Moving from Green Investment Scheme to a Cohesion Policy-based instrument

1. Moving from Green Investment Scheme to a Cohesion Policy-based instrument A Czech story 5 November 2013, Budapest

2. Chance for Buildings • An alliance by leading business and expert associations that advocates for favourable policy and economic framework, in order to to reap the crucial societal benefits of energy efficient buildings. • It brings together Czech Green Building Council, Passive House Center, Czech Mineral Insulation Manufacturer’s Association and Czech EPS Association. • It represents over 200 companies across the entire value chain of high energy performing building construction and renovation.

3. EPBD2: Roadmap to high performing buildings

4. EED: Renovation strategies for existing buildings • Art 4 of EED complemented by Art 5 (public buildings) should bring a key strategy for the sector • That should give a view what building stock may look like in the coming decades and allow long term planning needed for investments in the infrastructure • Exploiting potential of reducing energy consumption by 60/70/80% ?? by 2050 • Increasing deep renovation rate to 3% each year • Financial instruments needed: EU Structural Funds, EU ETS revenues, tax incentives, Energy Performance Contracting (EPC), Energy Efficiency Obligations under Art 7

5. Economic opportunity or disaster ? • World Energy Outlook 2012 – Efficient World Scenario • additional capex 3.2 trillion USD, reduced opex 5.9 trillion USD (by 2035, only buildings, only OECD) • Europe and USA wins, Russia and OPEC loses • Czech studies by leading economists Zamecnik and Niedermayer • energy efficient buildings do insure owners against raising energy prices, NPV almost exponentially depends on energy price increase • financial instruments to support deep renovation of buildings have positive macroeconomic benefits (for tax collection, for economic growth) • No doubt of the trend, no doubt of its economic benefits, question mark on how fast we go and how deeply we renovate our buildings

6. What we have achieved (1) • Green InvestmentSchemefor residential buildings funded from revenues of Kyoto credit (AAUs) sales (mainly to Japan, also to Spain, Austria via WB) • Czech Republic sold more than 90 mil. AAUs reportedly for the highest average price on the market • more than 800 mil. euro raised that supported 80,000 projects (approximately 150,000 households) • A. Energy efficient renovation of existing buildings • B. New construction in passive energy standard • C. Local renewable energy sources • D. Bonus for combination of measures • Subsidies as fixed amount per sq. meter (A), per house or flat (B) or per appliance (C) to avoid overpricing

7. What we have achieved (2) • Operational Programme Environment (2007-2013) spent about 560 mil. euro on renovation of public buildings • About 3000 objects have been or to be modernised (schools, hospitals, social houses, city halls..) • Acceptability criteria set quite progressively on low energy standard level • 1st call for applications after a huge negative feedback: Applicants did ask for 8-times more funds than were allocated – no worry that the criteria might be too strict

8. Combined benefits of GIS and OPE • Combined CO2 emission reducion calculated at 1.5 to 2 mil. tons annually (up to 1.5% of total Czech emissions) • Final energy savings at 7–8 PJ • 25 to 30,000 jobs created or sustained • National Economic Council evaluated these programmes as one of best economic recovery measures

9. Where do we stand now • EU-ETS auctioning revenues should go into New Green Investment Scheme (single family houses) • EU Structural and Investment Funds 2014–2020 pose a huge opportunity, should be directed all to energy efficiency renovation and high-performing new construction of multi-appartment buildings, public and commercial buildings • Czech Republic: 10.5 mil. inahabitants, 4.4 mil. households, +25% floor area for public and commercial buildings • 450-500 mil. euro can be effectively invested in support programmes annually, that induces 1.6-1.8 bln. euro total investment and 35-40,000 jobs in green economy, and leads to 50-70 PJ savings on final energy demand by 2020 (only in buildings)

10. What is needed • It is very simple: Long-term support programme with stable criteria and stable financing! • And: covering all types of buildings, having sufficient allocation, motivating for complete deep renovation, supporting a portion of extra costs for reaching high energy standards of new construction • What financial instruments? Probably a small subsidy is vital. Long-term low-interest loans, guarantees for commercial loans? Definitely combination with Energy Performance Contracting. • EED and EU Funds need to be dealt with as interlinked issues, especially renovation strategies should bring fundamental reasoning on how to utilize EU Funds for EE in buildings in a best way • Information, consultancy, trainings, ecucation removing non-economic barriers shouldn‘t be forgotten

11. Thank you for your attention Petr Holub +420 604 177 711 www.sanceprobudovy.cz Chance for Buildings is an alliance by leading trade associations that support energy efficient construction. It brings together the Czech Green Building Council, Passive House Center, Mineral Insulation Manufacturer’s Association and the EPS Association. It represents over 200 companies across the entire value chain of building construction and renovation. Chance for Buildings aspires to reap the crucial societal benefits of energy efficient buildings. We advocate for favourable policy and economic incentives, including proper implementation of relevant EU directives in the Czech Republic.