observations and recommendations on getting the framework right for energy efficient investments in...
TRANSCRIPT
Observations and recommendations ongetting the framework right for energy efficient
investments in multi-apartment buildings- based on the achievements and lessons learned
of the ClearSupport project
Conference and Workshop: COHESION POLICY INVESTING IN ENERGY EFFICIENCY IN BUILDINGS
Brussels, 29-30 November 2011
Nils Daugaard
Content
Part I: What did Clear Support do and what can be learned Review of Clear Support achievements
Case study of the multi-apartment sector in Lithuania
Part II: Enabling of a sound investment framework Observations and recommendations on the design of
future Cohesion funds based on the Clear Support experience, incl. ownership/decision making aspects
2“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
PART IIntroduction to ClearSupport:
3“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
ClearSupport – introduction Can be considered a pilot initiative on a systematic approach on enabling
energy efficient building investments – public, residential and (to less extent) private sector
This was done in the form of operating 5 Project Service Facilities/PSFs in
– Latvia – Lithuania – Poland– Czech Republic– Crete
ClearSupport was running from 2007 to the end of 2009 involving thirteen partners
4
Focus on making financing schemes work and activating energy services
“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
5
ClearSupport
ClearSupport - intervention at local level
RUE in building framework
- Regulatory framework
- Technology suppliers
- Socio-economic aspects
Project owners
Municipalities
Residential
Financing sources
National funds/programmes
EU funds – ERDF and Cohesion
National bank system
International Financing Institutions
Financing concepts
RUE in building design
- Project development tools
- Project standard solutions
Financing schemes
- Mix of financing sources
- Integrating financial concepts
- Defining adequate criteria
Project Service
Project ID
Project document.
Objective 1Bridging gab
between project Owner & Financing
Objective 2a-eFacilitating a
Sound frameworkfor RUE in
building projects
5“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
Services to bridge the gap
Local and nationalGovernment/policy
Financing institutions
ESCOs etc.
Public house owners
Residential house owners
SupportInformationProject preparationPreparation of applicationsConsultingEducationAnalyses
Heart of the action:PSFs delivering multi-disciplinary services
The ambitious goal was to support the initiation of 100-200 specific building renovations in the 5 target regions
6“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
The IEE support helped to create the multi-disciplinary skills required
ClearSupport:Achievements
7“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
8
The PSFs initiated 230 investments
8
36
72
64
58
0
50
100
150
200
250
Number of Projects
Projects supported by PSFs
Others
Financing application submitted
Financing approved
Implemented
Total = 230
“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
9
Supported projects divided on sectors
9
36%
7%
92%78%
25%
39%
14%
88%
8%22%
75%53%
50%
5%0% 0% 0%
7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Crete Czech Republic Latvia Lithuania Poland Total
Private Service Sector Public Sector Residential Sector
“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
ClearSupport:Financing instruments/schemes
10“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
11
Public-private partnership approaches (“innovative”) Energy Supply Contracting with guarantee elements
-> Residential sector Energy Performance Contracting
-> Municipal / Public sector Financing instruments
Credit / Loans Grants Interest subsidies Forfeiting Leasing (Operate & Finance)
Long-term strategy for financing building renovation: Revolving Funds
Scope of the work on financing schemes
“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
12
Financing Schemes – Reports and ToolsTwo analysis reports: Lessons learned: Overview of existing financing schemes and
experience from previous projects Financial instrument/scheme report, including recommendations on
suitable schemes for the target regions
A number of tools, including: Procedure and checklist for PSF operations Guide: Main points for contracts from a financing viewpoint (for
bankers) Subsidy guidelines (how to define an appropriate level of subsidies) Easy-to-use tools for project evaluation
Putting in place revolving fund stands out as a key recommendation
The reports and tools are available at www.clearsupport.eu/Downloads.htm
“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
Adoption of financing instruments in PSF regions - Examples
LatviaParticipation in Green Investment Scheme
LatviaParticipation in Green Investment Scheme
LithuaniaDevelopment of Revolving Fund
LithuaniaDevelopment of Revolving Fund
PolandAwareness raising and
training
PolandAwareness raising and
training
Czech RepublicDevelopment of the
ESCO Market
Czech RepublicDevelopment of the
ESCO Market
CreteEfforts to create local
ESCO market
CreteEfforts to create local
ESCO market
13“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
ClearSupport:Evaluation – Lessons learned
14“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
PSF Achievements – Project Investment Support Drivers behind supported projects:
Availability of PSF Services Availability of financing schemes
The PSF activities has ensured that the number of applications to the available financing programmes has accelerated and that financing applications are of sufficient quality thereby reducing front-up costs, as well as the time needed to consider applications
15“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
16
Helping to overcome barriers such as:• Shortage of funds • Inappropriate legal frameworks • Unclear ownership structures • Lack of awareness of financing options
In the form of:• Helping the building owners in developing proper investments• Developing new financing schemes • Improving legal framework conditions• Awareness raising• Training
PSF Achievements
16“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
Impact from the PSF Action
17“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
18
Case study: Situation of the multi-apartment sector in Lithuania
Technical aspects• There are about 45,000 multi-apartment blocks in Lithuania. 11% of
them were built before 1961, 80% in the period 1961 – 1990 and the remaining 9% after 1990.
• 66% of the Lithuanian population live in apartment blocks that were built in 1961-1990.
• The thermal characteristics of the apartment blocks built before 1993 are poor. Typical thermal resistance of outside walls is 0.9 [m2 K / W], which is 4 times less than Lithuanian current standard requirement and corresponding values in Scandinavian countries
“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
19
Case study (cont’d):Situation of the multi-apartment sector in Lithuania
Organisation, ownership and decision-making• Lithuanian apartment blocks suffer from the lack of a proper house
management system. More than 80% of apartment blocks have not created a housing association and led to a partial standstill of improving building management and undertaking renovations.
