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Energy Cities – Open Days 2011Energy & Territory: from multilevel governance to local agreements

Dr. Tudor Constantinescu

European CommissionDirectorate-General for Energy

Energy Efficiency funding and the EU Cohesion Policy

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Energy strategy 2020 –

Five priorities• Efficient use of energy

• Integrated energy market

• Secure, safe and affordable energy for consumers

• Technological leadership

• Strong international partnership

33[ Energy networks, diversifying energy sources and increasing energy efficiency ]

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Meeting our “20-20-20 by 2020” goalsReduce greenhousegas levels by 20%

Increase share of renewables to 20%

100%

Reduce energyconsumption by

20%

-10%Current

trend to 2020

-20%

20%

Current trend

to 2020

Current trend

to 2020

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Financial support

European funding mobilised

Structural funds/ERDF (incl. JESSICA) Intelligent Energy – Europe Programme ELENA Facility European Energy Efficiency Fund (EEE F) Smart cities (within the 7th Framework programme for Research)Public Private Partnerships(within the 7th Framework programme for Research)

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Cohesion Policy 2007-2013Cohesion Policy 07-

13(€ 347 billion)

European Regional

Development Fund

(ERDF)

Cohesion Fund

European Social Fund

(ESF)

DG REGIO DG EMPLOYMENT

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Cohesion Policy

Convergence objective: regions with GDP per capita under 75% of the EU average. 81.5% of the funds are spent on this objective.

Regional competitiveness and employment objective.

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Functioning of Cohesion Policy• European Commission & Member States

negotiated / agreed National Strategic Reference Framework (NSRF) and Operational Programmes (OPs) at national and/or regional level for 2007-2013.

• Member States alone select and implement the projects in line with priorities of the OPs (principle of ‘shared management’).

• Major Projects: Investments of more than € 50 million are submitted and approved by the Commission.

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• Co-financing rate of 50% (competitiveness regions) or 75/85% (convergence regions) at programme level.

• Different rate for ‘revenue-generating’ projects (possibility also to use revolving financing instruments for such projects)

• EU funds always completed by national, regional, EIB funds.

• Programmes managed by “Managing Authorities” (MAs) at national/regional level. Often national or regional Ministry for finance/economy/regional development.

Functioning of Cohesion Policy

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EnvironmentalRulebook

€54 bn

Low Carbon

Economy€48 bn

Eco-Innovation

€3 bn

= €105 billion 30% of Cohesion Policy funding

“Green economy” investments 2007-2013

Renewables €4.8 bilion

Energy Efficiency €4.4 billion

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Petroleum products2%

Natural gas6%

Electricity (TEN-E)3%Electricity

3%

Natural gas (TEN-E)3%

Wind7%

Solar 10%

Biomass17%

Hydroelectric, geothermal and other

10%

Energy efficiency, co-generation, energy

management39%

Cohesion Policy allocations to Energy

2007-2013 total = € 11 billion (3 % of total)

€ 9.2 billion EE & RES plus € 1.8 billion traditional energies & interconnectors.

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Energy Efficiency in the “Recovery Package”

• Amendment to ERDF regulation (May 2009)

• Up to 4% of the national ERDF allocation can go to energy efficiency and renewable energy in housing, potentially € 8 billion

• Member States define eligible categories of existing housing, to support social cohesion

• June 2010: Further regulatory amendment to facilitate the use of innovative financial instruments in this area, in addition to JEREMIE and JESSICA (JESSICA initiative also delivering EE & RES investments in the urban context)

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Uptake of the regulatory amendments

• According to first qualitative assessment by DG REGIO in autumn 2010, activities in this area triggered by the regulatory amendments in BE, BG, EL, FR, IT, LT, MT, NL, PL, PT, UK.

• In addition, EE and LV active in this area already from the outset of the period.

• Some further MS show interest and could take advantage of this new opportunity (DE, ES, HU,…?).

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Uptake of the regulatory amendments

• Only EL making immediate use of the new financial engineering opportunity by establishing a revolving fund of EUR 300 million to provide repayable assistance for energy efficiency in housing.

• However, it seems like the amendment has triggered further MS interest, as the set-up of additional financial engineering instruments with an energy efficiency and/or renewable energies component is currently considered in BG, DE, HU, SK, UK.

• Also eight JESSICA funds with energy component set up in seven MS: EE, LT, ES, IT, PL, PT, UK.

