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Brochure cash recommendations_final21112012


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CASH project: The Final recommandations of 10 cities and 1 region!

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Brochure cash recommendations_final21112012

  1. 1. Guide for EU decision makers and Managing Authorities in the frame of Cohesion Policy 2014-2020 Elaborated on the basis of CASH output documents CASH Final Conference, November 2012 Lead Partner
  2. 2. 2 Authors: Julien Dijol (Policy Analyst, CECODHAS Housing Europe), Sophie Moreau (CASH Coordinator, City of Echirolles), Stéphanie Abrial (elected official, City of Echirolles), Stéphane Durand (Head, Sustainable Development department, City of Echirolles) and CASH Techni- cal team Disclaimer: The sole responsibility for the content of this report lies with the authors. It does not necessarily reflect the opinion of the European Union and of URBACT Secretariat. CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  3. 3. 3TABLE OF CONTENTEXECUTIVE SUMMARY 5INTRODUCTION 6BETTER MONITOR LOCAL NEEDS AND RESOURCESAND FAVOUR LOCAL GREEN ENERGY MIX 7Recommendation 1: adapt the energy production systems to the local specificitiesand favour green solutions 8Recommendation 2: make affordable housing the core of local energy productionand distribution grids 9Recommendation 3: strengthen the local human capital 11DARE CITIZENS’ EMPOWERMENT AND PARTICIPATIONOF CIVIL SOCIETY! 13Recommendation 4: strengthen the participatory approach within the cohesionpolicy 14Recommendation 5: use EU funds to enable the participation of tenants in allstages of sustainability programmes in the field of social housing 15PROVIDE CLEAR AND STABLE FINANCIAL OPTIONS 17Recommendation 6: set up long term large-scale energy efficiency fundsaccessible at local levels 18Recommendation 7: create intermediary bodies that will coordinate energyefficiency programmes and help social housing deal with energy companies 20STRENGTHEN THE SKILLS OF LOCAL AUTHORITIES 21Recommendation 8: use EU structural funds to provide technical assistanceto develop long term sustainable social housing programmes 22Recommendation 9: create local clusters on sustainable social housing 24CONCLUSION 25PARTNERS CONTACTS 26 CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  4. 4. 4 City Hall of Echirolles where the kick-of f meeting of the CASH network was held in September 2010. CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  5. 5. 5EXECUTIVE SUMMARYCASH (Cities’ Actions for Social Housing) is a network of 11 partners led by the city of Echirolles in France (10 cities-Utrecht-The Netherlands, Tatabanya-Hungary, Sonderborg-Denmark, Les Mureaux-France, Brindisi-Italy,Bridgend-UK, Frankfurt-Germany, Yambol-Bulgaria, Eorda-Greece, Echirolles-France and one region –Rhône-AlpesRegional Council).The ambition of the CASH project is to propose new solutions and promote new policies for the sustainable renovationof social and affordable housing in the European Union.The network has organised local and transnational thematic seminars to exchange experiences, analyses barriersand collect good practices on issues such as the legal framework related to refurbishment of social housing, theinvolvement of citizens, the technical and financial aspects of energy efficiency investments. From those technicalseminars, the CASH network has proposed some policy recommendations in support of the EU work done in theframe of the Cohesion Policiy 2014-2020 to make the best use of the new structural funds to favour the “greening” ofsocial housing. This brochure intends to make the link between local on-the-ground obstacles and solutions and EUpolicies.The following are the 9 main EU policy recommendations from CASH, which are divided under 4 categories, whichalso corresponds to overall objectives.BETTER MONITOR THE LOCAL NEEDS AND RESOURCES1. Adapt the energy production systems to the local specificities and favour green solutions2. Make affordable green social housing the core of local energy production and distribution grids.3. Strengthen the local human capitalDARE CITIZENS’ EMPOWERMENT !4. Strengthen the participatory approach within the Cohesion Policy5. Use EU funds to enable the participation of tenants in sustainability programmes in the field of social housingPROVIDE CLEAR AND STABLE FINANCING OPTIONS6. Set-up long-term large-scale energy efficiency funds accessible at local levels7. Create intermediary bodies that will coordinate energy efficiency programmes and support social landlords negociating with energy companiesSTRENGTHEN THE SKILLS OF LOCAL AUTHORITIES8. Use EU structural funds to provide technical assistance to develop long-term sustainable social housing programmes9. Create local clusters on sustainable social housingThose recommendations are addressed to the Managing Authorities of EU structural funds but also to EU policymakers in the fields of energy, housing, urban renewal. CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  6. 6. 6 INTRODUCTION “We know how to limit greenhouse-gas emissions. We have a good sense of the costs — and they’re manage- able. All we need now is the political will 1” The economist Paul Krugman (1) gives in this sentence the sense of feasibility and urgency linked to the necessary energy revolution that the world has to trigger if we want to avoid the disastrous consequences of climate warming and the end of the natural resources upon which the current economic system is dependent. What P. Krugman however did not capture is that although we might know in theory how to limit greenhouse-gas emissions, we still struggle to turn theory into practice(s), in our case to turn cities into engines of sustainability. Housing is a good example of this discrepancy. Despite all the knowledge accumulated on how to perform energy refurbishment of existing housing, things are not moving as fast as they should to bridge the gap between the EU objectives on energy efficiency and the current path. In the meantime, the percentage of households living in a situa- tion of energy poverty increases and this require urgent action. Social housing represents 12% of European housing stock and 20% of CO2 emissions. Social housing is therefore a huge potential contributor to the massive energy savings we need to make in the next decades. In this context we do not only need political will as Krugman suggests; We also need a real expertise in technical and non-technical aspects – legal, financial, stakeholders’ involvement, systemic project management -, which in the case of sustainable housing, and in particular of sustainable social housing, means an integrated know-how based on vari- ous local experiences. This would give decision makers, at various levels, the information about the different options they have in order to make cities better places to live in ,through actions in favour of sustainable and affordable social housing. The CASH project has put together