L 231/4
EN
Official Journal of the European Union
20.9.2023
(16)
Energy efficiency should be recognised as a crucial element and a priority consideration in future investment decisions on the Union’s energy infrastructure.
The energy efficiency first principle should be applied taking into consideration primarily the system efficiency approach and societal and health perspective, and paying attention to security of supply, energy system integration and the transition to climate neutrality.
Consequently, the energy efficiency first principle should help increase the efficiency of individual end-use sectors and of the whole energy system.
The application of the principle should also support investments in energy-efficient solutions contributing to the environmental objectives of Regulation (EU) 2020/852 of the European Parliament and of the Council (6).
(17)
The energy efficiency first principle is provided for in Regulation (EU) 2018/1999 of the European Parliament and of the Council (7) and is at the core of the EU Strategy for Energy System Integration established in the Commission’s communication of 8 July 2022.
While the principle is based on cost-effectiveness, its application has wider implications from the societal perspective.
Those implications can vary depending on the circumstances and should be carefully evaluated through robust cost-benefit analysis methodologies that take into account the multiple benefits of energy efficiency.
The Commission has prepared dedicated guidelines for the operation and application of the principle, by proposing specific tools and examples of application in various sectors.
The Commission has also issued a recommendation to Member States that builds on the requirements laid down in this Directive and calls for specific actions in relation to the application of the principle.
Member States should take the utmost account of that recommendation and be guided by it in implementing the energy efficiency principle in practice.
(18)
The energy efficiency first principle implies adopting a holistic approach, which takes into account the overall efficiency of the integrated energy system, security of supply and cost effectiveness and promotes the most efficient solutions for climate neutrality across the whole value chain, from energy production, network transport to final energy consumption, so that efficiencies are achieved in both primary energy consumption and final energy consumption.
That approach should look at the system performance and dynamic use of energy, where demandside resources and system flexibility are considered to be energy efficiency solutions.
(19)
In order to have an impact, the energy efficiency first principle needs to be consistently applied by national, regional, local and sectoral decision makers in all relevant scenarios and policy, planning and major investment decisions – that is to say large-scale investments with a value of more than EUR 100 000 000 each or EUR 175 000 000 for transport infrastructure projects – affecting energy consumption or supply.
The proper application of the principle requires using the right cost-benefit analysis methodology, setting enabling conditions for energy efficient solutions and proper monitoring.
Cost-benefit analyses should be systematically developed and carried out, should be based on the most up-to-date information on energy prices and should include scenarios for rising prices, such as due to decreasing Union’s emission trading system (EU ETS) allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council (8), in order to provide an incentive to apply energy efficiency measures.
Priority should be given to demand-side solutions where they are more cost-effective than investments in energy supply infrastructure in meeting policy objectives.
Demand-side flexibility can bring wider economic, environmental and societal benefits to consumers and to society at large, including local communities, and can increase the efficiency of the energy system and decrease the energy costs, for example by reducing system operation costs resulting in lower tariffs for all consumers.
Member States should take into account potential benefits from demand-side flexibility in applying the energy efficiency first principle and where relevant consider demand response at both centralised and decentralised level, energy storage, and smart solutions as part of their efforts to increase efficiency of the integrated energy system.
(6) Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13).
(7) Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament and of the Council (OJ L 328, 21.12.2018, p. 1).
(8) Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC (OJ L 275, 25.10.2003, p. 32).