Transcript Slide 1

Financing Energy Efficiency
Looking towards 2020
Stefano Panighetti
Directorate-General for Energy
C3 Energy Efficiency
Energy
A particular momentum 1/2
A new framework directive to be adopted:
• To complement sectorial directives and introduce
binding measures for MS
• Art. 14 & 15a promotion of energy services,
financial instruments and incentives
 More Stable legislative framework: renewed
efforts from MS & investment predictability for
investors
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Energy
A particular momentum 2/2
A new Multiannual Financial Framework (2014-2020)
• 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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MFF 2014-2020: A new Paradigm
for sustainable investments:
• MFF in line with EU 2020 strategy: "smart,
sustainable & inclusive growth"
• Conditionality: implementation of relevant EU
legislation
• Cohesion policy Thematic concentration: shift to a
competitive low carbon economy
• Public authorities to pave the way (public building
renovation, use of EPC…)
Energy
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• 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, EU and national
funding to complement;
• Using market mechanism to avoid crowding out
investors and increase leverage;
• Such as Financial Engineering Instrument and
EPC;
• Grant to address primarilly market failures,
innovative technologies and beyond cost-effective
EE projects (deep renovation)
Energy
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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
What are the barriers to EE
investments?
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
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How can the EU support help?
• Cohesion policy funds (2007-2013):
• 5,1 billion € for energy efficiency (up to 8 billion € if all MS reallocate 4% for housing under ERDF)
• Intelligent Energy Europe Programme (2007-2013):
• 735 million € for ‘soft’ energy efficiency/renewables projects
• Capacity building, awareness raising, best practices sharing
• ELENA Facility:
• 97 million € for technical assistance to mobilise investments
• To scale up projects and reduce transaction costs and support
Project development phases
• European Energy Efficiency Fund (EEE-F):
• 265 million € for investments into mature, bankable
efficiency/renewables projects
• 20 million € for technical assistance
• Role model projects, leverage effect, EPC support…
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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
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Switch from grants to a revolving fund
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KredEx (Credit and Export Guarantee Fund of the State)
supports this
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Why revolving fund?
• Opportunity for re-usage of the funds
• Funds stay in state
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Loan is needed for reconstruction anyway
• Easier to administer, lower administrative costs
• End-beneficiary is used to take loan
• Innovative scheme, help from kfW
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Started 06/2009
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March 2010: 70 contracts with multi-apartment buildings,
total 5,1 mn € (average 74 400 €, 2035 apartments, saving
33%)
Energy
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JESSICA fund in Lithuania
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JESSICA Holding Fund amounts to €
227 million:
• € 127 million ERDF
• € 100 million National co-financing
• Expected later: some funds by
commercial bank
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Implementation started June 2010
To date, circa 100 projects have been
approved for funding.
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Planned to modernize 24.000 houses,
by the year 2020
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This example:
• 45 apartment multi family building
• Insulated external walls and roof
Windows replaced
• Glazing of balconies
• Modernization of heating substation
& heating systems
• Energy efficiency improvement of
Energy
60 %
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Energy Performance Contracting
(EPC)
Campaign
Directorate-General for Energy
Energy Efficiency
Energy
The EPC Opportunity
• New Regulatory Frameworks provide an opportunity
to develop the EPC market
• Multi-annual Financial Framework
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Use of Structural and Cohesion Funds to provide financing for EPCs
Potential to develop MS policy to reflect the EPC opportunity
• Energy Efficiency Directive
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Article 3 – required renovation of 3% of central government buildings
Article 7 – energy efficiency obligations 1.5% target to be met
Article 19 – removal of barrier to energy efficiency in accounting rules
Article 20 – Maximising the benefits of multiple financing schemes
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Energy
Aims of the 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
- Share experience
- Create dialogue among all stakeholders (public, private,
regional and national level)
• 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
Key Stakeholders
• National Administrations, including Ministries of Finance,
Energy, Environment, Public Works
• National Energy Agencies
• Financial Community
• Municipalities
• ESCo's
• Energy Services Industry (products, technology, energy
management systems)
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Energy
Accounting for EPCs in the Public
Sector
There is significant potential for energy savings in the public
sector, which could be facilitated by the uptake of EPCs
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EAS 95 – when “most project risk” is transferred to the private
partner to a government in a PPP (public private partnership),
then the assets involved in the PPP should not be reported on the
government balance sheet.
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'Off-balance sheet' financing to could be an incentive to encourage
public sector organisations to consider energy efficiency
investment
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May require changes to the reporting structures on PPPs to
Eurostat in some MS
• How do you account for EPCs?
Energy
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Thank you for your attention
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Energy