Energy efficiency EU directive and its impacts on Utilities business models

| Point of View

Energy Efficiency is a key stake for European Utilities today

The ‘climate and energy package’ enacted by the European Union (EU) in June 2009 set a series of demanding climate and energy targets to be met by 2020, known as the “20-20-20” (reduction in EU greenhouse gas emissions of at least 20%, 20% of renewable energy in EU final energy consumption, 20% reduction in primary energy use to be achieved by improving Energy Efficiency).

Whilst the 2 first objectives are articulated as binding legislation, the Energy Efficiency (EE) one is not. Given uncertainties for the EU in reaching this objective, the European Commission has been thinking about ways for helping Europe achieve this important objective.

On June 22 2011, the European Commission unveiled a project of directive to ensure the target of 20% primary energy savings by 2020 is met. The Power Utility industry is the main sector targeted by this directive. What are potential impacts of this new directive for the industry? How can this new legislation be used by the Utilities as an opportunity, rather than an additional regulatory constraint?