accessible  and  relevant,  but  some  important  gaps  remain.  In  particular,  it 
would  be  interesting  to  closely  monitor  energy  investment  and  deployment  across  the 
world,  to  assess  in  detail  the  competitive  position  of  the  EU  in  this  area.  Various 
indicators  could  be  considered,  including  e.g.  the  share  of  world's  renewable  energy 
patents held by EU companies19, the EU share in operational and service business (e.g. 
assembling,  maintenance,  repairs)  in  RES  installations  worldwide,  renewable  energy 
finance flows or the comparative advantage of EU RES technologies worldwide.     

S21:  Share  of  energy  and  environment  in  total  public  civil  R&D  spending: 
this  indicator  divides  public  R&D  spending  in  the  field  of  energy  and 
environment  by  the  total  public  R&D  spending  in  civil  research  (therefore 
excluding military public R&D spending).  

Whilst R&D spending does not always translate in the use of new technologies, it can be 
assumed that the latter will benefit from such spending. Yet, the choice of this indicator 
has some drawbacks. First, it does not cover corporate (or private) R&D spending, which 
is an essential component of overall R&D efforts in a given country. This is because no 
readily available data could be identified at Member State level on private R&D efforts 
in the field of energy. Some evidence is provided in the next chapter as regards private 
R&D  in  the  field  of  low-carbon  technologies,  but  information  is  still  quite  scarce. 
Second,  this  indicator  does  not  indicate  the  overall  effort  of  a  given  country  towards 
energy  and  environment.  To  close  this  gap,  some  information  is  therefore  presented  in 
the next section about the public R&D intensity of Member States in the energy field20. 
Comparison is also provided with R&D intensity in the energy field for main EU trading 
partners.  

Third, complementary indicators are presented to identify specialisation in R&D efforts 
within the energy field (e.g. between energy efficiency, nuclear or renewable energy) in 
the EU and EU trading partners.  

S22: Low-carbon technology patents application per million inhabitants: this 
indicator  divides  the  number  of  patent  applications  in  the  field  of  low  carbon 
technologies  by  the  number  of  inhabitants  in  a  given  country.  It  provides 
information  regarding  the  level  of  low-carbon  technology  innovation  in  a  given 
country,  adjusting  absolute  levels  by  taking  account  of  the  size  (number  of 
inhabitants) of the country. 

Regarding  deployment  of  innovative  technologies,  information  on  investments  in 
renewable  energy  generation 
the  next  chapter,  putting  recent 
developments  in  the  EU  in  perspective  with  developments  in  the  rest  of  the  world. 
Estimates on the evolution of costs for fossil fuel and renewable energy technologies are 
also presented.  

is  presented 

in 

19   Although information exists on patent applications, in many cases, data is still lacking as regards who 

effectively holds the patent.  

20   This analysis is based on data from the International Energy Agency and as such does not cover all 28 

Member States.  

15 

 
                                                 
2.2.6.2.Competitiveness:  EU  and  major  trading  partners'  energy  prices  and 

costs developments 

On the issue of competitiveness, the 2030 Climate and  Energy  Framework  recalled the 
need  to  monitor  energy  price  differentials  between  the  EU  and  major  trading  partners, 
building on the report on energy prices and costs21. Due to statistical issues, identifying 
relevant indicators that can be compared across (including non-EU) countries is difficult. 
In  addition,  broad  variations  exist  within  the  industrial  sector,  with  energy  prices  and 
costs having significantly different impacts depending on the sub-sector considered, even 
within a single Member State. Analysis of competitiveness should be complemented with 
additional and more detailed considerations.  

Indicators on wholesale price differentials between EU Member States and main trading 
partners are considered22 in a first step. Wholesale prices are considered for two reasons: 
first, comparability is much easier as differences with trading partners often happen due 
to  different  statistical  treatments  of  transmission  and  distribution  costs;    second, 
wholesale prices are usually considered a relatively good proxy of the price actually paid 
by  large  industrial  users,  that  is,  typically  consumers  most  affected  by  international 
competition.  Wholesale  price  indicators  are  complemented  with  information  on  final 
energy prices paid by a range of industrial users23, combining data from Eurostat for EU 
Member States and from the International Energy Agency (IEA) for trading partners and 
for the EU Member States who are also members of the IEA.  

When monitoring the impacts of energy prices on competitiveness, it is also important to 
consider  a  more  holistic  approach,  which  takes  account  of  overall  energy  costs. 
Therefore, the following indicator is being proposed.  

S23: Real unit energy costs: This indicator measures the amount of money spent 
on energy sources needed to obtain one unit of value added for the manufacturing 
sector, excluding the refinery sector. As such, it provides a more comprehensive 
approach regarding competitiveness issues related to energy costs, as it combines 
the  impact  of  energy  prices  and  of  energy  intensity  level,  when  comparing  to 
value  added.  The  higher  the  value  of  this  indicator,  the  higher  the  energy  cost 
component is in the overall cost structure of the manufacturing sector of a given 
Member State. 

There are some drawbacks with the choice of this indicator. The most significant one is 
that  data  is  outdated,  since  information  is  only  available  up  to  2011.  Therefore,  the 
Commission  is  working  on  updating  this  indicator  in  view  of  future  monitoring  of  real 
unit energy costs across the EU and main trading partners.  

2.2.7.  Cohesion Policy investments supporting the Energy Union 

EU Cohesion Policy makes a key contribution for delivering the Energy Union objectives 
on  the  ground,  including  significant  financial  allocations  from  the  European  Regional 
Development Fund (ERDF) and the Cohesion Fund (CF), totalling EUR 68.9 billion over 
2014-2020 for investments related to all five dimensions of the Energy Union. 

21   COM(2014) 21 /2, SWD(2014) 20 final/2 
22   Regarding gas, US hub prices (Henry Hub) and LNG import prices for Japan, South Korea, China and 
India  are  used.  Regarding  electricity,  wholesale  price  information  is  collected  for  some  trading 
partners, in comparison to the European composite average of wholesale electricity prices.  

23   Eurostat data is reported for the median consumption bands, as well as minimum and maximum prices. 

It is however difficult to interpret to which specific industrial users each price applies to.   

16 

 
                                                 
With the strategic policy framework and the important financial allocations which will be 
complemented  by  national  public  and  private  co-financing,  and  also  with  the  technical 
assistance  and  capacity  building  provided,  the  conditions  are  there  to  use  the  full 
potential of the funding for investing in the Energy Union in Europe's regions and cities. 
To  make  this  a  reality,  the  development  and  implementation  of  high  quality  projects  is 
crucial.  

Therefore, it is important to monitor progress in Cohesion Policy investments supporting 
the Energy Union. This can be done by dividing the amount of ERDF and CF allocations 
allocated to specific projects by the end of each year, or a certain cut-off date, by the total 
amount of planned allocations 2014-2020 for ERDF and CF investments supporting the 
Energy Union in a given country, i.e. the project selection rate. It provides information 
regarding  progress  in  Cohesion  Policy  investments  supporting  the  Energy  Union  in  a 
given  country,  controlling  for  the  size  of  the  allocation.  This  information  will  be 
provided  from  autumn  2016  onwards  and  will  be  included  as  part  of  the  scoreboard 
indicators. 

2.3. 

Summary 

2.3.1.  The selected scoreboard indicators 

An  overview  of  the  selected  main  indicators  included  in  the  scoreboard  is  presented  in 
Annex to this Staff Working Document, including latest available data per Member State 
regarding each selected indicator.  

Energy security, 
solidarity and trust 

A fully integrated 
internal energy market 

Energy efficiency and 
moderation of demand 

Decarbonisation 

Research, innovation 
and competitiveness 

S1: Net import dependency 
S2: Aggregate country-specific Supplier Concentration Index 
S3: N-1 rule for gas infrastructure 
S4: Electricity interconnection capacity 
S5: Market concentration index for power generation 
S6: Market concentration index for wholesale gas supply 
S7: Wholesale electricity prices 
S8: Wholesale gas prices 
S9: Annual switching rates on electricity retail markets 
S10: Annual switching rates on gas retail markets 
S11: Energy poverty index 
S12: Primary energy consumption 
S13: Primary intensity of the economy 
S14: Final energy intensity in industry 
S15: Final energy consumption per m2 in residential sector, climate corrected  
S16: Average CO2 emissions from new passengers cars 
S17: Gap between non-Emissions Trading System greenhouse gas emissions 
projections and target in 2020  
S18: Gap between latest proxy inventory of greenhouse gas emissions in the 
non-Emissions Trading System sector and targets  
S19: Share of renewable energy in percentage of gross final energy 
consumption 
S20: Greenhouse gas intensity of the economy 
S21: Share of energy and environment in total public civil R&D spending 
S22: Low-carbon technology patents application per million inhabitants 
S23: Real unit energy costs 

17 

 
 
2.3.2.  Areas for additional work in preparing and selecting key indicators 

The  following  table  summarises  the  coverage  limitations  identified  so  far.  It  can  help 
identify  areas  where  additional  indicators  could  be  developed,  and/or  when  a  regional 
focus would seem appropriate to complement the Member State specific analysis.  

Dimension 

Macroeconomic 
relevance of energy 
sector 

Energy security, 
solidarity and trust 

A fully integrated 
internal energy 
market 

Energy efficiency 
and moderation of 
demand 

Main area of 
relevance 
Contribution to 
economic growth 
Contribution to 
employment 
Security of 
electricity supply 
Electricity 
interconnections 

Gas 
interconnections 

Energy market 
coupling 
Retail market 
functioning 
Vulnerable 
consumers 
Energy intensity  - 
transport 
Energy intensity – 
residential 

Transport 

Greenhouse gas 
emissions  

Decarbonisation 

Renewable energy 

Research, innovation 
and competitiveness 

Public R&D 

Private R&D 

Researchers 

Innovation 
deployment 

Competitiveness 

Identified needs 

Need for additional focus on distributional effects across 
sectors and countries 
Need to better assess impacts of renewable and energy 
efficiency policies on net employment 

Need for harmonised indicators across EU MS 

Additional information could be added in the future on 
implementation of PCI projects and on the uptake of smart 
grids considering for instance the extent of smart metering 
deployment as a first quantification of developments in 
smart grids related infrastructure 
Need for deeper analysis based on additional indicators as 
regards intra-EU market coupling and energy trade flows 
Need for additional and more comprehensive indicators 
across EU Member States.  
Additional indicators/analysis could be developed for a pan-
EU assessment of energy poverty 
Need to develop robust indicators on energy and carbon 
intensity developments in the transport sector 
Need to work on the comparability of available indicators 
across Member States 
Additional data and information is needed to better assess 
energy intensity and decarbonisation trends in the transport 
sector. 
Additional sectoral and cross-country related indicators 
could complement and improve a comparability analysis 
Indicators on the cross-border integration of renewable 
energy could be further developed 
Indicators on local deployment of renewables and self-
consumption could be further developed 
Indicators on the sustainability of biomass for energy use 
(incl. impacts inside and outside the EU) to be further used 
Need to collect more up to date information on public R&D 
investments from all Member States 
Limited consistent data regarding corporate investments in 
R&D for low-carbon technologies. Need to expand coverage 
so that it is comparable to that available for public sector 
R&D 
Need to work on data collection on the number of 
researchers active in the energy sector 
Lack of indicators, including regional or EU-wide ones, on 
the deployment of innovation in low-carbon sectors and 
competitive position of such sectors on global markets 
Need to update data on real unit energy costs 

18 

 
 
 
 
3.  DESCRIPTIVE ANALYSIS 

This  chapter  presents  a  cross-country  descriptive  analysis  of  the  current  situation  and 
recent trends for the five dimensions of the Energy Union, complemented by information 
and analysis on the macroeconomic relevance of the energy sector and on the use of EU 
funds  to  meet  Energy  Union  objectives.  It  builds  on  the  selected indicators included  in 
the  scoreboard,  complemented  with  other  relevant  information  when  possible  and 
necessary24.  

3.1.  Macroeconomic relevance of the energy sector 

3.1.1.  Value Added and Employment 

In 2012, the energy sector accounted for 2.01% of the total value added of the economy 
in EU27 (Figure 1). These shares vary significantly across countries, with relative shares 
generally  higher  in  Eastern  Member  States.  Over  the  period  2005-2012,  these  shares 
grew  the  most  in  Ireland,  Spain,  Cyprus,  Latvia,  Romania  and  United  Kingdom,  while 
they  decreased  in  Denmark,  Greece,  France,  Lithuania,  Luxembourg,  Austria  and 
Slovakia.  

Figure 1: Value added of the energy sector - percentage of gross value added (total 
economy) in 2012 

Source: Eurostat – National Accounts 

The  EU  is  in  the  lead  when  it  comes  to  turnover  of  renewable  energy  companies.  In 
2013, the RES sector has generated a 138 billion€ turnover, with a 6% increase compared 
to the previous year. 

24   Note  that  for  data  collected  from  Eurostat,  the  extraction  of  the  data  was  performed  by  September 
2015. As such, there might be some discrepancies with the current Eurostat dissemination database.   

19 

 
 
                                                 
Figure 2: Turnover of all renewable energy sectors (% GDP 2013) 

Source: EurObserv'ER 

In terms of employment, the energy sector represented 0.56% of the total employment in 
EU-27  in  2012.  It  has  remained  broadly  stable  at  EU  level  over  the  period  2005-2012, 
although the share increased in Belgium, Denmark, Spain, Cyprus, Slovenia, Sweden and 
the  United  Kingdom.  The  share  in  employment  decreased  the  most  in  Bulgaria,  Czech 
Republic, Lithuania, Luxembourg, Poland, Romania and Slovakia. 

Figure 3: Employment in the energy sector – percentage of total employment in 
2012 

Source: Eurostat – National Accounts 

20 

 
 
 
European renewable energy  employs  over a  million people, i.e.  more than  2 renewable 
jobs  per  1000  capita,  which  is  twice  the  world  average.  Despite  the  financial  and 
economic crisis, employment has grown in the renewable energy sector, with almost half 
a million additional jobs in EU-27 between 2008 and 201325. 

Figure 4: Evolution of employment of all renewable energy sectors in the EU, 2008-
2013 

Source: EurObserv'ER 

A  growing  trend  can  also  be  observed  worldwide,  with  a  17%  increase  in  renewable 
employment  in  2013.  In  Europe,  new  momentum  for  job  creation  might  emerge  from 
exports towards rapidly expanding markets like Asia, South America and Africa.  

25   Source : EurObserv'ER database 

21 

 
 
                                                 
Figure 5: Employment of all renewable energy sources sectors - 2013 (per 1000 
inhabitants) 

Source: EurObserv'ER, REN21 

increased 

technologies.  Therefore, 

Renewable energy technologies are, in general, more labour-intensive than conventional 
energy 
implementation  of  renewable  energy 
technologies is likely to lead to increased employment in the future, at least in the sectors 
directly  connected  to  the  manufacture  and  operation  of  such  technologies.  However, 
expansion of renewable energy technologies is also expected to lead to new types of jobs 
and skill requirements, especially in the power sector26. The transition thus needs to be 
met  with  training  and  education,  notably  in  positions  related  to  research  and 
engineering27. 

3.1.2.  Consumer Prices 

Consumer  price  inflation  has  decreased  on  average  by  five  times  since  2011  at  EU 
level.  Energy  products  have  contributed  significantly  to  this  trend,  notably  in  2014 
through the sharp drop in oil prices.  

26  Cambridge  Econometrics,  Employment  Effects  of  selected  scenarios  from  the  Energy  roadmap  2050, 

2013 

27 Cambridge Econometrics, Studies on Sustainability Issues – Green Jobs; Trade and Labour, 2011 

22 

 
 
                                                 
Figure 6: Consumer Price inflation (%) across the EU in 2014 

Source: Eurostat – National Accounts 

Since 2011, energy inflation has experienced a significant reduction. Overall at EU level, 
this decrease has led to a price reduction in 2014 for transport and other liquid fuels and 
to  a  lesser  extent  for  gas.  For  electricity,  prices  have  overall  continued  to  increase 
although at a slower pace. These trends vary strongly across Member States as it depends 
on  their  economic  outlook,  the  electricity  and  overall  energy  mix,  the  share  of  the 
transport and petrochemical industries in the economy. For instance in 2014, electricity 
prices have decreased in 16 Member States (Belgium, Bulgaria, Czech Republic, Estonia, 
Croatia,  Cyprus,  Lithuania,  Luxembourg,  Hungary,  Malta,  the  Netherlands,  Poland, 
Romania,  Slovenia,  Slovakia,  Sweden),  while  gas  increased  in  10  Member  States 
(Ireland, Spain, Croatia, Malta, Poland, Portugal, Romania, Slovenia, Sweden and United 
Kingdom). 

