1. Financing Energy Efficiency
Roman Doubrava
Directorate-General for Energy
C3 Energy Efficiency
SFEI Event,

2. Finance: A particular momentum
New Multiannual Financial Framework ( )
Cohesion funding to allocate some € 17 billion to energy efficiency and renewable energy (doubling current allocations)
Horizon 2020: € 6.5 billion is to be allocated to research and innovation in "Secure, clean and efficient energy" Likely to include an IEE-type follow-up programme

3. Finance: A particular momentum
Energy Efficiency Directive (2012/27/EU)
New Regulatory Frameworks provide an opportunity to develop the EPC market
Article 3 – required renovation of 3% of central government buildings
Article 7 – energy efficiency obligations 1.5% target to be met
Article 8 - obliges large companies to carry out mandatory energy audits
Article 19 – removal of barrier to energy efficiency in accounting rules
Article 20 – Maximising the benefits of multiple financing schemes
More Stable legislative framework: renewed efforts from MS & investment predictability for investors

4. Finance: A particular momentum
EU funding should provide opportunity to attract & leverage funds from private investors
However, the big bulk of EE/RES investments should come from private sector, with EU and national funding to complement;
Using market mechanisms to avoid crowding out investors and increase leverage;
Grant to address primarilly market failures, innovative technologies and beyond cost-effective EE projects (deep renovation)

5. Cohesion Policy Package Negotiations
EU General Regulation, ERDF, CF, ESF regulations under discussions between EP-council
In parallel, EC to start bilateral discussions on country partnership contract to define each MS's priorities (further implemented through OPs)
 DG ENER providing input on country status regarding EE/RES investments, implementation of EU legislation, financing schemes… & provide recommendations
Country position papers will be sent to MS

6. What are the barriers to investment?
Regulatory framework & market barriers:
Procurement rules, public deficit accounting
Split incentives
Low level of awareness & capacity
Access to Financing
High perceived risk -unclear market valuation
Unadapted financing products
High upfront financing
High transaction costs
Grant dependency

7. FINANCIAL INSTRUMENTS for ENErgy Efficiency
Cohesion policy funds ( ):
5,1 billion € for energy efficiency
Intelligent Energy Europe Programme – IEE II ( ):
735 million € for ‘soft’ energy efficiency/ renewables projects
ELENA Facility and MLEI under the IEE II:
97 million € for technical assistance to mobilise investments
European Energy Efficiency Fund (EEE-F):
265 million € for investments into mature, bankable efficiency/renewables projects

8. What is the ‘investment’ need?
Energy savings potential across sectors requires investment of around 850 billion € ( )
Around 85 billion € per year
Buildings take the lion’s share of around 60 billion € per year

9. Best Practices examples 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%)

10. Kredex Revolving Fund in 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%)

11. The EPC Opportunity
Source: International performance, measurement and verification protocol, EVO, 2010

12. Guarantee for payments
The EPC Opportunity
Customer
Provision of loan
Investor (Bank)
Repayment of loan
Financing by
Bank
Guarantee for savings
Payments for services
Guarantee for payments
ESCO
Source: European Energy Service Initiative

13. DG ENER Energy Performance Contracting (EPC) Campaign
To highlight awareness of EPC at national, regional and local levels
To hold a series of practical workshops to, increase knowledge, build confidence and share experience
Three pillars working to complement each other: EPEC, ManagEnergy and Covenant of Mayors

14. EPC Campaign Structure
National
EPEC
Regional
ManagEnergy
Local
Covenant of Mayors
– series of national events planned
Targeting key policymakers at national level
Focus on implementation of EPC frameworks, use of cohesion policy funds, and practical examples of EPC benefits
– 42 events planned
Aimed at regional authorities and energy agencies
Focus on forthcoming changes to regulatory framework and potential replication of EPC projects
Webinar events
Capacity building events for local stakeholders
Focus on barriers encountered, solutions, and practical ways to roll-out more EPC projects locally

15. What can you do?
You can assist in facilitating the development of the energy services market, by understanding the financial and regulatory frameworks necessary to overcome barriers to EPC
Identify stakeholders in your MS, including possible speakers
Highlight best practice examples for dissemination
Facilitate and present at workshops

16. Thank you very much!
For further information on the EPC Campaign please consult our website: