1. Horizon 2020 Energy Efficiency Information Day Finance for sustainable energy Topics EE 19 | EE 20 | EE 21 12 December 2014

2. Agenda 14:00 Welcome and Introduction Anette Jahn, Head of Sector, EASME 14:10 The policy framework for financing energy efficiency Roman Doubrava, Policy Officer, DG Energy 14:15 Overview of the funding area Finance for sustainable energy Adrien Bullier, Project Officer, EASME 14:20 EE19: Improving the financeability and attractiveness of sustainable energy investments Christof Marx, Project Officer, EASME 14:30 EE21: Development and market roll-out of innovative energy services and financial schemes for sustainable energy Stephan Renner, Project Officer, EASME 14:40 EE20: Project development assistance Martin Eibl, Project Officer, EASME 14:55 Questions and answers

3. Finance and sustainable energy Trying to match squares and circles? 3  “Investment project” for the financial sector: technical black box standardized product cash-flows, IRR, NPV predictability of risks transaction costs Financial sector Projects developers ESCO? Innovative financing? Adapted from C. Milin, ECEEE 2013  “Investment project” for many project developers: technical design tailored to physical constraints state-of-the-art technology energy payback times “no financing” = “no subsidy” ? We’ve got money, but… we’re looking for projects! We’ve got projects, but… we’re looking for money! > 6,100 signatories of Covenant of Mayors + all other stakeholders committed to climate and energy goals Green bonds market forecast at USD 40bn for 2014 (BNEF) This presentation requires oral explanations

4. EE19 EE21 EE19 Finance and energy efficiency investments: filling the gap through EU programmes This presentation requires oral explanations 4 Financial sector Project developers Innovative financing? ESCO ? Adapted from C. MILIN, ECEEE 2013 Risk-sharing schemes Equity provision Dedicated credit lines EU structural and investment funds IEE & Horizon 2020 Benchmark investments Awareness of investors Organise dialogue Capacity building National funding Project dvpt assistance EPC facilitation Local financing schemes We’ve got money, but… we’re looking for projects! We’ve got projects, but… we’re looking for money! EE21 EE20 Green bonds market forecast at USD 40bn for 2014 (BNEF) +/- €85 bn/year add''l investment required in EE

5. Horizon 2020 Energy Efficiency Information Day Improving the financeability & attractiveness of sustainable energy investments Topic EE 19

6. Scope Foster dialogue with and between financial market actors, standardisation and valuation entities, industry, public authorities, consumers and property owners. Three sub-topics 1.Develop frameworks for the standardisation and benchmarking of investments 2.Target public institutional investors 3.Create EU / national sustainable energy financing platforms Consortia Min. of 3 independent legal entities from 3 countries, except for national platforms where 1 entity is sufficient. EE 19: Overview (1/2)

7. Indicative budget €0.5 – €2.0 million Expected impact (depending on the projects) Reduced uncertainty - increased investors' confidence and trust Innovative (and relevant) asset valuation methodologies agreed by the market Standardised descriptions of sustainable energy investments or measures/contracts Labelling schemes or harmonised frameworks for sustainable energy investments National strategies for financing sustainable energy investments EE 19: Overview (2/2)

8. For example: Labelling and standardisation of sustainable energy investments or portfolios Valuation techniques integrating the 'green value' of buildings Proposals integrated in a broader approach such as socially responsible investment or 'green buildings' should focus on the energy component. 1.Develop frameworks for the standardisation and benchmarking of investments

9. Public institutional investors (e.g. public or semi-public pension schemes) Increase the share of their funds invested in sustainable energy Develop specific funds or investment products. 2.Target public institutional investors

10. Bridge the gap between the financial sector and the sustainable energy sector: organise dialogue between all relevant stakeholders develop roadmaps propose improvements in the legal frameworks develop template documents and contracts leading to a better understanding of the market. Proposals from 1 single entity are eligible The mechanism for knowledge sharing between countries will be established by the Commission services 3.Create EU and national sustainable energy financing platforms

11. Develop valuation techniques and norms that recognise EE in the valuation of residential property. Use property value increases in asset backed mortgage structures. Develop protocols to standardise project development and documentation for commercial buildings and get commitment from investors that they will demand the use of these protocols by project developers seeking finance. Establish a common practice for professional risk assessment based on technical and financial due diligence for PV installations financed by professional investors. Develop a framework to assess the ‘climate performance’ of assets and investment portfolios and integrate the framework in databases and portfolio optimisation tools used by investors and in mandates of asset managers. Set up an a labelling and benchmarking framework for energy performance contracts on commercial buildings, in order to build trust in the financial sector Establish a national financing platform and develop a standardised investment instrument with the capacity of channelling capital market resources into on-farm RESs. EE 19: Project examples (Call 2014)

12. Horizon 2020 Energy Efficiency Information Day Energy services and financial schemes Topic EE 21

13. Further EE improvements needed Public budgets are limited Improvement of legal & financial framework for energy services needed Large-scale roll-out of innovative energy services and financial schemes The Challenge

14. 1.Roll-out of business models for innovative EE services Monetise energy savings Energy performance contracting (EPC) Specify clearly your business model Example: IEE-Project 'EESI2020' The Scope (1/3)

15. 2.Replication of successful innovative financing solutions Proven solutions (implemented!) Specify clearly the financing mechanism Get expertise on financing on board Example: IEE-Project 'Infinite Solutions' The Scope (2/3)

