The energy efficiency first principle in European energy and climate policy: Bridging the gap between conceptual foundations and practical policy implementation

Abstract

The ‘energy efficiency first’ (EE1st) principle has become a key element of the European Union’s (EU) strategy to transition to a net-zero emissions energy system. This principle advocates prioritising energy efficiency solutions, such as building retrofits, when they cost less or provide greater societal benefits than traditional energy supply infrastructure, such as power plants. Despite its inclusion in the EU Governance Regulation and the recast Energy Efficiency Directive, the implementation of the EE1st principle across Member States faces both conceptual and practical challenges. This research makes three main contributions: First, it provides a thorough investigation of the theoretical foundations of the EE1st principle through a combination of literature review and conceptual analysis, thereby integrating the principle into the broader research literature and clarifying its implications for EU policymaking. Second, it analyses the quantitative effects of the principle using energy systems modelling and cost-benefit analyses, examining the balance between energy savings in the building sector and the associated energy supply needs for electricity, heat, and hydrogen in the EU’s netzero transition. Finally, based on a literature review of economic theory and semi-structured interviews, the research provides policy guidance by categorising potential policy instruments and presenting a decision tree framework to facilitate energy planning. Altogether, this research highlights the critical role of the EE1st principle in moving the EU towards net-zero emissions by providing conceptual clarity, empirical evidence, and actionable guidance.