primary energy demand of renewable energy carriers · pdf filein addition, harmsen (2011)...

Primary Energy Demand of

Renewable Energy Carriers

Part 2 Policy Implications

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Primary Energy Demand of Renewable Energy Carriers

Part 2 Policy Implications

By: Dr. Nesen Surmeli-Anac, Dr. Andreas Hermelink, David de Jager, Heleen Groenenberg

Date: 9 May 2014

Project number: BUIDE14268

© Ecofys 2014 by order of: European Copper Institute



A cooperation of:



Table of contents

1 Introduction 1

2 Review of Directives on Primary Energy Factors 3

2.1 Introduction on directives 3

2.2 Energy Efficiency Directive 3

2.3 Renewable Energy Directive 4

2.4 Energy Performance of Buildings Directive 4

3 Review on primary energy targets 7

3.1 Occurrence within overarching EU communications 7

3.2 Primary energy statistics 8

4 Policy implications of different Primary Energy Factor definitions 10

4.1 Impact on the Energy Efficiency Directive 10

4.2 Impact on the Renewable Energy Directive 13

4.3 Impact on the Energy Performance of Buildings Directive 15

5 Conclusions 19

6 References 22

BUIDE14268 1

1 Introduction

Energy related discussions and policy making, such as defining energy saving targets or energy effi-

ciency measures, are often based on primary energy values. These values express the energy con-

sumption of a country, the energy demand of a system, service or product in primary energy units.

International and national energy statistics, energy scenarios or environmental assessments are de-

fining and publishing these values.

Primary energy values taken from different energy statistics and studies are sometimes compared

without considering possible influences from different definitions used for primary energy. Awareness

has been raised recently for the influence of different methods to determine primary energy con-

sumption from renewable energy sources in energy statistics. In Moomaw (2011) and Macknick

(2011) the differences in energy statistics and future scenarios that occur from the different methods

are highlighted as well as the challenges if statistics and scenarios with different accounting methods

are compared. In addition, Harmsen (2011) investigated the impact of different methods on energy

saving targets in Europe.

Primary energy factors (PEF)1, often referred to as conversion factors, are required to calculate the

total energy consumption including the total chain of energy generation based on the final energy

consumption data. For each type of delivered energy a so called primary energy factor (PEF) is as-

signed, which can track all energy relevant demand from initial harvesting to the point of energy de-

livery. Primary energy factors have been developed as a form of comparison on how much primary

energy is required to deliver one unit of secondary energy. As every country may have a very differ-

ent supply chain from exploration to delivery, PEFs may vary significantly between countries.

A number of EU directives and regulations refer to implementation of primary energy factors. The

main aim of the EU directives are to address long term energy and climate challenges and set targets

for EU in terms of energy saving and use of renewable energy sources. The use of primary energy

factors has influence on the accounting of such targets therefore they have an impact on long term

energy policy scenarios and energy generation investments. Although the method for calculating the

PEF for fossil fuels are well established, there is no unified approach in European regulation on how to

calculate PEFs for renewable energy sources (RE).

European Copper Institute had therefore commissioned a two paper series focusing on the options for

defining primary energy factors for renewables and clarifying the implications of these options in EU

energy policy areas. This paper is the second part of the two paper series. The first part of the study

“Primary Energy Demand of Renewable Energy Carriers – Part 1 Methodology and Examples” was

elaborated by PE International and describes various methods used for calculating PEFs. It is shown

1 In this paper PEF always means Primary Energy Factor, i.e. it is not to be interpreted as Product Environmental Footprint.

BUIDE14268 2

that depending on the methodology used the resulting PEFs for different energy sources vary signifi-

cantly.

The second part of the study results is presented in this paper. The aim of this paper is to present the

current use of PEFs in EU legislation and provide an outlook on possible policy outcomes of using

different PEF calculation methods in three energy policy areas and related EU legislation. Although

the emphasis is on Renewable energy carriers, nuclear energy is included in some discussions for the

sake of completion. In reality nuclear energy exists in the country energy mix and methods applied

for determination of primary energy factor of nuclear as well as RE have consequences on the energy

policy options. This paper first describes how primary energy factors are used in the EU regulatory

framework. Then, the study investigates to what extent different definitions of PEF for RE have impli-

cations on the three energy policy fields: EU Directives– Energy Performance of Buildings Directive

(EPBD), Energy Efficiency Directive (EED), Renewable Energy Directive (RED); the influence on the

target setting in overarching EU communications and energy accounting (statistics). The case studies

address the policy implications and challenges of using different PEF methodology under these three

energy policy areas.

BUIDE14268 3

2 Review of Directives on Primary Energy Factors

2.1 Introduction on directives

European Directives are legislative acts that set out the framework of common EU goals and prede-

termined end results that must be achieved in every Member State but without prescribing the means

of achieving those results. Therefore Member States are obliged to adapt their national laws to meet

these goals by means of measures which are adequate within their national legal, social and eco-

nomic context.

