Financing Energy
Efficiency
Roman Doubrava
Directorate-General for Energy
C3 Energy Efficiency
SFEI Event, 4.12.12
Energy
FINANCE: A PARTICULAR MOMENTUM
New Multiannual Financial Framework (2014-2020)
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Cohesion funding to allocate some € 17 billion to
energy efficiency and renewable energy (doubling
current allocations)
Horizon 2020: € 6.5 billion is to be allocated to
research and innovation in "Secure, clean and
efficient energy"
Likely to include an IEE-type follow-up programme
Energy
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FINANCE: A PARTICULAR MOMENTUM
• Energy Efficiency Directive (2012/27/EU)
• New Regulatory Frameworks provide an opportunity
to develop the EPC market
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Article
Article
Article
Article
Article
3 – required renovation of 3% of central government buildings
7 – energy efficiency obligations 1.5% target to be met
8 - obliges large companies to carry out mandatory energy audits
19 – removal of barrier to energy efficiency in accounting rules
20 – Maximising the benefits of multiple financing schemes
More Stable legislative framework: renewed efforts
from MS & investment predictability for investors
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Energy
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FINANCE: A PARTICULAR MOMENTUM
EU funding should provide opportunity to attract & leverage
funds from private investors
However, the big bulk of EE/RES investments should come
from private sector, with EU and national funding to
complement;
Using market mechanisms to avoid crowding out investors
and increase leverage;
Grant to address primarilly market failures, innovative
technologies and beyond cost-effective EE projects (deep
renovation)
Energy
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COHESION POLICY PACKAGE NEGOTIATIONS
• EU General Regulation, ERDF, CF, ESF regulations under
discussions between EP-council
• In parallel, EC to start bilateral discussions on country
partnership contract to define each MS's priorities (further
implemented through OPs)

DG ENER providing input on country status regarding
EE/RES investments, implementation of EU legislation,
financing schemes… & provide recommendations
Energy
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WHAT ARE THE BARRIERS TO INVESTMENT?
Regulatory framework & market barriers:
• Procurement rules, public deficit accounting
• Split incentives
• Low level of awareness & capacity
Access to Financing
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High perceived risk -unclear market valuation
Unadapted financing products
High upfront financing
High transaction costs
Grant dependency
Energy
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FINANCIAL INSTRUMENTS FOR ENERGY EFFICIENCY
• Cohesion policy funds (2007-2013):
• 5,1 billion € for energy efficiency
• Intelligent Energy Europe Programme – IEE II
(2007-2013):
• 735 million € for ‘soft’ energy efficiency/ renewables projects
• ELENA Facility and MLEI under the IEE II:
• 97 million € for technical assistance to mobilise investments
• European Energy Efficiency Fund (EEE-F):
• 265 million € for investments into mature, bankable
efficiency/renewables projects
Energy
WHAT IS THE ‘INVESTMENT’ NEED?
• Energy savings potential across sectors requires
investment of around 850 billion € (2011-2020)
• Around 85 billion € per year
• Buildings take the lion’s share of around 60 billion
€ per year
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Energy
BEST PRACTICES EXAMPLES
REFURBISHMENT OF SOCIAL HOUSING (FR)
• Investments of € 320 M of ERDF in whole country
• Average support by ERDF = € 2,886 per dwelling (14% of
total needs)
• Impacts:
• generated over € 1 billion in investment in energy
performance in social housing in FR
• helped to create and maintain 15,000 local jobs &
potentially 31,000 with measures in the pipeline
• 50,000 households with modest incomes supported to
fight energy poverty (heating costs reduced on average
by 40%)
Energy
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KREDEX REVOLVING FUND IN ESTONIA
•
Switch from grants to a revolving fund
•
KredEx (Credit and Export Guarantee Fund of the State)
supports this
•
Why revolving fund?
• Opportunity for re-usage of the funds
• Funds stay in state
•
Loan is needed for reconstruction anyway
• Easier to administer, lower administrative costs
• End-beneficiary is used to take loan
• Innovative scheme, help from kfW
•
Started 06/2009
•
March 2010: 70 contracts with multi-apartment buildings,
total 5,1 mn € (average 74 400 €, 2035 apartments, saving
33%)
Energy
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THE EPC OPPORTUNITY
Source: International performance,
measurement and verification protocol,
EVO, 2010
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Energy
THE EPC OPPORTUNITY
Provision of loan
Investor
(Bank)
Customer
Repayment of loan
Guarantee
for
savings
Payments
for
services
Financing
by
Bank
ESCO
Source: European Energy Service Initiative
Energy
Guarantee
for
payments
DG ENER
Energy Performance Contracting (EPC) Campaign
• To highlight awareness of EPC at national,
regional and local levels
• To hold a series of practical workshops to,
increase knowledge, build confidence and share
experience
• Three pillars working to complement each other:
EPEC, ManagEnergy and Covenant of Mayors
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Energy
EPC CAMPAIGN STRUCTURE
National
EPEC
Regional
ManagEnergy
Local
Covenant of Mayors
2012-13 – series of
national events planned
2012-14 – 42 events
planned
2012-14 Webinar events
Targeting key
policymakers at national
level
Aimed at regional
authorities and energy
agencies
Capacity building events
for local stakeholders
Focus on implementation
of EPC frameworks, use
of cohesion policy funds,
and practical examples of
EPC benefits
Focus on forthcoming
changes to regulatory
framework and potential
replication of EPC
projects
Focus on barriers
encountered, solutions,
and practical ways to rollout more EPC projects
locally
Energy
WHAT CAN YOU DO?
You can assist in facilitating the development of the
energy services market, by understanding the financial
and regulatory frameworks necessary to overcome
barriers to EPC
• Identify stakeholders in your MS, including possible
speakers
• Highlight best practice examples for dissemination
• Facilitate and present at workshops
Energy
Thank you very much!
For further information on the EPC
Campaign please consult our
website:
http://ec.europa.eu/energy/efficiency/f
inancing/campaign_en.htm
Energy