ENERGY EFFICIENCY SHOULD BE PRIORITIZED FIRST IN HEATING Dependence on foreign energy supply to the Union is not sustainable, nor for social Europe or the climate. The heating sector is one of the most important, as it heavily depends on natural gas and significantly impacts the average citizens' economy. The Energy Efficiency First principle, therefore, is very important for the future of Europe.

By Carsten Østergård Pedersen, Business Development Director Asbjørn Bjerregaard Ebbesen, Advisor, Public Affairs Rune Kaagaard Sørensen, Student Assistant

The best weapon against a growing problem Consolidation of the Energy Efficiency First principle in EU's Fit-For-55 negotiations is becoming significantly more impor- tant as the climate, social Europe, and our energy security call for a change in how we get our energy and use it. IEA argues that 40% of our carbon reductions towards 2050 should come from energy-efficient solutions1. However, we need to double the pace of energy-efficient solutions to stay within the Paris Agreement goals 2 Energy efficiency also plays a crucial role in our energy security. Before the Ukraine conflict, we saw unprecedented prices on natural gas, the most used energy source in the European Un- ion after oil 3 . However, experts only expect higher prices due to the current geopolitical conflict4 The situation is expected to have made more than 80 million Europeans live in energy pov- erty5, which will only worsen. However, 1% in energy savings is expected to reduce gas imports by 2,6%6, and energy efficien- cy has proven to be the most impactful measure in lowering natural gas imports.7 The heating sector is the most important sector to focus on. It represents 50% of Europe's total end-use consumption, and fossil fuels still deliver 75% of all heating within the European

Union 8 . Moreover is, 79% of all energy in European households for heating water and spaces9. Putting energy efficiency first in the heating sector can, therefore, lower carbon emissions, import of natural gas, and citizens' energy bills. How to create energy-efficient heating To create a more energy-efficient heating sector, the EU should focus on deploying fourth-generation district heating and individual heat pumps and lowering the total heat de- mand. Luckily, all the technologies are ready for deployment today. First, local authorities should focus on making strategic heat plans to secure a fast and cost-effective transition of local heating towards energy-efficient solutions that run on renew- able energy and surplus heat. Local communities have mas- sive untapped energy potentials, such as geothermal energy and surplus heat from industries, data centers, and soon pow- er2x. Surplus heat alone is expected to deliver 25% of future energy for district heating10. Strategic heat planning should ensure that future heating needs run at lower temperatures for lower heat losses and more efficiently integrate heat pumps and renewable energy. Therefore, the deployment of fourth-generation district heating plays a significant role in

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5 6 Directive (EU) 2018/ EU on the energy performance of buildings and Directive 2012/.../EU on energy efficiency (Europa. EU)

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