Geothermal and Energy Efficiency



Among the priorities of the European Union in its Climate and Energy agenda is the promotion of energy efficiency. To reach its target, the Union established several legislative documents: the Energy Efficiency Directive, the Energy Performance of Buildings Directive, Eco-design and Energy labelling. The specific regulations covering space and water heaters are available here.

Geothermal energy contributes to energy efficiency in several ways. First, combined heat and power plants for deep geothermal have greater levels of energy efficiency. Then, Ground source heat pumps are consistently the most efficient type of heat pumps. As such, they are best suited to contribute to improvement of energy efficiency on the supply side for heating and cooling.

EU legislation on energy efficiency can affect the deployment of geothermal in several ways, for instance though minimum requirements of renewable energy in buildings in EPBD – depending on how such requirements are defined geothermal district heating may not be eligible. Eco-design and energy labelling play a role in defining the level of efficiency of heating appliances on the market, and the level of efficiency perceived by consumers. It is also crucial that the saving in energy realised by switching fuels are eligible to contribute to the EU’s energy efficiency target.

The Energy Efficiency Directive was reviewed as part of the Clean Energy for all European package. The text, adopted by the European Council and the Parliament’s energy committee, sets a 32.5% indicative energy efficiency target to 2030 at the European level. Instead of national targets, a governance framework [link to the regulation] is set by a parallel regulation to define how effort should be spread out. However, the indicative nature of the target may prove a real threat to its delivery.

To achieve this target, energy sales will have to decrease by 0.8% annually after 2020, with some flexibility (for instance in some cases renewable energy produced on site will be able to substitute to part of the energy efficiency improvement expected to deliver the savings). Moreover, the text of the energy efficiency directive may prove ineffective in preventing the lock in of fossil fuel infrastructure: it does not prevent the allocation of subsidies to fossil fuel equipment in the name of marginal energy efficiency improvements.

The ambitious level of the energy efficiency target is quite a welcome signal for the geothermal sector, especially as it can support the deployment of “efficient district heating”[1], or the deployment of individual geothermal heating system, such as geothermal heat pumps. However, the lack of a constraining objective may lead to discrepancies in the framework laid out by the different Member States and to the benefits they will be designed to deliver.

[1] ‘efficient district heating and cooling’ means a district heating or cooling system using at least 50 % renewable energy, 50 % waste heat, 75 % cogenerated heat or 50 % of a combination of such energy and heat;

Relevant publications:

Joint industry paper on the primary energy factor

Joint RES-HC position paper on the clean energy package

Joint industry letter on the primary energy factor

Joint RES-HC PR on the RES and EED vote

Joint RES-HC paper: PEF for Electricity in the EED

EGEC public consultation response – Energy Efficiency Directive

For more of EGEC’s position on this topic and on others, go to the Position papers section of the website

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