In this section we look at those three directives that create the backbone of energy related regula-

tions throughout the European Union in terms of;

• Efficient use of energy: Energy Efficiency Directive (2012/27/EU)

• Exploitation of renewable energy resources: Renewable Energy Sources Directive

(2009/28/EC)

• Energy use in buildings: Energy Performance of Buildings Directive (2010/31/EU)

2.2 Energy Efficiency Directive

The Energy Efficiency Directive (EED) (2012/27/EU) is an important piece of EU legislation for achiev-

ing 20% primary energy savings in the period 2005 to 2020. It covers all sectors except transport,

and includes, for the first time in an “energy efficiency” related directive, measures for supply side

efficiency. The 20% energy saving target is set compared to 2020 energy consumption that is devel-

oped in the reference business as usual (BAU) scenarios under the European Commission’s PRIMES-

2007 forecasts (Capros, 2010). The EED clearly defines and quantifies for the first time the EU ener-

gy efficiency target as the ''Union's 2020 energy consumption of no more than 1,474 Mtoe primary

energy''

Article 7 of the EED states:

“the amount of energy savings required or to be achieved by the policy measure are expressed in

either final or primary energy consumption, using the conversion factors set out in Annex IV;”

Annex IV, footnote 3 to the conversion table, states:

“For savings in kWh electricity Member States may apply a default coefficient of 2.5. Member States

may apply a different coefficient provided they can justify it.”

With this phrase the EED suggests that the primary energy factor for electricity is 2.5 (1 kWh elec-

tricity stems from 2.5 kWh primary energy). It should be noted that within the EED there is no differ-

entiation between primary energy from fossil and renewable sources.

BUIDE14268 4

2.3 Renewable Energy Directive

The Renewable Energy Directive (2009/28/EC) (RED) is a European Union directive which sets levels

of renewable energy use within the European Union, published on 23 April 2009. The directive puts

mandatory requirements on EU member states to produce an agreed proportion of energy consump-

tion from renewable sources such that the EU as a whole shall obtain at least 20% of total final ener-

gy consumption from renewables by 2020. The targets of each individual Member State may vary

depending on their renewable energy potential, the energy mix and their gross domestic product. The

member states should base their indicative trajectory to reach the RE target on 2005 as the directive

mentions that this is the latest year for which reliable data on national share of energy from renewa-

ble energy sources are available.

The RED acknowledges the importance of the role of calculation methods on determining the actual

share of energy from renewable sources and states “It is necessary to set transparent and unambig-

uous rules for calculating the share of energy from renewable sources and for defining those

sources”. The RED proposes an approach where primary energy factors are calculated based on the

European Commission statistics (EUROSTAT data). As it was in EED there is no differentiation be-

tween primary energy from fossil and renewable sources within the RED.

2.4 Energy Performance of Buildings Directive

To address the energy consumed in the building stock, in particular for heating and cooling purposes,

the EU adopted a revised Energy Performance of Buildings Directive (EPBD) (2010/31/EU) in 2010.

Besides the obligation for Member States to apply minimum energy performance requirements for

new and existing buildings, the Directive requires them to ensure that by 2021 all new buildings are

"nearly zero-energy buildings". Above in Annex I the EPBD sets out requirements on the general

framework for the calculation the overall energy performance of buildings.

Annex 1 of EPBD - Common general framework for the calculation of energy performance of build-

ings, states:

“The energy performance of a building shall be expressed in a transparent manner and shall include

an energy performance indicator and a numeric indicator of primary energy use, based on primary

energy factors per energy carrier, which may be based on national or regional annual weighted aver-

ages or a specific value for on- site production. The methodology for calculating the energy perfor-

mance of buildings should take into account European standards and shall be consistent with relevant

Union legislation, including Directive 2009/28/EC.”

This is confirmed in Article 9, 3a of the EPBD dealing with nearly Zero Energy Buildings (nZEBs):

“… National plans [for increasing the number of nearly zero-energy buildings] include … the following

elements: … and including a numerical indicator of primary energy use expressed in kWh/m2 per

year. Primary energy factors used for the determination of the primary energy use may be based on

national or regional yearly average values and may take into account relevant European standards”;

BUIDE14268 5

Thus the EPBD highlights the concept of primary energy for assessing the overall energy perfor-

mance. A building usually may use one or more energy carriers such as gas, coal, electricity, etc.

Therefore, a common expression of all energy carriers is essential in order to aggregate the used

amounts and to make the energy performance of buildings comparable which are operated on dif-

ferent types of delivered energy.

The European standard EN 15603 Energy Performance of Buildings – Overall energy use and defini-

tion of energy ratings establishes general principles for the calculation of primary energy factors and

carbon emission coefficients. According to EN 15603, the primary energy factor always accounts for

the extraction of the energy carrier and its transport to the utilization site, as well as for processing,

storage, generation, transmission, distribution and delivery. The consideration of including the energy

required in building transformation units and transportation systems, as well as in cleaning up or

disposing of wastes, is optional.

EN 15603 states:

“National annexes may be added to this standard, giving tables of values representing local condi-

tions for electricity generation and fuel supply. Such tables shall give values for primary energy fac-

tors or non-renewable primary energy factors, depending on which are to be used at national level.”

Two conventions are given for defining primary energy factors mentioned in EN 15603.

• Total primary energy factor: All the energy overheads of delivery to the point of use are tak-

en into account in this version of the conversion factor, including the energy from renewable

energy sources. Consequently, this primary energy conversion factor always exceeds unity

(i.e. 1).

