Will Europe show the internal unity required to develop its electricity markets?


Jessica Stromback,
Executive Director,
By Jessica Stromback, Executive Director, Smart Energy Demand Coalition (SEDC)

Deletions in the new Energy Efficiency Directive would result in loss of €3.5-5 billion per year in new direct revenues for local businesses in Europe.

The Energy Efficiency Directive is now under intense debate in Brussels but could go far to develop the European electricity markets – or not. This week, amendments dealing with smart meter functionalities and demand response are under discussion between the European Commission and Parliament and the European Council.

The Commission and Parliament have written legislation requiring utilities to provide an effective minimum level of consumer feedback through smart meters. The Council has deleted all such provisions, though the material will still be debated in the technical committee. The provisional text as it stood after the Council’s deletions guaranteed consumers only one informative electricity bill – every two months.

Demand response is also under debate this week. The European Parliament’s Energy Committee (ITRE) introduced amendments to ensure end-customers’ access to the electricity markets, while the Council is attempting to have these deleted or redefined. The Smart Energy Demand Coalition (SEDC) projects that if the Council succeeds in removing these amendments, it would prevent European businesses from generating between €3.5 and €5 billion a year in new direct revenues from their participation in the energy markets.

International studies demonstrate that people utilizing demand response and feedback programs can reduce their peak electricity demand by over 20 percent and lower their total consumption by approximately 9 percent(1). At the EU level, and taking into consideration the entire population (including residential, commercial and industrial consumers who would not participate in demand response programs), demand response programs could reduce total overall energy consumption by 1.5 percent and contribute effectively to helping Europe achieve its 2020 targets.

These next few weeks will be absolutely defining for the pace at which the electricity markets develop in Europe. In essence it involves moving the markets forward a full decade or remaining well behind the U.S.A., Australia, Korea and Japan in the demand side programs offered.

The SEDC would strongly encourage the European Council to keep the benefit of the European public and business as a top priority and actively consider the proposed amendments on demand response and consumer feedback.

The views expressed in this article represent the views of the SEDC as an organization but not necessarily the point of view of any specific SEDC member.

1. VaasaETT, Empower Demand, ESMIG, 2012