16. 3.Large-scale capacity building for public authorities & SMEs Set-up or use innovative financing schemes for sustainable energy Active involvement of financial insitutions / financing expertise The Scope (3/3)

17. Savings of at least 25 GWh/year for every 1 million Euro of EU support; Larger investments in renewable energy & energy savings; Better implementation of energy-efficiency policies, number of policy makers influenced; Number of people with increased skills; Number of people changing their behaviour. Be clear about the expected impacts! (depending on specific project objectives)

18. Map and customize best practices ESCO markets and implement capacity building applying the “training of trainers” concept. Introducing innovative financing models (revolving funds, Energy Performance Contracting, Third Party Financing, cooperative models) in 3 pilot regions. Develop a cooperation platform to stimulate the establishment of SME partnerships for energy services and engage local supply side actors to offer standardized energy service packages. Develop new business and financing models to implement comprehensive refurbishment in public buildings using energy performance contracting (EPC). EE21: Project Examples (Call 2014)

19. Horizon 2020 Energy Efficiency Information Day Project Development Assistance (PDA) Topic EE 20

20. The Scope of EE20: Project development assistance will be provided to public and private project promoters such as public/private infrastructure operators, energy service companies (ESCOs), retail chains, cities and SMEs/industry, leading to innovative, bankable and aggregated sustainable energy investment schemes and projects of EUR 6 million – EUR 50 million.

21. Proposals must Lead to investment at the end of the action: Every million Euro of H2020 support must trigger investments worth at least EUR 15 million (1:15).  support is conditional on mobilised investments (pay- back clause!) demonstrate a showcase dimension in terms of delivering organisational innovation in the mobilisation of the investments and/or the financial approach. Have a high degree of replicability including a clear action plan to communicate across Europe towards potential replicators

22. Activities supported by PDA include to mobilise relevant stakeholders, draw up investment inventories, develop feasibility studies, set up financial engineering instruments, address legal and procurement issues.  Actual hardware investments, basic research or technology development are not covered! Focus on existing public and private buildings, retail energy market infrastructure, commercial and logistic properties and sites. Innovation should be demonstrated taking into account the situation in the targeted country. Proposals from 1 single entity are eligible for this topic.

23. 22 MLEI projects supported under Intelligent Energy Europe from 2011- 2013  http://ec.europa.eu/energy/intelligent/files/mlei-projects-2011-12.pdf  http://ec.europa.eu/energy/intelligent/files/mlei-projects-2011-12.pdf MLEI Energies Posit'if (France) Low-energy refurbishment with guaranteed energy savings in 32 condominiums as well as 8 social housing and public buildings Developing extended Energy Performance Contracting services to condominiums beyond normal market standards Minimum 60% energy savings targeted €40 million investment after 36 months  www.energiespositif.frwww.energiespositif.fr Project examples

24. H2020 Call 2014 – EE20 Bundling 8 public buildings (mostly schools) for energy refurbishment through Energy Performance Contracting Spreading use of EPC concept within the region Average 60% energy savings targeted €7.5 million investment after 30 months Project examples

25. H2020 Call 2014 – EE20 Low-energy refurbishment with guaranteed energy savings in 80 multifamily buildings in the Baltics Addressing the cash-flow problems of ESCOs through developing a forfeiting fund Minimum 60% energy savings targeted €30 million investment after 36 month Project examples

26. What is the concrete outcome expected from PDA projects? What if my project fails to deliver the investment? How does PDA relate to the ELENA Facilities?  please consult the FAQs for ENERGY EFFICIENCY - MARKET UPTAKE PDA (published next week) on the Horizon 2020 Participant Portal http://ec.europa.eu/research/participants/portal/desktop/en/opportunities/h2020/calls/h2 020-ee-2015-4-pda.html Some FAQ's

27. EE19 http://ec.europa.eu/research/participants/portal/deskt op/en/opportunities/h2020/topics/2379-ee-19- 2015.html EE20 http://ec.europa.eu/research/participants/portal/deskt op/en/opportunities/h2020/topics/2381-ee-20- 2015.html EE21 http://ec.europa.eu/research/participants/portal/deskt op/en/opportunities/h2020/topics/2380-ee-21- 2015.html More information: Participant Portal

28. EASME Energy Efficiency webpage: http://ec.europa.eu/easme/en/energy http://ec.europa.eu/easme/en/energy Horizon 2020 work programme 2014-2015  Secure, clean and efficient energy challenge  Energy Efficiency call  Section D: Finance for sustainable energy  Topics EE19, EE20, EE21 http://ec.europa.eu/research/participants/data/ref/h20 20/wp/2014_2015/main/h2020-wp1415-energy_en.pdf http://ec.europa.eu/research/participants/data/ref/h20 20/wp/2014_2015/main/h2020-wp1415-energy_en.pdf Practical information on H2020: http://ec.europa.eu/programmes/horizon2020/en/h ow-get-funding http://ec.europa.eu/programmes/horizon2020/en/h ow-get-funding Horizon 2020 – Energy Efficiency call Deadline 4 June 2015 17:00 CET - Online resources

29. For all questions: EASME-Energy@ec.europa.eu National Contact Points: http://ec.europa.eu/research/participants/portal/desktop/en/ support/national_contact_points.html

30. Thank you for your attention! @H2020EE