EU's Energy Efficiency Directive Needs More Work
THE purpose of the proposed European Commission's Energy Efficiency Directive is to save energy while increasing growth, but how to combine both still needs to be decided upon by member states.
British MEP Fiona Hall told EurActiv, “We are working hard to get compromises on this directive.”
The proposal has been referred to as the only complete piece of legislation so far to embrace the need to save energy and the economic necessity to stimulate growth and create employment.
Research has shown that energy efficiency contributes to economic growth, leading some, such as Anders Wijkman, a former MEP and Vice President of the Club of Rome think tank, to say: “Saying that it could slow down economic growth is ridiculous. You can do more with less energy through the rebound effect, so how could it impede growth?”
MEP Claude Turmes, has already tabled a key amendment explaining how energy savings will be financed in a way that will not hamper growth.
Turmes reveals in his report: “Without the necessary financing mechanisms the measures proposed in this directive will be wishful thinking and will not create numerous jobs and trigger innovation.”
His report states that that EU member states need to set up financing facilities which will mix a range of funds, calling for financial mechanisms to be funded through cohesion and structural funds; technical assistance and financial engineering funds; resources allocated to energy efficiency from the European Investment Bank, the European Bank for Reconstruction and Development and the Council of Europe Development Bank.
This suggestion would see these financial mechanisms pool money so that it would generate the highest leverage possible of private capital, in particular drawing on institutional investors who would also provide loans, grants and credits to reduce the perceived and the actual risks of energy efficiency projects.
Fiona Hall commented: “There are many different ways of financing these already, but there is a lack of understanding how these work. We need to make them available and publicise around Europe how the financial mechanisms work.”
The proposal as it stands looks at binding measures - 3 percent energy efficiency upgrades of public buildings and a 1.5 percent energy savings obligation scheme for energy companies, but implementing these measures requires initial capital.
To answer critics, one recent study on the effectiveness of energy efficiency investments made by Germany's KFW banking group showed that every €1 that went into the promotion of energy-efficient construction and refurbishment in 2010 returned €4 to €5 in revenue.
Friday 16th December 2011