The Joint Research Centre (JRC), the European Commission in-house science service, published a report entitled “Securing Energy Efficiency to Secure the Energy Union: how energy efficiency meets the EU Climate and Energy Goals”. In this piece of work, the JRC shows the central role of energy efficiency in meeting the Energy Union goals, and demonstrates that a 40% energy efficiency target for 2030 is the way forward.
The report addresses the need to overcome the challenge of financing energy efficiency investments. It is clear that the existing EU funding will not be sufficient to transform the EU economy from a fossil fuel based economy to a low-carbon economy unless they are blended with investments from Member States and private financial institutions. JRC points out that public finance should be used mainly to remove the policy and financial risks by establishing the appropriate de-risking financial instruments such as guarantees, to boost innovation as well as to build the technical capacity needed to develop, implement and monitor energy efficiency policies and measures.
According to the authors, the policy risks could be removed by
- encouraging the use of energy performance contracting to remove the perceived technical risk by investors,
- unlocking the utility data to establish more accurate baselines,
- developing instruments that allows for bundling small projects,
- upgrading skills,
- boosting innovation; and
- assessing energy saving by third independent parties.
Financial risks could be mitigated by developing risk sharing facilities to provide loans guarantees thus reduce the perceived financial risk through governmental guarantee of first-loss risks.
The full report is available on the JRC's website.
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