Figure 7: Harmonised Indices of Consumer Prices (HICP) in EU28 and its energy 
components' evolution, 2010-2014 (%) 

Source: Eurostat – National Accounts 

23 

 
 
 
3.1.3.  Energy and transport related taxes 

Environmentally  related  taxes,  including  taxes  on  energy  and  transport,  serve  both  a 
fiscal  and  an  environmental  objective.  By  targeting  different  sources  of  pollution, 
taxation  provides  incentives  to  reduce  emissions  and  enhance  efficiency.  Despite  some 
challenges in terms of political economy, experience has proven that environmental taxes 
can be effective and efficient instruments for achieving environmental policy objectives. 
Environmentally related taxes are also among the taxes considered to be least detrimental 
to  growth,  and  could  thus  be  a  source  of  revenue  that  can  be  used  to  improve  public 
finances or to facilitate a tax shift away from labour taxation.  

Taxation of energy, both in the form of taxes on carbon and energy products, currently 
generate the most revenue of these taxes. Transport related taxes excluding fuels include 
registration  taxes  (levied  on  the  purchase  of  a  car)  and  circulation  taxes  (levied  most 
often  annually  on  car  ownership).  Both  these  forms  of  vehicle  taxation  can  be  used  by 
Member States to encourage fuel efficiency and emissions reduction by making the tax 
rate dependent on the carbon dioxide emissions of the vehicle.   

Figure 8: Energy and transport related taxes in the EU, % of GDP, 2012 

Source: DG TAXUD, Taxation Trends in the EU annex A 

In 2012, energy and transport related taxation amounted on average to 2.3% of GDP in 
the EU28.  This revenue ratio to GDP has fallen slightly since 2005, when it amounted to 
2.4%  for  the  EU28.  This  decrease  can  be  attributed  to  revenue  from  transport  fuel 
taxation. Energy taxes on motor fuels, including carbon taxes where relevant, account for 
the greatest share of these revenues, i.e. 61% corresponding to 1.4% of GDP on average 
in 2012. In several Member States, notably Slovenia, Luxembourg, Bulgaria and Estonia, 
fuel taxation actually account for more than 2% of GDP. The tax revenues from heat and 
electricity taxes amount on average to 0.4% of GDP. Denmark, Sweden, Finland and the 
Netherlands tax electricity and heating as part of their climate and energy policies, which 

24 

 
 
results in revenue shares at or above 0.7% of GDP. Finally, Member States differ greatly 
in  their  use  of  vehicle  taxation  as  a  revenue  and  policy  instrument.  The  tax  burden  on 
vehicles in Denmark, Malta and the Netherlands amount to more than 1% of GDP, while 
it  is    0.1%  or  below  in  Lithuania,  Estonia,  the  Czech  Republic  and  Luxembourg.  This 
data  indicate  that  there  is  scope  for  several  Member  States  to  make  better  use  of  tax 
instruments in their energy and climate policies, in particular to achieve better energy and 
carbon efficiency28. 

3.2.  Energy security, solidarity and trust 

3.2.1.  Import dependency 

The EU imports about 53% of its fossil fuel needs from the rest of the world. This value 
slightly increased over the 2005-2013 period, notably due to the depletion of EU fossil 
fuel  reserves.  Figure  9  illustrates  the  net  import  dependency  levels  in  2005  and  2013 
across EU Member States (% of net fossil fuel imports in gross inland consumption and 
bunkers, based on tonnes of oil equivalent).  

Figure 9: Net import dependency for EU Member States29 

Source - Eurostat 

Import  dependency  greatly  varies  across  EU  Member  States,  some  countries  being 
almost  exclusively  dependent  on  imports  while  others  can  rely  on  national  resources. 
Over  the  2005-2013  period,  import  dependency  increased  most  in  Denmark,  Lithuania, 
Poland  and  United  Kingdom.  In  the  case  of  Denmark  and  the  United  Kingdom,  it  is 
notably  due  to  depleting  national  fossil  fuel  resources.  Conversely,  import  dependency 
significantly decreased in Estonia, the Netherlands and Romania.  

Moreover,  the  EU  imports  40%  of  its  uranium  and  other  nuclear  fuels.  In  2013,  it 
imported more than 17 000 tU. Out of it, 45% came from Russia and Kazakhstan.  

28   For  further  discussion  see  also  "Tax  Reforms  in  the  EU  Member  States  2015",  European  Economy, 

Institutional Paper, 8/2015, and previous editions of this report. 

29   For the United Kingdom, import dependency increased by more than 200%. Results are not visible on 

the graph for scale reasons.  

25 

 
 
                                                 
Figure 10: Share of purchases of natural uranium by EU utilities by origin, 2013 
(%) 

Source: Euratom Supply Agency 

Regarding trade patterns for petroleum products, although the EU has enough and even 
excess gasoline production capacity, it is at the same time unable to meet the demand for 
gas/diesel  oil.  Therefore,  the  majority  of  the  refined  products  import  in  2013  was 
gas/diesel oil: 44 million tonnes from extra-EU countries, a figure which almost tripled 
from 2000 (16 million tonnes). The total amount of gasoline exported extra-EU in 2013 
was  44  million  tonnes  which  is  more  than  double  compared  to  2000  when  the  export 
amounted to 19 million tonnes. In 2013 most exports, more than 13 million tonnes, went 
to the United States. 

3.2.2.  Supplier concentration index 

Only  focusing  on  import  dependency  own  does  not  provide  enough  information  on  the 
degree  of  diversification  in  import  sources,  as  well  as  on  the  relative  significance  of 
various import sources in the energy mix. Therefore, the analysis of the previous section 
is complemented with information on energy import supplier concentration.  

In the in-depth study accompanying the European Energy Security Strategy30, a country-
specific supplier concentration index (SCI) by fuel was computed as the sum of squares 
of  the  quotient  of  net  positive  imports  from  an  extra  European  Economic  Area  (EEA) 
country to an importing Member State (numerator) and the gross inland consumption of 
that  fuel  in  the  importing  Member  State  (denominator).  Smaller  values  of  SCI  indicate 
larger diversification and hence lower risk.  

An aggregated indicator, combining information on SCI for oil, gas and coal31, is used in 
this  Staff  Working  Document.  The  value  of  this  indicator  is  influenced  by  two  factors: 
the  share  of  non-EEA  country  sources  in  a  Member  State's  energy  mix,  as  well  as  the 
degree  of  diversification  of  the  Member  State's  energy  mix.  As  such,  it  combines 
information  regarding  import  dependency,  the  number  of  countries  from  which  such 

30   SWD(2014) 330 
31   Regarding coal, information on other bituminous products is used 

26 

 
 
                                                 
imports come and the relative balance in a Member State's energy mix between various 
energy sources.  

A  Member  State  importing  most  of  its  fossil  fuel  sources,  but  from  a  wide  range  of 
countries,  such  as  Spain,  shows  relatively  low  levels  of  supplier  concentration.  In 
addition, all else equal, a Member State in which fossil fuels represent a limited share of 
the  overall  energy  mix,  such  as  France,  also  shows  relatively  lower  values  for  this 
indicator than a Member State solely relying on energy imports.  

Figure 11: Aggregate (gas, oil, and coal) country specific concentration index32 

Source: European Commission services calculations, based on Eurostat 

At  EU  level,  the  indicator  is  low,  showing  a  good  degree  of  diversification  of  import 
sources and a balanced energy mix when considering the EU as a whole. However, the 
indicator  has  slightly  increased  over  the  2005-2013  period,  a  sign  of  small  additional 
concentration in import sources.  

Concentration  in  fossil  fuel  import  sources  is  particularly  high  in  Bulgaria,  Estonia, 
Finland, Lithuania, the Netherlands and Slovakia. Regarding changes over the 2005-2013 
period, it can be noted that concentration increased in most countries over the period, a 
potential sign of increased vulnerability to single supplier or fuel source. The aggregate 
concentration  index  however  hides  more  encouraging  signs  when  focusing  on  specific 
fuels,  such  as  gas,  as  this  specific  supplier  concentration  index  has  decreased  over  the 
period for a majority of Member States. 

3.2.3.  Contribution of renewables to energy security 

The  European  Energy  Security  Strategy  (EESS)  has  already  underlined  the  significant 
cost-effective potential for a fuel-switch to indigenous renewable electricity and heating 
sources to further reduce the use of natural gas in a number of sectors by the end of this 
decade.  For  this  purpose,  renewable  heating  and  cooling  is  highly  prioritised  and  can 

32   For Ireland and the Netherlands, partial lack of data does not allow presenting 2005-2013 trends. For 

Romania, Cyprus and Malta, incomplete data does not allow presenting results.   

27 

 
 
                                                 
displace significant amounts of imported fuels. At present, almost 17% of the heating and 
cooling demand in the European Union is covered by renewable energy sources33.  

Currently, renewables in Europe are already playing a key role for energy security. The 
increased consumption of renewable energy compared to the 2005-level has enabled the 
EU  to  cut  its  demand  for  fossil  fuels  by  98MToe,  the  equivalent  of  the  energy 
consumption of Poland. In 2012, the EU's gross inland consumption of fossil fuels would 
have been 7% higher34 without the introduction of large amounts of RES. Coal was the 
fuel most substituted by renewables across Europe (consumption would have been 13% 
higher without the introduction of a large amount of RES), followed by gas (7% higher 
without  RES)35.  At  country  level  in  2012,  12  Member  States  saw  reductions  of  their 
gross  inland  consumption  of  fossil  fuels  of  7  %  or  more,  in  response to  RES  increases 
since  2005  (Austria,  Belgium,  Denmark,  Estonia,  Germany,  Finland,  Italy,  Latvia, 
Portugal, Slovenia, Spain and Sweden).  

Figure 12: Relative reduction of gross inland consumption of fossil fuel use due to 
deployment of renewable energy 

Source : EEA, Renewable energy in Europe - approximated recent growth and knock-on 
effects, 2015 

33   RES Progress Report, EC, 2015 
34   EEA,  Renewable  energy  in  Europe  -  approximated  recent  growth  and  knock-on  effects,  2015.  2012 
figures  see  technical  report  :  http://www.eea.europa.eu/publications/renewable-energy-in-europe-
approximated 

35   Renewable  energy  in  Europe  -  approximated  recent  growth  and  knock-on  effects.  European 

Environment Agency technical report No1/2015 

28 

 
 
 
 
                                                 
3.2.4.  Net trade balance of energy products 

Figure 13: Net trade balance of energy products - % of GDP 

Source: Eurostat 

The  above  indicator  shows  the  influence  of  energy  import  bills  from  a  macroeconomic 
perspective. It is one of the indicators that can provide additional information as regards 
the  potential  vulnerability  of  Member  States  to  energy  price  shocks,  including  via 
negative implications on external macroeconomic imbalances.  Since 2005, the situation 
has  deteriorated  for  many  Member  States,  in  particular  for  Bulgaria,  Croatia,  Italy,  or 
Latvia.  However,  the  decrease  in  international  fossil  fuel  prices  in  the  second  half  of 
2014  have  reduced  energy  trade  deficits  of  most  Member  States,  in  particular  when 
compared to 2013 data.  

3.2.5.  Security of gas supply 

Regulation 994/2010 aims to safeguard the gas supply to the customers in the event of a 
supply disruption (e.g. interruption of external gas supplies, failure of infrastructure) or 
exceptionally  high  gas  demand.  The  Regulation  defines  an  EU-wide  infrastructure 
standard that all Member States should fulfil, the so called "N-1". The N-1 standard aims 
at ensuring a certain redundancy in the system so that in the event of a disruption of the 
single  largest  gas  infrastructure,  the  capacity  of  the  remaining  infrastructure  is  able  to 
satisfy  the  total  gas  demand  during  a  day  of  exceptionally  high  gas  demand  occurring 
with a statistical probability of once in 20 years.  

It  is  also  possible  to  fulfil  the  N-1  rule  on  a  regional  level  if  relevant  Member  States 
establish a joint Risk Assessment and a joint Preventive Action and Emergency Plan and 
define "the single largest gas infrastructure of common interest" for the region. 

29 

 
 
 
The number of Member States who comply with the N-1 rule has been increasing over 
the years and currently stands at 2036.  

Figure 14: Member States' position as regards the N-1 criteria (2015)  

(1) FI: Fulfils the N-1 using demand-side measures 
(2) IE: Fulfils the N-1 at regional level (UK-IE) 
(3) SE, SI, LU: Exempted from the N-1 rule 
Source: Member States' Risk Assessments and Preventive Action Plans 

3.2.6.  Security of electricity supply 

In  addition  to  fossil  fuel  trade  patterns,  security  of  energy  supply  considerations  also 
need  to  pay  attention  to  the  quality  of  electricity  supply  and  of  potential  generation 
adequacy issues. Such issues are usually addressed by energy regulators or transmission 
system operators (TSOs).  

The  ENTSO-E  Winter  Review  2014/15  highlighted  that  during  the  winter  2014/2015 
temperatures  across  the  whole  of  Europe  were  near  average.  As  a  result,  demand  was 
around seasonal average in most countries. In Greece, Croatia and Serbia, snow, ice and 
strong wind caused some difficulties and damages to the transmission network. However, 
no  critical  situation  related  to  system  adequacy  occurred  in  Europe  last  winter.  The 
ENTSO-E Winter Review 2015/16 will be published on 1 December 2015.  

The  Scenario  Outlook  and  Adequacy  Forecast  (SO&AF)  report  aims  at  providing 
stakeholders  in  the  European  electricity  market  with  a  Pan-European  overview  of 
generation adequacy with a five to ten year time frame. In the latest report, the regional 
analysis  shows  that  from  a  Pan-European  system  point  of  view,  the  level  of  imports 
necessary to maintain adequacy is feasible and within the level of forecast cross-border 
interconnectivity for the period 2016–2025.  

36   Additional  information  can  be  found  in  the  "Report  on  the  implementation  of  Regulation  (EU) 
994/2010 and its contribution to solidarity and preparedness for gas disruptions in the EU". Available 
at: 
https://ec.europa.eu/energy/sites/ener/files/documents/SWD%202014%20325%20Implementation%20
of%20the%20Gas%20SoS%20Regulation%20en.pdf  
30 

 
 
                                                 
3.3.  A fully integrated internal energy market 

3.3.1.  Electricity interconnection capacity 

Figure 15: Electricity interconnection capacity (% of total generation capacity) - 
201437 

Source: European Commission based on ENTSO-E scenario outlook and adequacy 
forecast 2014 

Being  aware  of  the  benefits  of  energy  interconnections,  Member  States  have  increased 
their  interconnection  capacities  during  the  last  decades.  For  instance,  the  launch  of  the 
Estlink2  interconnection  has  increased  remarkably  Baltic  States'  connectivity  with  the 
Nordic  power  market.  However,  currently  eight  Member  States  remain  below  the  10% 
electricity interconnection target and by increasing interconnections would further benefit 
from the internal electricity market.  

In this context, the EU has gradually been equipping itself with the right policy tools to 
enable necessary investments in grid infrastructure, investments in interconnection being 
paramount  among  those.  As  underlined  by  the  European  Council,  the  interconnection 
target  should  mainly  be  reached  through  implementation  of  the  Projects  of  Common 
Interest. 

37    Due  to  scale  reasons,  the  graph  does  not  properly  reflect  the  level  of  interconnection  capacity  in 

Luxembourg, which is much higher than suggested on this graph (i.e. at 245%). 

31 

 
 
                                                 
3.3.2.  Concentration on wholesale markets 

Figure 16: Market concentration in power generation capacity in EU Member 
States 

Source: Commission services calculations, based on Platts data 

Figure 17: Market concentration in Member States' wholesale gas markets 

Source: ACER 

At  EU  level,  market  concentration  remains  significant  both  on  electricity  and  gas 
markets38.  However,  at  least  for  electricity,  Concentration  levels  have  decreased  in 
wholesale electricity markets over the last 10 years, on average by 19%, a sign of greater 
competition.  

Concentration  levels  also  vary  across  Member  States.  Most  concentrated  markets  for 
electricity can be found in Cyprus, Estonia, Croatia, Latvia and Malta, while for gas, it is 

38   The  Herfindahl-Hirschman  index  (HHI)  describes  market  concentration.  It  is  the  sum  of  squared 
market shares of individual companies. The HHI assumes values between zero and 10,000, with high 
values  indicating  high  market  concentration.  An  HHI  of  10,000  is  a  monopoly,  an  HHI  of  5,000 
represents two market participants of 50% market share each, five equal  market participants yield an 
HHI of 2,000. 

