financing energy efficiency in residential buildings experiences from germany – model for india?

8/3/2019 Financing Energy Efficiency in Residential Buildings Experiences from Germany Model for India?

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Financing Energy Efficiency in ResidentialBuildingsExperiences from Germany Model for India?

Horst SchwrerAsian Urban Forum 2011November 17, 2011


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Loan (maturitye.g. 30 years)

Loan (maturitye.g. 30 years)

Interest ratedepending on

efficiency

standard

Bank Individualhomeowner

Re-financing

Marginfor creditrisk and

handling0.75%

GermanGovernment

Capitalmarket

Interest

subsidy

Funding

Promoting EE in housing KfW in GermanyFunding and On-lending system
http://www.kfw.de/


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NL = New Building Energy Need Level according to German Energy Conservation Ordinance*Actual value varies, depending on the reference building as per Energy Conservation Ordinance

EstimatedPrimary EnergyDemandin kWh/(m*a)*

Betterc

onditionsof

financialschemes

Subsidized loans, partialrepayment relief, grants

70 % of NLKfW-70

55 % of NLKfW-55

40 % of NLKfW-40

ca. 66-39*

ca. 50-30*

ca. 36-22*

Promoting EE in housing KfW in GermanyPromotional Scheme for new construction


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YearBudgetSubsidies(million)

LoanCommitments(million)

CO2-reduction(1000 tons p.a.)

HousingUnits(in 1000)

Investments(million)

2007 850 3,336 568 204 5,127

2008 1,300 5,127 767 280 8,552

2009 2,035 8,677 1,452 617 17,724

2010 1,337 8,746 1,049 953 21,330

Promoting EE in housing KfW in GermanyResults


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Constraints to Energy Efficiency in ResidentialBuildings

Sectoral aspects

- no or unsufficient minimum standards available- no or unsufficent knowledge of and trust in saving potential

(technology) by home owners and architects/developers- robust energy performance assessment tool not available

Organisational aspects

- multiple ministries and public agencies dealing with the residentialbuilding sector- single owners of condominiums have to be convinced to act together- complicated decision making processes in large condominium units- complex organisation of building processes in large scale units


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Constraints to Energy Efficiency in ResidentialBuildings

Financial aspects

- limited or no incentives for client to promote EE residential buildings

- banking sector has interest, but limited market/product knowledge- high efforts and transaction cost during market introduction

Personal aspects

- a multitude of single individuals have to align their living behaviour- concerning heating habits (temperature, comfort factor)- no chance to force them, no guarantee that they will contribute the

way expected


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Joint Assessment Tool developed byFraunhofer Institute and TERI, India

- Based on the whole-building-approach(Flexibility)

- Robust energy performance assessment(Comparability)

- Easy to use by architects and auditors(Scalability)

- Easy to compare different EE design,material and technology combinations(Optimization)

- Basis for Energy Efficiency Label(Communication)

Promoting EE Buildings in IndiaResults-based Tool and Label


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Loan (Eur 50 million) and Technical Assistance(EUR 1.5 million)to the National Housing Bank (NHB) as apex bank torefinance sub-loans for buyers of energy efficient new urban apartments

Highest energy savings potential in new apartment blocks for middleincome residents: 46-51% depending on climate zone - out of which

20-36% Building Envelope 16-22% Appliances

Investments to achieve up to 40% savings financially attractive at 5 yr.payback (Average FIRR 25%)

Preconditions for feasibility:

- optimization of whole building design at planning stage

- early contact to advise architects/developers

- robust energy performance assessment tool

- training of auditors and energy advisors

Promoting EE Buildings in IndiaEnergy Efficient New Housing Programme


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Early stage of implementation: Agreements signed 12/2010, firstdisbursement 07/2011, TA tender ongoing

Five residential housing developments located in the composite

climate zone being evaluated: 23 individual buildings assessed and optimized with the

Fraunhofer/TERI assessment tool

Energy efficiency certificates under preparation by TERI:

Covering 17,000 apartment units to be built in the next 5 yrs with

Savings of up to 2000 kwh p.a. per apartment; and

Expected total savings of 22,000 tCO2 p.a.

Fraunhofer/TERI tool is being amended for the hot-dry and warm-humidclimate zones (by November 2011)

Promoting EE Buildings in IndiaPromotional Programme Status


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Next steps under the Programme TA:

Establish the Energy Efficient Housing brand and label in the Indian

market

Train energy auditors and architects in the energy assessment of new

residential buildings with the Fraunhofer/TERI tool Achieve EE assessment and certification endorsement by public and

private institutions

Continuous Challenges to the Promotional Programme:

No mandatory minimum EE standard for residential buildings

Multiple ministries and public agencies dealing with the residentialbuilding sector

Lack of sustainable financial incentives to promote EE residentialbuildings

Promoting EE Buildings in IndiaPromotional Programme Next Steps & Challenges


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Energy Efficiency Services Limited (EESL) set up as Super-

ESCO by the Indian Government to support development of the EEand ESCO market in India

Envisaged functions of EESL :- facilitate preparation, financing and implementation of EE projects forpublic buildings, municipal infrastructure (e.g. street lighting), etc.

- promote private ESCO market (sub-contracting for implementation)

- provide consultancy and capacity building for stakeholders

- support implementation of central and state government schemes

Pilot Loan (EUR 50 Mio) and TA (EUR 1,5 Mio)

Promoting EE Buildings in IndiaEE in Public Buildings and other Infrastructure


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THANK YOU!

For more information, please contact:

Horst SchwrerHead of Sector and Policy Division Urban Development

Claudia Loy,

Head of Energy Sector and Policy Division

Silke Hermes,

Senior Project Manager

KfW Development Bank,

Energy - Asia,

[email protected]

+49 69 7431 9786

KfW Office Building Westarkade,Electricity Consumption: 98 kWh/p.sqm/p.a.
mailto:[email protected]:[email protected]

financing energy efficiency in residential buildings experiences from germany – model for india?

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