Supporting Energy Efficiency EU Policy & Financing tools Looking towards 2020

1. Supporting Energy EfficiencyEU Policy & Financing toolsLooking towards 2020 ICPE-KEN Conference , Ljubljana 24 October 2012 Stefano Panighetti Directorate-General for Energy C3 Energy Efficiency

2. EU Political Support for EE European Council Conclusions March 2007: 20 20 20 targets Europe 2020 Strategy June 2010: Smart, sustainable and inclusive growth Energy 2020 November 2010 - European strategy for a competitive, sustainable and secure energy • Energy efficiency one of five priorities • Focus on two sectors with the biggest energy saving potential: transport and buildings

3. What are the Existing instruments?

4. Current EU RegulatoryFramework Energy performance of buildings Directive • Minimum energy performance requirements • Energy Performance Certificates • Nearly zero-energy buildings • Certification and inspections Eco-design and Energy Labelling Directives • Minimum performance requirements on products •  17 measuresadoptedso far: electricalmotors, fans, light bulbs, washing machines… • Labelling EnergySaving Directive • Indicative 9% EE target by 2016 • National EE Action Plans (NEEAPs)

5. Current EU Financial Support to EE • Cohesion policy funds (2007-2013): • 5,1 billion € for energy efficiency (up to 8 billion € if all MS re-allocate 4% for housing under ERDF) • Intelligent Energy Europe Programme (2007-2013): • 735 million € for ‘soft’ energy efficiency/renewables projects • Capacity building, awareness raising, best practices sharing • ELENA Facility: • 97 million € for technical assistance to mobilise investments • To scale up projects and reduce transaction costs and support Project development phases • European Energy Efficiency Fund (EEE-F): • 265 million € for investments into mature, bankable efficiency/renewables projects • 20 million € for technical assistance • Role model projects, leverage effect, EPC support…

6. Are we meeting the targets?

7. Reduce greenhousegas emissions by 20% Increase share of renewables to 20% Reduce energyuse by 20% 100% Current trend to 2020 Current trend to 2020 -20% -10% Current trend to 2020 20% The EU 20-20-20 targets by 2020

8. A Unique Momentum • A new EE Directive to fill-in the gaps • More Stable legislative framework: renewed efforts from MS & investment predictability for investors • A new Multinannual Financial Framework to be negotiated (2014-2020) • Sustainable, smart and inclusive growth

9. Policy response: a new Energy Efficiency Directive • Proposed in June 2011, • Official signature by Parliament and Council in October, publication OJEU in November, entry into force December 2012 • Public sector to lead by example • Procurement of high energy efficiency products, services and buildings • Annual renovation rate of 3% of central buildings above 250 m2 • Local energy efficiency plans • Introduction of energy management systems • Use of Energy Performance Contracting • Increase awareness of the benefits of improvements in EE • Member States to create incentives for SMEs to undergo energy audits • Mandatory audits for large companies • Incentives for the implementation of recommended measures

10. A new Energy Efficiency Directive • Creating benefits for consumers • National energy efficiency obligation scheme for utilities (1.5% saving obligation) • Smart metering • Ensure accuracy & frequency of billing based on actual consumption • Provide appropriate information with the bill • Energy efficiency in transportation and distribution of energy • Network tariffs • Monitoring of efficiency levels of generation installations

11. A new Multiannual Financial Framework MFF 2014-2020 • 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

12. MFF 2014-2020: A new Paradigm for sustainable investments: • MFF in line with EU 2020 strategy: "smart, sustainable & inclusive growth" • Conditionality: implementation of relevant EU legislation • CohesionpolicyThematic concentration: shift to a competitivelowcarboneconomy • Public authorities to pave the way (public building renovation, use of EPC…)

13. 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, EU and national funding to complement; • Using market mechanism to avoid crowding out investors and increase leverage; • Such as Financial Engineering Instrument and EPC; • Grant to address primarilly market failures, innovative technologies and beyond cost-effective EE projects (deep renovation)

14. What is the ‘investment’ need? • Energy savings potential across sectors requires investment of around 850 billion € (2011-2020) • Around 85 billion € per year • Buildings take the lion’s share of around 60 billion € per year

15. Energy Performance Contracting (EPC) Campaign

16. The EPC Opportunity • New Regulatory Frameworks provide an opportunity to develop the EPC market • Multi-annual Financial Framework • Use of Structural and Cohesion Funds to provide financing for EPCs • Potential to develop MS policy to reflect the EPC opportunity • Energy Efficiency Directive • Article 3 – required renovation of 3% of central government buildings • Article 7 – energy efficiency obligations 1.5% target to be met • Article 19 – removal of barrier to energy efficiency in accounting rules • - Article 20 – Maximising the benefits of multiple financing schemes

17. Aims of the 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 • - Share experience • - Create dialogue among all stakeholders (public, private, regional and national level) • Three pillars working to complement each other: EPEC, ManagEnergy and Covenant of Mayors

18. EPC Campaign Structure

19. Key Stakeholders • National Administrations, including Ministries of Finance, Energy, Environment, Public Works • National Energy Agencies • Financial Community • Municipalities • ESCo's • Energy Services Industry (products, technology, energy management systems)

20. Accounting for EPCs in the Public Sector There is significant potential for energy savings in the public sector, which could be facilitated by the uptake of EPCs • EAS 95 – when “most project risk” istransferred to the private partner to a government in a PPP (public private partnership), then the assets involved in the PPP should not be reported on the government balance sheet. • 'Off-balance sheet' financing to could be an incentive to encourage public sector organisations to consider energy efficiency investment • May require changes to the reporting structures on PPPs to Eurostat in some MS • How do you account for EPCs?

21. Thank you for your attention