32 

 
 
 
                                                 
in  Estonia,  Spain,  Lithuania,  Latvia  and  Slovakia.  Most  significant  decreases  in 
concentration levels were observed in Greece, Italy, Ireland, Belgium, Spain or Romania.  

3.3.3.  EU energy market coupling and convergence in wholesale prices 

3.3.3.1.Prices developments on EU electricity markets 

As  can  be  seen  in  Figure  18,  wholesale  electricity  prices  showed  signs  of  convergence 
during  the  last  few  years,  as  the  difference  between  the  cheapest  and  most  expensive 
wholesale  electricity  market  prices  decreased in  the  EU.  However,  differences  between 
the price levels still remain and temporary price divergences may occur in the future, as a 
consequence  of  sudden  shifts  in  local  power  demand  and  supply,  owing  to  changes  in 
electricity mixes in different markets or availability of infrastructure and interconnection 
capacities. 

Figure 18: Difference between the highest and the lowest regional wholesale 
electricity price 

Source: European power exchanges, own computations 

More specifically, when observing latest trends, Figure 19 shows there were significant 
price differences in the wholesale electricity prices across the EU in the first quarter of 
2015, ranging from 28-29€/MWh in Denmark and Sweden to 58 €/MWh in Greece.  

Local market prices may significantly differ from each other even in a coupled region, as 
the  Central  Western  Europe  (CWE)  region  gave  a  good  example  for  this  in  the  first 
semester  of  2015.  Due  to  record  high  wind  power  generation  in  Germany  local  prices 
were  lower  than  in  France,  Belgium  and  the  Netherlands,  where  local  particularities  of 
the  fuel  mixes  (the  availability  of  nuclear  generation  and  gas-fired  plants)  significantly 
impacted  wholesale  prices.  In  the  Nordic  region  and  in  Spain  and  Portugal  the 
availability  of  hydro  reserves  can  impact  the  wholesale  electricity  price  level  and  can 
result in price volatility across different seasons of the year. Besides domestic generation 
mixes, the existence of sufficient level of interconnection capacities also exert significant 
influence on the local price level.  

33 

 
 
Figure 19: Comparison of average wholesale baseload electricity prices, first 
quarter of 2015 

Source: European wholesale power exchanges 

As  the  market  integration  moves  forward,  expectations  rise  towards  full  price 
convergence. However, it must be noted that the existence of fully converged prices over 
time is not a precondition to a well-functioning internal electricity market in the EU as 
regional  differences  stemming  from  the  aforementioned  reasons  will  probably  result  in 
temporary  divergences  in  the  future,  even  if  the  market  integration  is  complete  and  all 
necessary interconnection infrastructure is built. A better measure for a good functioning 
internal market is the disappearance of the non-economic power flows (when electricity 
flows from the higher-priced area to the lower-priced one), as these non-economic power 
flows result in welfare losses in cross-border electricity trade. 

34 

 
 
Market coupling is  the main tool for achieving the elimination of non-economic power 
flows through implementing implicit cross border electricity trade auctions. By mid-2015 
most of the EU electricity markets are coupled to one or several of their neighbours; the 
most significant coupling area is the North West European  coupled area, stretching from 
the Iberian-peninsula to the Nordic and Baltic markets, including seventeen EU markets 
plus  Norway  that  cover  about  three  quarters  of  the  total  EU  electricity  trade  volume. 
Between  2009  and  2014  four  markets  in  Central  and  Eastern  Europe  (Czech  Republic, 
Slovakia, Hungary and Romania) have been gradually coupled, and as of February 2015 
Italy has been coupled with Austria, France and Slovenia. 

3.3.3.2.Price developments on EU gas markets 

Figure 20: Wholesale day-ahead gas prices on gas hubs in the EU 

Source: Platts 

Regarding  gas,  the  situation  is  more  contrasted.  Figure  20  presents  the  evolution  of 
European  hub  day-ahead  natural  gas  prices  in  the  period  from  January  2009  until  July 
2015,  showing  the  convergence  in  the  day-ahead  price  on  major  European  gas  hubs. 
Nevertheless,  in  spite  of  the  convergence,  some  differences  remain,  often  caused  by 
infrastructure bottlenecks, e.g. between Northern and Southern France. 

However, not all gas consumed in Europe is traded on day-ahead markets. In particular, 
taking  account  of  gas  imported  via  pipelines,  the  signs  of  price  convergence  are  less 
obvious. The price of gas imports under long term contracts, especially from Russia, is 
often linked to  the price of oil products  (usually with a 6-9  month  time lag).  The level 
and dynamics of such "oil-indexed" prices can be quite different to that of hub prices.  

A comparison of a selection of estimated border prices of gas deliveries from the main 
exporters to the EU – Norway, Russia and Algeria – shows significant variations in price 
levels and, to a smaller extent, in price dynamics. After the increasing price divergence in 
2014,  prices  converged  again  in  the  first  half  of  2015  as  oil-indexed  prices  started  to 
decline. With the continuing weakness of oil prices, oil-indexed prices are set to decrease 
further, projecting a continuation of price convergence in the coming months. 

35 

 
 
Figure 21: Comparison of EU wholesale gas price estimations 
Source: Eurostat COMEXT and European Commission estimations, BAFA, Platts39 

Estimated prices of most of the contracts reported on Figure 21 decreased in the first half 
of 2014 but bounced back in the in the second half of the year. Hub-based prices were 
relatively stable in the first half of 2015 while oil-indexed prices clearly decreased. The 
estimated price levels of Russian gas to Lithuania and Algerian gas to Italy remained the 
highest but their premium to the other – mainly hub-based – prices has shrunk. The other 
contracts  more  or  less  followed  the  movement  of  the  NBP  price,  albeit  in  some  cases 
with a delay.  

39   Note: Border prices are estimations of prices of piped gas imports paid at the border of the importing 
country, based on information collected by customs agencies, and are deemed to be representative of 
long-term contracts. 

36 

 
 
 
                                                 
Figure 22: Comparison of EU wholesale gas prices in the second quarter of 2015 
Source: European Commission estimations40 

3.3.4.  Retail market functioning 

Retail  market functioning is  described below by looking first at switching  rates, before 
briefly mentioning the use of end-user regulated prices, and then describing competition 
levels  on  retail  markets.  Finally,  some  information  is  provided  on  the  deployment  of 
smart meters.  

40   Note: Border prices are estimations of prices of piped gas imports paid at the border of the importing 
country, based on information collected by customs agencies, and are deemed to be representative of 
long-term gas contracts. 

37 

 
 
 
                                                 
Figure 23: Annual switching rates for households on retail electricity markets - 2013 
and average 2008-2013 

Source: ACER 

Figure 24: Annual switching rates for households on gas retail markets - 2013 and 
average 2008-2013 

Source: ACER 

An available proxy indicator to assess retail market functioning is the annual switching 
rates  on  retail  gas  and  electricity  markets.  At  the  EU  level,  the  switching  rate  for 
households is above 5% for both electricity and the gas markets. In addition, switching 
rates  in  2013  were  above  the  2008-2013  average,  a  sign  of  additional  competition  and 
consumer  empowerment  on  retail  markets.  Large  discrepancies  are  still  observed 
between  Member  States.  In  many  cases,  switching  rates  are  equal  to  0%,  meaning  that 
consumers do not have the right to switch retailers or do not exercise it.  

38 

 
 
 
In  addition  to  information  on  switching  rates,  it  can  be  added  that  at  the  end  of  2013, 
household  end-user  price  regulation  existed  in  15  countries  for  electricity  and  in  15 
countries for gas41.  

Monitoring retail market functioning also requires considering competition levels, and in 
particular the cumulative market shares of main electricity and gas retailers42. The graphs 
below  show  the  cumulative  market  shares  and  the  number  of  main  retailers  on  each 
market.  

Figure 25: Concentration on retail electricity markets, 2013 

Source: Eurostat 

Figure 26: Concentration on retail gas markets, 2013 

Source: Eurostat 

41 Source: ACER Market Monitoring report 2014 
42   Retailers are considered as "main" if they sell at least 5% of the total national electricity consumption. 

39 

 
 
 
                                                 
Regarding electricity markets, in Cyprus, Estonia, Greece, Bulgaria, Slovakia and Malta, 
there are only one or two main actors on the market, which cumulate a very high market 
share  between  them.  Conversely,  there  are  at  least  6  main  companies  active  on  retail 
electricity  markets  in  Austria,  Hungary,  Lithuania,  Poland,  Slovakia  and  United 
Kingdom.  

Regarding  gas  markets,  there  are  at  most  2  major  companies  active  on  the  market  in 
Bulgaria, Estonia, Finland, Finland, Lithuania, Latvia, Poland and Slovakia. Conversely, 
there  are  at  least  6  major  companies  active  in  the  Czech  Republic,  Spain,  Hungary, 
Ireland, Romania and the United Kingdom.  

To facilitate the integration of distributed generation, the deployment of smart metering 
solutions  is  crucial.  Some  information  based  on  available  data  is  presented  below 
regarding  the  penetration  rate  of  smart  electricity  and  gas  meters  in  households. 
Information is only available for 15 Member States as regards electricity and 4 Member 
States as regards gas.  

On this basis, it can be seen that some countries, such as Sweden, Finland or Italy, have 
already achieved a full roll-out of electricity smart meters. This corresponds to close to 
45 million smart meters already installed in these three Member States43. Other Member 
States,  such  as  Denmark,  Estonia  or  Malta  are  close  to  or  above  a  50%  roll-out. 
Conversely,  deployment  rates  are  much  lower,  and  well  below  10%,  in  other  Member 
States.  

Information is even patchier as regards penetration rates for gas smart meters. Denmark, 
the United Kingdom, Italy and the Netherlands have begun a roll-out for a small share of 
consumers, but only in the Netherlands does it seem that deployment of gas smart meters 
has made some significant progress.  

Figure 27: Electricity smart meter Penetration rate achieved in households (%), 
2013 

Source: ACER/CEER market monitoring report 2014 

43   Benchmarking smart metering deployment in the EU-27 {SWD(2014) 188 final} 

40 

 
 
                                                 
A final dimension for which additional information will be needed in the future concerns 
self-consumption  of  renewable  energy.  It  will  be  important  to  monitor  the  pace  of 
deployment  of  small  scale  renewable  energy  projects  so  as  to  better  understand  and 
anticipate their implications on the electricity market functioning.  

3.3.5.  Electricity tariff deficits 

An  electricity  tariff  deficit  can  be  defined  as  a  shortfall  of  revenues  in  the  electricity 
system. It emerges when tariffs covering the regulated components of the retail electricity 
price are  set  below  the corresponding  costs  of  the  energy  companies.  In  general,  it  has 
been driven by both macroeconomic and energy market related factors44. Over the recent 
years,  electricity  tariff  deficit  has  emerged  in  some  Member  States.  In  2007,  only  four 
countries displayed a tariff deficit, while in 2013 there were 12 countries45.  

Tariff deficits differ in scope and size among the respective Member States. In some (e.g. 
Germany and Italy), the tariff deficits were temporary and caused by a mismatch between 
forecasted  and  actual  costs  for  the  renewable  electricity  production.  In  both  cases, 
subsidies  to  renewables  have  increased  substantially  during  2010-2012  and  were  not 
matched by a sufficient increase in tariffs. Similarly, in other Member States where  the 
economic crisis was particularly severe (Spain and Portugal), cumulative deficits turned 
into tariff debts, which reached 2 to 3% of GDP in 2013, while the tariff debts of France 
and Greece (0.2-0.4% of GDP) were much lower. In Bulgaria, Malta and Hungary tariff 
deficits emerged as a result of low regulated end-user prices (especially for households), 
while  in  Romania,  Latvia  and  Belgium  the  grid  tariffs  were  not  sufficient  to  cover  the 
corresponding costs. 

In  some  cases  the  tariff  deficit  has  been  recognized  by  the  authorities  (e.g.  Spain, 
Portugal, Greece, France, Italy, Germany, Belgium).  When  it is  not  recognised, it risks 
leading to accumulated losses for the electricity companies, usually electricity suppliers 
or  distributors.  Where  the  tariff  deficit  has  been  acknowledged,  reforms  have  normally 
been undertaken to address it, but the policy context differs across countries. Most of the 
reforms have aimed at reducing and controlling the cost of support schemes to renewable 
energy  and  co-generation.  For  example,  Spain,  Portugal,  Greece,  Italy  and  Germany 
tried, among other things, to reduce the level of remuneration (i.e. feed-in tariffs) and the 
period of support, as well as to allocate various revenue sources (tariff increases, various 
levies etc.) to finance the deficits. In addition, Spain and Portugal  have also securitised 
the accumulated tariff debt.  

As a result, Germany and Italy had managed to address their deficit by early 2014. Spain 
and  Greece  are  considered  to  have  control  of  their  tariff  debts  and  are  avoiding  new 
deficits.  Based  on  current  projections,  they  are  expected  to  achieve  balanced  systems 
from  a  revenue-cost  perspective  in  201546.  France  and  Portugal  have  defined  policy 
roadmaps with the aim to eliminate the tariff debt and achieve tariff sufficiency. 

44    Macroeconomic  factors  concern  the  economic  growth  and  budgetary  imbalances,  while  the  energy 
related factors are associated with increasing regulation of retail prices, cost of support schemes and 
crude  oil  prices,  as  well  as  with  highly  concentrated  electricity  retail  markets.    Electricity  Tariff 
Deficit:  Temporary  or  Permanent  problem  in  the  EU?,  Economic  Papers  534,  October  2014,  
http://ec.europa.eu/economy_finance/publications/economic_paper/2014/pdf/ecp534_en.pdf  

45   Belgium,  Bulgaria,  France,  Germany,  Greece,  Hungary,  Italy,  Latvia,  Malta,  Portugal,  Romania, 

Spain. 

46   Provisional  data  from  the  national  regulatory  authorities  for  energy  in  Spain  (CNMC)  and  Greece 

(RAE). 

41 

 
                                                 
3.3.6.  Vulnerable consumers 

Developing the Energy Union also means better protecting vulnerable consumers against 
energy  poverty  risk.  There  is  no  EU-wide  agreed  definition  and/or  measure  to  assess 
energy poverty issues and the vulnerability of consumers to energy price shocks47. Still, a 
variety  of  factors  contribute  to  energy  poverty,  which  includes  high  energy  bills,  low 
income  and  poor  energy  efficiency  of  the  building  envelope.  A  composite  indicator  is 
used to cover these various factors. It is based on the currently only available indicators 
across  the  EU,  which  relate  to  the  percentage  of  households  in  a  given  year:  i/  facing 
arrears on utility bills; ii/ who are unable to keep their home adequately warm; and/or iii/ 
living  in  dwellings  with  leakages  and  damp  walls48.  The  indicator  is  calculated  on  the 
basis of  the information collected by Eurostat in the EU Statistics on Income and Living 
Conditions. The share of population with arrears in accounts provides some insights into 
energy  affordability.  The  ability  to  keep  the  home  adequately  warm  can  inform  on  the 
need to constrain spending on heating. Dwellings with leakages and damp walls provide 
some  indication  of  building  quality.  The  higher  the  value  of  the  indicator,  the  most 
significant energy poverty issues are expected to be in a given Member State.  

On  average,  based  on  the  proxy  indicators  considered  for  this  analysis,  12%  of  EU 
households  can  be  considered  at  risk  of  energy  poverty49.  Energy  poverty  issues  seem 
particularly  relevant  in  Bulgaria,  Greece,  Cyprus,  Latvia,  Lithuania,  Hungary  and 
Portugal. Comparing trends since 2005, it must be noted that the situation deteriorated in 
Austria,  Denmark,  Malta,  Greece,  Slovenia,  Ireland  and  Italy,  as  well  as  in  the  United 
Kingdom.  

Figure 28: percentage of population at risk of energy poverty 

47   There are definitions for fuel and/or energy poverty and vulnerable consumers in several EU Member 
States  and  by  some  international  organisations.  Fuel  and  energy  poverty  are  mainly  related  to  the 
unaffordability of energy services.  

48   Some studies argue on the need to include an additional indicator, on the ability to keep comfortably 
See: 

cool. 
https://ec.europa.eu/energy/sites/ener/files/documents/INSloveniaGHT_E_Energy%20Poverty%20-
%20Main%20Report_FinlandNAL.pdf  

49   Note  that  based  on  the  available  data,  it  is  not  possible  to  establish  whether  the  same  or  different 
households face similarly the three issues identified in the survey (arrears on utility bills, inability to 
keep home adequately warm, and/or living in dwellings with leakages and damp walls). Therefore, the 
value obtained for the composite indicator should be interpreted with caution.  

