Industry is starting to get some answers

Very few of us in our work lives can work in a vacuum. There is a need to bounce ideas back and forth; there is a need to test our opinions. There is also a need to learn from the experience of others.

This is equally true for managers and technicians when we plan for improving the energy performance of our businesses. Since the oil crises of the 1970s, there have been efforts to bring together staff from industry to discuss problems and solutions to improving energy efficiency. There have been organised initiatives and informal approaches but there was an understanding that these experts – those who work with complex machinery and systems daily – were key to improvements in industrial energy efficiency. Energy Efficiency in Industrial Processes (EEIP) has been working with industry for many years to open the dialogue and create the right environment for more investment in energy efficiency.

One important way of improving dialogue is through what are known as energy efficiency networks.

Understanding Energy Efficiency Networks

The International Partnership for Energy Efficiency Cooperation (IPEEC), based in Paris, recently published a report a report on energy efficiency networks. It is a concept that has been going from strength to strength in recent years.

Much of the potential for cost-effective improvements remains untapped, as the report confirms. It states: “Realising energy efficient solutions in industry is often hindered by decision routines, prioritisation of core business areas, lack of specific knowledge and market overview, and high transaction cost. There is also a lack of communication, exchange of experiences and knowledge.” The last sentence on communication is key.

For those of you who do not know about energy efficiency networks (EENs), they are peer-to-peer business-to-business networks that have been designed to overcome identified barriers and tap into the energy efficiency potential in the industrial sector. While there were other attempts earlier, the EEN concept started in Switzerland in the 1980s. The concept has now spread to many countries.

One of the main proponents today, Eberhard Jochem, from the Fraunhofer Institute and the Swiss Federal Institute for Technology, said, “Energy efficiency networks are about [often unknown] opportunities, trust and knowledge”.

Benefits of Energy Efficiency Networks

  • The IPEEC report details many benefits of EENs:
  • Raising awareness for energy efficiency potentials and capacity building
  • Reducing energy costs
  • Improving productivity and competitiveness through enhanced product quality and reducing production rejects
  • Increasing market shares of energy efficient solutions and related services
  • Networking
  • Fostering innovation.
  • Creating new market dynamics in energy services
  • Increasing transparency about energy use and data
  • Ensuring compliance with legal requirements
  • Contributing to national and global climate policy
  • Catalysing international knowledge transfer

There is no single definition amongst countries that have such networking, although the German model (based on the Swiss approach) has gained considerable interest and is getting strong backing from government. This has been followed by similar ones in Norway and Sweden, amongst others.

The IPEEC report explains how they have evolved, how companies pay to participate, how governments have taken an active role in setting them up.

While we will come back to discuss them more in the future, the important point is that they bring people together to discuss common problems and to find innovative solutions. They are part technical and part management. They cover issues related to financing including ensuring confidence and de-risking.

Investor Confidence Project

This latter point is important as organisations such as EEIP work with partners to establish a credible approach to confidence building  to ensure significantly more investments in industrial energy efficiency.

This is behind the abbreviation “ICP” in the headline. ICP stand for Investor Confidence Project. The aim of this EU co-funded project is to support e.g. energy efficiency networks when it comes to the implementation of energy efficiency projects and the need to finance them.

ICP is currently developing easy to apply industry protocols allowing to standardise the process of documentation of such projects. This is reducing the requirements for technical expertise on the financial side (banks, investment funds, etc.) to assess such projects. Finally leading to easier and cheaper access to capital.

Understanding ICP

The concept of the Investor Confidence Project is relatively simple to understand. A potential project in a factory or a district energy system, for example, is identified. Someone has to do the necessary calculations to determine the viability. Someone has to be identified to install it (often the same organisation). And some organisation needs to fund it. What this project does is standardise the procedures so that all players gain confidence in the system. The factory owner is happy. The developer/auditor/installer is happy. The financial institution is happy. There are protocols in place and third party monitoring to ensure everything is done correctly. The protocols are developed by interested experts and not by commercial interests.

There are many elements in the process, but what is key now is the development of protocols that are used to establish a relationship between the consumer and the project developer (an ESCO, for example).

The protocol is technical but relates to the process, obviously with a good understanding of the technologies. This is why we need experts to help develop new protocols for industry, district energy and street lighting. The Energy Performance Protocols defines a standardised road map of best practices for originating energy retrofits following the ICP Project Lifecycle. ICP Protocols are an industry best practice assembly of existing standards, practices, and documentation in order to create the data necessary to enable underwriting or managing of energy performance risk. ICP Europe works with the European Technical Forum to develop protocols that are designed to address the range of typical industry (large and small), district energy and street lighting projects found in the European market.

These protocols reference international, European and national standards and best practices to provide all market actors across the European energy efficiency development and investment community with tools to improve the bankability of relevant energy efficiency projects. ​

The protocols are the first step – albeit a crucial one – in unlocking access to financing for the building, industry, district energy and street lighting markets by standardising how energy efficiency projects are developed, documented and measured.

For learning more about ICP please go to our project’s website or contact me at rod.janssen@ee-ip.org.

 

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