Funding for Renewable Energy

Peep Mardistepepe@ut.eeEnergy consumption in relation to GDP(tons of oil equivalents per 1 million Euro)Denmark 123Germany 165Sweden 224Finland 272Poland 650Latvia 759Estonia 1156Lithuania 1273in Russia the technical energy saving potential is 40...45% of total energy consumptionEU has in average more than 20% saving potentialin EU buildings account for 40% of total energy consumptionin EU buildings have 27% energy saving potential by 2020(which would decrease EU energy consumption by 11%)in reducing the energy use in buildings, insulation is key (accounts for 78% of reduction potential)insulation on pitched roof need ~30 EUR/m2 investment,annual energy saving ~7.5 EUR/m2payback time is 4 years1.4 million inhabitants1.1 million live in housing co-operativescurrent energy use ~250 kWh / m2 / yearsimple repair can achieve ~50 kWh / m2 / year:- insulation of walls- using of windows which keep warm- using proper ventilation- enabling to adjust temperature in radiators- replace incandescent lightbulbs with energy saving lamps- using solar panels for heating of water in Summercost of repair ~200 EUR / m2In 10 years total investment in Estonia: 6 billion EUR(= energy bills of households in 20 years)Financial need: state guarantees + international fund (potential EU Climate Fund 2014-2020)EU Directive 2002/91/EC on energy performance of buildings (EPBD)Green Paper on Energy EfficiencyAction Plan for Energy Efficiency 2007-2013More ambition needed in EPBD:abolish current 1000 m2 threshold for major renovationsestablish minimum performance requirements for buildingsCommission shall push all Member States to have very low-energy (or zero-net energy) standards by 2015Member States shall ensure that financing, subsidies and incentives are in place to allow rapid implementation of proven available energy efficiency improvements (especially in existing buildings)Funds and programmes of the European Union:Baltic Sea Region ProgrammeCompetitiveness and Innovation ProgrammeInterreg IVB and Interreg IVCJESSICA and JEREMIESeventh Framework ProgrammeStructural FundsOther financial instruments:EU-Russia cooperation fundsEuropean Bank for Reconstruction and Development (EBRD)European Investment Bank (EIB)Council of Europe Development BankGlobal Energy Efficiency and Renewable Energy Fund (GEEREF)Nordic Investment Bank (NIB)Nordic Environmental Finance Corporation (NEFCO)Baltic Sea Region Programme 2007-2013built on earlier experience of 1997-1999 Interreg IIC and 2000-2006 Interreg IIIBunder European Territorial Cooperation Objective and European Neighbourhood and Parthership Instrumenttotal budget of 237 million EURmostly targeted at territorial cohesion and cross-border cooperationtransnationally relevant innovations in SMEs such as promotion and transfer of knowledge in alternative and renewable energy management patterns, environmentally sound and eco-efficient technologytarget of financing:- 5 renewable energy projects (worth of total some 8 mEUR)- 3 energy efficiency projects (worth of some 4 mEUR)main framework for EU funding for projects in Russia consists of Annual Action Programmes under the European Neighbourhood and Partnership Instrument (ENPI)- EU-Russia Energy Technology Centre: support in preparation of bankable projects in the energy sector and providing technical assistance for project proposals, feasibility studies and other papers on energy efficiencyNorthern Dimension Environmental Program (NDEP)- started in 2001, 2.4 billion EUR pipeline of projects- international framework for financing priority environmental projects in north-west Russia- combines resources from EC, EIB, EBRD, NIB, World Bank and Russian Federation- energy efficiency is eligible (district heating Kaliningrad, Murmanks)36% of the EU budget2007-2013 strategic guidelines lists energy efficiency and renewable energy as one of the 12 prioritiesde-centralised through some 450 national and regional Operational Programmes (OPs)estimated 4.8 billion EUR for renewable energies and 4.2 billion EUR for energy efficiencyjust some 2.6% of total Structural Funds budget (up from 1.6% in 2000-2006)mixed ambition in Member States: over 5% in Lithuania, some 1.7% in PolandPercentage of total 2007-2013 Structural Funds assigned for sustainable energy in Central and Eastern Europe (draft!)operates in Russia, Estonia, Latvia, Lithuania, Polandthe only international financial institution (IFI) with a specialized energy efficiency teamtarget to lend or invest a total 1 billion EUR in energy efficiency and renewable energy projects in 2006-2010loans to projects of a significant scale which save energysupports energy service companies’ (ESCO) projects which target social facilities, such as schools or hospitalsloans for rehabilitation of district heating infrastructureWhile carrying out in 2010 a mid-term review of use of EU Structural Funds for 2007-2013 the Commission and Member States shall indicate the share of projects implemented in sectors of energy efficiency and renewable energy and if needed, increase relevant allocations.While drafting and negotiating the Regulation for use of EU Structural Funds for 2014-2020 earmarking of certain percentage of funds in all eligible regions for energy efficiency and renewable energy projects shall be considered.In context of Baltic Sea region it’s important that EU continues and increases support to energy efficiency initiatives in Russia within ENPI. Individual EU member states from Baltic Sea region could also consider earmarking additional funds for concrete partnerships on energy efficiency such as EU-Russia Energy Technology Centre.EBRD shall revise its energy policy to ensure emphasis on energy efficiency and set up gradually increasing targets for investments into energy efficiency, reaching for example earmarking of 50% of all lending in the power sector to increasing energy efficiency.EBRD shall revise its energy policy in order to set up targets for the financing of renewable energy projects, for example allocating 50% of all lending in the power sector in current or future EU Member States to renewable energy.Prior to the approval of any project, EBRD shall review related energy efficiency issues and ensure that an energy audit is undertaken.While Bank lends typically up to 50% of the project costs it shall consider adopting a policy of increasing its share of financing in case of renewable energy and energy efficiency projects to 80% or 90%.Prior to the approval of any project, NIB shall review related of energy efficiency issues and ensure that an energy audit is undertaken.Default Design