EU efficiency targets may be been distorted by miscalculations

Ongoing talks about the EU’s energy efficiency target for 2030 are deadlocked and the debate could have been skewed by the way initial cost estimates were calculated, according to a new study.

A new study by the European Council for an Energy Efficient Economy (ECEEE) has cast doubt on the way in which the Commission initially came up with its binding target of 30% as part of the Clean Energy Package, claiming that the calculation method was flawed.

In order to assess a target’s cost-effectiveness, a discount rate has to be used. The ECEEE study claims that the discount rate used by the EU executive was too high, as it was 10% compared to a member state average of 5.7% for buildings.

The study added that if the member state average had been used by the Commission then costs would have been lower and negotiators could have been freer to push for even higher targets and annual savings.

EU negotiators are set to resume trilateral talks in May but the member states, European Commission and Parliament disagree on an overall target for 2030, as well as an important annual savings mechanism.

The Institutional Investors Group on Climate Change (IIGCC), a platform that is worth €21 trillion, called on member states to get on board with the Parliament’s 35% proposal, based on their belief that the Commission assumed “unrealistically high investment costs”.

In a letter to ambassadors, IIGCC said the debate lacked a “more realistic, nuanced cost and benefit analysis” and urged negotiators to ensure the final agreement is binding and non-adjustable. The investors also called for a renewable energy target of at least 30%, talks on which are also ongoing.

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