local experiences based on field reality and has tried to build an integrated know- how about sustainable social housing in an urban context. This know-how should be supported and deepened through the action of the European Union (EU). Not that a single approach about the challenges of sustainable social housing in cities can be dictated from Brussels. But the EU is the most suitable platform to collect and disseminate this know- how. It is also a relevant level of policy, since EU decisions might have a huge impact on local practices. In this document we have therefore translated the local experiences and knowledge into policy recommenda- tions for EU decision makers but also into recommendations for the Managing Authorities of the new Struc- tural Funds. Indeed the EU structural funds (also known as the EU Cohesion Policy) are seen as a major (if not the main) source of funding to put the EU back on track to reach the energy efficiency objective. But it has of course a wider role in terms of economic and social development of regions and communities. However the recommendations will not be limited to the Structural Funds as other pieces of EU legislation have an impact on the way cities build sustainable social housing. The recommendations are put under 4 sections which are meant to correspond to the elements of a successful programme of City Actions for Social Housing (CASH) and which are reflected in the local action plans set up by each CASH partners : the skills of local authorities, the knowledge about local energy needs and resources, the forward looking financing options, the innovative involvement of users and residents. There is no order of priority among those elements, since we believe that they all are necessary ingredients of success. Each section also coincides with transnational seminars organised within the CASH project during which local practices, barriers and solutions have been exchanged. (1)- Paul Krugman, winner of the 2008 Nobel Memorial Prize in Economic Science, in The New York Times Magazine, April 7th 2010 CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  7. 7. 7Better monitor local needs andresources and favour local greenenergy mix• Recommendation 1: adapt the energy production systems to the local specificities and favour green solutions• Recommendation 2: make affordable housing the core of local energy production and distribution grids• Recommendation 3: strengthen the local human capital CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  8. 8. 8 BETTER MONITOR LOCAL NEEDS AND RESOURCES AND FAVOUR LOCAL GREEN ENERGY MIX The energy needs and the specificities of territories in terms of energy sources can greatly vary. Sometimes potential local energy sources are not identified. And very often one does not know where the energy comes from. But what is common to all territories is that all have a potential in terms of local energy production, which only needs a bit of know-how to be exploited. Sonderborg-Denmark 5th CASH Transnational Thematic Seminar on Energy production, May 2012Source: CETE, Lyon, France, June 2012 Recommendation 1: adapt the energy production systems to the local specificities and favour green solutions The scale of the problem Developing a strategic energy planning to get to a low or zero carbon local economy is what many cities are aiming for. Some are already putting the elements in place such as green district heating in urban areas, heat pumps in rural areas, biogas plants, retrofit of houses, electrical cars… But many cities also believe that this is out of reach, for techni- cal, financial or cultural reasons. Others are hesitating between different energy options for the future: opting for an energy which will require relatively low upfront investment (low fixed costs) –after initial industrial development- but which cost a lot to the final consumer (high variable costs), for instance in the case of fossil fuel based energy, or opting for an energy which will require high initial costs of investments but whose final price for the consumer will be stable and much cheaper, in the case of locally produced and renewable energy. The EU through the various pieces of legis- lation linked to energy will have a great impact on this kind of choice for cities and should favour the elaboration of green Energy Strategy by municipalities and regions. Legal or political requirement The implementation of the Energy efficiency Directive by the Member States (article 3a on the plan for the energy efficiency roadmap and article 4 about the exemplary role of public social housing) should take into account the effec- tiveness of some specific technologies such as the Green Combined Heat and Power (CHP) providing ‘decentralized power’ and favour diversified local green energy sources. Regions and cities must be free to choose the most cost effective technological options but incentives should be given to use the greenest option, locally available and to promote the development of green Strategic Energy Plans. Regions and cities should also make use of the EU Structural Funds to finance those investments in local green energy production under the investment priority “supporting shift towards a low-carbon economy” (article 5 of the draft ERDF regulation). However over reliance on a single source of energy should be avoided to ensure security of supply and stability of price. CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  9. 9. 9Experiences from CASH PartnersSonderborg strategic energy planning and Fjernvarme green district heating companySonderborg Fjernvarme green district heating company is a consumer owned non-profit utility company, where eachof the 9000 consumers has a vote. It produces energy with a production plant using green energy sources and distrib-utes the energy, covering a large part of the needs of social housing. • Its waste and wood chip incineration Heat Power station (CHP) It evolved from fuel oil in 1963 -with district heating producing the energy and pumps distributing the energy -, to fuel oil and N-gas and waste incineration in 1985, to fuel oil and N-gas and a combined heat and power station (cogeneration CHP) powered with waste incineration in 1996 and with waste, geothermal and wood chip boilers in 2012. • Its geothermal plant • Its Sun Park Vollerup Solar thermal park producing 1 900 MW/year with its 6000 m2 solar collectors, 4000 m3 storage tank and its 2 boilers, supplying 1000 households.Recommendation 2: make affordable housing the core of localenergy production and distribution gridsThe scale of the problemAny credible plan for a sustainable energy future in cities should encompass housing and in particular social housing.Social housing units are blocks predestined to have cogeneration CHP central systems – concept of “Decen-tralized power” and district heating can be conceived with green co-generation. Another key element is to allow theplanning of connections between district heating through ‘District heating net map’. Producing energy closed to thepoint of consumption, i.e the local level, allows, in particular, to avoid energy losses in transmission and the high costsof transmission which may represent the bulk of the increase of energy prices and may prevent drops in bills corre-sponding to consumption. CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  10. 