• Non-renewable primary energy factor: As above, but excluding the renewable energy compo-

nent of primary energy: The renewable part of delivered energy is considered as zero contri-

bution to the primary energy use. Consequently, for a renewable energy carrier, this normally

leads to a factor less than unity (ideally: zero). If the primary energy rating is supposed to

express the use of a fossil or other non-renewable or polluting energy source, this is the ver-

sion to be used.

The current version of EN 15603 provides a formula for calculating the total primary energy demand

of the building by subtracting exported energy (that is produced on-site or near-by the building) from

the imported energy (that is delivered (e.g. from the grid) to the building):

∑ , , , ∑ , , , (1)

Where

Ep = the primary energy demand

Edel, i= final energy demand of energy carrier (i)

fP,del,i = primary energy factor for demand energy carrier (i)

Eexp,I = exported final energy of energy carrier (i)

fP,exp,i = primary energy factor for export energy carrier (i)

BUIDE14268 6

The standard states that the primary energy factors for demand and export can be the same. How-

ever there is no strict requirement that they should. If they are same, then the production is in effect

subtracted from the demand, per energy carrier.

Currently EN 15603 is under revision, amongst others in order to more adequately reflect the ever

increasing interaction between the energy demand in buildings, on-site or near-by energy production

especially of electricity and thermal and or/electricity grids. It can be expected that there will be a

significantly more complex version of formula (1) after the revision that better reflects the quickly

changing share of renewables in the energy system, specifically on-site or nearby buildings.

BUIDE14268 7

3 Review on primary energy targets

3.1 Occurrence within overarching EU communications

The European Commission adopts communication documents which consider the need for EU level

actions. From this perspective EU communications are the key documents on the overall Commission

policy and present the possible courses of action on EU energy and environment policy as well as

other strategic areas. Although the European Commission has set out several communications about

the above mentioned directives, the documents generally don’t mention primary energy factors and

only very few include discussion on primary energy targets. Below the main EU overarching commu-

nications are reviewed in terms of the insight they provided for EU primary energy targets.

The Action plan for Energy Efficiency (COM(2006)545final) (European Commission, 2006) mentions

that the energy saving target can be primarily achieved through (1) end-use energy efficiency im-

provements such as performance requirements in buildings and minimum energy performance stand-

ards for appliances and (2) energy conversion in the supply sector.

The Communication from the Commission “Energy Efficiency: delivering 20% target” (COM(2008)

772 final) (European Commission, 2008) mentions that the 20% energy saving target should be in-

terpreted as being relative to a fixed base line projection (PRIMES 2007). In the communication, the

European Commission indicates that the 20% target should lead to 400 Mtoe less total primary ener-

gy demand (in 2012 this target was updated to 368 Mtoe through the Energy Efficiency Directive). It

mentions that the estimated energy saving potential is expected to be 19% in industry, 20% in

transport and 30% in households and services sector. However this is a challenging target. In the

2011 Energy Efficiency Plan it is mentioned that EU is not on track for reaching its 20% saving tar-

gets. In fact it is stated that only half of the 20% target will be achieved (European Commission,

2011).

The Energy Roadmap 2050 (COM(2011) 885 final) (European Commission, 2011) provides a set of

scenario results to provide an insight in the EU policy direction as to what should follow the 2020

agenda. One significant finding is that in all scenarios analysed it is clear that electricity will have an

increased importance and a high share in final energy demand (36-39% in 2050). The communica-

tion emphasizes that “To achieve this, the power generation system would have to undergo structural

change and achieve a significant level of decarbonisation already in 2030 (57-65% in 2030 and 96-

99% in 2050). This highlights the importance of starting the transition now and providing the signals

necessary to minimise investments in carbon intensive assets in the next two decades.” All scenarios

indicate that in achieving this decarbonisation of energy sector, it is expected that very significant

real final energy savings, and consecutive primary energy use drop of 16-20% in 2030 as compared

in 2005 would be needed. Moreover, the share of RES in final electricity consumption reaches 64-

97% in high energy efficiency and high renewables scenarios.

BUIDE14268 8

3.2 Primary energy statistics

The method for determining the share of renewable energy within the energy statistics is important

to discuss how renewable energy contributes to achieving the EU energy savings target.

The domestic energy consumption is reported by countries annually. This data is also used by inter-

national organizations such as International Energy Agency (IEA), Eurostat, Organization for Eco-

nomic Co-operation and Development (OECD) and US Energy Information Administration (EIA) in

order to be taken into account in international primary energy and GHG emission statistics. Three

methods of calculating primary energy factors are predominantly used in international energy statis-

tics (Moomaw et al., 2011) as shown in Table 1. The brief discussion on each methodology and how

they are applied for each energy source is presented in this section, the detailed descriptions were

presented in Part 1 of this paper series. .

Table 1 Methods for estimating primary energy

Options de-

fined under

this method

Calculation

method Comments Organizations

Option 1 Zero equivalency

method very limited use in practice

Sub-Option 2a Direct equivalent

method

A fixed standard value

with no distinction

between heat and

electricity

UN statistics and IPCC reports

Sub-Option 2b Physical energy

content method

Based on technical

conversion efficiency

International Energy Agency

(IEA), Eurostat, OECD

Sub-Option 2c Substitution

method

Compared to primary

energy requirement of

reference technology

US Energy Information Admin-

istration (EIA)

Option 3, Op-

tion 4 LCA method

Standardised method

that also takes into

consideration the

complete supply chain

and clearly makes a

difference between

renewable and non-

renewable shares

Not used in energy statistics

so far

Among the various options for PEF methodologies, on the one hand some options differ drastically as

they represent theoretical values; on the other hand a significant overlap exists in several others.