• There is lack of motivation among the flat owners; e.g. due to state subsidies of the heat bill. To this can be added that information about merits of renovation is often not available for the apartment owners
• This is accompanied with improper organisation of finance; the majority of houses do not accumulate funds for more significant repair or renovation. Further the bank sector is reluctant to enter the market due to risk concerns
“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
20
Case study (cont’d): Situation of the multi-apartment sector in Lithuania
Government policies• A key instrument concerns the Programme for the
Modernisation of Multi-family Buildings introduced in 2005 with the principal aim is to help the owners of flats in multi-family buildings to modernise their housing stock and to increase efficiency of energy use
• The financial crisis has forced the Government to reduce the incentives for the building owners associated with the programme; e.g. the grant levels have been lowered and the speed of renovation has slowed down.
“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
21
Case study (cont’d): Situation of the multi-apartment sector in Lithuania
It is possible !• Since 1996 around 700 apartment blocks were renovated and modernised.
But:
• The renovation so far makes up only 1.5-2% of the whole building stock.
• No effective solution suitable for large scale renovation has been found yet and the financial crisis has worthened the situation considerably
““Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
22
Case study (cont’d): Barriers yet to be overcome
• Lack of proper ownership and management structure of multi-family houses. House owners association model proved to be suitable for 20% of the multifamily house stock only;
• Lack of ownership was replaced by administrators nominated by municipalities. In many cases these administrating companies are monopolies and abuse their monopoly power against passive inhabitants;
• Prices and tariffs of house management services in these cases are still regulated and free market is non-existent. This has led to poor quality of services;
• Government does not pay sufficient attention to progressive innovations to increase energy efficiency in buildings. Government support programme deals mostly with thermal insulation of the building envelope, which is an important, but expensive and not the sole measure for energy efficiency.
““Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
23
PART II Enabling of a sound investment framework
observations and recommendations based on the ClearSupport experience
• ClearSupport has shown that a proactive effort on helping building owners in identifying and documenting investments is essential in optimising financing schemes
• To apply a multi-disciplinary approach is a key means to overcome the various barriers in the implementation
• The following slides will present some observations and recommendations as how to increase the level of EE investments in the multi-apartment sector as inspiration for the design of future Cohesion funds and related financing instruments
“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
24
How to create awareness and competences of managing authorities
• Observations • Generally the programming of ERDF does not take into proper account
the long term impact in the form of reduced energy bills and better environment that channelling support to EE in multi-apartment buildings bring about
• Recommendations • Introduce in the procedures for the programming of ERDF a stronger
set-up for addressing the potential merits of supporting investments EE in multi-apartment buildings (including a long term horizon for the impact assessment) as well as guidance on how to handle the management of the support in an adequate manner
“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
25
Regulatory framework• Observations
• Despite active policies the general observation is that there are yet big gabs in order to provide a strong framework in order that the big energy saving potentials can be exploited
• Recommendations • An essential point is that Member States are encouraged to put in
place consistent policies to go hand in hand with the investment process, including creating good linkage between the policies at EU, national, regional and local level.
• Part of this is to obtain best possible interaction with the NEEAPs and NREAPs and the process around the CoM
“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
26
Financing instruments• Observations
• There is found to be many good initiatives around Europe to provide better financing options for the multi-apartment building sector, including developing the revolving fund concept in conjunction with ERDF.
• Recommendations • The recommendation is to continue and accelerate this development,
but doing this in understanding of the holistic approach needed to make it work properly; not least taking into account that the building owners in general need good support in order to become aware of the energy saving potentials and to turn the awareness into action in form of appropriate design of EE measures.
“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
27
Ownership structures and decision-making• Observations
• Finding adequate ways for renovation of the multi-apartment building stock is to high degree a democratic process, in which the flat owners are to find appropriate ways for the building management, investment decisions etc. Unfortunately, as the case study from Lithuania shows, various barriers in this process hinders/slows down a positive development
• Recommendations • The key issue is that the relevant authorities find the right approaches in
coherence with the policy formulation and programming and administration of the financing instruments, including EU funds.
• There is a need for sober and direct dialogue with the housing associations/flat owners to provide them with relevant knowledge on issues like handling of investments (dissemination in form of e.g. posters is not enough)
“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
How to enable the investments to happen Good financing instrument(s) is not sufficient in itself ! Targeted and coordinated assistance to energy efficiency projects
can significantly accelerate the identification and the implementation of these
Local support combined with exchange of know-how and experience incl. an European Network can contribute to improve the quality of project documentation and implementation
Experience from the PSF process can contribute to develop framework conditions in EE building projects at the local level as well at the EU level (pro-active efforts from the PSFs)
28
You need a ’Delevery mechanism’ to make it all happen !!
“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
Recommended structure on promoting investments
Regional PSF Structure Regional PSF Structure
Potential European Supporting StructurePotential European Supporting Structure
Project service providersProject service providers
Project owners
Financing Institutions
29
See more in the ClearSupport Guidebook: www.ecnetwork.info/ClearSupport/Deliverables/D-
3.4%20Tool%202_Guidebook_FINAL.pdf
“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 f ov 2011
30
Find out more at: www.clearsupport.eu
“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011
Partners
Thank you for attention !
On behalf of the ClearSupport consortium
Nils Daugaard ([email protected])
More information on http://www.clearsupport.eu
ClearSupport partners:
In partnership with:
“Cohesion Policy Investing in Energy Efficiency in Buildings”, Brussels, 29-30 Nov 2011