Analysis to support the implementation of the Energy Efficiency First principle in decision-making. Final report

Energy efficiency (first) is one of the central pillars of the EU's long-term strategy [1] and is termed its first fuel. Yet, in real-world planning, it is a fuel that is still far too often overlooked as compared to supply-side options. In order to prioritise energy efficiency options when they are more beneficial than supply-side options, a more thorough discussion, understanding, and guidance is needed in which policy areas and at which decision-making steps the Energy Efficiency First (EEF) principle can and should be applied. This project aims to deliver a hands on approach to do so. To consequently implement the EEF principle in all steps of the decision-making process, it is necessary to value the benefits of energy efficiency (EE) against the supply-side options. Hereby, in a first step, it needs to be assessed whether energy efficiency is an alternative to an energy supply option at all. If yes, in the second step all the costs of the two options have to be considered in an encompassing manner. This goes beyond the mere direct economic costs necessary to implement the various options. Particularly the literature shows that the EE options are often performing better than the supply-side options when taking multiple impacts (such as environmental or employment impacts) and benefits over the lifetime of the projects into account, because EE options often have the advantage that they have smaller operating costs than supply-side options. Often decision-makers are trained to very specific considerations when deciding for a certain option. From recent studies, it is known that these considerations might systematically undervalue the advantages of EE options. In order to do justice to the EEF principle it is, therefore, necessary to widen the spectrum of indicators, which evaluate the best option. The EEF principle can be applied both in policy-making, in planning processes, and for concrete investment decisions. It is not only applicable to energy-related processes and decisions, but also to other sectors, including transport, water, digitalization, or all kinds of natural resources.