Power companies could be fined for failing to help customers cut back energy use, according to a law being drawn up the European Commission. 

The law would introduce a requirement for all energy customers to have individual meters and make public authorities renovate a proportion of their buildings. But critics say that the proposal will not be enough to meet Europe’s headline promise to improve energy efficiency by 20% by 2020.

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The proposal for an energy-efficiency directive, which will be presented by Günther Oettinger, the European commissioner for energy, aims to get the European Union back on track to meet its target, which is measured against a business-as-usual trend. Existing measures will bring the EU barely halfway to the 20% goal.

Stefan Scheuer, an energy efficiency consultant, described as “very weak and unambitious” the energy-efficiency plans contained in national economic reform programmes that national governments are obliged to submit to the Commission.

Based on his analysis of the ten plans that had been filed by 3 May, he concluded that only one country is doing enough. “If we compare [them] with what is needed then they are all off track, except for Portugal, which has used the European method.”

Efficiency savings

Oettinger’s draft proposal is now being circulated to other Commission departments for comment, and is scheduled for publication in June.

At its heart are obligations on energy companies to achieve annual efficiency savings for their customers. Customers must have individual metering and more accurate and regular bills so that they can monitor and manage energy use. Companies that fail to meet the savings targets would be fined.

When the Commission published its energy-efficiency action plan in March, it shied away from making the target of 20% savings by 2020 legally binding, but promised mandatory targets would be drafted in 2013 if member states were still not doing enough. However, the draft legislative proposal has pushed back the Commission’s interim assessment until 2014. The threat of a binding target has been dropped from the draft law, although it remains in the preamble.

Bendt Bendtsen, a Danish centre-right MEP and former business minister, said that binding targets were unrealistic. “Binding targets will not come as a result of this directive. The Council will not accept it and the Parliament will be divided,” he said.

Based on reports of the proposals, Bendtsen said he expected that the directive as currently drafted would be enough to meet the 20% target. “There is a lot of low-hanging fruit out there,” he said. In addition, legislators “may give the Commission the possibility to cancel national action plans that are not good”, thus strengthening accountability.

The draft law is already running into opposition from electricity companies. Nicola Rega, an adviser at the Union of the Electricity Industry (Eurelectric), said that the Commission was asking too much of energy companies. “The Commission has really fallen short in proposing anything that would boost the demand for energy efficiency…We are missing the focus on the end-user.”

Jan te Bos, director-general of the European Insulation Manufacturers Association (Eurima), said that efficiency obligations on energy companies needed to be imposed in such a way that they achieved “clear reductions” in energy use, rather than just slowed down the rate of growth.

He predicted that there would be “a fierce battle over the summer within the Commission and in the Parliament” on the proposal.