It is a welcome addition to the voices promoting energy efficiency in Europe.
EURELECTRIC paper on improvements needed to boost energy efficiency investments
This week EURELECTRIC, the association of the electricity industry in Europe, published a position paper on the pressing need to trigger energy efficiency investments. As private energy investments remain low, EURELECTRIC calls on European policy makers and Member States to revise the way in which EU energy efficiency investments are being promoted through financing. To achieve target investment levels, EURELECTRIC proposes more transparent processes, an exchange of best practices at the EU level and increased focus on small scale investments.
In its policy paper, EURELECTRIC addresses the gap in private energy efficiency investments, while underlining the clear need to revise the policies designed to boost investments in energy efficiency. The paper recommends a number of innovative instruments, currently being implemented in different Member States, to receive more recognition at EU level.
The paper finds that it will also be critically important to develop financing tools which leverage private investment and do not require refinancing via surcharges on the energy bill. Such tools may include Energy Performance Contracts (EPC) or Energy Savings Agreements (ESA). Better financing tools will help close the remaining gap to reach the 20% energy efficiency target for 2020 – and the more ambitious path toward 2030.
The paper identifies key obstacles currently impeding better energy efficiency investment:
- Limited access to finance;
- Long payback times compared to other investments;
- Sustainable energy investments suffering from higher perceived credit risk;
- Competing priorities for property owners;
- Complexity of projects binding investors’ in-house capabilities and resources.
The European power industry is convinced that utilities play a strong and active role in establishing and expanding markets for energy efficiency. The potential through building renovation, heat pumps and more efficient appliances is significant, particularly in the residential sector, and the required technologies are readily available. Thus, with a mix of improved existing tools and a broader and more coordinated application of innovative financing instruments, the target investment levels could be achieved.
Background information: Energy efficiency is a key enabler for reaching the EU’s climate and energy targets, as well as in the creation of a sustainable and secure future for Europe’s energy system. Even though today’s energy efficiency market offers products and services which improve sustainability and allow significant reduction in energy costs, investment levels remain lower than anticipated.
The position paper is available here.