Roundtable on Financing Industrial Energy Efficiency, October 19th

Finance

I

04 October 2017

I

Rod Janssen

October 19th, Brussels - Roundtable on Financing Industrial Energy Efficiency  

On October 19th there will be a special invitation only roundtable to discuss EEFIG (Energy Efficiency Institutions Group) recommendations and how the industrial sector fits into the EU’s overall energy efficiency strategy.

There is limited space but if you would like more information and would like to attend, please contact me at rod.janssen@ee-ip.org.

The clean energy package that is currently going through the approval process within EU institutions gives considerable attention to energy efficiency. For industry, there are no legislative changes being recommended. The reliance is in continuing the implementation of the articles in the 2012 Energy Efficiency Directive. These relate largely to mandatory energy audits for large companies, promotion of energy management systems and support for SMEs.

Fortunately, the Energy Efficiency Financial Institutions Group (EEFIG), created in 2014, is taking up much of the policy discussions relating to industrial energy efficiency. EEFIG identified many of the barriers to the long-term financing for energy efficiency and proposed policy recommendations and market solutions to them. The purpose of the group is to get the financial institutions and other relevant stakeholders to help find ways to overcome the investment blockage. There is financing available, but banks have poor capacity and interest to finance energy efficiency, and consumers (in this case industry or businesses or institutions) are reluctant to decide to undertake such measures. While there are some investments, for sure, they are not at a scale that will have a real impact that is needed to meet our long-term objectives. One of the problems is that there is a lack of standardisation in project development and documentation and that is seen as one of the major barriers to increasing investment into energy efficiency.

The members of EEFIG identified a clear opportunity to dramatically grow and improve energy efficiency investments in Europe’s industrial and non-industrial companies of all sizes to deliver competitive advantages globally and locally. EEFIG identified a need to raise the priority of energy efficiency at executive board level, incorporate energy efficiency investments within the standard corporate finance dialogue and process and to encourage firms to be more open with the investment horizons, scope and returns for energy efficiency investments which they will accept.  

The 2015 Final Report of EEFIG provided the following recommendations concerning industry:

  • The policy framework should positively support strong corporate energy efficiency investment choices at key points in their investment cycle
  • Public resources and facilitation should be engaged to establish dynamic and effective systems for sharing information and technical experience
  • Ensure EU and national policies and resources are working effectively together to drive R&D and optimal energy efficiency outcomes
  • Support the clarification of the regulatory, fiscal and accounting treatment and standardisation of Energy Performance Contracts
  • Energy efficiency opportunity identification and investible project pipelines should be supported with Project Development Assistance facilities for SMEs  
EEFIG [link - http://www.eefig.com/] has helped raise the profile of industrial energy efficiency but these recommendations remain, for the most part, unfulfilled. On October 19th there will be a special invitation only roundtable to discuss these recommendations and how the industrial sector fits into the EU’s overall energy efficiency strategy. There is an excellent group of panellists that will discuss some of the crucial issues facing policymakers and practitioners.  Some of the issues under discussion include:
  • What will be the impact of further efforts to “de-risk” investments? Is there room for further standardization of the investment process?
  • How can the “perceived” risk been brought down to the “real risk?
  • How do we encourage industry to consider energy efficiency investments as strategic decisions for improving their overall competitiveness?
  • What more can be done to ensure economic energy efficiency measures are implemented?
  • How do we motivate more private investment activity for financing industrial energy efficiency?  Is there the possibility of bundling projects to reduce transaction costs and make them more interesting to financial institutions?
  • Have the mandatory audits under the Energy Efficiency Directive led to significant investments? If not, why?  If not, how?
  • Can policy changes at EU or national levels encourage more investment in industrial energy efficiency measures?  

These are important issues and following the roundtable, Chairman’s Conclusions will be prepared and distributed to members of the EU institutions and relevant stakeholders.

There is limited space but if you would like more information and would like to attend, please contact me at rod.janssen@ee-ip.org.  

About the Author

Rod Janssen is the President of Energy Efficiency in Industrial Processes (EEIP).