The EU energy system is undergoing profound and rapid transformations prompted by the global challenges of the decarbonisation, the decentralisation and digitalisation of our economy.
In the wake of its commitments under the Paris Agreement, Europe is leading the global shift to a modern low-carbon and clean energy system. The energy transition will be decisive for the decarbonisation of our economy since two thirds of greenhouse gas emissions in the EU is coming from the production and consumption of energy.
At the same time, with the growing share of renewable energies installed at distribution level, the energy system is becoming more flexible and decentralised. This calls for changes in the way we build and operate our energy systems as well as for innovative solutions such as digital technologies and ICT to make the electricity
Adopted by the Commission last year, the Clean Energy for All Europeans package intends to modernise the energy system in order to successfully achieve the energy transition. This package has three main goals: putting energy efficiency first; achieving global leadership in renewables and providing a fair deal for consumers. It is about adapting all part of the energy system to integrate and support energy efficiency, renewable energies, smart grids, home automation, smarter cities as well as to create major breakthroughs in cleaner and digital technologies.
The package makes it clear that energy efficiency should be the main driver towards a sustainable society. That is why the European Commission is promoting ambitious policies that will accelerate energy efficiency.
Because the cheapest, cleanest, and most secure energy is the one we do not use.
The EU has already adopted a number of measures to improve energy efficiency in all sectors and has set a comprehensive regulatory framework with the Energy Efficiency Directive, the Energy Performance of Buildings Directive and the Ecodesign and Energy labelling legislation. These measures have contributed considerably to a decrease in EU energy consumption and have already helped consumers save energy and money. New buildings now consume half of the energy they did in the 1980s.
However, we need to accelerate efforts if we want the EU to successfully drive the clean energy transition and meet its energy and climate targets. Therefore, as part of the Clean Energy for All Europeans package, the Commission launched new and ambitious energy efficiency measures. It proposed a binding energy efficiency target of 30% at EU-level for 2030 as well as measures to improve the energy performance of products and buildings. This will bring further savings to consumers and will foster the development of energy efficiency technologies.
Energy efficiency is not only one of the most cost effective ways to support the transition to a low-carbon economy; it is also an effective way to create investment, growth and employment opportunities in Europe.
This is particularly true in the buildings' sector, where a considerable cost effective energy saving potential exists. Just consider the facts: the construction industry provides already 18 million direct jobs in Europe and accounts for 9% of our GDP. Construction activities that include renovation work and energy retrofits add almost twice as much value as the construction of new buildings. And SMEs contribute with more than 70% of the value added in the EU building sector.
Today, the building sector is the largest energy consumer in Europe, accounting for 40% of final energy consumption and 36% of greenhouse gas emissions in Europe. Yet, about three quarters of our building stock is energy inefficient and the current level of renovation is low.
Accelerating the rate, quality and effectiveness of building renovation will be a great challenge for the coming decades and this is why the Commission has proposed an update to our Energy Performance in Buildings Directive to exploit this untapped potential. It is now being negotiated by the co-legislators, the European Parliament and the Council – with the support of the Commission in order to maintain a high level of ambition.
Indeed, the proposed measures will help us to increase renovation rates with changes to buildings' energy performance rules, while taking advantage of all technologies and progress available such as ICT, smart building technologies and e-mobility. In this context, the revised Energy Performance of Buildings Directive will stimulate the uptake of digital technologies for buildings, in particular smart metering technologies and smart home appliances. These technologies will facilitate the penetration of renewable energy, support a more sustainable transport system and encourage the active participation of consumers through demand response; thus contributing to the modernisation of the whole energy system.
At the same time, raising the energy performance and intelligence of buildings will strengthen Europe's competitiveness, reduce the level of greenhouse gas emissions, decrease energy dependence and will provide tangible health and lifestyle improvements for our citizens. It will also foster innovation and the creation of jobs that are local, sustainable and not at risk of relocation. It is estimated that up to 700,000 jobs in the construction sector and 270,000 in the engineering sector will be created thanks to the measures put forward in the Clean Energy for All Europeans package. In that context, the energy renovation of buildings could become a real European source of growth and jobs.
Beyond the regulatory framework, the role of local actors and in particular of cities will be decisive for the energy transition and the decarbonisation of buildings. Today, the transition to a smart, sustainable and secure energy system is no longer a choice. It is a responsibility towards all citizens. And cities are a motor of innovation and a driver of the EU economy, with three quarters of Europe’s population living in them. But they are also responsible for an equal share of the EU's energy demand and greenhouse gas emissions. The Commission is therefore supporting cities to become smarter and engage with the use of digital and telecommunication technologies as they have the potential to accelerate the energy transition notably through better use of resources, smarter transport system and more efficient ways to light and heat buildings.