THE SPEZIALIST FOR PUBLIC CONSULTING 1 Support Mechanisms for sustainable small hydropower plants, case of Austria Christian Oberleitner Vienna, November 2014

THE SPEZIALIST FOR PUBLIC CONSULTING 2 Table of Contents  Profile of KPC  Austrian Experiences with different Financial Supporting Schemes  Project cycle  Conclusion

THE SPEZIALIST FOR PUBLIC CONSULTING 3 Table of Contents  Profile of KPC  Austrian Experiences with different Financial Supporting Schemes  Project Cycle  Conclusion

THE SPEZIALIST FOR PUBLIC CONSULTING 4 Fields of Business  Support scheme and programme management –Environmental support under Environmental Support Act (municipal water management, in-plant environmental protection measures, rehabilitation of contaminated sites) –Austrian JI/CDM Programme –Climate and Energy Fund –Klima:aktiv mobil support programme –ERDF/EAFRD management in seven Austrian provinces –Management of provincial support programmes since 2011  Salzburg Climate and Environment Pact  Economic support programmes of the Province of Tyrol  Photovoltaics for private residential buildings in Vienna –Waste Avoidance Initiative –Eco-Electricity Investment Support (OeMAG)  National and international consulting for the Environment & Energy segment  Climate Austria - Voluntary Carbon Offsetting  Management of the Environmental and Water Management Fund (UWF)

THE SPEZIALIST FOR PUBLIC CONSULTING 5 National and International Consulting  Examples of international consulting projects –EU study on engaging the private sector in development and extending the blending activities of the EU –EBRD Consultancy Services to support the implementation of the Residential Window (RuSEFF-Residential) under the Russian Sustainable Energy & Carbon Finance Facility –GIZSupport to municipalities in Moldova for improving municipal service provision –OECD Study on improving water management and climate change adaptation in the water sector in Moldova –World Bank Support in the set-up of a Homeowners Association Resource Center in Ukraine –EIBEIB - Consultancy services in support of EU Programmes on energy efficiency –ADA Policy advice for and support of water and waste-water projects within the framework of Austria‘s cooperation with CEE  Examples of national consulting projects –BMLFUW*Technical support for NER300 programme Technical, economic and financial consulting according to ISO 9001:2008 Quality Management Standard * Federal Ministry of Agriculture, Forestry, Environment and Water Management

THE SPEZIALIST FOR PUBLIC CONSULTING 6 Table of Contents  Profile of KPC  Austrian Experiences with different Financial Supporting Schemes  Project Cycle  Conclusion

THE SPEZIALIST FOR PUBLIC CONSULTING Stakeholders usually have different approach – Involved beneficiaries & Target groups 7 Investor Making profit Low risk Access to financing Stable framework conditions Support with project development Financing Institute Secure cash flow Promising business model Creditworthiness of client Reliable long term conditions Government Accelerate development of SSHP Low cost support scheme Self running market Access to energy for All End user Access to energy Secure supply Low energy costs

THE SPEZIALIST FOR PUBLIC CONSULTING Austria tried different supporting schemes 8 Investment subsidies In place since 2010, now with option for feed in tarif Feed-in-tariff system Low response due to high market prices Tradable green certificates Program failed und has been stopped after 9 month of operation

THE SPEZIALIST FOR PUBLIC CONSULTING FIT tariff not always preferable for SSHP operators FIT has been introduced in

THE SPEZIALIST FOR PUBLIC CONSULTING Investment subsidies to boost SSHP development Available only for SSHP up to 10 MW Different level of support (400 – €/kW), depending on capacity Estimated economic performance is considered Cap on 30% of eligible costs For new and for up-grading of existing SSHP 16 Million € / annum available  BUT: Market asked for FIT 10

THE SPEZIALIST FOR PUBLIC CONSULTING 11

THE SPEZIALIST FOR PUBLIC CONSULTING Findings There is no „one-and-only“ subsidy scheme available Design parameter are important to enable successful development Stable subsidy scheme is mandatory to attract investors Administration of subsidy scheme must be designed to capacity of market players Subsidy scheme as only instrument will not boost the market Flexibility is required to response market needs 12

THE SPEZIALIST FOR PUBLIC CONSULTING 13 Table of Contents  Profile of KPC  Austrian Experiences with different Financial Supporting Schemes  Project cycle  Conclusion

THE SPEZIALIST FOR PUBLIC CONSULTING Project cycle Application Pre-assessment eligibility Technical check Implementation Financial audit Eligibility of costs Economic assessment On site verification Disbursement of funds 14

THE SPEZIALIST FOR PUBLIC CONSULTING 15 Table of Contents  Profile of KPC  General purpose of Financial Support Schemes  Austrian Experiences with different Financial Supporting Schemes  Essential Design Parameters  Conclusion & Findings

THE SPEZIALIST FOR PUBLIC CONSULTING Investment costs per kW installed capacity Source: Oe-mag 16

THE SPEZIALIST FOR PUBLIC CONSULTING Support level per kW installed capacity Source: oe-mag 17

THE SPEZIALIST FOR PUBLIC CONSULTING Financial support needs assistance Nominate reliable and independent body Raise awareness for subsidy scheme Motivate investors Provide additional support such as technical assistance Set minimum quality criteria Ensure stable distribution networks 18

THE SPEZIALIST FOR PUBLIC CONSULTING Detail design needs to consider at least the following: Enable upfront financing Enable different options for project developers Secure long-time financing of subsidy scheme Customer friendly verification & fast decision making Blending of different models (Guarantees, soft loans, investment subsidies, FIT, tax incentives, risk sharing models …) is recommended Consider impact on industry, households and infrastructure 19

THE SPEZIALIST FOR PUBLIC CONSULTING General requirements on a supporting scheme are: Fair, clear and transparent design, public available Simple to understand and easy to administrate („One-stop-shop“) Enable flexibility but stable framework conditions Clear technical standards and legal documents Tailored to needs of market -> more than one option possible 20

THE SPEZIALIST FOR PUBLIC CONSULTING How to design a financial support scheme 21 Set clear and achievable goals Define target groups that needs to be approached Design different support models tailored to the market needs Secure sufficient financing for providing financial support Consider in advance additional activities needed Liaise with neighboring countries to run international programs

THE SPEZIALIST FOR PUBLIC CONSULTING Apart from financing following shall be considered Nominate intermediate body Set clear, simple, fair and transparent procedures Develop costumer friendly administration of support scheme Monitor and verify success of support scheme Adopt scheme when needed carefully Make use of technical assistance in designing and implementing supporting scheme 22

THE SPEZIALIST FOR PUBLIC CONSULTING 23 Kommunalkredit Public Consulting GmbH Türkenstraße 9, 1092 Wien Tel Fax