10. 10 CHP motor 5 electrical kW SENERTEC CHP motor 50 electrical kW CHP motor 611 electrical kW, 800 ‘Dachs’ machine, Frankfurt, Germany. managed by Social home owners thermal kW power gas engine for association Rödelheim, Frank- district heating network, Sossen- furt, Germany. heim, Frankfurt, Germany. Source: Utrecht-The Netherlands 1st CASH Transnational Thematic Seminar on Technological development, January 2011 Legal or political requirement European directives and funding should take into account, that social housing building blocks and areas which need to be modernized may be the nucleus of local energy distribution grids, thus giving better practical and economic conditions for the implementation of green cogeneration units and transforming the supply from fossil fuels to renewables. The EU directives about energy performance of buildings (EPBD) and energy efficiency (EED should take into account, that the modernization of social housing may be a main structural factor of implementing savings of energy and cogeneration and ‘greening’ the energy sources. Experiences from CASH Partners: Green co-generation for social housing blocks and its networking with green district heating, Frankfurt am Main. In the case of Frankfurt am Main, 2 billion are spent eachyear for energy, mostly imported from other countries (e.g. Russia). More than 50% comes from natural gas, 23% from coal and 7% from oil. The question raised is how to keep this money in the city and create green jobs. Key components are to: use as much green energy of the region - biomass from bio-wastes, solar energy, wind power -, shift towards green co-generation and reduce the demand - knowing that around 50% of the actual demand for heat, electricity and transportation is linked to behaviour. To achieve this, Frankfurt is working on its Energy Plan 2050. The following key steps are being analysed: • Understanding from where the energy comes from • How to transform this and possibilities – bottom-up estimation. Barriers foreseen are the mentality and views to change, as well as, inappropriate legal framework with lot of laws to change (see 2nd CASH transnational Thematic Seminar on Legal Framework, Brindisi-Italy, April 2011). Decision making tool: renovation in a portfolio strategy-Utrecht,Netherlands The Dutch housing corporation Mitros uses a decision model for its housing stock, based on return on investment from EE renovation. The principal goal is to try to raise the value of the housing stock. Next to the market value of the houses, it is also the value for renting them out and the value for the quality of living (‘social return’). Return on invest- ment gained through increased life span and value of the house, is a management criterion too. The returns from renovation can be summarised as follow: Making such future oriented calculations urges house owners, tenants and land- lords, to search for the most efficient and adapted techniques and technologies for energy renovation. With such model, a rational decision can be made between “Continuation of Utilization”, “Disposition”, “Renovation” or “Demolition / rebuilding”. Source: Frankfurt am Main energiereferat CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  11. 11. 11Recommendation 3: strengthen the local human capitalScale of the problemThe lack of specific technical knowledge and training among the different groups of energy retrofit actors (workers,tenants, social housing professionals…) is one of the most important obstacles to the success of actions towardssustainable social housing.The EU can help to bridge the gap in terms of human capital by investing into an integrated approach that willcombine the infrastructure aspect and the human capital aspect.The situation in the past has been very often characterised by a fragmented approach of the question of sustainableenergy: too often Operational Programmes of the Structural Funds only target the infrastructures aspect withoutcaring about the human skills needed to make those energy infrastructures function. This may lead to what has beencalled a “rebound effect”, where efficiency improvements are offset by behaviour changes, such as increasing demandsfor cheaper energy. EU projects have clearly shown the potential of behavioural changes 2.Political or legal requirementManaging authorities should use a significant part of the European Social Fund to support projects whose mainor ancillary activities consist in training workforces on sustainable energy related professions (installers, certi-fiers, engineers, workmen able to carry out deep retrofitting of building etc.).Example from CASH partnersEchirolles, FranceDeveloping synergies between stake-holders is a major issue tackled by theCity of Echirolles, France, in its publicand private EE renovation projects.The following diagram synthesisesthe synergies favoured among keystakeholders to optimize the time-frame, the cost, the efficiency and thesustainability of such projects.EUC Syd, Sonderborg, DenmarkThe regional technical college EUC Syd, with 23 000 students annually, from secondary school to pre-university levelshas a sustainable perspective. It has developed core competencies in energy efficiency (EE) and energy consump-tion, as well as in strategic energy planning. It has an active role in contributing to the carbon neutral 2029 regionaldevelopment and presents itself as a Zero academy.EUC Syd is training staff from the municipal institutions in how to be more sustainable, more EE and more criticalwith energy consumption. 140 municipal staff, in particular staff responsible of building management and mainte-nance, were trained. In cooperation with the Danish Institute of Technology, it has trained 150 energy counsellors– screening buildings for energy renovation on a sustainable basis. It has also trained people in contact withtenants to incentivize tenants.Shared enery skill center in les MureauxThe city of Les Mureaux plans to set up a special energy training facility for craftsmen.The city has identified a shared interest with several training / research organizations in the sector, for a commontechnical platform. The project partners will realise a new building with the newest energy efficient technologies so thatthe technical solutions of the building or equipment can be used for educational purposes and training.(2) CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  12. 12. 12 Source: Project Zero - for creating Zero Carbon Sonderborg, Denmark, CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  13. 13. 13Dare citizens’ empowerment !