On May 21st, the European Council for an Energy Efficient Economy published a discussion paper entitled “European competitiveness and energy efficiency: Focusing on the real issue”. So, what is the real issue?
Everyone is worried about the price of energy and that Europeans are paying so much more than in most other regions of the world. But the eceee paper points out the simple fact that energy prices are not necessarily the cause of high costs. But more importantly, the investing in measures to improve energy efficiency reduces the volume of energy used and since costs are the product of price and volume, energy efficiency mitigates accordingly the disadvantage that higher prices may have. This is a simple concept that so few seem to grasp.
It should be remembered that when industries in different parts of the world compete, energy price is only one component of production. A higher price for the input of energy can and almost invariably will be offset by higher security of supply and less exposure to risks the paper argues. It also has to be remembered that Europe has always had high energy prices, in large part because of taxes and factoring in externalities such as the environment, while other countries have taken a much more hands off approach.
“Competitiveness is to a considerable degree an issue of quality rather than of price for the products”, says Hans Nilsson, Swedish energy efficiency expert and an eceee board member.
Europe’s competitiveness is very much a major discussion point in the corridors of power these days. This is not a time for knee-jerk reactions, but for sound, deliberate policymaking. This is an opportunity to re-affirm our commitment to long-term sustainable policies but we have to appreciate what it takes to create the necessary policy framework.
As the report states, “energy efficiency is not a panacea for all economic and industrial concerns but it can play a vital role. But, without an energy-efficient approach and commitment at a high level, the inefficiencies within a plant, an industrial sector or an end-use sector, place too high a burden on an economy. Energy efficiency is recognised to be the most cost-effective way to address energy demand and environmental issues.”
EiD welcomes this initiative by eceee and looks forward to the ensuing discussion. The report is available here.