The Commission has declared energy efficiency to be ‘the most cost effective way to reduce emissions, improve energy security and competitiveness, make energy consumption more affordable for consumers as well as create employment, including in export industries’.86 Despite this, progress towards increased efficiency has been slow and efficiency gains tend to be negated by increased demand for energyconsuming products.
With the adoption in 2006 of Directive 2006/32/EC on energy end-use efficiency and energy services, an overall national indicative energy savings target of 9 per cent until 2016, to be reached by way of energy services and other energy efficiency improvement measures, was set out.87 Member States were also required to draw up Energy Efficiency Action Plans (EEAP) and submit them to the Commission (Art 4). The Commission subsequently described the quality of the EEAPs developed by the Member States as ‘disappointing, leaving vast potential untapped’.88 In 2007 the 9 per cent target was supplemented by the target of saving 20 per cent of the EU’s energy consumption, compared to projections, by 2020.89
In 2011 the Commission adopted the ‘Energy Efficiency Plan 2011’, in which it estimated that the EU was on course to achieve only half of the 20 per cent objective and spelled out a series of energy efficiency policies and measures.90 It also spurred the development of a new directive bringing together different measures aimed at increasing energy efficiency in several sectors.
The new Directive 2012/27/EU on energy efficiency is a response to the ‘unprecedented challenges resulting from increased dependence on energy imports and scarce energy resources, and the need to limit climate change and to overcome the economic crisis’71 It establishes a common framework of measures for the promotion of energy efficiency within the Union in order to ensure the achievement of the Union’s 2020 20 per cent headline target on energy efficiency and to pave the way for further energy efficiency improvements beyond that date. It aims to remove barriers in the energy market and overcome market failures that impede efficiency in the supply and use of energy, and provides for the establishment of indicative national energy efficiency targets for 2020. (Art 1.)
The Directive is based on Article 194 TFEU, that is, the legal basis for energy policy, but explicitly holds that it contains minimum requirements and shall not prevent any Member State from maintaining or introducing more stringent measures (Art 1). It repealed, as of June 2014, a directive on the promotion of cogeneration,^ as well as the 2006 Directive on energy end-use efficiency and energy services. However, the provisions on national indicative energy savings targets and EEAPs in the latter Directive (Art 4) remain in force until 1 January 2017 (Art 27).
Each Member State is to set an indicative national energy efficiency target. Those targets shall take into account that the Union’s 2020 energy consumption has to be no more than 1483 Mtoe of primary energy as well as remaining cost-effective energy-saving potential. (Art 3.)
Member States are expected to use public purchasing as a means to increase energy efficiency. Central governments may only purchase products, services, and buildings with high energy efficiency performance. However, the obligation applies only insofar as it is consistent with cost-effectiveness, economical feasibility, technical suitability, and sufficient competition. The obligation also applies only to contracts of a value equal to or above the thresholds laid down in the Public Procurement Directive (now Directive 2014/24/EU, Art 4).  Other public bodies, including at regional and local levels, shall be encouraged to follow the exemplary role of their central governments in this respect. (Art 6.)
The Directive furthermore provides for so-called ‘energy efficiency obligation schemes’ which shall ensure that energy distributors and/or retail energy sales companies, designated on the basis of objective and non-discriminatory criteria, achieve a cumulative end-use energy savings target by 31 December 2020. That target shall be at least equivalent to achieving new savings each year from 1 January 2014 to 31 December 2020 of 1.5 per cent of the annual energy sales to final customers of all energy distributors or all retail energy sales companies by volume, averaged over the most recent three-year period prior to 1 January 2013. The sales of energy used in transport may be excluded from this calculation. As an alternative to energy efficiency obligation schemes, Member States may opt to take other policy measures such as energy or carbon dioxide taxes, regulations or voluntary agreements, and energy labelling schemes, to achieve energy savings among final customers, if the annual amount of new energy savings achieved through this approach is equivalent to the amount required by the energy labelling-scheme option. The calculation of energy savings and the criteria that apply to the different options are complex. (Art 8.)
In so far as it is technically possible, financially reasonable, and proportionate in relation to the potential energy savings, final customers of electricity, natural gas, district heating, district cooling, and domestic hot water shall be provided with competitively priced individual meters that accurately reflect their actual energy consumption and provide information on actual time of use. With some exceptions, such a meter shall always be provided when an existing meter is replaced, or a new connection is made in a new building, or a building undergoes major renovations. (Arts 9-10.)
Member States are required to carry out a comprehensive assessment of the potential for the application of high-efficiency cogeneration and efficient district heating and cooling. When the assessment, including a cost-benefit analysis, identifies a potential for the application of high-efficiency cogeneration and/or efficient district heating and cooling whose benefits exceed the costs, the Member States shall take adequate measures for such district heating and cooling infrastructure to be developed. (Art 14.)
As to so-called smart grids, Member States shall ensure that national energy regulatory authorities provide incentives for grid operators to make available system services to network users permitting them to implement energy efficiency improvement measures in the context of the continuing deployment of such grids. Member States also had to ensure, by 30 June 2015, that an assessment was undertaken of the energy efficiency potentials of their gas and electricity infrastructure, in particular regarding transmission, distribution, load management and interoperability, and access possibilities for micro energy generators. Concrete measures and investments must also be identified for the introduction of cost-effective energy efficiency improvements in the network infrastructure. (Art 15.)
The Directive also contains provisions on availability of qualification, accreditation and certification schemes, information and training, and promotion of energy services.