• Recommendation 4: strengthen the participatory approach within the cohesion policy• Recommendation 5: use EU funds to enable the participation of tenants in all stages of sustainability programmes in the field of social housing CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  14. 14. 14 DARE CITIZENS’ EMPOWERMENT ! Involving citizens and civil society is challenging for any kind of policies. We indeed often hear several arguments against such an involvement: ‘The man on the street has not the sufficient expertise to take reasoned decision’. They are also selfish and will not take decisions that won’t bring them an immediate gain. They also might be aware of the necessity to take action for the wider good of society but not in their backyard. But behind those arguments, the question of timing and money arise as involving citizens adds to the timing of project and requires financial resources. No investor is usually keen on “wasting” time and money for this. However, they really should change their mind looking at the results of successful methods of involving citizens that have been used by the CASH partners. Involving citizens not only increases the acceptance of renovation programmes, but it increases the efficiency of those programmes, by changing the daily behaviours towards energy consumption and thus achieving up to an extra 30 % of energy savings! Bridgend-UK 4th CASH Transnational Thematic Seminar on Citizens’ involvement, January 2012 Recommendation 4: strengthen the participatory approach within the Cohesion Policy The scale of the problem: Insufficient cooperation and communication problems between different departments of the government when prepar- ing the national strategies, lack of involvement of energy stakeholders at the regional level when preparing the opera- tional programmes…, those situations are common in many member states and regions. Legal or political requirement: Member States and members of the European Parliament should agree on article 5 of the draft Common Provisions Regulation about the partnership principle which requires Member States to involve relevant partners at all levels of programming. The European Commission should support the development of a database for good practices and guidance to help Member States and Managing Authorities in that field. Experiences from CASH partners: In Wales the “ARBED – Strategic Energy Performance Investment Programme” was established in 2009 (using European Regional Development Funds) with an objective of improving EE of a minimum of 4800 homes in Wales by 2015. The Welsh government will try to continue this model by including relevant actors in the preparation of the 2014- 2020 Structural Funds programming period. A European Programmes Partnership Forum 2014-2020 (EPPF) has been indeed established to discuss the development of any future European funding programmes in Wales. The EPPF will provide advice and guidance to Welsh Government Ministers, on options and proposals for future Euro- pean programmes in Wales. Members of the EPPF are expected to consult and communicate with their constituencies to broaden discussion and share information. The Forum is expected to meet quarterly. CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  15. 15. 15Recommendation 5: use EU funds to enable the participation oftenants in all stages of sustainability programmes in the field ofsocial housingScale of the problem:They are usual obstacles to the involvement of tenants in the co-conception of social housing energy efficientrenovation: • existence of reluctance among the different stakeholders to involve citizens in the planning and design phases. Social landlords and architects often consider that tenants are not construction experts and that it will represent more work to involve them; • citizens’ involvement is not a top priority for social landlords and financing bodies ; • no dedicated time and budget for the involvement of citizens in the EE renovation project cycle; • long time frame of renovation process as opposed to tenants’ time frame. When tenants are informed too early they get frustrated because of the long period left before the renovation (sometimes up to 5 years).However, as stressed many times by the experience of CASH partners, citizens’ involvement is important because: • they are directly concerned since it affects their house in which they spend a great part of their life; • by involving owners and tenants, a sense of ownership and belonging is developed; • a greater understanding of what happens helps the renovation process and the development of appropriate behaviours.It has been clearly demonstrated that the adherence of inhabitants requires a participation process of the residentsbefore-during-after the EE renovation, which means during the different programme phases: planning, design, reno-vation, occupation.This is in particular a guarantee that the potential energy savings will not be jeopardised by the inappropriate behaviourof the tenants owing, in a huge part, to their lack of participation, as highlighted, as well, by the SHELTER project 3.Legal or political requirement:EU regulation and Managing Authorities’ criteria should favour citizens’ involvement in the co-conception of thesocial housing energy efficient renovation (SHEER) to ensure a design coherent with the cultural behaviourand the optimal use of the EE equipment and systems by tenants, thus favouring the optimum functioningof renovated buildings and the reduction of energy consumption.Managing authorities of the Structural Funds should build upon the experience of URBACT II cities that have devel-oped local action plans (LAP) which use the involvement of residents as a way to enhance the quality of policies.Synergies with other EU networks such as the Covenant of Mayors should be supported.Under article 7 of draft ERDF regulation, member states can propose a list of cities that will directly manage the fundsfor sustainable and integrated urban projects. Having participated to an URBACT II project with emphasis on citizens’involvement (such as CASH) could be one criterion when establishing the list of cities that can directly manage theFunds. Eventually, the Structural Funds should support practices that reinforce the participation of residents to theenergy savings measures such as the Energy Ambassadors 4.Experiences from CASH partners:Communities First (a Welsh Government funded programme to reduce poverty), has assisted in the develop-ment of a training programme with Valleys to Coast V2C social landlord to involve citizens in devising communityaccess plans. Voluntary community champions were identified and given the skills in design, planning and communi-cation. Even though the experience was not in the co-design of the EE renovation process, it allowed emphasizingkey principles of Community engagement, such as: - establishing driving motivations - exploring wider options - clarifying and reconciling options and motivations(3) (4) CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  16. 16. 