1.  Energy Efficiency funding and the EU Cohesion Policy
Energy Cities – Open Days 2011
Energy & Territory: from multilevel governance to local agreements
Dr. Tudor Constantinescu
European Commission
Directorate-General for Energy 1

2. Energy strategy 2020 – Five priorities
Efficient use of energy
Integrated energy market
Secure, safe and affordable energy for consumers
Technological leadership
Strong international partnership 2

3. Meeting our “20-20-20 by 2020” goals 
Meeting our “ by 2020” goals
Reduce greenhouse gas levels by 20%
Increase share of renewables to 20%
Reduce energy consumption by 20%
100%
Current trend to 2020
Current trend to 2020
-20%
-10%
Current trend to 2020
20%
[ Energy networks, diversifying energy sources and increasing energy efficiency ] 3 3

4. European funding mobilised
Financial support
European funding mobilised
Structural funds/ERDF (incl. JESSICA)
Intelligent Energy – Europe Programme
ELENA Facility
European Energy Efficiency Fund (EEE F)
Smart cities
(within the 7th Framework programme for Research)
Public Private Partnerships 4

5. Cohesion Policy 2007-2013 Cohesion Policy 07-13 European Regional
(€ 347 billion)
European Regional
Development Fund
(ERDF)
Cohesion Fund
European Social Fund
(ESF)
DG REGIO
DG EMPLOYMENT

6. Cohesion Policy
Convergence objective: regions with GDP per capita under 75% of the EU average. 81.5% of the funds are spent on this objective.
Regional competitiveness and employment objective.

7. Functioning of Cohesion Policy
European Commission & Member States negotiated / agreed National Strategic Reference Framework (NSRF) and Operational Programmes (OPs) at national and/or regional level for
Member States alone select and implement the projects in line with priorities of the OPs (principle of ‘shared management’).
Major Projects: Investments of more than € 50 million are submitted and approved by the Commission.

8. Functioning of Cohesion Policy
Co-financing rate of 50% (competitiveness regions) or 75/85% (convergence regions) at programme level.
Different rate for ‘revenue-generating’ projects (possibility also to use revolving financing instruments for such projects)
EU funds always completed by national, regional, EIB funds.
Programmes managed by “Managing Authorities” (MAs) at national/regional level. Often national or regional Ministry for finance/economy/regional development.

9. “Green economy” investments 2007-2013
Renewables €4.8 bilion
Energy Efficiency
€4.4 billion
= €105 billion % of Cohesion Policy funding

10. Cohesion Policy allocations to Energy
Petroleum products 2%
Natural gas 6%
Electricity (TEN-E) 3%
Electricity
Natural gas (TEN-E)
Wind 7%
Solar
10%
Biomass
17%
Hydroelectric, geothermal
and other
Energy efficiency, co-
generation, energy
management
39%
total = € 11 billion (3 % of total)
€ 9.2 billion EE & RES plus € 1.8 billion traditional energies & interconnectors.

11. Energy Efficiency in the “Recovery Package”
Amendment to ERDF regulation (May 2009)
Up to 4% of the national ERDF allocation can go to energy efficiency and renewable energy in housing, potentially € 8 billion
Member States define eligible categories of existing housing, to support social cohesion
June 2010: Further regulatory amendment to facilitate the use of innovative financial instruments in this area, in addition to JEREMIE and JESSICA (JESSICA initiative also delivering EE & RES investments in the urban context)

12. Uptake of the regulatory amendments
According to first qualitative assessment by DG REGIO in autumn 2010, activities in this area triggered by the regulatory amendments in BE, BG, EL, FR, IT, LT, MT, NL, PL, PT, UK.
In addition, EE and LV active in this area already from the outset of the period.
Some further MS show interest and could take advantage of this new opportunity (DE, ES, HU,…?).

