How energy savings and other gains from application of the energy efficiency first principle may be estimated

Abstract The Energy Efficiency First principle (EE1st principle) was defined in the 2018 EU Governance Regulation, and further elaborated in the 2023 recast of the Energy Efficiency Directive, which specifies concrete requirements for Member States in its articles 3 and 27. The application of the EE1st principle requires the identification of alternative cost-efficient energy efficiency measures optimising energy demand and supply. These measures must still achieve the objectives of the relevant sectoral policy, planning, and/or major investment decisions. In this paper, we present a methodology for estimating the cost-efficient potential for end-use energy savings and for other energy efficiency gains relevant to the energy system, which may particularly stem from demand-side response and storage but also targeted energy savings. The overarching methodology differentiates between the energy sector and the energy end-use sectors or areas. For the energy end-use sectors/areas, the methodology focuses on estimating energy savings potentials. The energy end-use sectors/areas included in the study were: transportation, industry, buildings, ICT services, water and wastewater management, and agriculture. A simplified methodology was applied to estimate the EU-wide energy savings potential for these energy end-use sectors/areas. For the energy sector—particularly in the electricity sector—the methodology incorporates additional steps to estimate the impact of energy efficiency on the load profile from energy savings, demand-side response and storage. These steps require a dynamic methodological approach, based on forecasting and modelling. We also discuss the proposed methodology’s limitations depending on its application in practice and currently available knowledge, using the results of an application for the transport sector as an illustration, and future research options to improve the assessment of the potentials of the EE1st principle in policy, planning and major investment decisions.