News Release

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Jessica StrombackNicolas Muzi

Smart Energy Demand CoalitionWeber Shandwick

+358 449066821+32 2 894 90 44

EU Governments’ Energy Efficiency DirectiveDraftfacesa €5bn Loss

Deletions in the new Energy Efficiency Directive result in loss of€3.5 -5 billion per year in new direct revenues for local businesses in Europe

Brussels, Belgium – 18 April, 2012 – The Smart Energy Demand Coalition (SEDC) projectsthat European Council’s version of the Energy Efficiency Directive (EED) could preventEuropean businesses from generating between €3.5 and €5.0 billion a year in new direct revenues from their participation in the energy markets. The European Parliament’s Energy Committee (ITRE) introduced amendments to the Directive to ensure end-customers’ active participation in the electricity marketand to create more consistentelectricity usage over the day - known as “Demand Response”. Those amendments were rejectedby the Danish presidency and the Council.

“We wish to express our disappointment and concern regarding the European Council’s stated reluctance to consider the ITRE Committee’s proposed amendments on demand response and consumer feedback,” said Jessica Stromback, SEDC Executive Director.

Demand response– empowering consumers to manage their electricity bill

Demand Response offers several important environmental and financial benefits within today’s electricity markets. International studies demonstrate that people utilising demand response and feedback programmes can reduce their peak electricity demand by over 20% and lower their total consumption by approximately 9%. At the EU level and taking into consideration the entire population (including residential, commercial and industrial consumers who would not participate in demand response programmes), demand response programmes could reduce total overall energy consumption by 1.5% and help effectively contribute to Europe 2020 targets.

Demand responsesubstantially reduces the need for peak generation by shifting consumption away from peak hours,lowering green-house gas (GHG) emissions andreducing wholesale energy costs. It alsodecreases the need for network investments, asit shifts consumption away from peak hoursin regions with a tight network capacity.

Demand response delivers these benefits through providing residential, commercial[1] or industrial consumers– with information, control signals, and financial incentives (often direct payments) to lower or adjust their consumption at strategic times.

Keeping revenue local

The majority of revenue from demand response programmes flows to end users, and stays within the local communities whilstcontributing tolocal businesses. The demand response market in the USA is already generating approximately $6 billion in annual direct revenues for American businesses as well as gaining indirect earnings through fewerinvestments.

In Europe at the moment, there are significant regulatory barriers inover 23 of the 27 Member States,which impede the establishment of Demand Response programmes and the ability of third parties, such as aggregators, to enter these markets.

The Parliamentary amendments to Article 12 of the Energy Efficiency Directive would significantly improve this situation by providing essential consumer access to theelectricitymarkets.The amendments would alsoencourage National Regulatory Authorities (NRAs) and transmission system operators (TSOs) to define the technical specifications needed forconsumers to participate and profit fromdemand responseprogrammes.

This amendment is currently being ignored by the European Council.The omission will not only lower the environmental benefits of the EED, but block European consumers’ access to billions of Euros in new, environmentally friendly revenue streams, at a time of widespread financial uncertainty.

Jessica Stromback stated: “SEDC has found that sustainable changes in the energy consumption habits of end consumers are indispensable for substantialand lasting energy efficiency gains. Unless people know how much energy they are consuming, and how much it costs, they will be unable to adjust their consumption behaviour and make a meaningful contribution to energy efficiency in Europe. The SEDC therefore strongly encourage Council Members to re-consider provisions recommended by the European Commission and the ITRE Committee in Articles 8 and 12 and Annex VI of the EED”.

About the Smart Energy Demand Coalition (SEDC)

The SEDC is an industry group, which represents the requirements of programmes involving smart energy demand in order to further the development of the Smart Grid and ensure improved end-consumer benefits.

The SEDC vision is to promote the active participation by the demand side in European electricity markets, ensure consumer benefits, sustainability, competitiveness and energy efficiency.

The SEDC focus is to promote Demand Side programmes such as peak clipping and shifting, energy usage feedback and information, smart home, in-home and in-building automation, electric vehicle charging management, and other programmes related to making demand a smart, interactive part of the energy value.

The views expressed in this document represent the views of the SEDC as an organisation but not necessarily the point of view of any specific SEDC member.

[1]The term “commercial” refers to all buildings and businesses which are not directly industrial or residential; in other words, municipal buildings, SMEs, businesses such as hotels, office spaces, etc.