42 

 
 
                                                 
Source: European Commission calculations, based on Eurostat 

There  is  no  readily  available  indicator  on  the  share  of  energy  products  in  households' 
expenditure. However, the weights used to calculate the Harmonised Index of Consumer 
Prices (HICP) can be used as proxy. The information used to calculate the weight of each 
product  group  is  collected  mainly  by  means  of  household  budget  surveys  and  cross-
checked  and  updated  with  information  from  other  sources  (e.g.  VAT  revenue  statistics 
and  national  accounts).  The  product  group  weights  are  representative  for  the  average 
household  consumption  expenditure  at  national  level.  As  such,  for  each  country  they 
capture  national  consumption  habits,  which  may  depend  on  climate,  product  taxes, 
lifestyles, cultural traditions and other factors (e.g. product availability). It is important to 
note that the HICP takes into account the consumption expenditure of all the households 
in  a  country  and  not  some  “typical”  household.  This  indicator  does  not  allow  either  to 
isolate the share of energy expenditures for low-income households.  

Considering all energy products together (electricity, gas and other fuels, as well as fuel 
and  lubricants  for  personal  transport  equipment),  they  represent  more  than  10%  of 
average  households'  expenditure  in  the  EU.  The  higher  the  share,  the  more  vulnerable 
consumers become to energy price hikes. Furthermore, this share increased  at EU level 
by more than 20% since 2005. The share is highest in Poland, Latvia, Slovakia, Croatia 
and Hungary. It has increased for most Member States since 2005, except in  Denmark, 
Poland, Portugal, Romania, Slovakia and Sweden.  

Figure 29: Share of energy products in households' expenditure, as used for the 
calculation of HICP 

Source: Eurostat 

43 

 
 
3.4.  Energy efficiency and moderation of demand 

3.4.1.  Evolution of primary and final energy consumption 

Figure 30: Evolution of EU28 Primary and Final energy consumption 

Source: Eurostat 

The  long  term  evolution  of  primary  and  final  energy  consumption  at  EU  level  shows 
similar trends50. Consumption peaked around 2006 before declining in the past few years, 
under the influence of both the economic crisis, which decreased economic growth and 
therefore  the  need  for  energy,  and  of  more  efficient  and  ambitious  energy  efficiency 
policies.  

Final  energy  consumption  (FEC)  of  EU28  dropped  from  1186  Mtoe  in  200551  to  1105 
Mtoe in 2013. This equals a reduction of final energy consumption by 18.6% compared 
to 2020 projections. The absolute final energy consumption of all Member States except 
Estonia, Germany, Lithuania, Malta and Poland has declined since 2005. Looking at the 
short term trends, final energy consumption increased from 1102 Mtoe in 2012 to 1105 
Mtoe  in  2013.  There  were  increases  in  Austria,  Belgium,  Czech  Republic,  France, 
Germany, Hungary, Ireland, the Netherlands, Slovakia and the United Kingdom. 

Primary energy consumption (PEC) of EU28 dropped from 1709 Mtoe in 2005 to 1567 
Mtoe  in  2013.  This  equals  a  reduction  of  primary  energy  consumption  by  15.5% 
compared to 2020 projections. The absolute primary energy consumption of all Member 
States  except  Estonia  and  Poland  has  declined  since  2005.  The  average  reduction  was 
more pronounced compared to EU28 in Bulgaria, Ireland, Greece, Spain, Croatia, Italy, 
Cyprus,  Lithuania,  Luxembourg,  Hungary,  Malta,  Portugal,  Romania  and  the  United 
Kingdom.  

50   More details on energy efficiency developments can be found in COM(2015)574 "Assessment of the 
progress  made  by  Member  States  towards  the  national  energy  Directive  2012/27/EU  as  required  by 
Article 24 (3) of Energy Efficiency Directive" 

51   2013 is the most recent year for which data are available from Eurostat. 2005 was chosen because it 
allows consistency with the EU energy and climate framework where both the GHG and RES targets 
are set against 2005 as the base year.  

44 

 
 
                                                 
Between  2012  and  2013,  the  latest  years  for  which  data  are  available,  most  Member 
States  lowered  their  primary  energy  consumption  to  close  their  gap  towards  the  2020 
target.  However  Belgium,  Denmark,  Germany,  Estonia,  France,  Poland,  Portugal  and 
Slovakia increased their primary energy consumption in 2013 compared to 2012. 

Figure 31: Primary and final energy consumption per Member State in 2013 (2005 
= 100) 

Source: Eurostat 

3.4.2.  Primary energy intensity of the economy 

When  describing  efficiency  trends  it  is  meaningful  to  compare  absolute  trends  with 
trends in terms of economic output, not only because energy consumption and economic 
growth  are  correlated,  but  also  because  a  decoupling  of  these  two  indicators  can  be 
considered  as  a  proxy  for  increasing  energy  efficiency.  As  shown  in  Figure  32,  many 
Member States significantly reduced on average their energy consumption from 2005 to 
2013, while at the same time increasing their economic output.  

45 

 
 
Figure 32: Average annual growth of GDP  and average primary energy 
consumption developments in % in the period 2005-2013 

Source: Eurostat 

Estonia is the only Member State where average primary energy consumption increased 
more  than  the  average  increase  of  GDP  from  2005  to  2013.  Thus,  the  primary  energy 
intensity  for  the  whole  economy  of  Estonia  grew  on  average  over  the  period  between 
2005  and  2013,  whereas  it  decreased  in  all  other  Member  States.  Bulgaria,  Czech 
Republic,  Cyprus,  Greece,  Hungary,  Lithuania,  Luxembourg,  Malta,  Poland,  Romania, 
Slovakia, Spain, Sweden and the United Kingdom reduced their intensity on average by 
more than 2% in this period. 

46 

 
 
Figure 33: 2005-2013 Average improvement rate of primary energy intensity in % 

Source: Eurostat 

3.4.3.  Energy intensity of industry 

Figure 34: Energy intensity for industry 

Source: Eurostat 

Measuring energy intensity of the industry can help to see if the value added in industry 
has  been  produced  with  less  final  energy  over  time,  which  was  the  case  for  the  EU28 
from 2005 to 2013.  

47 

 
 
 
In  Figure  34,  it  can  be  observed  that  there  is  a  significant  difference  between  the most 
energy intensive Member State, Bulgaria, and the least energy intensive ones, Denmark 
and  Ireland.  Whilst  this  is  influenced  by  the  share  of  energy-intensive  industries,  most 
Member States decreased energy intensity in industry from 2005 to 2013, the exceptions 
being Greece, Hungary, and Latvia.  

Given  the  significant  impact  that  the  structure  of  industry  has  on  the  overall  energy 
intensity, it is worth performing a decomposition analysis, which strips out the impact of 
three  variables  on  the  changes  in  energy  consumption:  changes  in  production  activity 
(volume  produced),  changes  in  the  structure  of  production,  and  energy  efficiency 
improvements.  The  outcome  of  the  decomposition  analysis  performed  in  2014  shows 
that, in absolute terms, 45 Mtoe were saved in the industry sector across the EU28 in the 
period 2008-2012. The main reason was a decrease of industry activity, followed by the 
impact of energy efficiency improvements on the energy consumption of industry, which 
was  almost  three  times  bigger  than  the  impact  of  changes  in  the  structure  of  the 
industry52. 

3.4.4.  Energy intensity in the residential sector 

Figure 35: Final energy consumption per m2 (koe/m2) 

Source: Odyssee-Mure 

When looking at the residential sector different factors influencing energy consumption 
must be taken into account. For example, the climate variations over the years, changes 
in  consumption  in  terms  of  comfort  and  a  change  in  the  size  of  dwellings.  In  addition, 
consumption  might  be  driven  by  the  economy,  by  demographics  and  by  concrete 

52   This  analysis  was  performed  in  2014  by  an  external  contractor  of  the  European  Commission  and  is 
also undertaken by the Odyssee-Mure project which is co-financed by the Intelligent Energy Europe 
Programme. See PwC/Fraunhofer ISI/TU Wien (2014): Study evaluating the current energy efficiency 
policy framework in the EU and providing orientation on policy options for realising the cost-effective 
energy 
18 
and 
(https://ec.europa.eu/energy/sites/ener/files/documents/2014_report_2020-
2030_eu_policy_framework.pdf) 

efficiency/ 

potential 

beyond, 

saving 

Figure 

2020 

until 

48 

 
 
                                                 
efficiency measures, such as building renovation or the installation of efficient equipment 
or equipment assisting consumers in optimising their energy use. 

The indicator above  focuses  on energy consumption per  square  meter of the residential 
sector. It is corrected for climate variations across Member States. As these data are not 
collected  by  Eurostat,  findings  from  the  Odyssee-Mure  project  are  taken  into  account. 
The data from Odyssee-Mure show that between 2005 and 2013 energy consumption per 
square meter decreased in all Member States except  in Italy where it grew by 10% and 
Estonia where the value remained constant53.  

Additional  indicators  or  analysis  can  also  be  considered  to  assess  energy  consumption 
improvements in the residential sector, for instance to better capture changes in the fuels 
used  for  heating  purposes.  Some  information  is  presented  below  when  describing 
developments in the share of renewable energy for heating and cooling purposes.   

3.4.5.  Energy efficiency in transport 

As explained in section 2.2.4, due to data availability and other methodological issues, it 
is not possible to provide sound indicators for monitoring the energy intensity trends in 
transport.  However,  some  high  level  analysis  is  provided  below  drawing  on  the  final 
energy consumption in transport and transport activity, while keeping in mind the caveats 
mentioned in section 2.2.4. 

Final energy consumption in transport54 in the EU28 decreased from 370 Mtoe in 2005 to 
349 Mtoe in 2013 (decrease of 6%). When focusing on the first three years 2005-2007, 
final energy consumption in transport increased by 4% during this period, but has been 
decreasing  quite  rapidly  since  2007  (-9%  for  2007-2013).  According  to  the  findings  of 
the Odyssee-Mure project, about 40% of the 2007-2013 reduction is estimated to be due 
to  the  economic  crisis,  with  the  stabilisation  of  passenger  traffic  and  the  decrease  in 
freight  traffic.  The  remaining  60%  mostly  originates  from  improvements  in  energy 
efficiency  of  passenger  cars.  Energy  efficiency  improvements  for  road  freight  have 
slowed down after 2007, driven by the fall in traffic and the less efficient operation of the 
vehicle fleet i.e. as shown by the lower load factors55.  

In  relative  terms,  the  highest  reductions  in  final  energy  consumption  in  the  transport 
sector  were  registered  in  Greece,  Ireland  and  Spain  in  the  period  2005-2013. 
Consumption  increased  slightly  in  Croatia,  Finland  and  Germany  and  a  considerable 
increase in relative terms was recorded in Lithuania, Malta, Poland, Romania, Slovakia 
and Slovenia. Most of the increase originated from road transport. Comparison between 
Member States can however be influenced by other factors as well.  This is because final 
energy  consumption  is  based  on  the  fuels  sold  rather  than  on  the  fuels  used  on  the 
territory of a country. Therefore, factors other than energy efficiency come into play e.g. 
the degree  to which a given Member State is  a ‘transit country’  for road transport or  a 
hub for aviation. 

53   See Odyssee-Mure database: http://www.indicators.odyssee-mure.eu/online-indicators.html  
54   Eurostat data used with the code: tsdpc320. 
55    Odyssee-Mure (2015): Trends and policies for energy savings and emissions in transport (available at:  

http://www.odyssee-mure.eu/publications/br/energy-efficiency-in-transport.html) 

49 

 
                                                 
Figure 36: 2005-2013 Average annual change of final energy consumption in  
transport (%) 

Source: Eurostat 

Comparing  2012  and  2013  data,  final  energy  consumption  in  transport  increased  in 
Austria,  Croatia,  Finland,  Germany,  Ireland,  Latvia,  Lithuania,  Malta,  Slovakia,  and 
Sweden.  

Figure 37: Evolution of final energy consumption in the transport sector of EU28 
Source: Eurostat, DG MOVE Transport in Figures56 

Findings  from  the  Odyssee-Mure  project  show  that  the  majority  of  transport  measures 
undertaken  at  Member  State  level  concern  the  passenger  modes.  The  energy  efficiency 
improvements  seem  to  be  mainly  related  to  three  sets  of  measures,  i.e.  measures 

56   http://ec.europa.eu/transport/facts-fundings/statistics/pocketbook-2015_en.htm 

50 

 
 
 
                                                 
concerning  the  energy  and  CO2  standards  for  new  cars,  measures  addressed  to  the 
renewal of the car fleet, and measures addressed to traffic management57.  

For  road  freight,  significant  energy  efficiency  improvements  took  place  between  2000 
and  2007,  driven  by  an  increase  in  the  efficiency  of  vehicles  and  by  a  more  efficient 
management  of  freight  transport  (e.g.  higher  load  factors  and  a  shift  to  larger  trucks), 
according  to  the  findings  of  the  Odyssee-Mure  project.  However,  since  2008,  despite 
continuous improvements in vehicle efficiency, empty running increased and trucks were 
less loaded58.  

Focusing  more  specifically  on  CO2  emissions  in  road  transport,  EU  legislation  sets 
mandatory  emission  reduction  targets  for  new  cars  and  vans  leading  to  significant 
improvements in the fuel economy of light duty vehicles sold on the European market59. 
The average emission level of a new car sold in 2014 was 123.4 g CO2/km (provisional 
data), i.e. significantly below the 2015 target of 130 g CO2/km, according to provisional 
data from the European Environment Agency. This is a 24% decrease compared to 2005. 
As a result of both EU and Member State level measures, the specific fuel consumption 
of  passenger  cars  EU  fleet  average  went  down  from  about  7.4  l/100km  in  2005  to  6.8 
l/100km in 2012 according to the findings of the Odyssee-Mure project. 

Figure 38: Average CO2 emissions from new passengers cars 

Source: European Environment Agency 

The  countries  for  which  average  CO2  emissions  from  new  passenger  cars  are  highest 
include  Bulgaria,  Cyprus,  Estonia,  Lithuania  and  Latvia.  Conversely,  lowest  emissions 
for new passenger cars are recorded in the Netherlands, Greece, Portugal and Denmark. 
The  countries  with  the  highest  percentage  reductions  since  2005  are  Denmark,  Ireland, 
Greece, Sweden and the Netherlands.  

57   Odyssee–Mure (2015): Trends and policies for energy savings and emissions in transport. 
58   Odyssee-Mure (2015): Trends and policies for energy savings and emissions in transport  

51 

 
 
                                                 
 
3.5.  Decarbonisation 

3.5.1.  Monitoring greenhouse gas emission reductions in the non-Emission 

Trading Systems sectors60  

Figure 39: Gap between greenhouse gas emissions in the non-ETS sector and targets 

According  to  the  projections  submitted  by  Member  States,  24  Members  States  are 
projected  to  meet  their  2020  targets  in  the  non-ETS  sectors  with  existing  policies  and 
measures. However, four Member States - Ireland, Luxembourg, Belgium and Austria - 
will need to make additional efforts to meet their 2020 targets for the non-ETS sectors at 
home  or  to  make  use  of  the  flexible  mechanisms  provided  for  in  the  Effort-Sharing 
Decision (ESD). This includes transfers of unused emission allocations from one year to 
another,  the  use  of  international  project  credits  or  transfers  of  unused  emission 
allocations between Member States. 

For all Member States, 2013 emissions and estimates for 2014 are expected to be below 
their respective 2013 and 2014 targets under the ESD.  

3.5.2.  Monitoring other greenhouse gas emission reductions developments 

3.5.2.1.Greenhouse gas intensity of the economy 

The  greenhouse  gas  (GHG)  intensity  of  the  economy  is  the  ratio  of  greenhouse  gas 
emissions  to  Gross  Domestic  Product  (GDP).  In  the  EU,  real  GDP  increased  by  46% 
between  1990  and  2014  while  emissions  decreased  by  23%.  Subsequently,  the  GHG 
intensity  of  the  EU  economy  decreased  by  almost  half  during  this  period  of  time.  The 
GHG intensity of all the Member States has also been decreasing since 1990.  

60   More  detailed  analysis  on  these  developments  can  be  found  in  the  Climate  Action  Progress  Report, 

COM(2015)576. 

52 

 
 
                                                 
Figure 40: Greenhouse gas intensity of the economy, 2013 

Bulgaria, Estonia, Poland, the Czech Republic and Romania are the five Member States 
with the largest greenhouse gas intensity of the economy. This reflects the large share of 
energy  intensive  industries  in  their  economy  and  also  for  some  of  the  Member  States 
concerned  the  importance  of  coal  in  their  energy  mix,  in  particular  in  the  power 
generation  sector.  With  the  exception  of  Luxembourg,  which  imports  most  of  its 
electricity, the countries with the lowest greenhouse gas intensity (Luxembourg, Austria, 
France,  Denmark  and  Sweden)  have  also  a  high  share  of  low-carbon  technologies 
(renewable and nuclear) in their electricity mix. 

