ING calls for new measures to promote energy efficiency
For a Better Environmental Footprint
This spring, the ING Economics Department published a new study on energy savings. In this research ING urges for new approaches to be taken in order to meet the EU targets for energy consumption. ING argues that the attention should not only be on investing in wind turbines and solar panels, but first of all on improving the efficient use of energy.
The study is aimed at the Dutch Energy Accord currently being prepared by the Social and Economic Council of the Netherlands (SER). ING states that the Energy Accord should include plans to put in place an effective policy that not only improves energy efficiency but also reduces absolute energy consumption - throughout all sectors.
Offering economic opportunities
The study elaborates on how the agriculture sector is leading the way in saving energy, but that there is great potential in for instance the manufacturing sector and the built environment. It also explains the need for more frequent data on energy use and that energy efficiency offers economic opportunities.
Hans van der Noordaa, member of the ING Bank Executive Board: “Targeting energy savings will reduce carbon emissions and lower energy costs in the production processes of Dutch businesses. This will give us a competitive advantage internationally. In addition we will be creating jobs in the Dutch market for residential and commercial building insulation.”
Current situation
The Dutch economy is making increasingly efficient use of energy. Over the past decade energy efficiency has improved by an annual 1.1%. In other words, without the energy efficiency drive we would currently be using around 12% more energy than 10 years ago. The agricultural and horticultural sectors, industry and households in particular have become more efficient in their energy usage, whilst the transport sector has made little headway.
The EU targets are to achieve an annual 1.5% improvement in energy efficiency and for 16% of the energy requirement to be derived from sustainable energy sources by 2020.
Adopting new approaches
In order to further reduce energy consumption the Energy Accord must boldly adopt new approaches in terms of supply and demand of products and services that encourage more efficient use of energy and the mobilising of funding for energy saving measures. ING is urging the SER to take considerations such as the following into account when drafting the accord:
- The desire to save energy is manifesting itself in the context of a growing energy requirement. The policy in the Netherlands is aimed at more efficient use of energy: individual products and services have to be more energy efficient, but there is no guarantee that consumers will buy these products. The Energy Accord should therefore also focus on actively reducing energy consumption.
- Behaviour is a major factor in energy consumption and ingrained behaviour patterns are hard to change. In view of this the Energy Accord should also provide for policy and initiatives aimed at raising awareness of energy saving in society at large
- Efficient use of energy at product or equipment level is the low-hanging fruit, but the biggest gains stand to be made from increased efficiency throughout the entire energy chain: in some chains a mere 11% of the energy is used efficiently. Smart meters, energy labels displaying consumption throughout the life of the product, and ready availability of up-to-date information on energy saving in the various sectors of the Dutch economy will all contribute to this.
Concerted action by investors and financiers is key
Concerted action by investors and financiers is key to realising these objectives. A key factor in this respect is that investors currently have limited visibility of the value created by energy saving in the long term and how this can be translated into financial returns. This is because there is no clear framework of consistent government policy at present.
Van der Noordaa: “Facilitating investments and loans for energy saving on this scale will require major steps from the financial sector, but also from the government. It is crucial to investors and financiers to be able to operate with a long-term horizon of 10 to 15 years. To achieve this they need to be able to rely on a long-term commitment from the government to design and implement energy saving plans. And so we are urging the Social Economic Council to ensure that the Energy Accord also provides for policy with a long-term horizon. Only then will the public and private sectors be able to act in concert to realise these plans.”