EU - Financing Energy Efficient Retrofit - nuances public affairs analysis 2013


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EU - Financing Energy Efficient Retrofit - nuances public affairs analysis 2013

  1. 1. The new EU strategy: Financing energy efficient retrofit September 2013
  2. 2. Page 2 Buildings account for more than 40% of energy con- sumption, the majority of which for providing heat Building sector Rest of energy market 59% 41% Heating and warm water account for 85% of the energy con- sumption of buildings. Share of building sector within total energy market Europe
  3. 3. Page 3 The EU has ambitious climate and energy targets for 2020.
  4. 4. The targets are based on three pillars – the focus here is on the energy efficiency goal Page 4 20% Reduction in greenhouse gas emissions (compared to 1990) 20% Share of energy production from renewable sources 20% Improvement in energy efficiency The EU climate and energy package and its “20-20-20” targets
  5. 5. How does the EU plan to achieve the efficiency target? Page 5
  6. 6. By committing the member states and by financing efficiency measurements via the EU budget Page 6 Member states have to compile so- called National Energy Efficiency Action Plans (NEEAP) till April 2014. In there, they have to demonstrate the means they plan to take in order to achieve the efficiency target. As of 2014, energy providers are supposed to sell 1.5% less energy each year. They can offer efficiency measurements to achieve this goal. One of the focuses of the next multi- annual financial framework 2014 to 2020 is energy efficiency. Through the European Regional Development Fund (ERDF) the EU will provide EUR 17 billion for efficiency measure- ments to the regions in Europe. Through the Horizon 2020 pro- gramme, the EU will provide EUR 6.5 billion for R&D on energy efficiency in the period 2014 to 2020. Committing the member states, e.g. through the Energy Efficiency Directive Financing energy efficiency measurements via the EU budget For 2 years now, the EU Commission has been seeking dialogue with the private sector to find out what the main obstacles are to invest in energy efficiency. A consultation process in 2012 was part of that effort.
  7. 7. What is the path of ERDF money from the EU to the regions? Page 7 • Operational Programmes – ERDF • Partnership contracts – ERDF • Joint strategic framework – ERDF European level National level Regional level consult/ agree consult/ agree
  8. 8. Operational Programmes have to dedicate 20% of the ERFD funds to renewables and energy efficiency Page 8 20% Renewables and energy efficiency funding as share of total ERFD funding
  9. 9. Particularly financing energy efficiency in buildings has become an important goal of the ERDF Page 9 EUR 17 billion (2014–2020) EUR 5.5 billion (2007–2013)Less than 4% of total ERDF funds Almost 10% of total ERDF funds
  10. 10. Per member state, the ERDF dedicates on average EUR 610 million to energy efficiency in buildings Page 10 EUR 17 billion (2014–2020) Ø EUR 610 million per member state (2014–2020)
  11. 11. How can the impact of the EU funding be increased? Page 11
  12. 12. The EU funding is supposed to be leveraged to invest- ments of about EUR 60 billion per year by 2020 Page 12 Investments in energy efficiency, such as housing insulation, are usually high and have a long pay-back period of 15 to 20 years. Private banks are often not willing to provide capital for that. There is a lack of information regar- ding the most appropriate efficiency measurement for a particular building. Professional energy consulting is needed. Particularly in the corporate sector, energy costs only apply for about 5% of total costs so that energy efficiency is not on top of the list. But: There are limitations to private invest- ments in energy efficiency measurements EUR 17 billion (2014-2020) EUR 60 billion p.a.
  13. 13. In the EU, the Member States play a key role in imple- menting energy efficiency Page 13 Germany gives market incentives by subsidising credit rates: doing more by the housing association or the individual landlord does translate into lower interest rates. The UK government has set up a framework where energy suppliers have to give an interest-free loan to housing associations and individual landlords to pay for energy efficiency refurbishment. The beneficiaries will have to pay back this “loan” via their electricity and gas bills. Germany and the UK are offering the two main models to trans- pose EU energy efficiency policy into action
  14. 14. In Germany and the UK, state-owned KfW bank and the Green Deal support energy efficiency investments… Page 14 EUR 1.5 billion p.a. EUR 235 million The Green Deal is new and has some teething problems. The key is information and trusting the energy consultant who is giving advice about the best energy efficiency measures.
  15. 15. …on the European level, the EIB is engaged in finan- cing energy efficiency but could do even more Page 15 EUR 1.5 billion p.a. EUR 235 million EUR 265 million
  16. 16. Energy efficiency has gone beyond Europe, also be- coming a focus of the International Energy Agency (IEA) Page 16 Energy efficiency in buildings Mandatory building energy codes and mini- mum energy performance Aiming for net-zero energy consumption in buildings Improving the energy efficiency of existing buildings Building energy labels or certificates Improved energy perfor- mance of building components and systems In 2011, the IEA updated its 25 Energy Efficiency Policy Recommen- dations. 5 of the 25 recommendations are particularly de- dicated to ener- gy efficiency in buildings
  17. 17. “We (the U.S.) want to be in that position of leadership. We must create an energy policy for the future. We cannot fall behind.” Page 17 Terminating, a quote from Arnold Schwarzenegger, former Governor of California and today Founding Chair of the NGO ‘R20 Regions of Climate Action’, after a visit to Brussels where he learnt about Europe’s energy strategy: Energy efficiency is one key to achieving this
  18. 18. Annex Page 18
  19. 19. Page 19 IEA Energy in Buildings and Communities Programme (EBC) – Annex 61 (1/4)
  20. 20. Page 20 IEA Energy in Buildings and Communities Programme (EBC) – Annex 61 (2/4)
  21. 21. Page 21 IEA Energy in Buildings and Communities Programme (EBC) – Annex 61 (3/4)
  22. 22. Page 22 IEA Energy in Buildings and Communities Programme (EBC) – Annex 61 (4/4)
  23. 23. Thank you for your time and consideration. Contact: Markus Rosenthal CEO nuances public affairs Neue Grünstraße 17/18 10179 Berlin, Germany T +49 (0)30 257 407 20 F +49 (0)30 257 407 29