Under Option 1: Zero equivalent method, the zero equivalence provided between primary energy and

electricity from non-combustible renewable energy sources proves to be nominal values with no un-

derlying real technical or scientific basis. Therefore this method differs from the rest of the options as

BUIDE14268 9

its strength lies in its demonstrative capacity. This method has its most possible use for scenario

developments that demonstrate the fundamental transitions of energy systems that mostly consider

low-carbon, non-combustible energy sources rather than calculations in energy statistics. Therefore

this option is not included in the discussion below. Option 2 provides three different calculation meth-

ods. This set of methodologies constitutes the predominantly used approaches in international energy

statistics. Option 3 and 4 introduce the approach where primary energy values are split into renewa-

ble and non-renewable primary energy where the calculation of the primary energy factors is based

on LCA methodology (i.e. consideration of entire supply chain). Option 3 alone has no or only limited

use in EU energy policy, it is included in the discussions below for completeness. Option 4, allows two

calculation methods as well: technical conversion efficiencies and physical energy content method.

Especially for the method based on physical energy content, the primary energy factors that are

combinations of option 3 and option 2b are basically for non-combustible renewable energy sources.

BUIDE14268 10

4 Policy implications of different Primary Energy

Factor definitions

It has been shown in the first part of this paper series that although the primary energy concept is a

well-established and defined term in energy accounting, various methods are used in practice to cal-

culate primary energy factors. The discussions carried out in this section refer mainly to different PEF

calculation options summarized in section 3.2 based on the detailed description in Table 5 and Table

6 of the first part of this paper series.

We have shown in previous sections of this paper that the EU Directives which are the primary tools

for EU energy policy due to their direct effect on setting and reaching EU energy targets, namely EED

RED and EPBD, lack a clear indication of PEFs for RE or their calculation methods to be used in ener-

gy accounting applications. Thus the current situation possibly creates ambiguity in methods applied

in Member States and leaves room for different interpretations. Use of different methodologies would

lead to significantly different results in energy accounting, and consequently the monitoring and eval-

uation of EU targets. The important outcomes with regard to use of different PEF definitions and

methodologies are discussed in the following paragraphs. To illustrate the implications of different

PEF accounting methodologies a series of hypothetical examples are used.

4.1 Impact on the Energy Efficiency Directive

The fundamental principle underlying the EED is to reduce the energy demand in the EU. The di-

rective aims for 20% primary energy savings by 2020. However, how the amount of energy saving is

calculated depends significantly on which primary energy factor methodology is used.

For illustration purposes we assume a country that does not use nuclear energy achieves 10% final

electricity savings. 50% of the electricity is provided through conventional fossil fuels, and the other

50% of the electricity is provided by a mix of renewable energy sources, where each renewable ener-

gy source contributes an equal share of electricity. Figure 1 illustrates how total primary energy is

distributed between conventional fossil fuels and different renewable sources depending on the calcu-

lation method. Note these calculation methods are explained in the first part of this paper. They all

apply the same PEF of 2.5 for electricity from conventional fossil fuels, but very different PEF for dif-

ferent renewable energy sources. Please also note that intentionally for exemplary purpose in these

examples non-renewable energy and renewable energy may be shown aggregated as well for options

4a and 4b although their explicit objective is to discern between renewable and non-renewable

shares and to show their different potentials for efficiency gains. This is why in Figure 1 the conven-

tional electricity is shown with a diagonal pattern.

The major insight is that as long as a reduction of electricity consumption is evenly distributed to all

energy sources – fossil and renewable – a 10% reduction of electricity use leads to a 10% reduction

for each energy source, and consequently to a 10% reduction of total primary energy for all calcula-

BUIDE14268 11

tion methods. But if the question is: “from which source should we reduce supply most in order to

achieve maximum relative primary energy savings” the picture changes significantly. In all options

that feature a relative share of renewables in the total PEF of more than 50% it seems to be more

attractive –only having the objective of maximum primary energy reduction – to switch off renewable

power plants rather than fossil power plants, i.e. in all those options only switching off renewable

power plants would lead to primary energy savings of more than 10%. This is the case for options 2b

and 2c but especially for options 4a and 4b due to their intentionally improper use.

For illustration we give another example. As said, fossil and renewable sources each provide 50% of

electricity. If in our hypothetical energy system all fossil power stations are switched off, in option 4a

50% reduction of electricity supply, 100% reduction of greenhouse gas emissions but only approx.

33% reduction of total primary energy use would follow. Therefore in 4a it may seem to be more

attractive to switch off all renewable power stations, as it seems to lead to approx. 67% reduction of

total primary energy use, again 50% reduction of energy supply - but 0% reduction of greenhouse

gas emissions.

First, this highlights the importance to reflect on the adequate application of the different methods to

avoid unintended and misleading results. Second, it highlights that a “primary energy only” focus

may lead to conclusions or decisions that clearly contradict climate targets, which aim at maximum

reduction of greenhouse gas emissions rather than of primary energy use.

Figure 1 Share of different energy sources in total primary energy in a hypothetical energy system applying different

PEF calculation methodologies.

