The Enefirst Plus consortium is releasing a new practitioner’s guidance and an accompanying CBA Excel Tool to help public authorities, regulators and analysts put the Energy Efficiency First (EE1st) principle into practice in cost–benefit analysis. Together, the guidance and the tool aim to bridge the gap between high-level legal requirements in the Energy Efficiency Directive and the practical application of cost-benefit analysis.
Why this matters: EE1st is now a concrete requirement
In the recast Energy Efficiency Directive, Article 3 makes EE1st a fundamental principle of EU energy policy and requires Member States and competent authorities to:
- systematically assess energy efficiency solutions (including demand-side flexibility) in planning, policy and major investment decisions, and
- apply cost–benefit methodologies that capture wider benefits and address energy poverty.
In practice, this means that public authorities and planners can no longer treat efficiency as an afterthought. Whenever new energy infrastructure are considered, they are expected to test efficiency and demand-side options on equal footing with supply-side options, using transparent and robust economic methods. This is exactly the gap the new guidance and tool are designed to fill.
What the guidance offers
The guidance, “Making Informed Decisions – A Practitioner’s Guide to Capturing the EE1st Principle in Cost-Benefit Analysis”, focuses on how to adapt existing CBA practice so that energy efficiency and demand-side options are assessed on an equal footing with energy supply infrastructure.
Key elements include:
- Nine practical Issues to keep in mind when applying EE1st in CBA – from defining the option space and structuring cost items, to handling discount rates, system effects, risk and distributional impacts.
- A common cost-item framework that shows which costs and benefits belong in societal, private and state-budget perspectives, and where multiple impacts (health, air quality, comfort, etc.) fit.
The guidance is aimed at public authorities, regulators, consultants, researchers and students who already work with CBA or economic appraisal and want to align their practice with EE1st.
What the Excel tool does
To make the guidance concrete, Enefirst Plus has developed a CBA Excel Tool focused on local heating planning in the residential sector. The tool allows users to:
- Define a local building stock based on standard archetypes (building types and age classes).
- Compare a NoEff option set (continued use of gas, oil and biomass boilers with only standard envelope maintenance) with an EE1st option set (light and deep renovation of the building envelope combined with air-to-water and ground-source heat pumps).
- Calculate costs and benefits under both a societal perspective and a private perspective.
- Quantify the energy-efficiency gap by showing where the privately least-cost option diverges from the socially optimal one.
- Explore simple policy levers (grants, carbon prices, tariff changes, soft loans) that could close this gap and see how this affects public budgets.
Everything is implemented in Excel, with pre-filled data for all EU-27 Member States (building archetypes, technology cost ranges, energy prices and emission factors) and a clear four-step workflow. Basic Excel skills are sufficient; no modelling background is required.
A separate Technical Model Description document, released alongside the tool, documents the model logic, data sources and limitations for users who need more detail.
How to use this package?
We recommend:
- Using the guidance as the conceptual backbone for integrating EE1st into existing CBA practice;
- Using the Excel tool as an illustrative, hands-on example for the residential heating case;
- Referring to the Technical Model Description whenever the tool is used in analytical work or reports.
Features under development
The current release is a first step. Work is already underway on:
Training exercises linked to the Nine Issues: A set of short, guided exercises will help users explore, directly in the tool, how different methodological choices change results, for example:
- including or excluding multiple benefits,
- using different discount rates for societal and private perspectives,
- correctly removing transfer payments from the societal ledger,
- switching between different price and emission pathways (e.g. BAU vs NetZero).
These exercises will make the link between the conceptual guidance and the numerical implementation even clearer.
Inclusion of district heating options: A future version of the tool will expand the option set to include district heating (DH), so that users can compare:
- individual heat pumps and renovations,
- continued use of individual boilers, and
- connection to or expansion of DH networks.
This will reflect more realistic local heat planning choices, where EE1st often means jointly optimising building-level measures and network solutions.
Go through our webinar materials to discover the CBA Guidance and Tool!
