The Research Center for Energy Economics (FfE), today published a study on the Primary Energy Factor (PEF) for electricity and the corresponding CO₂ Equivalent Emission Factor (CEEF) applicable to technologies coupling heat and electricity sectors. According to the study, commissioned by COGEN Europe, the additional electricity demand from sectors subject to electrification will rely less on renewable electricity and more on fossil fuel generation, compared to the average electricity mix. Based on the study, European renewable and efficient heat industry associations (AEBIOM, COGEN Europe, EFIEES, EGEC and EHP) call for a dedicated EU PEF approach for calculating the real efficiency of heating systems, which use or produce electricity, in order to inform energy consumers correctly and help deliver the EU energy and climate objectives.

The FfE study uses the “displacement mix”, a simplified marginal method¹, to assess the efficiency and CO₂ intensity of the electricity mix associated with the additional electricity generation and, with some restrictions, additional electricity demand from sectors subject to electrification, e.g. heating. The study found that the “displacement mix” EU PEF is 2.81, with a CO₂ intensity of 986 g CO₂/kWh². Dr. Serafin von Roon, FfE Managing Director, said in a statement: “The displacement mix method provides a new way of looking at our increasingly complex and dynamic electricity supply system. Shifting towards marginal approaches will support policymaking in the energy transition, as they more accurately identify efficient and carbon saving technologies, including those which couple the heat and electricity sectors.”

By demonstrating that the marginal approach allows for a more accurate estimate of the real efficiency and CO₂ intensity of additional electricity generation and consumption units, the FfE study brings new evidence to the debate on the PEF in the Energy Efficiency Directive (EED) and its use in other policy contexts. Based on the study’s findings, it is clear that the average PEF value of 2.0 proposed by the European Commission in the EED review differs significantly from the “displacement mix” PEF estimated at 2.81, which better reflects energy systems dynamics linked for example to the electrification of heat. Therefore, the average EU PEF should not be applied outside the EED, especially in legislation addressing the heating sector like Energy Labelling, Ecodesign and Energy Performance of Buildings.

Commenting on the study, COGEN Europe’s Managing Director, Hans Korteweg, said: “Given the size of the heating sector and the difference between the average and marginal approaches highlighted in the study, choosing the wrong approach would provide a distorted picture of reality, undermining the potential for energy efficiency and CO₂ emission reductions in this important sector. It is key that consumers can continue to trust the energy labels on space heaters to make informed choices on the actual efficiency gains and energy bills reductions.”   

Philippe Dumas, Secretary General of EGEC, said: “Comprehensive assessments such as the FfE analysis published today, are key to showing that additional electricity demand due to heating electrification may not mean more renewable electricity. Therefore, decarbonising the heating sector should not focus on electrification. Renewable heat from biomass, biogas, geothermal and solar thermal energy must be given a fair shot. Getting the primary energy factor right will be key in ensuring a level playing field is created.”

There is no one-size-fits-all PEF methodology or value for its different purposes. In Ecodesign, Energy Labelling and Energy Performance of Buildings Directive, which target sectors responsible for more than 30% of EU’s energy consumption and 36% of CO₂ emissions, a dedicated impact assessment is needed, taking into account the marginal PEF approach and the specificities of the heating sector. This will ensure that the PEF reflects the real performance of a space heating system, not its desired performance in a hard to predict future. For the EED review, an average annual PEF should be no less than 2.3 to reflect the real efficiency of the electricity system taking into account the latest EU data and its use should remain strictly limited to EED. This call is supported by key industry associations active in the fields of renewable energy and energy efficiency.

Read the study in its entirety HERE.

1 The marginal approach considers that each additional demand for electricity is not supplied by the generators with the lowest variable cost (e.g. wind, solar, hydropower), which will be dispatched first to meet the existing electricity demand and will no longer be available to cover any additional electricity demand. Instead additional generation will be covered by those dispatchable power plants which are on average running in part-load or are not operating and can therefore increase their electricity generation.
2 Figures based on 2015 Eurostat data, excluding the contribution of nuclear electricity and including grid losses of 5%, and are calculated on the basis of net calorific heating values. At national level, the marginal PEFs range from 2.3 to 3.75. Should nuclear electricity be accounted, the EU PEF would reach 3.17, while the CO₂ intensities would decrease to 446 g CO₂/kWh. Including conversion factors from lower to higher heating value into the calculation, increases the average PEF to 3.26 including nuclear energy and 2.99 excluding nuclear energy.
 

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NOTES TO EDITORS

About FfE
The FfE is an independent research institute that focuses on energy technology and energy management issues on a scientific basis. It draws up its research results across all energy carriers and represents them free of political directions - on the basis of scientific methods and analyses.

Since 1949, the FfE has been dedicated to "promoting practical energy knowledge" in order to achieve the most efficient use of energy. A holistic approach takes account of market, regulatory, social and ecological factors in equal measure.

About the associations
AEBIOM – The European Biomass Association
COGEN Europe – The European Association for the Promotion of Cogeneration
EFIEES – The European Federation of Intelligent Energy Efficiency Services   
EGEC – The European Geothermal Energy Council
Euroheat & Power – The International Network for District Energy, Promoting Sustainable Heating and Cooling in Europe and Beyond

About the PEF
A Primary Energy Factor (PEF) connects primary and final energy. It indicates how much primary energy is used to generate a unit of electricity or a unit of usable thermal energy.

Primary Energy Factors (PEFs) are used for different purposes in energy policy at EU and national levels: as a conversion factor to relate final energy use to primary energy consumption, to define and compare the efficiency of devices using different energy sources and their potential energy savings, as well as to assess the energy performance of buildings.

The PEF helps compare how much primary energy is needed to produce the energy product (electricity, gas, gasoline or heat) required to satisfy final energy demand. EU legislation currently applies an average electricity PEF of 2.5 when calculating the energy efficiency of nearly all ‘electricity using’ appliances. This means that for every single unit of electricity used by an appliance, the current PEF value indicates that two and a half times as much primary energy (the fuel used to generate the electricity) has been consumed. In other words, the current PEF assumes that all power generation in the EU is delivered at 40% efficiency (100% divided by 2.5 = 40%).