The scale of investment needed to meet the EU's 2020 energy efficiency target is estimated at around €100 billion per year. The EU has increased the amount of public funds available for energy efficiency, but there is a need to boost private energy efficiency investments through a targeted use of public funds, the development of robust investment solutions and support activities for project developers.
Funding schemes for energy efficiency
EU Horizon 2020 funds support the research, demonstration and market up-take of energy efficient technologies. Funds are available to support energy efficient buildings, industry, heating and cooling, SMEs and energy-related products and services, as well as for improving the attractiveness of energy efficiency investments.
Project Development Assistance (PDA)
The European Commission has set up different PDA facilities to support the development and launch of ambitious and replicable energy efficient projects:
ELENA: Managed by the European Investment Bank, this provides grants to help local and regional authorities develop and launch large-scale sustainable energy investments. ELENA covers up to 90% of the technical support costs.
- PDA: This programme helps public and private project promoters develop sustainable energy investment projects ranging from €6 million to €50 million.
This €265 million fund provides tailor-made debt and equity instruments to local, regional and (if justified) national public authorities or public or private entities acting on their behalf.
This is a new financial instrument under the EU's LIFE programme (a funding instrument for the environment and climate action) which co-funds energy efficiency programmes in several EU countries.
Under ESIF, more than €27 billion is ring-fenced to support the shift towards a low-carbon economy.
Initiatives to accelerate Energy Efficiency investments
Energy Efficiency Financial Institutions Group (EEFIG) Final Report
The EEFIG was set up by the European Commission and the United Nations Environment Programme Finance Initiative (UNEP FI) in 2013 to determine how to overcome the well documented challenges for up-scaled investments into energy efficiency. The Report does so by addressing the key drivers of demand for and supply of financing for energy efficiency investments. The Report concludes with practical recommendations for both policy makers and market participants.
The investor confidence project in Europe aims to develop a set of best practice standards for use in the process of renovating buildings to make them more energy efficient that should reduce transaction costs and make risk manageable for investors.