Open Letter to the EU-Parliament

20 December 2022

EPBD – Recognise sector coupling solutions to foster demand-side flexibility of buildings

Ahead of the upcoming committee vote on the EPBD revision, the signatories of this statement call on to the ITRE committee to adopt an ambitious, forward-looking, and comprehensive definition for demand-side flexibility.

Ahead of the adoption vote on the Energy Performance of Buildings Directive in the ITRE Committee, we call MEPs to recognise the key role of sector coupling solutions, such as hybrid heat pumps and smart cogeneration, as part of the definition on demand-side flexibility.

Specifying system integration solutions, including hybrid heat pumps and smart cogeneration, as critical for buildings “demand side-flexibility” definition, ensures that European buildings are ready to positively contribute towards a carbon neutral, resilient and cost-effective energy system, especially as these solutions increasingly run on renewable gases, including biomass, biomethane, renewable hydrogen, waste heat, renewable LPG, etc. This is supported by multiple studies and aligned with key EU Green Deal legislation:

• It is aligned with the European Commission’s Energy Efficiency First Guideline, which recommends that power markets set the right incentives or requirements for demand-side flexibility to compete with generation on an equal footing. This should include “support for installation of smart equipment able to respond to grid signal such as micro-cogeneration or other hybrid devices using renewable gas and electricity. Such support should typically be granted through transparent, competitive and non-discriminatory processes.¹”

• Hybrid heat pumps, cogeneration or combinations of both are recognised as key solutions to reduce electricity peak demand in the context of the ongoing energy crisis, as captured in the recent European Commission’s Smart Grids Task Force publication²:

• Ensures consistency with EPBD Annex I, Paragraph 5 (b) requirement to consider the positive influence of “electricity produced by cogeneration”, along district heating, natural lighting, and local solar exposure conditions. Referring to smart cogeneration ensures that the highest efficiency controllable power source is used to cover peak demand and provide inter-seasonal firm capacity, at times of insufficient intermittent renewable power. This can be achieved at site level, via micro-cogeneration or via DHC.

• It is complementary to the Electricity Market Design and ongoing efforts to develop a network code on demand side flexibility, while further adapting it to the buildings’ context. 2 European Commission Smart Grids Task Force, December 2022. Paper on electricity demand reduction: Measures to mobilise consumers’ flexibility this winter and beyond.

Recommendation: XXa. demand-side flexibility” means the capability of customers and smart energy appliances to react to external signals and adjust their energy generation and consumption, individually or through aggregation, with regard to time and cost, which may be provided by smart, decentralised energy resources, including demand management, energy storage, and distributed renewable generation, as well as sector coupling, such as hybrid heat pumps and smart ogeneration, to support a more reliable, sustainable and efficient energy system;

1. COMMISSION RECOMMENDATION (EU) 2021/1749 of 28 September 2021 on Energy Efficiency First: from principles to practice — Guidelines and examples for its implementation in decision-making in the energy sector and beyond, page 35.
2. European Commission Smart Grids Task Force, December 2022. Paper on electricity demand reduction: Measures to mobilise consumers’ flexibility this winter and beyond.