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Refurbishment of social housing (FR)• Investments of € 320 M of ERDF in whole country• Average support by ERDF = € 2,886 per dwelling (14% of total needs)• Impacts:

– generated over € 1 billion in investment in energy performance in social housing in FR

– helped to create and maintain 15,000 local jobs & potentially 31,000 with measures in the pipeline

– 50,000 households with modest incomes supported to fight energy poverty (heating costs reduced on average by 40%)

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Revolving fund example Estonia• Switch from grants to a revolving fund

• KredEx (Credit and Export Guarantee Fund of the State) supports this

• Why revolving fund?

•Opportunity for re-usage of the funds

•Funds stay in state

• Loan is needed for reconstruction anyway

•Easier to administer, lower administrative costs

•End-beneficiary is used to take loan

•Innovative scheme, help from kfW

• Started 06/2009

• March 2010: 70 contracts with multi-apartment buildings, total 5,1 mn € (average 74 400 €, 2035 apartments, saving 33%)

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JESSICA fund in Lithuania• JESSICA Holding Fund amounts to € 227 million:

– € 127 million ERDF – € 100 million National co-financing– Expected later: some funds by commercial

bank

• Implementation started June 2010

• Planned to modernize 24.000 houses, by the year 2020

• This example:– 45 apartment multi family building– Insulated external walls and roof

Windows replaced– Glazing of balconies– Modernization of heating substation & heating

systems– Energy efficiency improvement of 60 %

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European Local Energy Assistance (ELENA) facility – ELENA EIB

• ELENA is a technical assistance facility, providing grants to cities, provinces, regions and entities acting on their behalf, of up-to 90% of eligible costs, for development of bankable sustainable energy investment programmes/projects at their territories. • Minimum leverage factor - 25, as of 2011 - 20• ELENA is financed through the IEE Programme, no call deadlines• Applications sent directly to EIB

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ELENA projects until 31/3/2011 -6 signed, 6 approvedELENA contribution: EUR 21,877,929 – Expected investment: EUR 1.6bn

Project name Beneficiary Location Sector

REDIBA Province of Barcelona (E) over 300 small and medium municipalities

EE &RE

CHP/DH City of Purmerend (NL) 1 medium-size municipality

RE & Local infrastructure

EE Milan Covenant of Mayors Province of Milan (I) 100 small municipalities

EE &

MADEV City of Madrid (E) 1 large municipality Transport

EE Ecoles Paris City of Paris (F) 1 large municipality EE

Vila Nova de Gaia Sustainable Programme

City of VN de Gaia (P) 1 medium-size municipality

EE & transport

Development of smart grid infrastructure in autonomous islands of the Aegean Sea

DAFNI (GR) 5 Islands, 10 small-size municipalities

Local

infrastructure & RE RE-FIT Greater London Authority

(UK)Several London Boroughs

EE

Electrobus: EE efficient bus network for Barcelona

City of Barcelona 1 large municipality to large cities

Transport

SPIS – Sparvagnar I Skane City of Malmö (S) 3 medium Transport

London – Decentralised Energy Greater London Authority (UK)

Minimum of 15 DE projects

Local

infrastructure ELENA - MODENA

Province of Modena (IT) Municipalities in the province

PV, buildings, public lighting

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ELENA facility: technical assistance for municipalities since 2009

New European Energy Efficiency Fund (EEE F) 265 million

Launched 1st July 2011 (EUR 146 million EERP, + financing

from EIB, CDP and DB). Beneficiaries: Local & regional Public

authorities, but PPPs are possible. Financing in form of loans,

guarantees, forfeiting schemes (to finance ESCO)…

Technical assistance (grant) is available to structure projects.

Also ongoing: DG ENER Impact Assessment on the best financing

instruments for energy efficiency (also with a view to new EU

Financial Framework 2014-2020) as well as an analysis of the

appropriateness of EU funding for the EPBD as requested by the

EPBD Directive

Other EU funding

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• “Factories of the future” PPP initiative € 1.2 billion in 4 years

• “Energy-efficient buildings” PPP initiative € 1 billion in 4 years

• “Green cars” PPP initiative € 1 billion in 4 years

Part of the European Economic Recovery Plan•Adopted by the EC on 26 Nov 2008 •Endorsed by the EU Council on 11-12 Dec 2008

The 3 Public Private Partnerships (PPP’s)

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Networks

Support measures and networks

• Cohesion policy funds• ELENA• EEE F

Possibilities for • State Aid • VAT reduced rates

Financial & fiscal

instruments

• Sustainable Energy Europe Campaign

• ManagEnergy network

ESD & EPBDimplementation

support

• Committees• Concerted Actions: EPBD , ESD

• CEN EPBD standards

• IEE programme• Research FP

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Thank you for your attention!!!

tudor.constantinescu@ec.europa.eu