ARTICLE ON THE USE OF THE PRIMARY ENERGY FACTOR (PEF)

Bruno De Wachter March 2012

ECI Publication No Cu0164

ON THE USE OF THE PRIMARY ENERGY FACTOR (PEF)

AS LAID DOWN IN ENERGY PERFORMANCE OF BUILDINGS DIRECTIVE
The new version of the EU Energy Performance of Buildings Directive (2010/31/EU) stipulates that a Primary Energy Factor (PEF) should be taken into account when evaluating the electricity consumption of a building. But how should this PEF be calculated, and what are its effects on the market? These were some of the subjects of the Ecofys study Primary energy factors for electricity in buildings released May 2011. The EPBD lays down a general framework for calculating the integrated energy performance of a building. This includes the use of a Primary Energy Factor (PEF) for electricity, which ensures that the energy losses of electricity generation and transport are taken into account when comparing electricity use with other types of energy use in the building. The directive does not stipulate a precise calculation method for the PEF. It only demands a common approach, a level playing field, transparency, and conformity to European standards. That is a formulation that still leaves plenty of freedom to the Member States. In each case, each national integrated PEF is based on the energy mix for electricity generation in that country. It integrates the individual PEFs for each of the energy sources of this mix. Ecofys studied the national integrated PEFs of seven EU member states: France, Germany, the Netherlands, Poland, Spain, Sweden, and the UK. For several of those countries, Ecofys was unable to determine the precise calculation methods used to determine their PEF. Clear indications were found that the PEFs of France, the Netherlands, and Sweden were not laid down purely by an algorithm. The PEFs of Spain and Sweden were found to be to be disproportionally high for the energy mix of those countries, which includes a high share of renewables. The level playing field and transparency required by the directive seems to be lacking.

EVOLVING ENERGY MIX COMPLICATES CALCULATION

This lack of consistency hardly comes as a surprise when considering the changing energy landscape in Europe. The PEF is a straightforward figure as long as you compare the direct use of fossil fuels in buildings with the use of electricity generated in fossil fuel power stations. To compare them on a fair basis, it is logical that both types of energy use should be calculated back to the amount of fossil fuel that is consumed. This means that a correction factor is required to reckon with the energy losses of electricity generation and transport. It becomes more complicated when nuclear energy comes into play. The efficiency of a nuclear power station differs greatly depending on where you draw the borders of the system. The CEN standard 15603:2008 recommends a PEF value of 2.8 for nuclear energy, but many countries have chosen to use a higher value. Spain, the only Member State that reports PEFs of individual electricity generation technologies, stipulates a PEF of 3.03 for nuclear energy. An even more difficult topic is the PEF for renewable energy technologies. In theory, those technologies should be given a Primary Energy Factor of 0 as their primary energy is theoretically eternally renewable. However, renewable energy systems have other types of environmental impact. These include such factors as the use of land and material, which implies that it is still crucial to use renewable energy as efficiently as possible. To agree on a PEF for renewable energy equal to zero is therefore only a good idea so long as the share of renewables in the energy mix is low. In such a case, it will stimulate the development of renewables without jeopardizing the need for energy efficiency efforts. Once the share of renewables becomes higher, the PEF for renewables incorporates a potential conflict between stimulating renewable energy development and stimulating energy efficiency. In this event, there are good reasons to opt for a PEF for renewables that lies somewhere between 0 and 1.
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The PEF issues regarding nuclear energy and renewable energy clearly illustrate how - in the current energy landscape at least - the PEF has become a political correction factor rather than a scientific value.

A DYNAMIC APPROACH TO THE PEF

The Ecofys study investigated the expected evolution of the national integrated PEFs over the coming decades, supposing the PEF for renewables is set at 1. Obviously, the integrated PEF will converge towards 1 as the penetration of renewables increases as 2050 approaches. However, by 2020 the integrated PEF is still expected to hover around 2 in most countries. This means that by that time, local fossil fuel boilers in buildings will still be in favour compared to electric heating systems such as heat pumps. This could result in missing a valuable opportunity for the further development of renewables, as the storage capacity of electric heating systems and heat pumps can be a useful buffer in dealing with the intermittency of renewables. The above example shows that the rapidly changing energy mixes and the political character of the PEF call for a dynamic approach to PEF calculations. Ecofys recommends re-evaluating PEF calculation methods at regular and timely intervals and adapting them to changing needs and circumstances. For instance, it could be a good idea to keep the PEF for renewables below 1 as long as renewables are not the main energy source used for electricity generation.

