There is no energy source more sustainable and affordable than the one you do not have to use, writes Hans Korteweg.
Doing more with less energy is key to reducing greenhouse gas emissions and steering our planet towards climate neutrality by 2050.
Energy Efficiency First has been recognised by the European Union as a cornerstone of the energy transition and runs through its energy legislation as a guiding principle.
Despite high ambitions, the implementation of energy efficiency policies has been slow across Europe. For many years, the EU was on track to miss its 2020 goal to improve energy efficiency by 20% due to insufficient action.
The outbreak of the COVID-19 pandemic and the following drop in energy consumption reversed this trend. Official data on energy efficiency for 2020 are still lacking, but it is expected that the 20% reduction target has been met.
Adjusting energy efficiency targets
With Europe slowly recovering from the pandemic and energy consumption picking up again, the question is whether the EU will be able to stay on this track and continue increasing energy efficiency. The current energy efficiency target for 2030 is at least 32.5%.
However, the European Commission asserts in the Fit for 55 Package that this target is too low to ensure the EU can reduce its GHG emissions to at least 55% below 1990 levels by 2030 as stipulated in the European Climate Law.
Therefore, the Commission suggests in its recast proposal of the Energy Efficiency Directive to push this 32.5% target for 2030 to a number between 36% and 41%.
However, based on the current National Energy and Climate Plans of the EU Member States, the EU is on track for a mere 29% energy consumption reduction. This is about 10% short of the envisioned target in the Fit for 55 Package.
The Commission recognises that huge efficiency investments need to be made in both primary and final energy consumption. Europe does not only have to become more efficient in how it consumes energy, but also in how it produces and transports energy.
Heating and cooling taking the lead
The largest area where energy efficiency gains can be made is in the heating and cooling sector. Far too many thermal power plants still work in power generation only mode. These plants convert only 40% to 60% of the fuel into electricity. The heat they generate is simply lost in the atmosphere.
A combined heat and power unit, a single unit generating both electricity and heat simultaneously, manages to convert between 80% to 90% of the fuel into useful energy. The heat is captured and used on-site or distributed via a district heating network.
The potential of combining the generation of heat and power in a single unit is tremendous. Today, combined heat and power (CHP) generates 11% of electricity and 16,5% of heat in Europe. By 2030, CHP has the potential to generate up to 20% of electricity and 25% of heat in a cost-effective way. That would translate into reducing CO2 emissions by 350 million tonnes and achieving 18% of the current EU’s energy efficiency target.
A sector which deserves special attention is the building sector with its important heating and cooling component. Heating and cooling in buildings is responsible for 40% of energy consumption and 36% of emissions in Europe.
More than 70% of heating in buildings is supplied by old and inefficient boilers and Europe’s current annual renovation rate is below 1%. A leaky and fossil-fuel dependent building stock is a serious threat to the ambitious 55% GHG emissions target. Energy efficiency will be crucial to sufficiently reducing emissions from buildings.
A range of solutions will be needed to supply efficient and increasingly renewable heat to and in buildings. It will include reducing demand and using waste heat, direct electrification, solar thermal, geothermal, district heating and combined heat and power.
The choice between different decarbonisation solutions will largely depend on the seasonality of heat demand, the variability and capacity of renewable electricity supply, the constraints of electricity grids, customer preferences and costs.
Today, CHP can run on practically all renewable fuels such as biofuels and hydrogen. With the recast of the Renewable Energy Directive under the Fit for 55 Package, the development of renewable fuels will get a serious boost.
Using these fuels in a combined heat and power mode will ensure their efficient use and the fastest track towards reducing GHG emissions.
Furthermore, CHP is flexible. It can generate heat and electricity at any moment and support the power grid when electricity supply from wind and solar is low. This will ensure that more intermittent renewable electricity capacity can be added while at the same time decommissioning inefficient fossil-fuel plants.
The town of Hassfurt in Germany demonstrates how a combined heat and power unit running on hydrogen can be at the centre of the local community’s long-term decarbonisation strategy. The unit generates green electricity and heat, distributed via a district heating, for the town.
The hydrogen comes from excess wind power and can be stored over longer periods of time to ensure there are sufficient energy sources for the cold months. The combined heat and power unit ensures its efficient use.
Another example of how a local community can reduce its emissions in a cost-effective way is in Ochain, a village in Belgium. The local farmers built a biogas facility to turn their agricultural waste into a valuable energy source.
The biogas facility is connected to a CHP plant which generates electricity for the neighbourhood and provides heat to a local nursing home. This example can be easily replicated by local farming communities in Europe to generate their own green energy.
There are plenty of different examples of how combining heat and power generation can increase energy efficiency and reduce emissions.
National and local authorities have a cost-effective tool at their disposal to significantly reduce their energy consumption by 2030. At the moment, the EU is on track to reduce its energy consumption by 29% whereas the 2030 target will end up being around 10% higher under the Fit for 55 Package.
The National Energy and Climate Plans of the EU Member States will have to become way more ambitious for the EU to reduce its GHG emissions by at least 55% by 2030. A framework enabling the rapid development of CHP in Europe should be enshrined in the Fit for 55 Package.
The CHP sector is ready to assist policymakers and stakeholders in building such a framework to achieve the EU climate and energy ambitions.
About the author
Hans Korteweg is Managing Director of Cogen Europe