13. Uptake of the regulatory amendments
Only EL making immediate use of the new financial engineering opportunity by establishing a revolving fund of EUR 300 million to provide repayable assistance for energy efficiency in housing.
However, it seems like the amendment has triggered further MS interest, as the set-up of additional financial engineering instruments with an energy efficiency and/or renewable energies component is currently considered in BG, DE, HU, SK, UK.
Also eight JESSICA funds with energy component set up in seven MS: EE, LT, ES, IT, PL, PT, UK.

14. 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%) 14

15. Revolving fund example 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 €, 2035 apartments, saving 33%) 15

16. JESSICA fund in Lithuania
JESSICA Holding Fund amounts to € 227 million:
€ 127 million ERDF
€ 100 million National co-financing
Expected later: some funds by commercial bank
Implementation started June 2010
Planned to modernize houses, by the year 2020
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 60 % 16

17. European Local Energy Assistance (ELENA) facility – ELENA EIB
ELENA is a technical assistance facility, providing grants to cities, provinces, regions and entities acting on their behalf, of up-to 90% of eligible costs, for development of bankable sustainable energy investment programmes/projects at their territories.
Minimum leverage factor - 25, as of
ELENA is financed through the IEE Programme, no call deadlines
Applications sent directly to EIB

18. ELENA projects until 31/3/2011 -6 signed, 6 approved
ELENA contribution: EUR 21,877,929 – Expected investment: EUR 1.6bn
Project name
Beneficiary
Location
Sector
REDIBA
Province of Barcelona (E)
over 300 small and medium municipalities
EE &RE
CHP/DH
City of Purmerend (NL)
1 medium-size municipality
RE & Local infrastructure
EE Milan Covenant of Mayors
Province of Milan (I)
100 small municipalities
EE &
MADEV
City of Madrid (E)
1 large municipality
Transport
EE Ecoles Paris
City of Paris (F) EE
Vila Nova de Gaia Sustainable Programme
City of VN de Gaia (P)
EE & transport
Development of smart grid infrastructure in autonomous islands of the Aegean Sea
DAFNI (GR)
5 Islands, 10 small-size municipalities
Local infrastructure & RE
RE-FIT
Greater London Authority (UK)
Several London Boroughs
Electrobus: EE efficient bus network for Barcelona
City of Barcelona
1 large municipality to large cities
SPIS – Sparvagnar I Skane
City of Malmö (S)
3 medium
London – Decentralised Energy
Minimum of 15 DE projects
Local infrastructure
ELENA - MODENA
Province of Modena (IT)
Municipalities in the province
PV, buildings, public lighting

19. 
Other EU funding
ELENA facility: technical assistance for municipalities since 2009
New European Energy Efficiency Fund (EEE F) 265 million Launched 1st July 2011 (EUR 146 million EERP, + financing from EIB, CDP and DB). Beneficiaries: Local & regional Public authorities, but PPPs are possible. Financing in form of loans, guarantees, forfeiting schemes (to finance ESCO)…
Technical assistance (grant) is available to structure projects.
Also ongoing: DG ENER Impact Assessment on the best financing instruments for energy efficiency (also with a view to new EU Financial Framework ) as well as an analysis of the appropriateness of EU funding for the EPBD as requested by the EPBD Directive

20. “Factories of the future” PPP initiative
The 3 Public Private Partnerships (PPP’s)
Part of the European Economic Recovery Plan
Adopted by the EC on 26 Nov 2008
Endorsed by the EU Council on Dec 2008
“Factories of the future” PPP initiative
€ 1.2 billion in 4 years
“Energy-efficient buildings” PPP initiative
€ 1 billion in 4 years
“Green cars” PPP initiative

21. Support measures and networks
Support measures and networks
Committees
Concerted
Actions: EPBD ,
ESD
CEN EPBD standards
ESD & EPBD
implementation
support
Cohesion policy funds
ELENA
EEE F
Possibilities for
State Aid
VAT reduced rates
IEE programme
Research FP
Financial & fiscal instruments
Sustainable
Energy Europe
Campaign
ManagEnergy
network
Networks

22. Thank you for your attention!!!