The method used to deal with the share of renewable energy within energy statistics is important for

discussing the contribution of RE for achieving primary energy savings from another perspective.

Harmsen et al. (2011) discuss the interaction between EU’s renewable energy and primary energy

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Option 2a-Direct

equivalent

Option 2b-Physical

Energy Content

Option 2c-

Substitutionmethod

Option 3-Only non-

renewable primaryenergy

Option 4a-LCA-

TechnicalConversion

Efficiencies

Option 4b-LCA-

Physical EnergyContent

Rela

tive S

hare o

f S

ou

rces i

n

Tota

l P

rim

ary E

nerg

y

Hydro (storage power station) Hydro (run-of-river power station)

Wind Solar photovoltaic

Solar thermal Geothermal

Biomass (solid biomass fired power plant) Biomass (biogas fired gas turbine)

Conventional electricity

BUIDE14268 12

savings target. They explain that when electricity is produced from fossil fuels, typically a primary

energy factor of 2.5 is used. This means that if a smaller primary energy factor is used in energy

statistics for renewable energy sources (e.g. option 2b uses 1 for hydro, solar PV and wind) then an

increased relative share of such renewable energy sources will lead to primary energy savings with-

out any final energy savings. They state “…for example: replacing 1 unit of fossil electricity (=2.5

units of primary energy) by 1 unit of wind, hydro and solar electricity (=1 unit primary energy) leads

to 1.5 units of primary energy savings.” Following the same principle the potential impact of different

PEFs on indirect total primary energy use, i.e. changes in total primary energy use that don’t directly

follow from an actual reduction of electricity use but only from replacing fossil fuel by another energy

carrier is shown in Figure 2. The figure shows the indirect total primary energy change for all calcula-

tion methods. Only the PEF calculation methods featuring PEFs for renewables that are smaller than

2.5 may end up in a reduced total primary energy balance by reducing fossil fuel electricity by re-

newable electricity. Figure 2 may be interpreted as follows: ten different energy carriers are shown. If

10 units of electricity from fossil power plants would be replaced by one unit of electricity from each

of those 10 alternative power plants the net change in the total primary energy balance would be the

positive part in each option minus the corresponding negative part. This means while in option 2a

total primary energy would decrease by approx. 5 units, in option 4a it would increase by approx. 15

units. With this analysis it is visualized that the RE sources which remain competitive against fossil

electricity varies (or seems to vary) within each calculation method. From this perspective larger PEFs

for renewable energy (especially values bigger than 2.5) will risk to hamper the RE development as

this would seem to imply an increase in primary energy use especially for biomass, geothermal and

solar thermal and waste energy options.

Figure 2 Total primary energy change caused by replacing one unit of fossil electricity by another source.

-20

-15

-10

-05

00

05

10

15

20

25

30

Option 2a-Directequivalent

Option 2b-PhysicalEnergy Content

Option 2c-Substitution

method

Option 3-Only non-renewable primary

energy

Option 4a-LCA-Technical

ConversionEfficiencies

Option 4b-LCA-Physical Energy

Content

In

dir

ect

Ch

an

ge o

f To

tal

Prim

ary E

nerg

y

by S

ub

sti

tuti

ng

Fo

ssil

Gen

erati

on

b

y A

no

ther S

ou

rce





Waste Nuclear

BUIDE14268 13

Harmsen et al. (2011) show that based on the 100% conversion efficiencies used in Eurostat energy

statistics for wind, solar and hydroelectricity, renewable energy provides primary energy savings and

as a result contributes to Europe’s 20% primary energy savings target. However, care must be taken

in EU policy whenever such interaction between energy saving and renewable energy targets exists.

In the context of the EED there is a risk of limited policy focus on meeting real progress in energy

efficiency when booking increased renewable shares to the benefit of primary energy savings. Re-

member that the fundamental aim of the EED is energy savings on demand side in transport, indus-

try and buildings with additional benefits such as lower energy bills, increase of the renewable energy

share without investing in new renewable capacity, and long-term climate targets to reduce green-

house gas emissions.

4.2 Impact on the Renewable Energy Directive

While we focused on primary energy factor within the context of the EED, now the focus switches to

the share of renewables to match the context of the RED. The RED directive sets binding targets for

the percentage of renewable energy in 2020. The method of calculation and choice of PEFs have a

potentially large impact on the calculation of share of renewable energy and consequently on energy

markets. We use a hypothetical situation to illustrate the impacts of different PEFs on calculating the

share of renewable energy and on energy systems. The situation assumes a total gross inland con-

sumption of 100 units of final energy from fossil fuels and 10 units of renewable energy from each

renewable energy source concerned in this paper. Table 2 shows remarkable differences for the share

of renewable energy from using different methods; all previously shown energy carriers are included,

except waste (as sometimes being doubtful if renewable or not) and nuclear. Option 3 was left out as

it only shows the non-renewable primary energy. The contribution of each source is shown in Figure

3. The energy share for each renewable source is calculated as:

% /∑ ∑ (2)

Where

%RES(i) =Share of Renewable energy source (i)

PEFRES(i) = Primary energy factor for renewable energy source (i)

ERES(i) = Final energy demand from renewable energy source (i)

PEFFF = Primary energy factor for fossil fuel (2.5)

EFF = Final energy demand from fossil fuel

Table 2: Percentage of total renewable energy demonstrated for hypothetical case.