16 - acknowledging geographical / spatial / socio-economic differences - tackling the issue of information asymmetry (unknown knowns, unknown unknowns…blind, secret and missing knowledge) and building trust - testing perception against. Echirolles, France In Echirolles, citizens are involved since the beginning of the process, as illustrated hereafter, but mainly through consultation and information, except if tenants contribute to the financing of the renovation through rent increase: • Planning phase: - for the emergence of the renovation idea through meetings and ‘diagnosis while walking’. • Design phase: - at the reception of the funding agreement through an information meeting by the SHO; - during the elaboration of the pre-program of work by SHO through an individual survey focused on comfort aspects; - at the restitution of survey results and of pre-programme of works through an information meeting during which works related to comfort are debated; - in the case of requesting tenants to contribute to the financing of the renovation, renovation scenarios prepared by SHO and designers are presented and the negotiation is focused on the costs; the renovation methodology is presented by SHO and validated during a meeting with tenants. • Renovation phase: - the undertaking of the renovation works is presented by SHO and a follow-up of works is achieved through regular meetings at the foot of the building, to analyse malfunctions and disturbances and works’ evolution. • Occupation phase: - the energy consumption monitoring for a good control of operating costs is performed by the SHO and results are shared through a tenants’ committee or through quarterly meetings. Individual information is sent by mail by SHO to disseminate good practices; - the control of operating costs and charges is done during an annual meeting between SHO, tenants’ union and tenants association / representatives - first monitoring results are presented at a public meeting coordinated by the SHO and the city. On the basis of this analysis, the OPAC38 and SDH social landlords have agreed to integrate into their specifications a genuine involvement of tenants in decision-making in the different phases described. CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  17. 17. 17Provide clear and stablefinancing options• Recommendation 6: set up long term large-scale energy efficiency funds accessible at local levels• Recommendation 7: create intermediary bodies that will coordinate energy efficiency programmes and help social housing deal with energy companies CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  18. 18. 18 PROVIDE CLEAR AND STABLE FINANCING OPTIONS Financing sustainable social housing, at a time of scarce public resources and low interest from the private sector due to the rather low rate of return on investment, is a real challenge. However the experience accumulated around Europe gives clear indications about what needs to be put in place to take up this challenge. Frankfurt am Main 3rd CASH Transnational Thematic Seminar on Financial Instruments, September 2011 Recommendation 6: set up long term large-scale energy efficiency funds accessible at local levels The scale of the problem: It has been estimated that the comprehensive energy renovation cost for a dwelling, is in average 23,000 Euro (in France). In order to reach the European CO2 reduction goals for housing, approximately 70 to 180 million housing units in the European Union (EU) need to be renovated according to low energy consumption standards. This would require from 1,500 to upwards of 4,000 billion Euros of energy refurbishment investments in the residential sector before 2050, which represents roughly 27% of the energy consumption in the EU. How can this be achieved knowing that energy costs should be reduced by a factor of 3 to 4 and that 2/3 to 3/4 of the renovation costs are often dedicated to general maintenance measures? The trend is to cover these costs in the long term by the added value of the building and in the short term through higher rents. However, it is often not possible in the case of social housing, to raise the rent and certainly not more than the expected reduction in heating costs. Thus, additional financial instruments are required. Limited financial capacity for co-funding planned investments makes necessary to look for leveraging public funds. This was the reason why the European Commission introduced in 2007 a new mechanism: Joint European Support for Sustainable Investment in City Areas (JESSICA)5. Its main financial innovation and benefit becomes obvious at the level of projects to be funded: instead of paying out capital as a grant, capital is revolving and can therefore be rein- vested in new projects (enabling the “recycling of funds”). JESSICA was therefore launched with a view to providing new opportunities to Managing Authorities responsible for the implementation of Structural Funds in line with Opera- tional Programmes agreed for the current programming period. However, supporting the emergence of innovative local / regional financial instruments, scaling down the EU level of intervention, is also a terrain need. A question remains, however, about the suitability of such financial engineering instruments in the case of large scale and long term energy investments such as the renovation of large real estate and in particular social housing renova- tion where the profitability is limited. (5) _udf_en.pdf CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  19. 19. 19Legal or political requirement:Member states and members of the European Parliament should support the mainstreaming of financial engi-neering instruments as proposed by the European Commission (art. 56 of the Draft Common Provisions Regula-tion), as well as the development of innovative local / regional financial instruments. Consequently part of theERDF technical assistance funds should be dedicated to setting up those instruments, in particular, the revolvingfunds similar to JESSICA urban development funds.Experiences from CASH Partners:The Danish Building Fund:Started in 1966, this national fund is fed by rents once the loans made by the “Local Social Housing Department”(social landlord) for the construction of the building have been paid back. The state supervises this self-financingnational fund, through a board with 9 elected members.Rents cover the following costs: improvement costs: 21%, common costs (elevators, green areas…): 17%, LocalSocial Housing Department: 28%, Loans or National Building Fund (depending if building loans are paid back or not):20%, Reserve (to repair the apartments): 14%.This means that 20 % of the rents go to the National Building Fund, once the building has been paid. In 2010, the valueof the Fund was of 9 000 000 €.To cover renovation investments: 50% of the investment comes from the National Building Fund (upon its agreement)and 50% from a loan.However: Local Social Housing Department has no access to green loans and is obliged to take normal loans ; theprocedure is not simple and it takes time to obtain