The European Commission recently published its proposed new Energy Efficiency Directive. Replacing the existing directive, this would add new and stronger incentives for EU member states — including a renewed emphasis on smart meters and smart grids in order to achieve the EU’s 20% conservation target by 2020.

The new directive also establishes a common framework to promote energy efficiency, and to pave the way for further energy efficiency after the target is met.

But so far, the EU is behind on energy efficiency. The EC’s latest estimates suggest that so far the EU would only achieve half its energy conservation target goal by 2020…

The directive includes rules designed to remove barriers and overcome some of the market failures that impede efficiency in Europe’s supply and use of energy. For example:

• Building upgrades. Bring up to minimum energy standards at least 3% of the floor space of each public building, beginning in 2014
• Energy efficiency targets. Require all energy retailers to increase efficiency by 1.5% per year. This target is more aggressive than any of the 28 U.S. states with efficiency targets, including California.
• Audits. Promote home and business energy audits.
• Smart meters. Require smart meter rollouts in accordance with earlier directives — calling for 80% deployment by 2020, and 100% by 2022.
• No estimated bills. Require electricity billing to be based on actual consumption. Today virtually all European consumer power bills (except in Scandinavia and Italy) are based on estimated meter readings. Actual readings are taken only once a year or so. This is another important driver for smart meters.
• Energy information. Consumers must receive detailed energy information free of charge, and have the right to have their data sent to energy service providers of their choice.

Critically, this directive proposes that EU members adopt penalties for non-compliance with these rules — giving it real teeth. An element of this is an annual reporting requirement.

What’s next? In its summary presentation about this proposed directive, the EC projects final adoption by the European Parliament in about 12 months — and that it would take effect by the end of next year.

All of which begs the question: What is the current U.S. vision from Washington?

Further analysis: See this Smart Grid Watch guest post by Chris King, eMeter’s Chief Regulatory Officer.