Option 2a-Direct

equivalent meth-

od

Option 2b-

Physical Energy

Content

Option 2c-

Substitution

method

Option 4a-LCA-

Technical Con-

version Efficien-

cies

Option 4b-LCA-

Physical Energy

Content

30% 42% 40% 55% 49%

BUIDE14268 14

Thus for the same situation different methods can create the illusion of very different achievement

levels of renewable energy targets. The highest share of renewable energy is communicated by the

two LCA based methods, Option 4a and Option 4b.

A more detailed view of the percentages shown in Table 2 is presented in Figure 3. Among all the

methods the share of hydroelectricity remains quite stable between different options. Option 2c- sub-

stitution method - clearly favours hydroelectricity to any other method. The share of wind energy

shows little variation, mostly favoured by Option 4a. Both photovoltaics and solar thermal reach their

highest shares also in Option 4a. Geothermal reaches its highest share with physical energy content

methods, namely 17.3% (2b) or 14.3% (4b) respectively. For biomass Option 4a and Option 4b pro-

duce quite close percentages.

Figure 3 Contribution of energy sources to renewable energy share for the hypothetical power system.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

Option 2a-Direct equivalent Option 2b-Physical energy

content

Option 2c-Substitution

method

Option 4a-LCA-Technical

Conversion Efficiencies

Option 4b-LCA-Physical

Energy Content

Percen

tag

e o

f R

en

ew

ab

le E

nerg

y





BUIDE14268 15

4.3 Impact on the Energy Performance of Buildings Directive

Renewable energy sources are a necessity for reducing the fossil based energy consumption in build-

ings, achieving nZEBs and beyond. The EPBD defines a nearly Zero-Energy Building as follows: [A

nearly Zero-Energy Building is a] “building that has a very high energy performance… [ ]. The nearly

zero or very low amount of energy required should to a very significant extent be covered by energy

from renewable sources, including renewable energy produced on-site or nearby.” Therefore, it is

extremely important that renewable energy applications are considered accurately in the national

calculation methods or requirements in order to provide a sound basis for comparison, evaluation and

monitoring.

In principle very high performance buildings and nZEBs can be self-sufficient in terms of their energy

needs. However, the difference between the time of use and the time of generation of “on-site” or

“nearby” renewable electricity hinders the possibility to use it fully for self-consumption. Grid connec-

tion is usually necessary to enable the true physical zero energy balance. The energy performance is

calculated based on the balance or the difference between the energy consumption and energy pro-

duction of a building. (Net) Primary energy demand (or consumption) is the EPBD’s primary measure

of energy performance, and it is derived from delivered energy and the respective primary energy

factors. Therefore, one area where application of PEFs will have a significant impact is the metric of

balance used to calculate the energy balance of nZEBs between imported and exported energy.

Energy use in buildings is one of the areas where PEFs may influence the end-user choices between

various energy sources. The building owner can select among different energy sources to fulfil the

nZEB requirements. Different fuels having different primary energy factors may be used within one

building, and also different buildings will run on different fuel-mixes. The method of calculating PEFs

influences the respective choices.

A recent paper by (ECOFYS, 2012) lists the possible implications of different PEFs on the technologies

used in the building sector. The paper outlines the consequences of increased use of renewables and

consequent changes in PEFs from two perspectives: electricity delivered to the building and electricity

produced on-site or nearby. Below we further elaborate that discussion based on each PEF methodol-

ogy and related PEF values.

For the following considerations please compare Tables 5 and 6 in part 1 of this study.

As to electricity delivered to the building (left side of equation (1) in chapter 2.4), the increasing

share of renewable energy in the electricity mix will lead to decreasing total PEFs for electricity.

(Baake et al, 2012) estimate total PEFs for electricity generation in Europe to drop from 2.5 today, to

2.05 by 2020, 1.65 by 2030 and 1.2 by 2050. Consequently electricity consumption will contribute

less primary energy to the overall energy performance indicator of a building resulting in an increas-

ing competitive advantage for electric heating over oil and gas. Note that such development is plausi-

ble in the case of PEF accounting options 2a, 2b, and 4b. Option 2c will not work towards lowering

the total PEF for electricity as it assigns equal PEFs to renewables and conventional resources. De-

BUIDE14268 16

pending on the total share of renewable energy in the electricity mix, for countries with high RE

share, the total decrease of PEF for electricity may not be reached due to high PEFs provided in op-

tion 4a for renewable energy sources. In that situation the high PEFs (compared to the given elec-

tricity supply mix in that country) used by some EU Member States may hamper the development of

grid-coupled renewable energy in the long run. Consequently the competitive advantage of electricity

over the fossil fuel heating will not be reached. Although the required energy for heating will be com-

paratively low in high performance buildings, it is likely that end-users will supply it from local fossil

fuel burners instead of using the increasingly renewable grid electricity. In a nutshell, depending on

the PEF calculation method used people may use different fuel mixes for minimising their building’s

primary energy balance.

As to electricity produced on-site or nearby (right side of equation (1) in chapter 2.4), the PEFs as-

signed to renewable energy will have a direct influence on calculating the total primary energy. For

low-energy buildings and nZEBs the aim is to maximise this amount in order to lower the total prima-

ry energy consumption. Having this target, option 2c and option 4a will be most beneficial, due to

their high PEFs for electricity produced on-site or nearby, especially if it comes from PV or wind ener-

gy.