HOW TO COUNT IN LOCAL RENEWABLES

Another political decision that needs to be taken into account is which primary energy factor to use for renewable energy produced on site. The terminology PEF for produced electricity that is used by the directive is confusing. This PEF for produced electricity is the factor that locally produced electricity should be multiplied by to compare it with grid electricity. If the PEF for produced electricity is taken to be the same as the integrated PEF for delivered grid electricity, this means in fact that the locally produced electricity can be entirely deducted from the grid electricity that the building is consuming over the year.

Fig. 1: No energy is produced locally

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Fig. 2: Part of the energy is produced locally, with PEF produced = PEF delivered The PEF for produced electricity is in some cases set lower than the average PEF for delivered grid electricity. The reason is that local renewables will mainly produce at times when demand is low (e.g. solar PV mainly produce in summer) or when the share of renewables in the electricity mix of the grid is already high (e.g. local PV cells produce when centralized PV cells produce as well). This is penalized by lowering the PEF for produced electricity. This means that locally produced renewables are not deducted from the consumed grid electricity at their full value.

Fig. 2: Part of the energy is produced locally, with PEF produced < PEF delivered

In short: the PEF for produced electricity follows an opposite reasoning as the PEF for delivered electricity. It is high when the energy benefit of local renewables is considered high, and low when this energy benefit is considered low.

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In five out of the seven countries studied by Ecofys, the PEF for produced electricity is set equal to that of delivered electricity. This does stimulate the development of local renewables on buildings, but it also reduces the incentive to improve the energy performance of the building.

THINKING LOW ENERGY HOUSES

It is not just the energy mix in generating electricity that has been rapidly changing in recent years. The energy consumption of buildings is also in full evolution. An increasing number of new or renovated constructions are being built according to zero or low energy concepts. Consequently, heating and cooling take an increasingly lower share in the total energy consumption of the building. When calculating the energy performance for these types of buildings, it would be a good idea to include electrical household appliances. This will enable the incorporation of locally produced renewable electricity at maximum value, since more of this energy could be written down as locally consumed and will be accounted for with a lower PEF. For low or zero energy buildings, Ecofys also recommends separating energy demand from energy supply in the energy performance evaluation. The initial step of this type of evaluation determines the energy demand of the building. This energy demand must be kept as low as possible. The energy supply is assessed in a second step, taking a primary energy factor into account. This kind of evaluation method for the energy performance avoids the occurrence of low PEFs giving a negative incentive for further improvement in the buildings energy efficiency.

PEFS CRUCIAL FOR THE DEVELOPMENT OF RENEWABLES

Winding up, the Ecofys study on the PEF for buildings gives five clear recommendations: 1) The calculation methods for the PEFs should be made as consistent as possible, and they should at least be documented. 2) For countries that use disproportionally high PEFs for their national electricity mix (e.g. Sweden and Spain), the details of the decision-making process should be revealed and adapted where necessary. 3) Considering the rapid evolution of the electricity system, PEFs should be revised at least every three to five years. 4) Given the strong move toward zero energy buildings, there is a case for taking appliances into account in the electricity demand of the building. This would provide greater reward for on-site renewable electricity. 5) Assessing energy demand and energy supply separately avoids lower PEFs giving a negative incentive for energy efficiency. If these recommendations are not put into practice at least partially - the high PEFs (compared to the given electricity supply mix in that country) used by some EU Member States could ultimately jeopardize the development of centralized, grid-coupled renewables. On the economic level, that would result in a less attractive market for renewable energy developers. On the technical level, it would hinder the opportunity to use the storage capacity of electrical heating systems as a buffer for the intermittent nature of renewable energy power stations. On the ecological level, this would slow down the rate at which greenhouse gas emissions are being reduced.

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