3.5.2.2.Greenhouse gas emissions per capita 

Figure 41: Greenhouse gas emissions per capita, 2013 

The GHG emissions per capita indicator is the ratio between emissions and population. 
Croatia, Portugal,  Sweden, Hungary, Romania and Latvia have the lowest emissions per 
capita in the EU while Luxembourg, Estonia, Ireland, Czech Republic, the Netherlands, 
Finland  and  Germany  have  the  highest.  Luxembourg's  high  per  capita  emissions  are 
explained  by  the  high  level  of  road  transport  emissions  (representing  more  than  two-
thirds of total non-ETS emissions) due to low excise duties on motor fuel as well as to a 

53 

 
 
 
 
large  number  of  commuters  and  transit  traffic.  High  per  capita  emissions  in  Estonia, 
Czech Republic, Finland and Germany reflect their industrial specialisation and the share 
of solid fuels in the energy mix of some of these countries. High per capita emissions in 
Ireland reflect the importance of the agricultural sector in the economy, but also the lack 
of public transport and the underutilisation of Ireland's renewable potential.   

3.5.2.3. Sectoral share of greenhouse gas emissions  

(% share of 
total emissions) 

Transport  

Manufacturing, 
industry & 
construction 

Agriculture  Energy 

Residential, 
Commercial 
& 
Institutional 

Waste  Other 

EU28 

 Austria 

 Belgium 

 Bulgaria 

Croatia 

 Cyprus 

Czech Republic 

Denmark 

Estonia 

 Finland 

France 

 Germany 

Greece 

 Hungary 

 Ireland 

 Italy 

Latvia 

 Lithuania 

Luxembourg 

Malta 

Netherlands 

 Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

 Spain 

 Sweden 

United Kingdom 

19,6% 

27,0% 

21,4% 

13,7% 

21,6% 

22,3% 

12,9% 

23,7% 

11,9% 

20,8% 

27,0% 

16,6% 

14,5% 

17,5% 

18,6% 

23,0% 

25,4% 

21,0% 

55,1% 

17,6% 

17,7% 

11,7% 

24,7% 

12,7% 

15,2% 

30,5% 

23,7% 

33,2% 

19,7% 

19,0% 

33,5% 

27,7% 

11,9% 

22,0% 

14,1% 

22,2% 

12,1% 

7,6% 

22,6% 

20,5% 

19,7% 

13,9% 

13,9% 

11,6% 

18,4% 

15,5% 

23,0% 

16,1% 

7,9% 

18,8% 

14,7% 

19,0% 

23,5% 

35,7% 

14,3% 

20,9% 

25,5% 

15,5% 

12,1% 

10,5% 

9,8% 

11,5% 

15,4% 

9,7% 

6,3% 

22,7% 

8,3% 

11,9% 

20,5% 

8,1% 

9,1% 

15,5% 

32,0% 

9,3% 

25,5% 

23,9% 

6,1% 

3,3% 

13,6% 

11,9% 

12,1% 

16,3% 

7,8% 

11,1% 

14,3% 

16,0% 

9,7% 

32,8% 

16,1% 

20,0% 

54,1% 

27,8% 

38,4% 

46,8% 

33,1% 

68,6% 

34,2% 

11,7% 

40,0% 

50,7% 

30,3% 

21,9% 

29,0% 

17,6% 

21,6% 

9,1% 

65,5% 

32,4% 

46,5% 

27,3% 

34,0% 

24,6% 

33,5% 

28,3% 

19,5% 

34,5% 

13,2% 

10,8% 

19,7% 

2,9% 

9,0% 

3,1% 

2,1% 

1,3% 

5,9% 

4,3% 

4,5% 

10,8% 

8,2% 

6,1% 

1,9% 

4,5% 

17,7% 

14,1% 

7,6% 

17,8% 

14,2% 

16,8% 

10,5% 

6,0% 

13,2% 

3,7% 

15,4% 

11,4% 

2,9% 

2,1% 

1,6% 

3,4% 

2,6% 

1,4% 

4,3% 

5,1% 

1,7% 

3,5% 

5,5% 

4,5% 

0,4% 

2,1% 

1,9% 

3,8% 

4,9% 

11,9% 

8,1% 

9,2% 

7,9% 

9,1% 

2,8% 

16,1% 

4,9% 

5,0% 

2,6% 

3,8% 

2,8% 

4,0% 

0,2% 

0,1% 

0,0% 

0,0% 

0,0% 

0,2% 

0,9% 

0,2% 

0,1% 

2,6% 

0,0% 

0,1% 

0,0% 

0,0% 

0,0% 

0,1% 

0,1% 

0,0% 

0,0% 

0,0% 

0,2% 

0,0% 

0,1% 

0,5% 

2,4% 

0,0% 

0,0% 

0,3% 

0,4% 

Figure 42: Share of greenhouse gas emissions by economic sector, 201261 
Note: Sectorial breakdown for 2013 emissions is not yet available. 

61   Emissions from agriculture also include emissions from fuel combustion in this sector.  

54 

 
 
                                                 
The  share  of  emissions  per  economic  sector  is  specific  to  the  particular  situation  of 
Member States in the field of energy and climate.  

3.5.2.4.Share  of  emissions  within  the  Emissions  Trading  System  in  total 

greenhouse gas emissions 

Figure 43: Share of emissions within the ETS in total GHG emissions, 2013 

In 2013, 42% of the EU emissions were covered by the EU ETS. Figure 43 displays the 
share of ETS emissions by Member State. The share of ETS emissions is the highest in 
Estonia, Malta, Bulgaria, Greece and the Czech Republic. In most of these countries, the 
industrial sector is relatively important compared to the other sectors of the economy and 
solid  fuel  (or  oil)  are  used  predominantly  in  the  electricity  mix.  Conversely,  countries 
like  Luxembourg,  Latvia,  France  and  Ireland  have  a  limited  share  of  emissions  in  the 
ETS  due  to  relatively  limited  size  of  the  industrial  sectors  in  their  economic 
specialisation. For the case of France, the predominance of nuclear in the electricity mix 
also explains the limited size of the ETS sector.   

3.5.3.  Renewable energy developments 

Renewable  energy  offers  a  cost-effective  solution  for  climate  change  mitigation.  The 
increase in renewable energy use since 2005 resulted in approximately 326 Mton of gross 
avoided  CO2  emissions  at  EU  level  in  2012,  the  equivalent  to  the  annual  emissions  of 
Spain.  Renewable  energy  and  energy  efficiency  policies  have  contributed  to  the 
decoupling of greenhouse gas emissions from economic growth.  

55 

 
 
3.5.3.1. Overall renewables developments 

Figure 44: Share of energy from renewable energy sources in gross final energy 
consumption 

Source: Eurostat 

In 2013, the combined EU share of renewable energy reached 15% in gross final energy 
consumption and the estimate for 2014 indicates a 15.3% share62. In all Member States, 
the share of RES has increased between 2005 and 2013, notably because of a decrease in 
the overall energy consumption in several Member States. The most important increases 
in the RES shares took place in Austria, Bulgaria, Italy, Sweden and Denmark. 

Nineteen  Member  States63  may  exceed,  some  even  considerably,  their  2020  renewable 
energy targets with implemented and planned renewable energy policies.  

However, seven Member States, i.e. France, Luxembourg, Malta, the Netherlands and the 
United Kingdom, and to a lesser extent Belgium and Spain need to assess whether their 
policies  and  tools  are  sufficient  and  effective  in  meeting  their  renewable  energy 
objectives. Achievement of the 2020 renewable energy targets is also not certain in the 
case of Hungary and Poland: it is only under optimistic assumptions related to the future 
development of energy demand and country-specific financing conditions that the 2020 
renewable energy targets appear achievable64.  

A decomposition analysis can be performed to better understand the determinants of an 
increase in the share of RES in gross final energy consumption. From the figure below, it 
can be seen that gross final energy consumption from renewable sources increased in all 
Member States over the 2005-2013 period. In addition, 25 Member States experienced a 
decline  of  gross  final  energy  consumption,  which  amplifies  the  increase  in  the  RES 

62   More  details  can  be 

found 

in 

the  2015  renewable  energy  progress  report.  http://eur-

lex.europa.eu/resource.html?uri=cellar:4f8722ce-1347-11e5-8817-
01aa75ed71a1.0001.02/DOC_1&format=PDF 
63  
including for example Austria, Estonia, Denmark, Germany, Italy, Lithuania, Romania or Sweden, 
64   See the 2015 Renewable energy progress report (COM(2015) 293) for more details on developments 

across Member States and sectors 

56 

 
 
                                                 
shares.  Conversely,  the  increase  in  total  gross  final  energy  consumption  observed  in 
Estonia,  Malta  and  Poland  during  this  period  somewhat  mitigated  the  effect  of  the 
increase in RES use on the RES share65. 

Figure 45: Member States’ growth in total gross final energy consumption (total; 
RES) and RES Shares between 2005 and 201366 

Source: Adapted from EEA Report No 4/2015 Trends and projections in Europe 2015 Tracking 
progress towards Europe's climate and energy targets for 2020, calculated from Eurostat 

65   See  EEA  Report  No  4/2015  Trends  and  projections  in  Europe  2015  Tracking  progress 

towards Europe's climate and energy targets for 2020 for more details 

66   Malta exhibits very strong growth in renewable gross final energy consumption (3 271 %). Due to its 

absolute small size however, the data may not be fully representative and is thus omitted above. 

57 

 
 
                                                 
3.5.3.2.Renewable energy in electricity 

Figure 46: Share of energy from renewable energy sources in electricity generation 

Source: Eurostat 

In 2013, more than 25% of electricity was generated from renewable energy sources, a 
more  than  10  percentage  point  increase  since  2005.  All  Member  States  have  seen  the 
share of RES in electricity increase since 2005, ranging from 1 percentage point to more 
than 20 percentage points.  

Total  installed  capacity  of  renewable  electricity  generation  has  increased  significantly 
over  the  last  20  years,  in  particular  through  rapid  growth  of  installed  wind  and  PV 
capacity.  To  put  into  perspective,  while  electricity  generation  capacity  from  renewable 
sources in 2013 reached around 380 GW, the existing electricity generation capacity of 
fossil fuel plants in the EU was around 450 GW in 2013. Preliminary data indicate that 
the EU managed to set a new wind energy capacity installation record in 2014 with 12.4 
GW newly installed capacity. By the end of 2014, the EU wind energy fleet had passed 
the 130 GW mark The total capacity of installed offshore wind power reached 9.2 GW at 
the end of 2014, compared to 7 GW at the end of 2013)67.  

In  the  electricity  sector,  technology  deployment  and  production  rates  in  2013  were 
generally in line with  the  trajectory  foreseen  in the National Renewable Energy  Action 
Plans  (NREAPs)68.  15  Member  States  (Belgium,  Bulgaria,  Germany,  Estonia,  Spain, 
Croatia, Italy, Cyprus, Latvia, Lithuania, the Netherlands, Romania, Finland, Sweden and 
United  Kingdom)  were  above  their  indicative  trajectory  for  renewable  electricity    in 
2013.  

67   Wind Energy Barometer, Eurobserv'ER (2015) 
68   Data  sources:  2013  Eurostat  data  are  used  to  assess  Member  State  and  sectorial  performance,  while 
renewable  energy  technology  assessments  are  based  on  provisional  2013  data  from  Eurobserv'ER 
2014 

58 

 
 
                                                 
Hydropower plants generate by far the largest share of electricity from renewable energy 
sources,  although  their  share  of  the  total  renewable  electricity  generation  shrank  from 
94% to 43% over the 1990-2013 period.  

Wind power generation more than tripled over the period 2005-2014 and it has become 
the  second  largest  contributor  to  renewable  electricity,  taking  over  biomass69.  Solar 
electricity  generation  also  increased  rapidly  and  in  2013  accounted  for  10%  of  all 
renewable  electricity,  the  third  most  important  contributor  to  the  electricity  production 
from renewable sources70.  

Solid  renewables  (wood  and  other solid  biomass,  excluding  renewable wastes)  are also 
used  in  conventional  thermal  generation  power  plants:  their  share  in  electricity  from 
renewable  sources  grew  from  3.5%  in  1990  to  9.5%  in  2013.  Bioliquids  and  biogas, 
which were negligible in 1990, reached 6.7% in 201371. 

Figure 47: EU renewable electricity generation in 1990-2013 

Source: Eurostat 

69   Eurostat statistics explained (March, 2015) 
70   Eurostat statistics explained (March, 2015)  
71   Idem. 

59 

 
 
 
                                                 
3.5.3.3. Renewable energy in heating and cooling 

Figure 48: Share of energy from renewable energy sources in heating and cooling 

Source: Eurostat 

About half of final energy consumption in the EU is used for heating and cooling. At EU 
level, the renewable energy share in the heating and cooling sector was estimated to be 
16.6% in 201472, while it was 10.3% in 2005. The share increased in all Member States, 
ranging from 1 percentage point to more than 20 percentage points. Renewable heating is 
increasingly  being  used  as  a  cost-efficient  and  secure  alternative  to  fossil  fuels  in 
Member States in district heating and at local level. 

Solid biomass was still the largest contributor to renewable heat production in 2013 with 
73 Mtoe of renewable heat produced73.  In 2014, the European Commission published a 
report  on  the  sustainability  of  solid  and  gaseous  biomass  for  heat  and  electricity 
generation. Roughly one sixth of the biomass heat generation is based on grid connected 
applications,  while  the  majority  is  still  based  on  decentralised  units.  In  absolute  terms, 
decentralised  heat  generation  from  biomass  also  grows  faster  than  biomass  heat 
generation  from  grid  connected  systems.  The  largest  biomass  heat  consumers  were 
France with 10.2 Mtoe and Germany with 8 Mtoe74. Heat pumps contributed 7.4 Mtoe to 
renewable energy heat and cooling production in 2013. In absolute figures, Italy stands 
out as a leader in heat pump use with 2.5 Mtoe, followed by France with 1.6 Mtoe and 
Sweden  with  1.2  Mtoe  production75.  Biogas  plays  a  significantly  smaller  role  among 
heating and cooling technologies. In 2013, 2.6 Mtoe of heat was produced from biogas.  

Solar thermal heat production, with 1.9 Mtoe in 201376, still contributes relatively little to 
the renewable energy use in the heating and cooling sector.  

3.5.3.4. Renewable energy in transport 

Renewable energy use in transport has generally been lagging in most countries, except 
in Sweden, Finland, Austria, France and Germany. At EU level, the share in  2013 was 

72   ECOFYS, 2014 
73   Eurobserv'ER 2014 
74   Eurobserv'ER 2014 
75   2013 EUROSTAT.  
76   2013 Eurostat 

60 

 
 
                                                 
5.4%.  Sweden  is  the  only  Member  State  that  has  already  reached  its  renewable  energy 
target  for  transport  with  the  2013  share  reaching  16.7%,  well  above  the  binding  10% 
target for 202077.  

Biodiesel remains the most widely used form of renewable energy in transport with 10.3 
Mtoe in 2013, followed by bioethanol with 2.7 Mtoe78. France, Germany and Italy are the 
top 3 biodiesel markets in the EU with 2.3 Mtoe, 1.9 Mtoe and 1.2 Mtoe consumption in 
201379. Also for bioethanol the largest consumption was reported by Germany with 758 
ktoe, followed by France with 392 ktoe and Denmark with 387 ktoe. 

A consumption of 1484 ktoe of renewable electricity in transport was reported for 2013, 
the vast majority  of it being consumed in  non-road transport modes.  In absolute terms, 
France  was  the  biggest  consumer  with  239  ktoe,  followed  by  Italy  with  218  ktoe  and 
Germany with 215 ktoe80. 

Figure 49: Share of energy from renewable energy sources in transport 

Source: Eurostat 

Currently,  the  vast  majority  of  biofuels  is  produced  from  food  crops.  The  share  of 
advanced biofuels based on cellulosic material or wastes and residues is still small, due 
to  technological  challenges,  feedstock  availability,  financing  and  political  uncertainty. 
Given  the  move  towards  a  low  carbon  electricity  mix,  both  electrification  of  transport 
and  the  use  of  hydrogen  produced  from  renewables    could  contribute  to  the 
decarbonisation of the transport sector. Around 38 000 electric vehicles were registered 
in the EU in 2014, up by 57% compared to 2013. The largest number of registrations was 
recorded  in France (more than 10 700 vehicles), Germany (around 8 500 vehicles) and 

77   Eurostat   
78   Eurostat 
79   Eurostat. 
80   Eurostat 

61 

 
 
                                                 
the  UK  (around  6  700  vehicles).  Nevertheless,  electric  vehicles  continue  to  constitute 
only a very small fraction of new registrations (0.3 %)81. 