Table 3 Renewable energy sources with competitive advantage compared to grid mix electricity

Option 2a-

Direct equiva-

lent

Sub-Option 2b-

Physical Energy

Content

Sub-Option 2c-

Substi-tution

Sub-Option 4a-

Technical Con-

version Effi-

ciencies

Sub-Option 4b-

Physical Ener-

gy Content

Norway Biomass, (waste)

Solar thermal,

geothermal, Bio-

mass, (waste)

Hydro, wind,

solar (photovol-

taic and ther-

mal), geother-

mal, Biomass,

(waste)

Wind, solar

(photovoltaic

and thermal),

biomass (waste)

Solar thermal,

geothermal,

biomass,

(waste)

Poland Biomass, (waste)

Solar thermal

(only slightly),

geothermal, bio-

mass (waste)

Biomass,

(waste)

Solar (photovol-

taic and ther-

mal), biomass

(waste)

Geothermal,

biomass,

(waste)

Spain Biomass (waste)

Solar thermal,

geothermal, bio-

mass (waste)

Biomass (waste)

Solar (photovol-

taic and ther-

mal), biomass

(waste)

Solar thermal,

geothermal,

biomass (waste)

BUIDE14268 17

It should be emphasized that the influence of PEFs on the accounting of energy performance of build-

ings will have a dual effect on electricity delivered to the building and electricity produced on-site or

nearby simultaneously. Therefore the impact of any PEF option on building performance accounting

will heavily depend on the actual energy mix in a country and which renewable energy sources are

used for energy production for nZEBs. For illustration purposes, based on the PEF values provided in

the first part of this paper, we discuss three examples featuring significantly different electricity mix-

es: high share of renewables (e.g. Norway), high share of fossil fuels (e.g. Poland) and renewable

and fossil fuels (e.g. Spain). For these three countries we compare the PEF of grid mix electricity with

PEF of various energy sources under different methods. Table 3 provides the list of renewable energy

sources which have equal or higher PEF than grid mix electricity, therefore equal or higher impact on

primary energy demand equation compared to grid mix electricity. The renewable energy choices

given in Table 3 will push the balance towards zero or positive energy buildings. Please compare Ta-

ble 6 from Part 1 of this study for more details on grid mix PEF for these countries when using differ-

ent methodologies for calculating PEFs.

For Norway

• In sub-option 2a and 2b the PEF for electricity (PEFdelivered: 1.2) is slightly above the PEF pro-

vided for the majority of the non-combustible renewable energy sources (PEFexported: 1), with

the exception of solar thermal (PEFexported: 3) and geothermal (PEFexported: 10) in sub-option

2b. In this case, non-combustible renewable energy sources in mentioned accounting meth-

ods will have a less favourable effect on reduction of total primary energy demand of build-

ings compared to biomass (and waste) which have higher PEFs.

• Sub-option 2c returns higher PEF for all renewable energy sources than the grid mix electrici-

ty (PEFdelivered: 1.9). Therefore all renewable energy sources will provide equally high impact

in the reduction of primary energy demand if used for export..

• Sub-option 4a provides a similar PEF for grid mix electricity in Norway as 2a and 2b (PEF deliv-

ered: 1.33). This situation will put solar (photovoltaic and thermal), waste and biomass (biogas

fired gas tribune) in a very favourable position wind to a favourable position over hydro ener-

gy, which is has appr. equal PEF (1.2) as the grid mix. Those will be the renewable choices

with higher PEFs than the grid mix; consequently their impact on reducing the total primary

energy demand will be more significant than the rest of the sources.

• In sub-option 4b the PEF for grid mix is (PEFdelivered: 1.19) is only slightly higher than PEF for

hydro wind and PV (1.0) but significantly lower than for solarthermal, geothermal, biomass

and waste. Therefore using those renewable energy sources for reducing the primary energy

demand of a building on the supply side (right side of equation in section 2.4) will have a

competitive advantage over hydro, wind and PV to be used as on-site and nearby options.

For Poland;

• The PEFs calculated for grid mix electricity remains stable in each option (PEFdelivered: 2.9 to

3.2). In sub-option 2a and sub-option 2b the PEF of wind, solar and geothermal (PEFexported:

1) will remain considerably lower than PEF of electricity mix. Thus the impact of wind, solar

and geothermal in reducing the total primary energy demand of the building will be limited.

BUIDE14268 18

Biomass (and waste) with their PEFs higher than the PEF of grid mix will have an advantage.

The results of sub-option 4a and 4b for Poland will be same as for Norway.

For Spain;

• The calculation methods result in different PEF values for electricity mix in Spain than the

other two countries. However, in the comparison of renewable energy versus grid mix, the

renewable energy sources options that create significant impact on reduction of total primary

energy demand of a building remain almost the same as in Poland (see the list provided in

Table 3). The results are only slightly different in case of sub-option 4b where using solar

thermal electricity on the supply side will result in lowering the primary energy consumption

in buildings compared to high fossil fuel based electricity grid mix.

