EN21 Final Energy Consumption Intensity

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1.1 Trends across the EU-27

Over the period 1990 to 2005 the total gross domestic product (GDP) of the EU-27 grew at an annual average rate of 2.1 % and final energy consumption by 0.6 %. This led to a decrease in final energy consumption intensity at an average annual rate of -1.4 %. However, this trend has slowed in recent years with final energy intensity actually increasing by 1.6 % from 2002 to 2003, before starting to decrease again from this point onwards. Improvements in final energy intensity are, in general terms, influenced both by structural changes of the economy such as a shift from industry towards services and within industry to less energy-intensive industries, as well as improvements in end-use energy efficiency, such as lower energy consuming appliances or use of insulation in buildings.

The drivers and the pace of final energy intensity improvement are significantly different between the new Member States (EU-10) and the pre-2004 EU-15 (-3.9 % and -1.0 % average annual change, respectively, over the period 1990 to 2005). In the EU-15 during the early 1990s, a combination of low growth in GDP, low fossil fuel prices (see EN31) and a general low priority for energy saving in most Member States contributed to a slowdown in the reduction in final energy consumption intensity. Since then energy-efficiency improvements have become more important (ADEME, 2005). The same trend can be seen for the new Member states (EU-10). Final energy consumption intensity differs widely across countries. In the new Member States it is still around 1.3 times higher than in the EU-15, although there is a converging trend. The main factors leading to improvements in energy intensity of the New Member States were structural changes of the national economies and a rise in energy prices.

1.2 Sectoral trends

Examining trends in final energy consumption intensity by sector for the EU-27 indicates that both the industry and services sectors have seen substantial improvements in their energy intensity over the past decade. In contrast, the energy intensity of the household sector (final energy consumption of the household sector per capita) has actually worsened and the transport sector shows only a very limited decoupling of transport energy consumption from economic growth.

Overall, from 1990 till 2005 energy-intensity of final energy consumption of the EU-27 decreased by approximately 20%. This trend is also seen in CO₂-intensity (EEA, 2007).

The energy intensity of the industry sector fell steadily between 1990 and 1999, and whilst it slowed for a period after this it fell steadily again last year. The average annual decrease over the period 1990-2005 was -2.3 % although industry final energy consumption declined far more slowly. Hence this improvement was mainly due to a rise in value added within the sector during the 1990s (although it has stabilised since), coupled to relatively static final energy consumption. Recently published results indicate that most manufacturing industries (except textiles) experienced increasing energy efficiency between 1990 and 2002 in the EU-15, influenced by improved production processes and innovative technologies (ADEME, 2005). In the new Member States the economic restructuring of the early 1990s led to a substantial initial decline in both the energy consumption and output of heavy industry. Since 1995, industrial production has started to recover, while energy consumption continues in a downward trend, with the overall result that final energy intensity has reduced much more rapidly than in the EU-15. The largest shift to less energy intensive branches of industries between 1996 and 2001 was observed in Hungary and Slovakia (Lapillonne 2004).

The services, agriculture and other sector has a relatively low level of final energy consumption intensity. In the EU-27, energy intensity declined by 1,8% per year on average, largely due to a significant large reduction between 1996 and 2000. The rate of reduction in intensity was about three times faster for the new Member States than for the EU-15, although the overall EU-27 trend is dominated by the EU-15. Drivers impacting on services final energy intensity include: improvements in energy efficiency; use of information and communication technology in offices; the average office or floor space per unit of added value; climatic conditions, and insulation. Fluctuations in energy intensity reflect the cyclical nature of the economy, and also year-on-year fluctuations in climatic conditions which can contribute significantly to energy intensity trends as they affect building requirements for space heating.

The final energy consumption intensity of the household sector increased over the period 1990-2005 (by 0.9% on average per year), with average annual population growth of 0.3 % and final household energy consumption growing by 1.1 % per annum. As the indicator is sensitive to both changing population size and household size, it is measured per capita and not per household. The household sector's energy intensity is also linked closely with climatic conditions, as the major part of the energy is used for space heating1. Final energy consumption intensity improved in the EU-10 new Member States by an average of 0.2% per year between 1990 and 2005, compared to an average annual increase of 0.9 %. in the EU15. In general, the lack of improvement in energy intensity in the EU-15 is due to increasing living standards and lifestyle changes. These have outweighed the improvements in the efficiency of large electrical appliances such as refrigerators and TVs, which were supported by the introduction of energy efficiency labels and standards (IEA, 2005). Building energy efficiency standards have also been tightened in recent years but because the rate of turnover in the housing stock is slow the effect of these improvements will only be seen over the longer term.

Decoupling of transport energy consumption from economic growth has barely occurred at all - the average annual decrease in energy intensity remained small at 0.3%. This was due to the rapid growth in road transport, which led to a rapid increase in energy consumption despite some improvements in the fuel efficiency of cars. For example, the average fuel efficiency of a new car in the EU has fallen by 12% between 1995 and 2004 (European Commission, 2006). Freight transport is growing faster than the economy. A consequence is that emissions of CO₂ from freight transport are growing quickly. Passenger transport continues to grow, particularly in aviation and cars. Increased car usage and a reduced number of passengers per car negate the improvements gained from improvements in vehicle efficiency. Greenhouse gas emissions in the transport sector continue to increase steadily. Although improvements have been made in the energy efficiency of various transport modes and non-fossil fuels have been introduced, increased transport demand is outweighing these benefits (EEA, 2008).