3.5.3.5.Renewable energy deployment at local level 

Deployment of distributed generation and self-consumption at household level is mostly 
driven by solar photo-voltaic (PV).  

Figure 50: Residential PV capacity, 2014 

Source: Bloomberg New Energy Finance 

At local level, in October 2015, over 6500 cities representing over 40% of EU population 
are  committed  to  fighting  climate  change  and  promoting  renewable  energy  under  the 
Covenant  of  Mayors82  initiative.  More  than  3000  municipalities  have  committed 
themselves  to  implement  sustainable  energy  action  plans,  already  covering  9%  of  their 
energy needs with locally produced energy, of which at least 19% were renewables83  

3.6.  Research, innovation and competitiveness 

3.6.1.  Research and innovation 

The analysis below focuses first on collected information on investments in research and 
development, before specifically considering innovation performance.  

3.6.1.1. Investments in R&D 

As mentioned in Section 2.2.6, the analysis of research and innovation efforts in the field 
of  sustainable  energy  and  other  low-carbon  technologies  is  made  difficult  by  a  certain 
lack of data, in particular when looking for recent trends and by the need to interpret with 
caution  the  situation  across  countries,  given  differences  in  size,  population,  economic 
development  and  national  Smart  Specialisation  Strategies.  Taking  account  of  these 
methodological limitations, this section highlights:  

81   Source: EEA http://www.eea.europa.eu/highlights/new-cars2019-co2-emissions-well 

82   Source : COMO website 
83   JRC,  The  Covenant  of  Mayors  in  Figures  and  Performance  Indicators,  2015  -  Based  on  BEIs, 

excluding CHP, DH and not specified 

62 

 
 
 
                                                 
  The degree of specialisation of public R&D investments in the fields of energy 
and  environment  across  Member  States,  as  compared  to  other  sectors  of  public 
R&D investments.  

  The public R&D intensity in the energy sector, that is, public R&D investments 

in the energy sector compared to GDP. 

  Within  the  energy  field,  the  degree  of  specialisation  across  areas  (e.g.  energy 
efficiency,  renewables,  nuclear)  across  some  Member  States  and  at  EU  level, 
compared to trading partners.  

  Some  information  on  absolute  corporate  R&D  investments  in  the  energy  field 
across  Member  States,  as  well  as  the  relative  share  of  public  vs.  private 
investments.  

(a)  Public support to R&D 

This  first  element  to  consider  is  the  concentration  of  EU  Member  States'  and  some 
trading  partners'  public  R&D  support  towards  energy  and  environment,  as  opposed  to 
other research fields. 

Figure 51: Share of energy and environment in total public civil R&D spending 

Source: Eurostat 

Overall,  there  is  limited  concentration  of  public  support  to  R&D  in  the  field  of  energy 
and environment (7.1% at EU level). However, this share has slightly increased over the 
2007-2013 period, even if there are large discrepancies across Member States in terms of 
trends. Bulgaria, Cyprus, Croatia, Ireland and Malta are the countries showing the lowest 
share  of  public  support  to  R&D  in  the  field  of  energy  and  environment.  Conversely, 
Finland,  France,  Hungary,  Latvia  and  Romania  concentrate  a  relatively  high  share  of 
public  R&D  budget  to  these  issues.  In  terms  of  growth  rates,  Slovenia, Poland  and  the 
United  Kingdom  register  the  highest  increases  between  2007  and  2013  while  Bulgaria 
and Malta show important declining trends. 

Another dimension to  assess relates to the public R&D intensity in the field  of energy, 
that is, public support to R&D in energy divided by GDP. This analysis is based on  data 
from  the  International  Energy  Agency  and  therefore  does  not  cover  all  EU  Member 

63 

 
 
States84. Overall, EU available data shows that public R&D intensity support to energy in 
Europe  falls  between  R&D  intensity  in  the  US  and  in  Japan.  Between  Member  States, 
contrasted situations emerge, with relatively strong support in Denmark, Finland, France, 
Hungary  or  Luxembourg,  while  support  intensity  seems  much  lower  in  countries  like 
Czech Republic, Estonia, Portugal, Ireland or Spain.  

Figure 52: Public R&D intensity support to energy (R&D budget/ GDP, 2011-2013)  

Source: IEA available EU MS and other countries] 

In addition, it is possible to look at the split of public R&D investments in various energy 
fields. In 2013, EU available data shows that nuclear energy was energy field receiving 
the  highest  share  of  public  investment  in  energy  R&D,  closely  followed  by  energy 
efficiency and renewable energy. The share of public support to renewable energy R&D 
increased from 19% in 2005 to 25% in 2013. The share of public R&D support to nuclear 
decreased  by  12  percentage  points  since  2005,  when  it  represented  about  39%  of  total 
public support to energy.  

84  
because of a different understanding of what should be included in the R&D and demonstration reports. 

The  quality  of  the  data  reported  with  this  indicator  might  vary  across  countries,  for  instance 

64 

 
 
                                                 
 
Figure 53: Split of public support to R&D in various energy fields - EU available 
data (2005 – 2013)  

Source: IEA 

Regarding the EU's trading partners, the focus in Canada and Norway is very much on 
fossil fuels, which can include also a significant share for CCS-related research, while in 
Japan,  it  was  –  at  least  until  2011  –  on  nuclear.  Korea  shows  a  very  balanced  public 
support to R&D in various energy fields. The situation is also quite balanced in the US, 
with cross-cutting technologies research receiving the highest share.  

65 

 
 
Figure 54: Split in public R&D support in various energy fields - international 
comparison, 2011 

Source: IEA 

(b) Corporate R&D in low-carbon technologies 

In total, EUR 8.8 billion have been invested in 2011 in R&D from public (European and 
national level) and corporate sources in  nine energy related technologies. Among those 
investments,  the  total  investment  in  renewable  energy  technologies  was  around  €  3,8 
billion,  with  around  €  1  billion  from  national  funding85,  €  2,6  billion  from  corporate 
funding and € 146 million from EU funding86. 

The figures below illustrate the level of investments from the corporate sector in different 
energy  technologies  and  across  countries.  In  the  EU,  Germany,  France,  Denmark,  the 
United  Kingdom  and  Spain  are  the  Member  States  in  which  corporate  R&D  spending 
was the highest.  

85 As a comparison, the US national funding for RES research and innovation was € 668 mi 
86 Source : JRC, capacities map, 2015. Figure for 2011 (latest data available) 

66 

 
 
 
 
                                                 
Figure 55: Absolute investment from the corporate sector in R&D per technology 
and country for 2011. 

Source: JRC Capacities Map 

In the EU, in 2011, energy storage, wind and bioenergy received the biggest investment 
from  corporate  sources,  both  in  absolute  and  relative  terms.  Conversely,  areas  like 
nuclear, CCS, or  electricity  grids  show a  more than 50%  contribution from public (EU 
and national) sources.  

Figure 56: Absolute figures and relative contribution of national, EU and corporate 
funding to R&D for the nine technologies examined in the year 2011. 

Source: JRC Capacities Map 

3.6.1.2.Innovation trends in low-carbon and sustainable energy sectors 

In  addition to R&D investments, it is  also important to  monitor  developments at other, 
more downstream phases of the innovation process. Here again, data constraints do not 
yet  allow  for  a  comprehensive  assessment  of  all  relevant  dimensions.  However,  it  is 
possible to monitor innovation activities and their diffusion by looking at:  

  Developments  in  low-carbon  technology,  and  more  specifically  renewable 

energy, patent applications across Member States and trading partners; 

  Global trends in energy innovation, by main world region; 

67 

 
 
 
  Recent and projected trends,  at EU level, in  power generation investment costs; 

and 

  Global trends in renewable energy investments. 

First,  regarding  patent  applications,  EU  levels  fare  well  compared  to  major  trading 
partners, standing above US or Canada levels but below Japan or South Korea.  

Figure 57: Number of low-carbon technology patent applications, per million 
inhabitants, 201187, 

Source: Eurostat 

Austria,  Germany,  Denmark,  Finland  and  the  Netherlands  are  the  countries  with  the 
highest  number  of  patent  applications  in  low-carbon  technologies,  per  million 
inhabitants. Conversely, Bulgaria, Greece, Croatia, Romania and Slovakia show very low 
numbers of patents applications.  

Beyond  patent  applications,  European  companies  today  hold  40%  of  all  patents  for 
renewable technologies. The EU is leading in key sectors such as: 

  Wind turbine  manufacture, with  78% of all  wind turbines installed in  the world 

except China produced by European manufacturers88 

  Offshore  wind,  with  92%  of  the  global  offshore  wind  capacity  installed  in 

Europe; 

  Concentrated Solar Panels, with EU entities involved in all projects developed so 

far worldwide; 

  and  pioneering  the  integration  of  large  shares  of  renewables  through  smart  grid 

technologies, storage systems or demand response. 

87   Denmark  numbers  are  actually  much  higher  than  suggested  by  the  graph,  being  at  48  patents  per 

million inhabitants.  

88   2014 JRC wind status report 

68 

 
 
 
 
 
 
                                                 
Second,  in  order  to  obtain  information  on  the  trends  concerning  global  energy 
innovation, the geographical distribution of the main academic and industrial players in 
100 energy priority areas was identified, as presented in the relevant KIC report89. 

Figure 58: Geographic distribution of the top 10 most prominent industry and 
academic players and the frequency that they appear in 100 energy priorities 

Source: KIC InnoEnergy & Questel Consulting 

Each  figure  displays  the  number  of  times  a  country  is  represented  by  a  top  innovative 
player  covering  all  priorities.  80%  of  innovative  leaders  in  industry  come  from  Japan, 
Europe  and  North  America.  European  industrial  and  academic  innovative  players  are 
well  positioned  overall  in  the  global  energy  landscape  (coming  second  in  both  cases 
behind  Japan  and  China  respectively).  We  observe  a  strong  presence  of  Chinese 
academic players in all 100 energy priorities, with a 40% frequency of occurrence in the 
top 10 rankings.  3 energy thematic fields regroup 70% of the top 30 academic players: 
clean coal technologies, renewable energy convergence and solar PV. None of the top 30 
innovative players appear to be wind energy; this may be because of a lack of appropriate 
data.  On  the  other  hand,  Chinese  industries  are  almost  absent  from  the  rankings 
concerning the industrial players.  

89   KIC InnoEnergy & Questel Consulting, ''Top 10 Energy Innovators in 100 Energy Priorities: A unique 

report mapping industrial and academic players in global competition'', January 2015 

69 

 
 
                                                 
Third,  the  following  graph  presents  a  comparison  of  the  levelized  costs  of  electricity 
generation  (LCOE)90  for  a  range  of  representative  technologies  across  both  a  historical 
and future time horizon. Such costs are based on economic conditions at the time of the 
investments,  and  are  projected  for  future  years  based  on  current  estimates91.  It  is 
important  to  note  that  these  cost  estimates  are  on  the  conservative  side,  as  markets  for 
new  technologies  develop  fast  and  experts  have  been  constantly  revising  their  cost 
estimates  downwards.  In  addition,  estimates  for  2030  are  based  on  current  energy  and 
climate  policy  trends  and  meeting  2020  targets.  LCOEs  are  also  influenced  by  the 
economic lifetime  of the project, the  number of  full load operating hours  per year, and 
the net efficiency of the power generation technology.  

Figure 59: Evolution of levelized costs of electricity generation broken down by key 
cost components for selected representative technologies for the past, present and 
future92 

Source: European Commission services calculations, based on NTUA 

In 2005, the comparative advantage for traditional fossil fuel technologies was evident, 
as  the  LCOE  for  such  technologies  was  significantly  lower  than  those  for  renewable 
electricity  technologies.  However,  such  cost  disparities  have  decreased  considerably  in 
favour of new low-carbon technologies in the last ten years. Policy-induced technological 
progress has led to a rapid decrease in investment costs for solar and wind technologies. 
For instance, the LCOE for solar PV decreased by 71% (Northern Europe) and by 66% 
(Southern  Europe)  over  the  last  ten  years,  something  unexpected  even  five  years  ago. 
Wind investment costs are estimated to have slightly increased between 2005 and 2015, 
mostly  due  to  additional  raw  material  costs  that  came  with  the  development  of  more 
advanced,  taller  and  more  efficient  and  powerful  wind  turbines.  Nonetheless,  wind 
technology costs are projected to decrease in the next 15 years.  

90   LCOE estimates are calculated by accounting for the power generation technology’s expected lifetime 
costs  (including  e.g.  construction,  fuel,  maintenance,  carbon  prices),  which  are  then  divided  by  the 
technology’s  lifetime  expected  power  output  (kWh).  All  cost  and  benefit  estimates  are  discounted  to 
account for the private time-value of money using the same WACC (weighted average capital cost) of 
8.5%.  

91   CO2  prices  used  for  the  estimates  of  the  carbon  costs  are  those  available  in  the  2013  EU  energy, 

transport and GHG emissions trends to 2050 

92   In 2005, the LCOE for solar PV in Northern Europe was more than 500 €2013/MWh-net. However, 
the Y-axis in the chart above has been set to a maximum of 250€/MWh-net to better visualize changes 
in cost estimates for the rest of technologies and years 
70 

 
 
                                                 
Finally,  the  analysis  below  is  an  attempt  at  comparing  energy  investment  across  main 
regions.  Figure  60  compares  renewable  energy  investments  across  world  regions  from 
2004 to 2014. It can be seen that up to 2012, Europe represented the main region in terms 
of renewable energy investments. However, since 2013, China is the area with the most 
important investments in renewable energy.   

Figure 60: Global trends in renewable energy investments, by region 

Source: IRENA 

When  observing  these  trends  per  sector,  solar  and  wind  remain  the  most  important 
contributors to renewable energy investments at global level.  

Figure 61: Global trends in renewable energy investments, by sector 

Source: IRENA 

3.6.2.  Energy prices and costs in a global perspective 

71 

 
 
 
 
 
3.6.2.1.EU and major trading partners energy price developments 

(a)  Wholesale electricity prices 

The Energy Union Strategy noted that the competitiveness of the European economy is 
affected by energy price and cost differentials across the world, especially in the case of 
energy intensive industries exposed to intensive international trade. From this perspective 
it is worthwhile to compare European electricity prices against some of the main global 
trading partners of the EU. 

Regional  wholesale  electricity  prices  in  the  US  were  generally  below  the  European 
power benchmark, the PEP index. However, US power prices are more volatile than their 
peers in Europe, primarily owing to dependence on gas-fired generation as gas prices are 
sensitive  to  changes  in  weather  conditions.  Low  gas  prices  in  the  US  tended  to  partly 
squeeze  out coal from the local  power generation mix  during the last few years, which 
also  impacted  the  global  coal  market,  assuring  export  opportunities  for  US  coal  and 
decreasing global coal prices, resulting in decreasing coal-fired power generation costs in 
many countries, especially in Europe. 

Looking at Japan, over the last few years, wholesale electricity prices have consistently 
been  higher  than  in  the  EU.  The  price  differential  to  the  EU  power  prices  has  become 
even greater in consequence of the Fukushima nuclear power plant  accident, as nuclear 
generation has been replaced by gas-fired plants. However, during the last few months as 
LNG  import  prices  became  lower,  power  generation  costs  also  decreased  and  it  had 
beneficial impact on wholesale electricity prices in Japan. By the end of the first half of 
2015,  the  Japanese  wholesale  electricity  price  levels  returned  to  the  pre-Fukushima 
ranges. 

In  Australia,  the  average  wholesale  electricity  price  level  used  to  be  lower  by  a 
magnitude  of  two-to-three  compared  to  the  EU  average;  in  the  first  half  of  2015  the 
average price level was 40% below the PEP index in the EU. Wholesale electricity prices 
in  the  US  and  Australia  have  been  of  comparable  magnitude  during  most  of  the  time 
between 2010 and 2015, being significantly lower than in Japan and the EU. 

Figure 62: Wholesale electricity prices in the US, Japan, in comparison to the 
European composite average (PEP) 

72 

 
 
Source: Platts 

(b) Wholesale gas prices 

Figure  63  shows  an  international  comparison  of  wholesale  gas  prices.  Over  2014, 
wholesale  prices  decreased  in  all  regions  and  the  trend  continued  in  early  2015.  Since 
March 2015, prices have remained relatively stable.  

