Municipalities and regions must lead the way – energy efficiency requirements are tightening

Municipalities and regions are expected to take the lead on energy efficiency. New EU requirements and a proposed Swedish law will give energy efficiency a more prominent role in everything from long term planning to investment decisions and procurement. At the same time, many profitable measures still fail to make it from proposal to implementation.

Municipalities and regions are responsible for large property portfolios, including schools, healthcare facilities, sports venues, housing and offices. This creates major opportunities to reduce energy use while cutting costs, freeing up capacity in the energy system and making public services more resilient.

Yet many profitable energy efficiency projects still stall before a decision is made. Competition for investment funding is fierce, and the full value of energy efficiency is not always clear enough in the business case. At the same time, pressure on municipalities and regions to act is increasing.

EU directives raise the bar

The Energy Efficiency Directive, EED, gives the public sector a specific role as a frontrunner. Among other things, the public sector’s total final energy consumption is to fall by 1.9 percent per year. The directive also strengthens the energy efficiency first principle, meaning that energy efficient alternatives should be considered before decisions are taken.

The Energy Performance of Buildings Directive, EPBD, places greater emphasis on the building stock and the path towards an energy efficient and fossil free building stock by 2050. For municipalities and regions, this creates further reasons to take a long term approach to the energy performance and renovation of their properties.

New Swedish legislation on energy efficiency in municipalities and regions

Sweden is also preparing new legislation on energy planning. The proposal includes requirements for long term plans to improve energy use within municipalities’ and regions’ own operations. Before major investments and certain planning decisions, different alternatives would also need to be assessed in line with the energy efficiency first principle.

Public procurement is also covered by the proposal. Contracting authorities and entities would be required to assess different options from an energy efficiency perspective before procurement decisions are made. The government would also be given the power to introduce requirements for high energy efficiency performance in areas such as goods, services, buildings and construction contracts.

This means that energy efficiency is becoming an issue not only for property and energy managers, but also for senior management, finance, procurement and political decision makers.

How do you get decisions over the line?

New requirements do not automatically lead to investment. For anyone responsible for municipal or regional properties, the crucial question often remains: how do you get politicians and senior managers to prioritise energy efficiency? Which arguments carry the most weight, and how do you secure long term support, resources and financing?

A key step is to look beyond kilowatt hours. Link the project to goals the municipality already prioritises and show the full value of the investment. How much money will it save over its lifetime? Can it free up capacity in the electricity grid? How will it support climate targets, improve the indoor environment or reduce maintenance needs? And can lower energy use make essential public services less vulnerable during disruptions?

It is also important to speak the language of decision makers. Energy savings become more tangible when they are translated into money and operational value. Technical measures become more relevant when it is clear which problems they solve and which risks they reduce.

Above all, make the decision easy. A strong decision making case should quickly answer three questions: What do we want to do? Why do we need to do it? What does the municipality or region stand to gain?

There are likely to be major differences in how well prepared municipalities are for the new requirements and in how actively they have worked with energy efficiency so far. But the proposed legislation means that municipalities and regions will need to address their energy planning more systematically. That could provide the starting point for an important discussion and a more structured approach across their organisations.

Requirements are increasing, but so are the opportunities

The EED, EPBD and forthcoming Swedish legislation are placing greater focus on the energy use of municipalities and regions. But this is about more than compliance.

Better energy use can lower municipal costs, free up capacity for growth and electrification, improve public properties and strengthen resilience. That makes it far more than a technical property issue.

The technology and many of the profitable measures already exist. The challenge is making sure they are actually implemented.

Facts: article series on the EU’s new regulatory framework

This article is part of a series on the EU’s new regulatory framework for energy efficiency and sustainable buildings, developed at the initiative of Clima Energy Nordic and Eneff.

The series explores the Energy Efficiency Directive, EED, and the Energy Performance of Buildings Directive, EPBD, from several perspectives, with a focus on how the regulations affect property owners, installers, municipalities and other stakeholders across the energy and property sectors.

The aim of the series is to build knowledge about how the EU’s new requirements can be translated into practice and contribute to sustainable, resilient and energy efficient properties and communities.

About Eneff

Eneff is Sweden’s industry association for energy efficiency. It brings together companies, organisations, municipalities and other stakeholders to accelerate the transition towards more efficient energy use and an affordable, reliable and sustainable energy system.