the money.National rent scheme and scoring system, NetherlandsIn the Netherlands, the maximum rent of social housing is set by a national scoring system. The higher the quality ofthe house, the higher the rent can be. A recent adaptation of the system has included the energy label of the house inthe scoring methodology, to motivate social landlords to invest in energy improvements.If landlords improve the EE of the house, a higher rent may be charged. On the other hand, if no energy improvementis made until 2014, the scoring will be lower and rents reduced. The scoring for the energy label varies from 0 to 44points and can be a considerable part of the total score of an apartment or house.Green Deal, UKIn the Energy Act of 2011, the UK Government has announced a “Green Deal”, which intends to reduce carbon emis-sions from buildings, starting in October 2012 with the following characteristics:Every British home and business will be able to install packages of energy saving technologies, such as insulation, atno upfront cost. Repayments will be made over time out of the energy savings. A revolving fund will be installed. Strictstandards will be put in place to protect consumers.A new requirement on energy companies is to provide support, with an estimated value of £1.3 billion a year, to ensureequal access to the Green Deal – regardless of income or of the type of house. Additional help will be available toensure the fuel poor get better boilers and fix draughty homes while subsidy will also be provided to help tackle homesthat are hard to insulate, including solid wall homes.The Green Deal is expected to kick start around £14 billion of private sector investment over the next decade. It couldsupport at least 65,000 insulation and construction jobs by 2015.KfW programs, GermanyIn Germany the KfW-development bank has been operating funding programs for energy and modernization ofresidential buildings for more than 15 years. Their funding tools are soft loans and direct subsidies (Zuschuss). Thereis a wide range of programs for reducing heat demand, for promoting renewable energies and for the modernizationof energy sources and dwellings. KfW’s main rule is that the higher the savings, the lower the interest rate or the higherthe subsidy. Additionally, the services of a consulting body to determine savings potentials and to follow-up the worksto ensure good results, is also funded. Over the last year, KfW has integrated funding for co-properties (Wohnei-gentümergemeinschaften). On the one hand, KfW’s pro grams are sometimes criticized because they tend to changerather rapidly. On the other hand, they provide several guidelines for achieving good results and savings, thus contrib-uting to the good use of State money. From April 2012, heritage-protected buildings can also be financed. KfW’sprograms have been evaluated several times for their effectiveness in reducing CO2 emissions and improving livingconditions. CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  20. 20. 20 Recommendation 7: create intermediary bodies that will coordinate energy efficiency programmes and help social housing deal with energy companies Scale of the problem: Third party financing is a financial mechanism involving the financing by an outside energy service investment company (ESCO) or by an energy provider. These investments are then paid off using the cost savings achieved. The investor installs efficient technology and maintains the system to make sure energy is saved. This might, for example, involve provision of the heating equipment, fuel and maintenance, as well as energy saving measures or investments in reno- vation operations paid back on energy savings. In some countries, as in UK, there are legal obligations which compel energy companies to contribute to the EE renovation costs. In Energy Savings Performance Contracts, the contractor (public or private, or a holding) proposes the owner meas- ures that will produce measurable guaranteed savings, committing itself to reach the level of savings defined in the contract. Projects are partly funded through energy savings and may result in future revenue for the owner. The use of third party financing whereby the upfront investment for the refurbishment of a house is made by an energy companies which is paid back through the savings made on the energy bill, is a promising financing option for sustain- able social housing. However, in reality, it turns out to be complex to implement not only because of the difficulty to guarantee the expected energy savings and because social landlords have not the same control over the EE renova- tion process and need to build-up monitoring competencies, but also because energy companies would need (as any private investor) large scale operations to recover transaction costs. In the housing sector, in particular social housing, this is hardly the case. Legal or political requirement: As for the Structural Funds, third party financing should be considered as authorized co-financing although it is not an expense paid by the beneficiaries (article 59 of the draft Common provisions regulation of the Structural Funds). As recommended by the CASH network, within the framework of the implementation of the Energy efficiency directive, independent third party managing entities should be created to manage technical, financial and organisational aspects and the monitoring of measures. They would act as facilitator between sociallandlords/coproperties’ owners and tenants. The role can be taken by local/regional funds/foundations or energy service/supply companies or even tenants organisations. Experiences from CASH partners: Tatabanya – Hungary: the reinvestment of Municipal power plant profit to finance heating modernization, as well as the selling of Kyoto CO2 quotas. The district heating company, co-owned by Tatabanya municipality,is developing several measures to support homeowners and co-properties’ owners in reducing their energy consumptionand reduc- ing CO2 emissions: • Development of a heating modernisation fund to connect households to the district heating network - from 1700 to 2400 Euros with a rate of contribution of 25-33% -. In the first twoyears, 10% of the targeted apartments have been connected,counting for 31% energy savings; • Measurement appliances setting on radiators • Information and personal advice. Local financial instrument, Brindisi, Italy In Brindisi, Italy, the public social landlord IACP (Istituto Autonomo Case Popolari) regulates its relations with tenants through a mixed committee “Commissione di Gestione della Carta dei Servizi”, according to the charter “Carta dei Servizi. Through municipal deliberation, it has been modified to allow the tenants’ Union to receive 30% of the rents (of 30€ min.) for self-management, which could be used for improvements in agreement with the IACP. Discussions are underway to include energy efficient renovation in the improvements. CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  21. 21. 