Blog from Ettore Piantoni: Getting benefits, risks and business aligned to boost the adoption of energy efficiency improvement measures by SMEs

CEN CENELEC Sector Forum Energy Management (SFEM) promoted a one-day scoping seminar on Energy efficiency and energy management: tailored approach and roadmap for SMEs and other stakeholders on Sept 27th in Brussels. This event invited participants from the European Commission, EASME, IPEEC, financial institutions as well as representatives of leading European programmes in this field to present the state of the art and recommend the way forward to turn remarkable short-term efforts into meaningful long-term results.

The outcome of the seminar is applicable to the energy efficiency market in general with some specific actions towards SMEs.

SFEM welcomes the adoption of the new energy efficiency savings target of 32,5% for 2030 and the revision of the Energy Efficiency Directive planned to be published on the Official Journal by the end of the year. The related proposals of the European Commission’s to further integrate Article 8 “energy audit” with supporting actions of EASME for innovative plan for SMEs and of EEFIG for the promotion of toolkits to de-risk sustainable finance, strengthen the commitment to the Clean Energy for all European Package.

Energy efficiency targets and the support towards them on a global basis have been further strengthened by the International Partnership for Energy Efficiency Cooperation (IPEEC) reporting the commitment of G20 to promote best practices and the adoption national measures for their national interest and the benefits of the global community.

No single stakeholder, policymaker, private or public financial institution, market operator can deliver and scale up energy efficiency measures and related investments. It is necessary to provide a robust collaborative framework in which the use of standards will play a key role (technical, financial, accounting, management, trading, etc.).

The challenges to foster market uptake need to consider the fundamentals of the energy efficiency market from the perspective of each individual stakeholders:

  • energy efficiency is not a tangible asset and the market is highly fragmented, particularly with reference to SMEs;
  • today each stakeholder work in “silos” with very limited transparency and complex communication with the intended user of his own activity;
  • Audits are key drivers to awareness raising and then to promoting actions, especially in the context of SMEs,
  • financial institution primarily focus on “corporate lending” which limits the access to private finance to large organizations with sizeable investments,
  • there is a need for a collaborative framework (business model?) which engages upstream and downstream value chains’ stakeholders, to transform energy efficiency process for a sequential format to a circular process with dynamic ongoing exchange to the management of material information;
  • SMEs are difficult to effectively reach out to. Local governments, energy agencies or industry associations are better placed to work directly with SMEs due to their proximity and better insights into business condition;
  • standards and the focus on materiality along the value chain are enabling factors to de-risk energy efficiency projects and streamline the circular process; and
  • the majority of the energy efficiency measures that will be implemented will be installed and maintained by SMEs.

The results of the seminar, arising from the presentations and the panel discussions, are distilled through the following recommendations addressed to all stakeholders of the energy efficiency value chain:

  • Promote agile, transparent, standardized business practices along the value chain

Define a meaningful integrated energy efficiency process, end to end, which include all stakeholders and their best practices.

Integrate standards (technical, environmental, management, financial, accounting, trading) in a toolkit to align the materiality requirements of each stakeholder along the value chain. Map and digitalize the integrated energy efficiency process as standardized business model to be adopted by end-users, suppliers, financial institutions, insurance organizations with transparent allocation of the benefits and risks.

SFEM will promote this programme with policy makers and will endorse initiatives to deliver actionable toolkit to facilitate energy efficiency/management market uptake (top down and bottom up).

  • Emphasize additional benefits of energy efficiency

The effectiveness of energy efficiency in making the organization more competitive and resilient to energy market volatility as well as economic crisis, needs to include all measurable and intangible additional benefits (improved productivity, increased value of the retrofitted assets, etc). Materiality requires a meaningful performance metrics.

SFEM through the cooperation with energy related CEN and/or CENELEC Technical Committees, and especially CEN/CENELEC JTC 14, will promote the adoption of a more holistic approach in the revision or development of standard to include materiality and sustainability concepts.

  • Institute motivational dialog targeted to SMEs promoting Energy Efficiency Network

The Energy Efficiency Network (EEN) appears to be the cost-effective options to motivate and engage goal-oriented organizations. The structured and outcome-oriented involvement (clearly defined to-dos, assigned responsibilities, tracking progress) results in a higher and constant energy efficiency improvement year after year above market average.

EEN should provide a transparent and collaborative involvement of SMEs with a Single Stop Shop option (including financing) labelled and endorsed by the EEN.

SFEM through its national standardization bodies members, will support the cooperation with local initiatives as appropriate.

  • Build the skills for success

To ensure that the integrated energy efficiency process is adopted, organizations must develop new capabilities—filling skill gaps in various functional areas.

Capability-building programmes to employees involved in the energy efficiency integrated framework (policy makers, end-users, financial institutions both private and public ones, accountant, insurance institutions, market operators, etc.) has to be implemented. It is recommended to make use of digital tools for training and sharing information.

SFEM through its network of international and local experts can provide assistance for a collaborative dialogue.

SFEM leadership thanks all participants, key speakers and panellists, for their high-level contributions and for making the seminar a success, with major outcomes. As a consequence, SFEM will activate a working group for further consideration of the recommendations.

To download the agenda of the September 27th seminar with the presentations please click here.

The author, Ettore Piantoni, is the CEN CENELEC SFEM Vice Chair. Ettore can be contacted at epiantoni@comastservizi.it

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