It is encouraging to see in the press that the rate of growth of the global economy is picking up. In Europe, the economy is expected to grow at the fastest pace in a decade. This is equally true in America and in Asia. This is great news for industry but also reason for some concern because, with all regions growing, those who are most competitive are going to gain in the long run.
One area to improve competitiveness is to ensure costs are minimised. For many industries, particularly those that are energy intensive, that means ensuring investments in the most energy-efficient technologies in parallel with good energy management practices.
Yet, evidence shows that investment in energy-efficient technologies is occurring at a lower rate than should be, especially since borrowing rates are so low. It could be because energy prices have been relatively low, even though we have seen oil prices in particular increasing in recent months. While individual plants may have reduced dependence on petroleum products in their production facilities, overall fossil fuel consumption remains high.
You know the situation in your own business, your own sector, your own country. You probably also know what you need to do in your facility since the first round of mandatory audits in the EU have taken place. If your company is above a certain size, the audit would have been undertaken and you know what actions/investments are recommended.
Have you acted? If so, you are seen to be a minority in Europe. Most are still deliberating what to do. Either that or they have tucked away the audit report in some obscure filing cabinet and assigned it to history.
There is no need for me to ask why you have taken such action – or inaction. There is some help, however.
How ICP an help
One of the major barriers identified in investing in energy efficiency is the lack of standardisation of the process. The process is essentially the interaction between the asset owner/manager and the project developer (an energy service company, an installation or engineer company).
There are many factors that influence decisions and action. The Investor Confidence Project is there to remove many of the complications and risks in improving your company’s energy performance in improving your company’s energy performance. It ensures that the process of choosing what to do, how to do it and how to finance it is standardised, giving you assurance. It can help senior management better understand energy efficiency from a strategic perspective because it does remove risk.
ICP brought to Europe to develop a system to give confidence to all active stakeholders. There are still concerns that investing in energy efficiency is risky. ICP is designed to change that. ICP started with investments in buildings and is now broadening the scope to include industry, district energy and street lighting through a two-year project funded by the European Commission.
The concept of ICP is relatively simple to understand. A potential project in a factory or a district heating 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.
The project will work with all of those involved in the project cycle from owners through to project developers and verifiers. They all have a key role to play. To ensure that the protocols are robust, technical forums are being set up to review the draft protocols and provide important technical input to their development.
For asset owners or managers, the ICP approach will provide transparency of the process and will give them the confidence in implementing the measures.
For the project developer, ICP provides a process that is understood and accepted by all participants. This will reduce transaction costs and should minimise any misunderstandings.
For the financial community, the ICP approach will standardise the project development process and bring the necessary confidence to undertake the investments.
Importantly, ICP Europe Investor Network is comprised of energy efficiency investors who recognise the benefit of industry best practice and standardised energy renovation project delivery. Members of the Network support the use of the ICP Protocols and Credentialing System because these systems increase confidence in project performance while reducing due diligence-related transaction costs. ICP Investor Network represents €1.5 billion in energy efficiency project capital.
ICP Europe also has a wide range of allies. The ICP Europe Ally Network provides valuable input and advice on the development and deployment of the programs and products of ICP Europe. These organisations have agreed to support the goals of ICP Europe: reducing energy efficiency projects performance risk, lowering transaction costs and increasing project demand.
The protocols for larger industrial projects and for targeted industrial projects have been prepared and published. The training for project developers will begin in the next couple of months.
ICP is now looking for pilot projects to ensure all elements of the ICP process are ready for full market deployment. If you would like your company to participate, please contact me via email@example.com
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