The  Fukushima  accident  in  March  2011  and  the  ensuing  increase  of  Japanese  gas 
demand  set  LNG  prices  on  an  upward  trajectory.  In  2014,  however,  LNG  prices 
showcased  a  big  decrease,  with  Japanese  landed  prices  decreasing  by  65%  between 
February 2014 and February 2015. LNG prices started to fall at the end of the 2013/2014 
winter, mainly because of weak demand in Asia, the biggest LNG market, coupled with 
the commissioning of the Papua New Guinea LNG plant. Unlike in previous years, the 
2014/2015  winter  failed  to  reverse  the  downward  trend  and  after  a  rebound  in 
September-October 2014 prices continued to fall.  

By  February  2015,  Asian  spot  LNG  prices  were  on  a  par  with  the  price  at  NBP,  the 
United Kingdom gas hub. This was a major change compared to previous years when the 
LNG  price  had  a  premium  of  3-10  USD/mmbtu  over  the  NBP  price.  During  summer 
2015, Asian LNG prices slightly increased and in July traded 1 USD/mmbtu above the 
NBP price. 

European prices significantly decreased in the first half of 2014. After a partial recovery 
in the autumn months, prices remained relatively stable in spite of the onset of winter. In 
the first half of 2015, NBP averaged about 7 USD/mmbtu (22 €/MWh). German border 
prices remained above NBP for most of 2014, with the premium exceeding 5 EUR/MWh 
in June, but this premium has practically disappeared in the first half of 2015. 

Since 2010, with the onset of the shale gas boom, US gas prices have been consistently 
lower than European and Asian prices. The average monthly Henry Hub price remained 
below 3 USD/mmbtu in the first half of 2015, the lowest level since mid-2012. While the 
fall of the oil price cut the production of associated gas from oil shale plays, the resulting 
cost deflation helps the gas producers as they focus on gas-rich fields. 

International gas prices have significantly converged in 2014 and the beginning of 2015. 
The  ratio  of  the  Japanese  LNG  price  and  US  Henry  Hub  has  fallen  to  2.5  in  February 
while  in  2013  this  indicator  was  in  the  4-5  range.  The  NBP/Henry  Hub  ratio  slightly 
increased in early 2015 (to about  2.5)  but remained below 2012-2013 levels.  The price 
convergence  was  partly  driven  by  exchange  rate  developments:  the  Euro  weakened  by 
12%  compared  to  the  US  dollar  during  2014  and  by  a  further  11%  in  the  first  three 
months of 2015, thereby lowering European prices expressed in dollars. 

73 

 
Figure 63: International comparison of wholesale gas prices 

Sources: Platts, Thomson-Reuters, BAFA 

(c)  Retail prices paid by industrial users 

Despite the importance and utility to look at wholesale prices as a proxy for prices paid 
by  large  industrial  users,  it  is  also  essential  when  studying  economic  and  industrial 
competitiveness to consider the final price paid by end consumers. Therefore, Figure 64 
and Figure 65 compare final electricity and gas prices paid by industrial users.  

There  are  large  discrepancies  in  the  prices  paid  by  industrial  users  within  countries, 
depending  on  the  consumption  band  considered.  At  the  same  time,  averages  for  the 
whole  industrial  sector  hide  a  huge  variation  of  situations  across  the  wide  spectrum  of 
industrial sectors and sub-sectors. Besides, methodological limitations make international 
comparisons difficult. As such, the information presented below can only be indicative at 
this stage. It still shows that, in line with comparisons made on wholesale markets, prices 
paid by industrial users in the US are lower than in most EU Member States. However, 
EU prices fare better when compared to Japan.  

In  order  to  address  some  of  the  identified  methodological  limitations,  the  European 
Commission  will  publish  in  2016  a  new  energy  prices  and  costs  report  to  provide  an 
analysis  of  the  cost  of  energy,  including  network  costs,  taxes  and  levies.  It  will  also 
perform  international  comparisons,  trying  to  overcome  some  of  the  identified  data 
limitations  when  trying  to  compare  EU  energy  prices  with  the  ones  of  key  trading 
partners.  

In  addition  to  this  strand  of  work,  additional  information  on  trends  in  terms  of  new 
investments,  installed  capacity,  used  capacity  and  market  shares  could  be  added,  when 
available,  to  more  broadly  assess  the  EU  competitiveness  strengths  and  weaknesses,  in 
particular for key energy intensive industries.   

74 

 
 
 
Figure 64: Electricity end-user prices paid by industrial customers (without VAT 
and rec. taxes, second half of 2014) 

Source: European Commission services calculations, based on Eurostat and IEA 

Figure 65: Gas end-user prices paid by industrial customers (without VAT and rec. 
taxes, second half of 2014) 

Source: European Commission services calculations, based on Eurostat and IEA 

3.6.2.2.EU and major trading partners energy cost developments 

Looking  at  prices  only  is  not  sufficient  to  assess  competitiveness  considerations,  as 
energy  efficiency  may  have  an  impact  on  the  energy  costs  faced  by  the  manufacturing 
sector. Therefore, the emphasis is put below on an indicator – the real unit energy costs 
(RUEC)  –  combining  energy  prices  and  energy  intensity  to  assess  the  significance  of 

75 

 
 
 
energy costs in the manufacturing sector93. Results are presented as percentage of value 
added.  

Compared to its main economic partners, the EU manufacturing industry had in 2011 the 
second  lowest  RUEC94  in  terms  of  value  added.  China,  Russia  and  other  major 
economies  such  as  Brazil  and  Indonesia  show  substantially  higher  values  than  the  EU. 
The good performances of Japan and the EU are mostly explained by the low levels of 
energy intensity of their manufacturing sector which has helped to compensate the high 
real energy prices. 

In  the  EU,  the  evolution  of  RUEC  for  Member  States  between  2000  and  2009  is  in 
general characterised by an upward trend. The heterogeneity in levels is rather wide. For 
some Member States the RUECs are sensibly lower than the EU average while others on 
the contrary display levels that are significantly higher, not only than the average but also 
than the levels of their main international competitors.  

In  2011,  the  Member  States  for  which  the  RUEC  were  the  highest  were  Bulgaria, 
Lithuania and to a lesser extent Slovakia, Poland and Latvia. This can be explained by a 
certain  concentration  of  the  industrial  sector  in  energy  intensive  industries  for  some  of 
these  countries.  Over  the  2000-2011  period,  real  unit  energy  costs  increased  in  most 
Member  States  by  a  very  significant  amount  and  by  45%  at  EU  level. This  means  that 
during  the  years  2000s,  despite  continued  efficiency  improvements,  specialization  in 
higher-value  added  productions  and  potentially  because  of  more  limited  economically 
and  technically-feasible  options  than  in  the  past,  the  energy  intensity  improvements  in 
the  EU's  manufacturing  sector  were  not  sufficient  to  compensate  for  the  increase  in 
energy  prices.  Having  said  this,  the  EU  manufacturing  sector  has  enjoyed  some  of  the 
lowest Real Unit Energy Costs (lower RUEC than in Russia or China, at similar levels 
than in Japan, but however now higher than in the US)95.  

Figure 66: Real unit energy costs (% of value added) in the manufacturing sector 
(excl. refining) 

93   See  http://ec.europa.eu/economy_finance/publications/european_economy/2014/pdf/ee1_en.pdf  for  a 

more comprehensive assessment 

94   Large  differences  of  real  unit  energy  costs  are  explained  by  refineries.  For  this  reason,  excluding 
refineries  from  the  real  unit  energy  costs  is  better  to  analysis  the  energy  cost  competitiveness  of 
manufacturing sectors.  

95   See  http://ec.europa.eu/economy_finance/publications/european_economy/2014/pdf/ee1_en.pdf  for  a 

more comprehensive assessment 

76 

 
 
                                                 
Source: European Commission calculations, based on WIOD 

Figure 67: Contribution to annual growth rate 2000-2009 – Manufacturing excl. 
refining) 

Source: European Commission calculations, based on WIOD 

3.7.  Cohesion Policy investments supporting the Energy Union 

EU Cohesion Policy makes a key contribution for delivering the Energy Union objectives 
on  the  ground,  including  significant  financial  allocations  from  the  European  Regional 
Development  Fund  (ERDF)  and  the  Cohesion  Fund  (CF),  totalling  EUR  68.9  billion, 
which  will  be  complemented  by  national  public  and  private  co-financing,  over  2014-
2020 for investments related to all five dimensions of the Energy Union: 

  EUR 13.3 billion for energy efficiency in public and residential buildings; 
  EUR 3.4 billion for energy efficiency in enterprises, with a focus on SMEs; 
  EUR 1.7 billion for high-efficiency cogeneration; 
  EUR 4.9 billion for renewable energy; 

77 

 
 
  EUR  2.6  billion  from  the  ERDF  currently  allocated  to  research  and  innovation 
and adoption of low-carbon technologies, with possible increases in the future in 
line with evolving smart specialisation strategies. 

  EUR  3.4  billion  for  smart  energy  infrastructure,  including  EUR  1.1  billion  for 
smart distribution grids and EUR 2.3 billion for infrastructure for smart electricity 
and  gas  distribution,  storage  and  transmission  systems,  the  latter  mainly  in  less 
developed regions (six Member States currently foresee to use ERDF support for 
energy infrastructure investments of this kind: Bulgaria, Czech Republic, Greece, 
Lithuania, Poland, Romania). 

  EUR  39.7 billion  for  supporting 

towards  an  energy-efficient, 
decarbonised  transport  sector,  including  EUR  16.0  billion  for  sustainable  urban 
mobility (clean urban transport infrastructure, intelligent transport systems, cycle 
tracks and  footpaths),  and EUR 23.7 billion for  other  low-carbon transport (e.g. 
rail, seaports and inland waterways). 

the  move 

Figure 68 and Figure 69 below illustrates how different Energy Union-related measures 
are prioritized within the ERDF and CF allocations by the Member States. 

R&I in low-carbon
Smart energy infrastructure
Cogeneration
Renewabe Energy
EE in enterprises
EE in buildings

16%

12%

8%

4%

0%

T
A

E
B

G
B

Y
C

Z
C

E
D

K
D

E
E

S
E

I
F

R
F

R
G

R
H

U I
E
H

*
T
I

T
L

U
L

V
L

T
M

L
N

L
P

T
P

O
R

I

E S
S

K
S

*
C
T

K
U

Figure 68: Share of the national ERDF and CF allocations to energy-related Energy 
Union areas out of the total Cohesion Policy allocations for the 2014-2020 period 

* – not all operational programmes adopted 
TC – territorial cooperation 

Source: European Commission calculations, based on operational programmes (data as 
of November 2015) 

78 

 
 
18%

15%

12%

9%

6%

3%

0%

Other

Rail

Urban mobility

T
A

E
B

G
B

Y
C

Z
C

E
D

K
D

E
E

S
E

I
F

R
F

R
G

R
H

U I
E
H

*
T
I

T
L

U
L

V
L

T
M

L
N

L
P

T
P

O
R

I

E S
S

K
S

*
C
T

K
U

Figure 69: Share of the national ERDF and CF allocations to transport-related 
Energy Union areas out of the total Cohesion Policy allocations for the 2014-2020 
period 

* – not all operational programmes adopted 
TC – territorial cooperation 

Source: European Commission calculations, based on operational programmes (data as 
of November 2015) 

The figures also show that Energy Union investments receives a significant part – 20% 
on average – of the Cohesion Policy funding – ranging in the individual Member States 
from about 9% to 26%. 

Following  the  adoption  of  the  programmes,  all  efforts  must  now  be  focused  on  their 
implementation. The development and implementation of high quality projects is crucial 
to  the  success  in  delivering  on  the  policy  objectives.  In  order  to  assess  such 
developments, from 2016 onwards, progress in Cohesion Policy investments supporting 
the  Energy  Union  should  be  monitored,  e.g.  by  dividing  the  amount  of  ERDF  and  CF 
allocations allocated to specific projects by the end of each year, or a certain cut-off date, 
by  the  total  amount  of  planned  allocations  2014-2020  for  ERDF  and  CF  investments 
supporting  the  Energy  Union  in  a  given  country,  i.e.  the  project  selection  rate.  It  can 
provide  information  regarding  progress  in  Cohesion  Policy  investments  supporting  the 
Energy Union in a given country, controlling for the size of the allocation. 

79 

 
 
 
 
4.  ANNEX:  

4.1. 

Scoreboard of selected indicators 

The tables below present the indicator values per Member State and at EU level for the 
selected  indicators  in  the  scoreboard.  Highlighted  in  green  (respectively  red)  are  the 
values of the top 5 (respectively bottom 5) Member States for a specific indicator.  

80 

 
 
 
 
IndicatorsS1 - Net import dependencyS2 - Aggregated supplier concentration indexS3 - N-1 rule for gas infrastructureS4- Electricity interconnection capacityS5 - Market concentration index - power generationS6 - Market concentration index - wholesale gas supplyS7 - Wholesale electricity pricesS8- Wholesale gas pricesS9 -Annual switching rates - electricity retail marketsS10 - Annual switching rates - gas retail marketsS11 - Energy poverty indexSourceEurostatCommission services, based on EurostatIHS , Gas coordination groupENSTO-EPlattsACER/CEEREuropean CommissionEuropean CommissionACER/CEERACER/CEERCommission services, based on EurostatUnitnet imports - % of gross inland consumption0-100 (100 means maximum concentration)% of total demand that can be satisfied if disruption of largest gas infrastructure% of installed capacity0-10000 (10000 means a single supplier)0-10000 (10000 means a single supplier)EURO/MWhEURO/MWh% of total consumers% of total consumers% of householdsYear20132013201520142014201320142014201320132013EU53%114031484540.925.56.0%6.0%12%Austria62%25235%29%1793750033221.8%2.4%7%Belgium78%17247%17%39321709412114.6%12.8%10%Bulgaria38%6835%11%26507587290.0%0.0%31%Croatia52%29101%69%85680.0%0.0%18%Cyprus96%0%95560.0%0.0%28%Czech Republic28%33268%17%4008905133225.7%10.0%7%Denmark12%6141%44%2240257031216.2%9.6%8%Estonia12%73105%10%71671000038320.0%9.0%10%Finland49%7496%30%6453124036287.5%0.0%5%France48%8131%10%4294518135262.0%6.1%9%Germany63%16190%10%1261198233225.7%5.5%7%Greece62%32109%11%1523200058300.1%0.0%26%Hungary52%61104%29%2150598741240.0%0.0%21%Ireland89%16118%9%254131985711.3%17.7%14%Italy77%16112%7%1541121552267.6%5.5%18%Latvia56%62221%10%9097318550300.0%0.0%23%Lithuania78%10079%10%5343209350360.0%0.1%21%Luxembourg97%378%245%518510000330.1%0.0%7%Malta104%0%9310100000.0%0.0%16%Netherlands26%75162%17%11602488412113.1%13.1%7%Poland26%27104%2%1693455044241.0%0.0%12%Portugal74%2888%7%384838834226.8%0.0%23%Romania19%101%7%1460327035260.0%0.0%19%Slovakia60%73305%61%5900959534233.6%6.2%6%Slovenia47%3896%65%5403502740303.9%5.1%17%Spain70%20112%3%116410000432612.8%12.4%11%Sweden32%1614%26%27692766322410.7%0.5%4%United Kingdom46%6112%6%850950532012.3%10.2%12%Energy Security, solidarity and trustInternal energy market 
 