21Strengthen the skills of localauthorities• Recommendation 8: use EU structural funds to provide technical assistance to develop long term sustainable social housing programmes• Recommendation 9: create local clusters on sustainable social housing CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  22. 22. 22 STRENGTHEN THE SKILLS OF LOCAL AUTHORITIES Although the economic, social and environmental necessity of triggering the energy transition, if not revolution, has gained a kind of consensus among the wider public opinion, there are strong inequalities in the capacity and competence of the local level (in particular cities) to deal with that challenge. Gaining expertise and a strategic vision for a sustainable future takes time and requires ideas and experience from elsewhere but also the support from the EU in particular the EU structural funds. Yambol-Bulgaria 6th CASH Transnational Thematic Seminar on SHEER Project management, September 2012 Recommendation 8: use EU Structural Funds to provide technical assistance to develop long term sustainable social housing programmes The scale of the problem Often referred to as a magical recipe to make successful policies although without being clearly defined, technical assist- ance means, in our case, the use of EU funds (in particular Structural Funds) in order to: • foster the administrative capacity of the beneficiary regions; • provide the training of staff involved in Structural Funds implementation; • put in place well-functioning monitoring and evaluation systems; • foster information, communication and promotional activities related to the national strategies. Technical assistance has therefore been mainly used by Managing authorities of the Structural Funds in the past to increase their own competence in managing the funds (compliance with EU rules). But what is now needed is to use tech- nical assistance to: • ensure project promoters are aware and can access funds to help them set up a project; • ensure Managing authorities can develop the necessary tools to write relevant calls for proposals in the field of sustainable social housing (through needs analysis, consultation with energy practitioners) understanding the systemic approach required for Social Housing Energy Efficient Renovation (SHEER) projects. At the EU level, there are at the moment opportunities of project development assistance, in particular ELENA (European Local ENergy Assistance)6 financed through the Intelligent Energy-Europe (IEE) programme. ELENA support covers a share of the cost for technical support that is necessary to prepare, implement and finance the investment programme, such as feasibility and market studies, structuring of programmes, business plans, energy audits, preparation for tendering procedures - in short, everything necessary to make cities’ and regions’ sustainable energy projects ready for EIB funding. Funds are currently available to support projects under this facility. Another project development assistance opportunity has been recently developed through the yearly IEE calls for proposals on Mobilising Local Energy Investments (MLEI- PDA)7. An important feature of MLEI is that it has an investment threshold of only 6M€ compared with 50M€ for ELENA - EIB. The supported technical assistance for project development services is similar. (6) CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  23. 23. 23However, the funding available under these facilities will not be sufficient to cover the needs and act at large scale. Techni-cal assistance under the new Structural Funds – including the Integrated Territorial Investment ITI - should thereforeprovide the same kind of services then project development assistance facilities, to facilitate their accessibilityby social landlords, co-properties and / or municipalities and to clearly explain the scale of operations for whichthey are intended.Project development requires in particular legal skills for the design and implementation of tendering processes. Manypossibilities do exist to use procurement rules to promote sustainability and an integrated approach: Green public procure-ment (includes the cost of the life cycle of a product/service/equipment), framework contracts, build-design tender. Localauthorities are not always equipped to take the most efficient approach from a societal point of view.Legal or political requirementMember states and members of the European Parliament should support the proposal of the European Commissionabout the widening of activities for which technical assistance possibilities are foreseen in the draft common provi-sions regulation (article 51).Local authorities should be incentivized to use green public procurement procedures in particular when using the Struc-tural Funds for sustainable energy programmesAn EU funded research priority may be the development of tools and instruments for a long term refurbishment strategyon city level. Support is needed to develop capacity for these tasks.Experiences from CASH PartnersTechnical support can cover: Technical assistance for the certification process, accessing financial support andhelping draw up funding requests, as in France; energy measurements by universities, as in Denmark; development ofdistrict heating by municipalities, as in Denmark and the Netherlands; use of smart metering to raise awareness, as inGermany.Capacity building and training vary widely, going from schoolchildren to scholars: in Denmark, National educa-tional programme exist for primary schools, as well as regional educational programs for municipal staff, energy ambas-sadors and teenagers; in Germany, teaching programmes exist in technical schools around the PassivHaus building,including programmes for architects and builders.(7) CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  24. 24. 24 Renovation approach: Rhone-Alpes Regional Council energy renovation plan for social hous- ing, France Starting with the challenge of national EE targets set in the new French Environment bill ‘Grenelle 2’, of 80 000 renovations, with an energy consumption performance level <150kWh/m²/year, CASH partner Rhône-Alpes Regional Council (RARC) has adopted an ambitious regional energy renovation plan in favour of social housing, both public and private, for the 2011- 2013 period. This plan, built around the regional partnership between RARC, the French Agency for Energy and Environ- ment Management (ADEME) and the regional association of social housing organisations (ARRA-HLM), will provide technical assistance and financial support to public social landlords and co-properties. Objectives of this plan are to generalise the target of high energy performance and to develop a project management integrating a multi-criteria approach (architecture, ventilation, comfort, eco-materials, etc.). Energy requirements have been set up so that flexibility and capacity of adaptation are guaranteed to operators. Energy renovation of Bulgarian homes Programme of the Ministry of Regional Development and Public Works, Bulgaria