BUIDE14268 19

5 Conclusions

The major European directives we discussed have different objectives:

• Energy Efficiency Directive: this is to improve end–use energy efficiency, but which is meas-

ured in terms of total primary energy use which – as demonstrated in this paper - is not the

most adequate indicator. Therefore there is a danger that without actually reducing final en-

ergy use, still improvements in energy efficiency in terms of primary energy can be shown,

depending on the accounting method which is used; in specific cases even increased green-

house gas emissions may occur concurrently with reduced primary energy use.

• Renewable Energy Directive: this is to increase the share of renewable energy, but depending

on the accounting method very different shares of renewable energy will be demonstrated.

This means that by just changing the methodology significant “virtual” improvements could

be achieved.

• Energy Performance of Buildings Directive: this is to improve the energy efficiency of new and

existing buildings, primary energy use being the main indicator for the energy performance.

The applied accounting methodology will have significant effects on the calculated energy

performance and thus on the chosen fuel mix and share of renewables in buildings.

There are significant reasons to set up a transparent, scientifically based methodology for determin-

ing primary energy factors for all energy sources all over the EU MS which is in line with over-arching

climate targets. As pointed out, there are different methodologies for determining PEFs that lead to

significantly different PEF for different energy carriers including energy from renewable sources.

Our analysis revealed that a too strong focus on primary energy may even have adverse effects on

climate targets. There are different commonly used methodologies for determining primary energy

factors which may even lead to an increase in primary energy use by replacing fossil fuel based pow-

er generation with power generation from renewable sources. Equally a decrease in total primary

energy use may be achieved without saving a single kWh of electricity by just replacing fossil fuels

with energy from renewable sources in power generation. This may disguise a standstill in energy

efficiency improvements.

On top, there are some issues with the EC’s currently used default primary energy factor for electrici-

ty, which is 2.5 and used amongst others in the Energy Efficiency Directive and Eco-Design regula-

tions:

• Lack of unambiguous scientific values: The conversion factor of 2.5 was introduced in the

footnote to Annex II of the Directive on energy end-use efficiency and energy services (Di-

rective 2006/32/EC). This value of 2.5 was already present in the Commission Proposal for a

Directive of the European Parliament and of the Council on energy end-use efficiency and en-

ergy services, published on 10 December 2003 in the EU Official Journal (COM(2003) 739 fi-

nal) (European Commission, 2003). It is reasonable to expect that, in December 2003, avail-

BUIDE14268 20

able Eurostat figures were referring to the year 2001, at the latest and therefore there is a

strong need for updating this value.

• Lack of consistency: Where PEFs are mentioned, the EU directives state that the Member

States are free to choose PEFs. Energy Efficiency Directive (EED) (2012/27/EU) Annex IV,

footnote 3 to the conversion table, states: “For savings in kWh electricity Member States may

apply a default coefficient of 2.5. Member States may apply a different coefficient provided

they can justify it.” A similar hint is also included in the EPBD. This means that those direc-

tives actually provide considerable space for Member States to deviate from the suggested

values rather than mandating a specific value.

• Lack of transparency: A recent study by Ecofys (2012) concluded that primary energy factors

are not commonly based entirely on scientific arguments and clear algorithms. It is highly

likely that the values used as substitution factors will be debatable. Given the significant

changes ahead in electricity supply, the PEF for electricity should be regularly revised and its

method of calculation clearly documented and eventually harmonized. This provides the op-

portunity to present arguments feeding into national discussions for establishing PEFs.

Therefore the final conclusions are:

• For monitoring the progress in Europe all Member States should use the same or a very simi-

lar methodology for determining primary energy factors for renewable and non-renewable

energy sources.

• Utmost care has to be taken that methods are not abused – be it intended or unintended –

for promoting fossil fuels versus renewable sources. This danger is especially relevant for

methods 4a and 4b which are mainly designed for illustrating efficiency potentials separately

for energy from conventional and renewable sources, which of course is not meant to suggest

preferring conventional over renewable sources.

• Such methodology needs to be transparent and should be based on available data.

• In order to provide a consistent insight into the effect of replacing conventional power gener-

ation by renewable power generation a solid, scientifically based determination of primary

energy factors for renewable, conventional, fossil or nuclear based power supply must be

available and commonly applied.

• The method used for determining primary energy factors for energy from renewable sources

must be in line with climate policy targets. Changes in the power system which lead to reduc-

tions in greenhouse gas emissions generally should lead to reductions in primary energy use.

• Primary energy factors should be determined and applied in a way that enables to clearly dif-

ferentiate between direct primary energy savings - stemming from actual final energy savings

- and indirect primary energy savings – stemming from changes in the energy mix.

• Finally care should be taken, that renewable energy sources are treated equally relative to

their effect on reducing greenhouse gas emissions and the calculated share of renewables in

an energy mix. Generally it does not seem helpful for achieving a well-balanced mix of differ-

ent renewable sources when one zero-emission source is outpaced by another zero-emission

source by assigning very different primary energy factors to these sources.

BUIDE14268 21

All directives we discussed in this paper aim at improving the environmental quality in Europe. Apply-

ing the above given guidelines in determining a suitable, common methodology for calculating prima-

ry energy factors would ensure that the policy targets included in these directives will be in harmony

with each other rather than having the risk of them being in disharmony or even competition with

each other.

BUIDE14268 22

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ECOFYS Germany GmbH

Am Karlsbad 11

10785 Berlin

T: +49 (0) 30 29773579-0

F: +49 (0) 30 29773579-99

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