With the current European economic situation, making more efficient use of resources has become increasingly important in regions across the continent-perhaps more important than ever. And perhaps the most important resource we need to begin using more efficiently today is energy-not only on the demand side, but particularly on the supply side-that is, increasing the efficiency with which we generate and distribute electricity and heat. The benefits to European society of increasing supply side energy efficiency are numerous, including lower electricity costs, employment growth, the reduction of greenhouse gas emissions, and reduced dependence on fossil fuel imports. Energy efficiency may be Europe's greatest energy resource.
Energy in Europe Today
Today, most European Union member states are not on track to meet the minimum energy-savings targets established by the Energy 2020 plan. Of the three pillars that make up the Energy 2020 strategy making a 20% improvement in energy efficiency has made the least progress. In fact, the EU is currently on track to achieve only half of its 20% energy efficiency target. European efforts to enhance energy efficiency up to this point have focused mainly on measures to improve end-use (or demand side) efficiency, largely ignoring the potential to reduce huge losses that occur every day in the production and delivery of power. In fact, most of the energy consumed to produce power is not converted to power. According to the International Energy Agency the average global efficiency of traditional fossil-fuelled power generation is 35-37%. Roughly 2/3 of heat is wasted during fossil-fuelled power generation; transmission/distribution account for an additional 9% of losses.
Targeting Supply Side Efficiency (SSE)
Armed with this knowledge and confronted with an ageing power infrastructure across the continent, the European Commission in March 2011, adopted an Energy Efficiency Plan. The plan identifies energy efficiency as one of the most cost effective ways to enhance security of the energy supply, reduce greenhouse gas emissions, and as a key step toward achieving the EU's long-term energy and climate goals.
Since about 30 percent of the EU's total energy consumption is used by the energy sector for the production and distribution of electricity and heat, it's clear that in addition to demand-side efficiency measures, we must also adopt strategies and measures to effectively enhance supply side efficiency. Supply side energy efficiency represents a large, untapped reservoir of opportunity for European society and its energy industry, holding the potential to dramatically improve the performance of existing power generation facilities, and helping member states better manage their natural resources while improving their ability to meet growing power demand.
A recent analysis conducted by Delta Energy & Environment of the primary energy-savings benefits achievable through the adoption of supply side energy efficiency technologies in France, Poland and the UK concludes that "supply side energy efficiency measures have the potential to make a significant contribution to the achievement of the EU's carbon emissions and primary energy savings targets." In these three member states, Delta estimates that "supply-side options can contribute at least 18% of an overall goal of a 20% carbon emissions reduction and at least 23% of an overall goal to reduce projected energy demand by 20%." (Delta Report)
Supply side energy efficiency simply means using less energy input to produce the same amount of electricity, so that a higher percentage of the energy consumed to produce electricity is actually converted to electricity or usable heat. There is potential for substantial improvement on the supply side, and the good news is that many of the options currently available to increase supply side energy efficiency are proven, cost-effective, and reliable technologies that are already commercially deployed.
Although the full potential of many of these technologies has yet to be realized, the benefits of supply side efficiency measures are becoming better understood every day, and we are now in a good position to start applying this knowledge to our full advantage.
As identified in Delta's report, a wide range of innovative and viable energy technologies are available to help set us on the course for realizing greater supply side energy efficiency, such as switching from coal to natural gas as a primary fuel, optimizing the operational efficiency of power plants, expanding the use of combined heat and power (CHP) applications for district heat and electricity, employing more smart-grid enabled solutions for improved energy management, and capturing waste heat from power plants and industrial processes that can be converted into electricity.
Although in the long term new power plants based on renewable energy sources and cleaner-burning fuels will need to be built across the EU to replace an aging and primarily coal-based fleet, supply side efficiency technologies can serve as the bridge we build today that leads us to the energy-efficient Europe of tomorrow.
For example, combined-cycle gas turbine (CCGT) power plants are more efficient than coal-fired plants because less fuel is consumed to produce electricity. The typical operational efficiency of a new combined cycle gas turbine plant is about 50 percent, while a 25-year old coal plant typically has an operational efficiency of about 35 percent or less. And because they burn less fuel more cleanly, CCTG plants produce only about half the CO2 emissions per kilowatt hour of generation as do coal-fired plants.
Developing a Social Consciousness
Investing in supply-side opportunities is a strategic imperative for achieving a more resource-efficient electric power generation and delivery infrastructure in the EU. Reaching the 2020 targets will require a European approach-a concerted and collective effort where all regions and member states share a common understanding of the keys factors for transitioning to a high-efficiency, low-carbon energy system. In other words, a "social consciousness" needs to be developed across the continent with energy efficiency at its core.
Capital investment will be needed to reach the necessary levels of improvement in supply side energy efficiency, but investments made now will actually cost less in the long term as gains in efficiency begin to pay dividends in the form of lower fuel costs, greater energy security, employment growth, and the opening of markets for new products and services.
Regions across Europe can play a key role in driving momentum for this new sense of collective responsibility, as financial solutions will require a mix of public investment and private financing. Clearly defined energy legislation and policies at the EU and national levels must ensure that the right incentives exist to encourage private investment along with the mechanisms by which public funding can be used to direct those investments toward supply-side energy efficiency opportunities.
Creating an Energy-Efficient Future
Although specifics are currently under debate, energy efficiency is widely recognized as the lowest-cost and fastest means of achieving energy savings while making better use of resources and delivering environmental and economic benefits throughout Europe. However, the average efficiency of generation capacity in the EU today is considerably lower than the best available technologies. When energy providers make supply side efficiency investments, they dramatically improve power plant performance, reduce carbon emissions, and improve resource management-all while maintaining the ability to meet power demands.
Exploring the challenges of achieving the EU's commitment to reduce greenhouse gas emissions to 80 to 95 percent below 1990 levels by the year 2050 while maintaining and improving a secure, sustainable and affordable energy supply, the European Commission's Energy Roadmap 2050 concludes that Europe's energy efficiency goals must focus on efficiency opportunities along the entire energy value chain, including supply side efficiency. Adopting this approach will result in producing more energy for final consumption from less primary energy and other natural resources. In this way, an efficient European energy sector can empower Europe and Europeans to do more with less, instead of constraining them to do less with less. As the EU transitions to the low-carbon energy system that is the future, supply side efficiency may be our best energy resource, and it is right at our fingertips.