In Bulgaria where the public stock has been transferred to private ownership characterized mainly by low income owners, a special attention has been given to providing technical assistance to co-properties‘ owners. Indeed, in its Energy reno- vation Program, the Bulgarian Ministry of Regional Development is offering the service of a project manager who: • helps co-properties’ owners and associations preparing the indicative budget for the building renovation and allocates the expenses amongst the owners; • prepares information about the method of financing of each owner; • assists in finding the technical documentation of the building; • helps in founding the association of owners; • assists in finding solutions for the insolvent owners; • cooperates in the issuing of property sketch; • makes clarifications; attends General meetings; fills forms; • keeps in contact with municipality. Recommendation 9: create local clusters on sustainable social housing The scale of the problem Against the lack of local skills (i.e lack of expertise and training from local small and medium enterprises, but also from the housing providers, the municipalities, etc.), one often suggests that a possible response is more competition among small and medium enterprises (SMEs). However this might not be the most effective one. Indeed the clustering approach, favouring the development of special linkages and synergies between local stakeholders involved in a specific field - as research, industry, municipality, social and private landlords (in the case of EE renovation -, is an efficient tool to help developing these skills. Through different types of linkages, fromknowledge spill-overs to the use of a common labour market, clusters could through synergies decrease the cost of research and development and decrease all transaction costs (i.e. all costs incurred in participation in the energy refurbishement market). Local clusters may also be developed for the whole supply chain of energy efficient renovation from supplier, planners, architects via installer, to users. In such a cluster, Quality management can be developed, using energy labeling. Legal or political requirement The future EU strategy on low energy buildings, which will be launched in the autumn 2012, should support the creation of clusters, using the Intelligent Energy Europe programme for pilot clusters based on transnational experience and Structural Funds to scale them up. Experiences from CASH partners The Apulia “Cluster for Sustainable Building” (Brindisi, Italy) is promoting cooperation and educational activities for sustainable development to increase awareness of sustainability in the building process at any level. It brings together industries, companies and universities in the region, informs and gives training on sustainable development and energy-related issues, as well as, initiates research and innovation. Stakeholders involved share their experiences, allow- ing regions to give feedbacks to the higher legislative level and to influence new legislation, through the cluster’s R&D activities. CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  25. 25. 25CONCLUSION GET READY FOR THE COHESION POLICY 2014-2020 The European Union wants to be back on track to reach the objective of 20% reduction of energy consumption by 2020. It is not only a question of political credibility. It is also for cities an opportunity to mitigate and adapt to climate change and thus create new sources of growth. Cities should see the EU as an ally in this quest, not as a costly constraint. The EU indeed provides many new opportunities to support green social housing and thus increasing both the environmental performance and social inclusion in cities. To seize these opportunities requires a bit of preparation especially for the implementa- tion of the Structural Funds programming period 2014-2020. Member States and Regions will indeed prepare their Partnership agreements and Operational Programmes from early 2013 onwards. They should rely on the expertise of cities involved in other EU initia- tives such as URBACT II or the Covenant of Mayors, and cities all over Europe should benefit from CASH partners’ know-how on green social housing and articulate programmes and projects around the different dimensions of a successful project such as technological issues, legal framework, financial engineering, citizens’ involvement, energy production aspects and systemic project management. CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  26. 26. 26 PARTNERS CONTACTS Lead Partner Tatabanya Thierry Monel, Ville Echirolles, France Tamas Galgovics - Tel: 33 (0)4 76 20 63 00 Lead Coordinator Utrecht Sophie Moreau, Ville Echirolles, France Inge Van der Klundert - Tel: 33 (0)4 76 20 56 00 Bridgend (UK) Yambol Elaine Williams Mariya Paspaldzhieva Brindisi (Italy) Conseil Régional Rhône-Alpes Valerio Costantino Claire Prédal Frankfurt (Germany) Werner Neumann Echirolles Elected member in charge of CASH Les Mureaux (France) Stéphanie Abrial Brigitte Bonafoux and Laeticia Bideau-Maruejouls Echirolles Elected member in charge of Housing Carole Simard Eordea (Greece) Kostas Nikou Lead Partner Technical support team Stephane Durand,Sustainable Development Service Sonderborg Inge Olsen Sylvain Bove, Financial Officer CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012
  27. 27. URBACT is an European exchange and learning programme promoting sustainable urban developpement. CASH (Cities’ Action for Sustainable Housing) is an URBACT network of 11 partners (10 cities: Utrecht-The Netherlands , Tatabanya-Hungary, Sonderborg-Denmark, Les Mureaux-France, Brindisi-Italy, Bridgend-UK, Frankfurt-Germany, Yambol-Bulgaria, Eordea-Greece, Echirolles-France and one region Rhône-Alpes Regional Council-France) led by the city of Echirolles in France. The ambition of the CASH project is to propose new solutions and promote new policies for the sustainable renovation of social and affordable housing units in the European Union. Cities have become major policy players in the area of climate change policy and sustainable energy policy, for at least 2 simple and interlinkedreasons: first, cities use a significant proportionof the world’s energy and secondly, cities have significant energy and CO2 savings potential .URBACT CASH PROGRAMPARTNERS
  28. 28. URBACT is a European exchange and learning programme promoting sustainableAN URBACT II PROJECT urban development. It enables cities to work together to develop solutions to major urban challenges, reaffirming the key role they play in facing increasingly complex societal challenges. It helps them to develop pragmatic solutions that are new and sustainable, and that integrate economic, social and environmental dimensions. It enables cities to share good practices and lessons learned with all professionals involved in urban policy throughout Europe. URBACT is 300 cities, 29 countries, and 5,000 active participants. URBACT is co-financed by the ERDF Funds and the Member States.