Alternative financing schemes for energy efficiency in buildings

Transcription

1 Alternative financing schemes for energy efficiency in buildings A presentation of paper of the ECEEE Summer Study 2013 Hyères, 5 June 2013 Adrien BULLIER Project officer Intelligent Energy Europe programme, European Commission abullier@gmail.com Christophe MILIN Economist ADEME christophe.milin@gmail.com The sole responsibility for the content of this presentation lies with the authors. It does not necessarily reflect the opinion of the European Commission or ADEME, which are not responsible for any use that may be made of the information contained therein.

2 Looking for the right tool To achieve the EU's 2050 objectives we need (among others): Deep renovation of buildings (50%-80% savings, investments on building envelope) + A higher renovation rate Investments required = 60bn/year on buildings The only adapted financial resource is the future energy savings Current schemes not scalable or generate lower savings (20-40%): Grants and tax incentives have a direct impact on public budgets Soft loan schemes are limited by householders' debt capacity Energy performance contracting focusses on HVAC systems The absence of proven, scalable and sustainable financial models is a key obstacle to make those investments happen There is already a lot happening across Europe 2

3 Financing deep renovation of buildings Energy savings Factor 4 / low energy retrofit Deep renovation Very insulated building envelope Ventilation and air tightness + HVAC (+ Renewables) + Regulation / O&M Insulated building envelope (+ Renewables) + HVAC + O&M HVAC systems HVAC + O&M Low hanging fruits Operation & maintenance Payback / cost 5 y 15 y 25 y 50+ y 3

4 Energy Cost Energy cost (before) Energy performance contracting Can it be adapted for deep renovation? 3. Lower cost of capital to reduce the contract duration 2. Extra contribution to reimburse the investments: grants or contribution of building owner At the end of the contract, cost savings are for the building owner Guaranteed energy saving are used to repay the investment 1. Extension of contract duration to allow payback of deep renovation W O R K S Energy cost (after) Contract starts Contract ends 4

5 Supporting EPC uptake What is an EPC? How much savings can we do? How to make it bankable? How to procure an EPC? With more buildings I can level risks and reduce transaction costs Pooling Owner A Berlin Energy Savings Partnership Market facilitation Assistance to building owners Energy service companies Owner B Owner C Audits Performance requirements Technical specifications Legal framework Procurement (negotiated procedure or competitive dialogue) Bundling IEE project MLEI ENSAMB (Norway) IEE project MLEI PARIDE (Italy) IEE project MLEI Accelerate (Spain) 5

6 Bundling EPCs to reach a critical size Contractual options for joint procurement 1 Back-to-back contracts Ad hoc structure 1 investment contract Contractor Shared liability 2 1 investment contract Contractor Shared procurement with X packages 3 X investment contracts Contractor IEE project MLEI PARIDE (Teramo, IT) 6

7 Disconnecting debt from the building owner - Using the UK's Green Deal IEE project MLEI Newinretro Newcastle (UK) Interest 7% / 25 y => low or medium savings! Source: Martin Walker, Newcastle City Council 7

8 Public third-party investment operators to develop the market French pilots OSER (Rhône-Alpes, public buildings Energies Posit'If (Ile de France, condominiums) Source: Caisse des Dépôts et A. Consignations, Bullier, C. Milin 2010 Alternative financing schemes for energy efficiency in buildings ECEEE Summer Study This presentation requires oral explanations 8

9 Energies POSIT'IF: public third party investment operator for condominiums "Local facilitators": energy agencies, associations Mature projects Condominium Administrator IEE project MLEI POSIT'IF Ile de France (FR) Source: José Lopez, Energies POSIT'IF Equity (local authorities & private partners) Long-term loans (low interest rates) 1. Unconditional phase Design of measures Financing plan 2. Conditional phase with options Implementation of the works EPC (guaranteed savings) Third party investment + or O&M with shared savings ERDF Jessica fund (loans/equity) - potentially Grants and tax incentives for home owners (tbc) Soft loans for homeowners (tbc) Energies POSIT IF Sub-contracting or co-contracting agreements Architects Thermal engineers Construction companies Energy service companies 9

10 Forfaiting transferring the ESCO's debt to banks Loan Bank Annuities ESCO's intervention potential is limited by its debt capacity ESCO / 3rd party investor Capex Energy savings EPC EPC EPC Buy future receivables Bank Assign claim to the bank ESCO / 3rd party investor EPC with TPI Guarantee O&M fees EPC EPC EPC After 1-2 years, the contract becomes a safe stream of revenue Forfaiting 10

11 Increasing available funding Public support schemes Financial markets! Requires critical size and standardised assets pipeline of projects Bonds Factoring fund Securitisation Initial capital + first risk coverage EESF (Bulgaria) Banks don't want to increase their debts either! Bank Loan Soft loans / interest rates buy down Estonia, Lithuania London EE Fund Guarantee fund(s) to cover first losses BGEEF (Bulgaria) Loan ESCO EPC! High interest rates kill savings potential Banks don't trust energy savings as revenues! Portfolio guarantee fund for payment delays BGEEF (Bulgaria) 11

12 Scaling up Public intervention needed! 20% of EU structural funds allocated to EE and RES = 17bn ( ) = 2% of required investments by 2020 ( 115bn / year) Use public subsidies to leverage private funding "Jessica" funds using EU Structural funds for soft loans (Estonia, Lituania, London), guarantees on loans, or equity Project development assistance: 1 in grant leads to 20 invested (ELENA, MLEI PDA IEE programme) We have all the pieces of the puzzle! But the vision is lacking Diffusion of the existing models is essential to replicate them Massive capacity building is needed for public authorities 12