Socio-economic research conceptualising and modelling energy efficiency and energy demand

2018:

The research projects should help to make the Energy Efficiency First principle more concrete and operational and to better understand its relevance for energy demand and supply and its broader impacts across sectors and markets. In particular, it needs to be analysed how energy efficiency programmes along the efficiency chain, i.e. end-use, operation, transmission and generation/utilisation of resources, can compete in reality with supply side investments (e.g. additional generation capacities or import capacities) including at the level of countries and having in mind limited public budgets. It would also be necessary to describe and assess how it interacts with and correlates to other policy objectives, at a policy level as well as at the level of implementation.

Actions which conceptualise and assess the impacts and model the energy efficiency first principle, in particular as regards:

• its role and value in the energy system (e.g. for planning of generation assets and networks adequacy etc.) and the energy market (participation in capacity market, participation and impact on prices and costs on wholesale and balancing/reserve markets);
• its role and value in financing decisions (considering as well that in some Member States retail prices do not reflect real costs);
• its economic and social impacts;
• its correlation and interaction with other policy objectives (e.g. renewable energy, demand response);
• existing best practices worldwide where energy efficiency projects are given priority over additional supply side measures.

The Commission considers that proposals requesting a contribution from the EU of between EUR 1 million and 1.5 million would allow this specific challenge to be addressed. Nonetheless, this does not preclude submission and selection of proposals requesting other amounts.

2019:

The aim of the action is to deepen the demand side-related parameters in existing models and to include new aspects and data sources (e.g. by tapping DSOs modelling for forecasting of distributed loads). In general, it is to be expected that the introduction of smart meters and smart equipment will lead to more accurate consumption data providing for a more holistic mapping of the demand side and thus for better projections inside energy policy development and a more effective regulatory framework.

The action should complement the existing demand side energy models by developing multiple-agent energy models and/or modelling segments and/or developing methodologies on how to improve and enhance the demand side aspects in modelling.

These models and/or methodologies should:

• be compatible with the energy models most commonly used at European level;
• model more accurately those aspects not yet sufficiently considered in the existing models;
• make use of new data sources, including big data as for example generated by smart meters, smart buildings and smart equipment;
• identify and refine the structure and patterns of demand and how it will develop;
• contribute to an enhanced demand-side model to be consistently used at European level.

The Commission considers that proposals requesting a contribution from the EU of between EUR 1 million and 2 million would allow this specific challenge to be addressed. Nonetheless, this does not preclude submission and selection of proposals requesting other amounts.

In the Energy Union Strategy, Energy Efficiency was recognised as a resource in its own right which should be enabled to compete on equal terms with generation capacity and to have primary consideration across all policies[[Communication from the Commission A Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy /* COM/2015/080 final]]. However, the structure of energy demand as well as the real value beyond the fuel's cost and the (energy and non-energy) impacts of energy efficiency are still not well understood with the effect that benefits of energy efficiency are not sufficiently taken into account in financial and political decision making, and planning, while prices of fossil fuels remain relatively low.

The topic addresses three different dimensions of this challenge with the aim to trigger actions which

1. make the energy efficiency first principle more operational (2018);
2. substantiate the demand side aspects in energy modelling (2019).

2018:

Actions are expected to support policies aiming to promote and implement the ""energy efficiency first-principle"" based on a sound assessment of the concept and its impacts. To this end, actions should lead to a better understanding of:

• all relevant aspects linked to the ""energy efficiency first-principle"";
• its impacts (e.g. technical, economic, socio-economic, and ecological etc.) on the relevant sectors and markets;
• its potential across the different policy areas and sectors;
• its consideration and valorisation in modelling and assessments; and
• its interaction with other policy objectives both at policy level (e.g. climate and renewable policies, circular economy) and at the level of concrete application (e.g. design of buildings).

2019:

Proposals are expected to demonstrate the impacts listed below, using quantified indicators and targets wherever possible

• More accurate and holistic mapping and modelling of the demand side and to a better assessment of energy consumption trends for different categories of economic agents.
• More accurate follow-up of energy efficiency measures implemented at the demand side;
• Better assessment of demand-side policy needs at European level.