 
82 

IndicatorsS12 - Primary energy consumptionS13 - Primary energy intensity of the economyS14 - Final energy intensity in industryS15 - Final energy consumption per m2 in residential sectorS16 - Average CO2 emissions from new passenger carsS17 - Gap between non-ETS GHG emissions projections and target in 2020S18 - Gap between latest proxy inventory of GHG emissions in the non-ETS sector and targets S19 - RES share S20 - GHG intensity of the economyS21 - Share of energy and environment in total public civil R&D spendingS22 - Low-carbon technologies patents S23 - Real unit energy costs in manufacturing sector (excl. Refining)SourceEurostatEurostatEurostatOdyssee/MureEuropean Environment AgencyEEA, European CommissionEEA, European CommissionEurostatEurostatEurostatEurostatCommission servicesUnit2005 = 100toe/M€'10final energy consumption (industry)/GVA (industry)Final energy consumption per m2 in residential sector, climate correctedg CO2/km  (% of 2005 base year emissions)(% of 2005 base year emissions)percentage share of gross final energy consumptiontons per million euro%number per million inhabitants% of value addedYear20132013201320132013gap 20202014 proxy20132013201320112011EU91.71219716127--15%3467.1%4.313.7%Austria98104115181324%-7%33%2605.0%7.814%Belgium92127134181246%-7%8%3204.1%2.020%Bulgaria8642827210142-25%-12%19%14661.4%0.139%Croatia8916812113116-20%-19%18%6060.6%0.2Cyprus88122996139-49%-31%8%4711.0%1.217%Czech Republic9425214519135-17%-2%12%8255.3%0.414%Denmark927447141130%-9%27%2285.6%48.38%Estonia12038614725147-13%-14%26%12857.0%1.014%Finland98176243161320%0%37%33910.0%8.413%France951208511117-4%-9%14%2409.2%4.717%Germany951138220136-1%-4%12%3558.3%10.89%Greece771281379112-27%-21%15%5684.4%0.321%Hungary8321114517134-40%-27%10%5709.3%0.420%Ireland8979551312110%-7%8%3471.7%1.56%Italy861008313121-5%-13%17%2836.6%2.016%Latvia9821118427147-10%-7%37%53317.7%26%Lithuania7217811418140-18%-4%23%6185.0%48%Luxembourg901051251413321%-2%4%2774.9%2.012%Malta801173119-21%-8%4%3910.2%9%Netherlands9610511012109-5%-18%5%3122.9%5.825%Poland10623912719138-8%-2%11%10128.5%0.423%Portugal861271406112-26%-20%26%3885.6%0.512%Romania8423214428132-15%-14%24%82211.0%0.115%Slovakia9122819415135-17%-12%10%6174.0%0.320%Slovenia9619213018126-12%-14%22%5176.1%1.014%Spain841109522122-2%-12%15%3106.3%2.117%Sweden9712312618133-11%-16%52%1466.3%5.510%United Kingdom871037916128-3%-7%5%3056.3%2.59%Research, innovation and competitivenessDecarbonisation of the economyEnergy efficiency and transport 
4.2.  Definition and sources for selected indicators 

4.2.1.  Macroeconomic relevance of energy sector 

  The Value Added of the energy sector:  

o  Definition: It calculates the value added generated by the supply of 

electricity, gas, steam and air conditioning over the total value added of 
the economy. Value added refers to the value of goods and services 
produced, less the value of consumption of intermediate inputs. 

o  Source: Eurostat 

  The Employment in the energy sector  

o  Definition: the indicator covers all persons engaged in the supply of 

electricity, gas, steam and air conditioning. Employed persons are either 
employees or self-employed. 

o  Source: Eurostat 

  Employment and turnover in the renewables energy sector 

o  Definition: it measures total direct and indirect employment in the 

renewable energy sector, as well as turnover.  

o  Source: Eurobserv'er, REN21 

  Consumer Prices Index:  

o  Definition:  The Harmonised Indices of Consumer Prices (HICPs) 

indicator measures the change over a year of the prices of consumer goods 
and services acquired by households. In this exercise, it measures the 
relative contribution of energy to inflation for the countries and country 
groups for which it is produced. It is used to give an indication of the 
relative contribution of energy to price increases.  

o  Source: Eurostat 

  Energy and transport related taxes, % of GDP 

o  It measures the amount of energy transport related taxes collected in each 

Member State, divided by GDP 

o  Source: Commission services 
o  Used in: Tax Reforms in the EU Member States 2015", European 

Economy, Institutional Paper, 8/2015, 

4.2.2.  Energy Security, solidarity and trust 

 

Import dependency:  

o  Definition: Energy import dependency shows the extent to which a country 
relies upon imports in order to meet its energy needs. It is calculated based 
on the following formula also used by statistics institutes such as 
EUROSTAT: net imports / (gross inland consumption +bunkers). A 
negative dependency rate indicates a net exporter of energy, while a 
dependency rate in excess of 100% indicates that energy products have 
been stocked.  

o  Source: Eurostat database, complete energy balances, annual data  

(nrg_110a) 

 
 
o  Link: 

http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nrg_110a&lang=e
n    

  Country-specific supplier concentration index 

o  Definition: weighted average of the sum of the square of net imports of 

gas, oil, and other bituminous products divided by gross inland 
consumption) 
o  Source: Eurostat 
o  Used in: Commission Staff Working Document on an in-depth study of 

European Energy Security  

o  Link: 

http://ec.europa.eu/energy/sites/ener/files/documents/20140528_energy_s
ecurity_study_0.pdf 

  Net imports of energy products as % of GDP 

o  Source: Eurostat [tipsen10] 
o  Used as part of the auxiliary scoreboard under the macroeconomic 

imbalances procedure 

o  Link: 

http://ec.europa.eu/economy_finance/indicators/economic_reforms/eip/ind
ex.html#/auxiliary/ 

  Member States' position as regards the N-1 criteria (2015)  

o  Definition: % of total demand that can be satisfied with the remaining 
infrastructure in the event of a disruption of the single largest gas 
infrastructure. 

o  Source: Member States' Risk Assessments and Preventive Action Plans, 

JRC calculations. 

4.2.3.  A fully-integrated internal energy market 

 

Interconnection capacity for electricity in 2014  

o  Source: European Commission based on ENTSO-E scenario outlook and 

adequacy forecast 2014 

o  Used in Communication "Achieving the 10% electricity interconnection 

target" 

o  Link: http://ec.europa.eu/priorities/energy-

union/docs/interconnectors_en.pdf (page 5) 
  Market concentration index  for power generation:  

o  Definition: sum of the square of the market shares of the three largest 
companies in the electricity sector, as measured by total generation 
capacity installed.  

o  Source: European Commission calculations, based on Platts data 

  Market concentration index for wholesale gas supply:  

o  Source: ACER 
o  Used in ACER/CEER monitoring on the internal electricity and gas 

markets 

84 

 
o  Link: http://www.acer.europa.eu/Events/Launch-of-the-ACERCEER-

Monitoring-report-on-the-internal-electricity-and-gas-markets-
/Documents/Public%20data%20underlying%20the%20figures%20publish
ed%20on%20ACER%20CEER%20Annual%20Market%20Monitoring%2
0Report%202013.pdf (page 67) 

  Wholesale gas prices  

o  Definition: simple average of annual gas prices for a country, based on 
data and methodology developed in Quarterly report on European gas 
markets 

o  Source: European Commission  
o  Used in Quaterly gas markets report 
o  Link to quarterly reports: https://ec.europa.eu/energy/en/statistics/market-

analysis  
  Wholesale electricity prices:  

o  Source: European Commission  
o  Used in Quaterly gas markets report 
o  Link to quarterly reports: https://ec.europa.eu/energy/en/statistics/market-

analysis  
  Electricity switching rates:  

o  Definition: Switching rates for electricity household consumers in Europe. 
o  Source: ACER 
o  Used in ACER/CEER monitoring on the internal electricity and gas 

markets 

o  Link: http://www.acer.europa.eu/Events/Launch-of-the-ACERCEER-

Monitoring-report-on-the-internal-electricity-and-gas-markets-
/Documents/Public%20data%20underlying%20the%20figures%20publish
ed%20on%20ACER%20CEER%20Annual%20Market%20Monitoring%2
0Report%202013.pdf page 31 

  Gas switching rates:  

o  Definition: Switching rates for gas household consumers in Europe. 
o  Source: ACER 
o  Used in ACER/CEER monitoring on the internal electricity and gas 

markets 

o  Link: http://www.acer.europa.eu/Events/Launch-of-the-ACERCEER-

Monitoring-report-on-the-internal-electricity-and-gas-markets-
/Documents/Public%20data%20underlying%20the%20figures%20publish
ed%20on%20ACER%20CEER%20Annual%20Market%20Monitoring%2
0Report%202013.pdf page 32 

  Cumulative market share of main electricity retailers 

o  Source: Eurostat 
o  Link: http://ec.europa.eu/eurostat/statistics-

explained/index.php/Electricity_market_indicators  

  Cumulative market share of main gas retailers  

o  Source: Eurostat 

85 

 
o  Link: http://ec.europa.eu/eurostat/statistics-

explained/index.php/Natural_gas_market_indicators  

  Arrears on utility bills:  

o  Definition: Share of total population with arrears on utility bills  
o  Source: SILC survey [ilc_mdes07] 
o  Link: 

http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_mdes07&lan
g=en  

 

Inability to keep home adequately warm.  

o  Definition: Share of total population with inability to keep home 

adequately warm  

o  Source: SILC [ilc_mdes01]  
o  Link: 

http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_mdes01&lan
g=en  

  Dwellings with leakages and damp walls:  

o  Definition: Share of total population living in a dwelling with a leaking 
roof, damp walls, floors or foundation, or rot in window frames of floor  

o  Source: SILC [ilc_mdho01] 
o  Link: 

http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_mdho01&lan
g=en  
  Energy poverty meter:  

o  Definition: average of share of population with arrears on utility bills, 
inability to keep home adequately warm, or living in a dwelling with a 
leaking roof, damp walls, floors or foundation, or rot in window frames of 
floor.  

o  Sources: SILC: [ilc_mdes07, ilc_mdes01, and ilc_mdho01] 

  Share of energy in households' expenditures 

o  Definition: Share of energy products in households' expenditure, as used 

for the calculation of HICP 
o  Source: Eurostat [prc_hicp_inw] 

4.2.4.  Energy Efficiency and moderation of energy demand 

  Primary energy consumption:  

o  Definition: Primary energy corresponds to the Gross Inland consumption 

minus final non-energy consumption. 

o  Source:  based on EUROSTAT database and from DG ENER country 

datasheets released annually at: 
https://ec.europa.eu/energy/en/statistics/country  

  Final energy consumption:  

o  Source: Eurostat database, complete energy balances, annual data  

(nrg_110a) 

  Primary energy intensity of the economy:  

86 

 
o  Definition: Primary energy intensity gives an indication of the effectiveness 

with which primary energy consumption produces added value. It is 
defined as the ratio of Primary Energy Consumption to Gross Domestic 
Product.  

o  Sources: primary energy consumption from the above mentioned country 

datasheets. GDP data in euro, chain linked volumes 2010 from 
AMECO/ECFIN database 

  Final energy intensity in industry:  

o  Definition: final energy consumption of industry (including construction 

sector) divided by gross value added for industry, buildings and 
construction sectors 

o  Sources: final energy consumption of industry (Eurostat [tsdpc320]) , 

gross value added (chain linked volumes 2010): AMECO data base of DG 
ECFIN 
(http://ec.europa.eu/economy_finance/db_indicators/ameco/zipped_en.ht
m). 

  Final energy consumption per m2 in residential sector, at normal climate 

o  Definition (as in Odyssee): It is obtained by dividing the unit consumption 
per dwelling by the average size of dwellings (floor area). To avoid 
climatic variations, this unit consumption can also be calculated at normal 
climate, i.e. taking into account the energy consumption with climatic 
corrected using heating degree-days. 

o  Source: Odyssee project, from the online database at below link or early 

updates through direct communication between Commission and 
ENERDATA, technical coordinator of the project. 
http://www.indicators.odyssee-mure.eu/energy-efficiency-database.html  

  Average CO2 emissions of new passenger cars 

o  Source: European Environment Agency  
o  Used in: EEA publications: Monitoring CO2 emissions from passenger 
cars and vans, progress towards achieving the Kyoto and EU2020 
objectives 

o  Link: http://www.eea.europa.eu/highlights/new-cars2019-co2-emissions-

well  

4.2.5.  Decarbonisation 

  Gap between greenhouse gas emissions in the non-ETS sector and targets (GHG 

emission inventory data and projections) 

o  Source: EEA, European Commission  
o  Used in Climate Action Progress Report 
o  Link:http://ec.europa.eu/clima/policies/strategies/progress/documentation

_en.htm 

  Renewable Energy Share (total, electricity, transport, heating and cooling) 

o  Source: Eurostat  
o  Used in SHARES tool 
o  Link: http://ec.europa.eu/eurostat/web/energy/data/shares  

  Greenhouse gas intensity of the economy 

o  Source: EEA, European Commission  

87 

 
o  Used in Climate Action Progress Report; Staff Working Document. 
o  Link:http://ec.europa.eu/clima/policies/strategies/progress/documentation

_en.htm 

  Greenhouse gas emissions per capita 

o  Source: EEA, European Commission, Eurostat  
o  Used in Climate Action Progress Report; Staff Working Document. 
o  Link:http://ec.europa.eu/clima/policies/strategies/progress/documentation

_en.htm 

  Sectoral share of greenhouse gas emissions (2014 inventory) 

o  Source: EEA, European Commission,  
o  Used in Climate Action Progress Report, Staff Working Document. 
o  Link:http://ec.europa.eu/clima/policies/strategies/progress/documentation

_en.htm 

  Share of ETS in total GHG emissions 

o  Source: EEA, European Commission,  
o  Used in Climate Action Progress Report, Staff Working Document. 
o  Link:http://ec.europa.eu/clima/policies/strategies/progress/documentation

_en.htm 

4.2.6.  Research, innovation and competitiveness 

  Share of public energy and environment R&D expenditures in total public civil 

R&D:  

o  Source: Eurostat: Total GBAORD by NABS 2007 socio-economic 
objectives  [gba_nabsfin07] (energy + environment / total civil) 

o  Link: 

http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=gba_nabsfin07&l
ang=en  

  Public R&D intensity support to energy 

o  Source: International Energy Agency 
o  Link: http://www.iea.org/statistics/RDDonlinedataservice/  

  Split of public support to R&D in various energy fields 

o  Source: International Energy Agency 
o  Link: http://www.iea.org/statistics/RDDonlinedataservice/ 
  Absolute investment from the corporate sector in R&D per technology and 

country for 2011. 

o  Source: JRC Capacities Map  

  Low-carbon technologies patents applications (patents per million habitants):  
o  Source Eurostat: Energy technologies patent applications to the EPO by 

priority year [pat_ep_nrg] (Technologies or applications for mitigation or 
adaptation against climate change) 

o  Link: 

http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=pat_ep_nrg&lang
=en  

  Levelised costs of electricity 

88 

 
o  Source: Based on cost estimates received from the National Technical 

University of Athens, E3MLab. 

o  Cost estimates are calculated using similar assumptions as regards fossil 
fuel prices, weighted average capital cost (WACC), and carbon prices. 
Assumptions on the projected evolution of investment costs and fossil fuel 
prices are in line with the ones considered in the context of the on-going 
update of the EU energy, transport and greenhouse gas emission trends 
Reference scenario that uses the PRIMES model managed at the National 
Technical University of Athens, E3MLab. The carbon price trajectory is 
the one derived from the 2013 EU Reference scenario.  

o  Link: 

http://ec.europa.eu/energy/sites/ener/files/documents/trends_to_2050_upd
ate_2013.pdf   

  Share of European manufacturers in annual world RE installations (wind):  

o  Source: Joint Research Centre (JRC) of the European Commission and 

Global Wind Energy Council (GWEC) 

o  Sum of global installations by European manufacturers (JRC) divided by 

annual global installations (GWEC) 
o  Source: JRC annual wind status report 

  Energy industrial prices:  

o  Source: Eurostat and IEA 
o  Electricity prices for industrial consumers - bi-annual data (from 2007 
onwards)  [nrg_pc_205] and gas prices for industrial consumers - bi-
annual data (from 2007 onwards) [nrg_pc_203]: data reported on the 
various consumption bands;  

o  Link: 

http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nrg_pc_205&lan
g=en and 
http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nrg_pc_203&lan
g=en  

o  IEA Energy end-use prices: Electricity and gas prices for industry, Total 

prices, including excise taxes but excluding VAT  

o  Link: http://data.iea.org/ieastore/product.asp?dept_id=101&pf_id=401 

  Real Unit energy costs:  

o  Definition: This indicator measures the amount of money spent on energy 
sources needed to obtain one unit of value added for the manufacturing 
sector, excluding the refinery sector. 

o  Source: European Commission 
o  Used in Energy Economic Developments in Europe 2014 

Link:  
http://ec.europa.eu/economy_finance/publications/european_economy/201
4/pdf/ee1_en.pdf page 24  

4.2.7 Cohesion Policy investments supporting the Energy Union 

  Progress in Cohesion Policy investments supporting the Energy Union: 

89 

 
o  Definition: This indicator, to be provided from autumn 2016 onwards, 

will divide the amount of ERDF and CF allocations allocated to specific 
projects by the end of each year, or a certain cut-off date, by the total 
amount of planned allocations 2014-2020 for ERDF and CF investments 
supporting the Energy Union in a given country, i.e. the project 
selection rate. 

o  Source: European Commission, based on Annual Implementation 

Reports from Member States 

o  Link: https://cohesiondata.ec.europa.eu/ 

90