Katainen: Private sector will decide if EU money goes to energy efficiency

Jyrki Katainen at the press conference after his meeting with EU finance ministers. [James Crisp]

This article is part of our special report An efficient energy union.

SPECIAL REPORT / The European Union will not ring-fence funds from the Juncker plan to pay for renovation projects to boost the energy efficiency of buildings, the Commission Vice-President in charge of the €315 billion investment package told EURACTIV yesterday (9 March).

Jyrki Katainen, responsible for jobs, growth, investment and competitiveness, said it was up to the private sector to choose which projects got the cash.

Public money from the Juncker plan will act as risk guarantees on the projects, to entice private investors.

Building sector industries had called for investment plan money to be earmarked for renovating buildings, after the publication Tuesday (9 March) of a report by Copenhagen Economics, a consultancy.

The report said that deep renovation projects would deliver returns for investors, help the EU hit efficiency targets and create jobs and growth. “Shovel ready” investments with a quick roll-out and high rate of return on societal benefits should be prioritised, it said.

“Energy efficiency is one of the Commission’s key priorities,” Katainen said, “and that’s why I expect there will be energy efficiency projects. But it’s up to the private sector to apply or establish those projects.”

However, a national or regional platform concentrating on energy investment could apply for resources for efficiency from the European Fund for Strategic Investments (EFSI), Katainen said at a press conference in Brussels.

That could then be channelled to efficiency projects such as smart grids, he added. Smart grids use digital technology to improve the efficiency and reliability of electricity supply.

Katainen had earlier met EU finance ministers, who agreed on the regulation to set up the EFSI. The EFSI is the legislation which will distribute the €21 billion euros of public money that – it is hoped – will leverage at least €315 billion of private investment over the next three years.

>> Read: EU ministers pave way for Juncker plan


Economics report

Deep building renovation projects respond more effectively and cost-efficiently to the key operational objectives of the EFSI, the Copenhagen Economics report states. 

“The EFSI aims to give priority to projects that boost short and medium-term activity while providing high returns to society,” said Adrian Joyce, secretary general of EuroAce and Renovate Europe campaign director. “This report shows that building renovation can respond very effectively to all these requirements”

Jan te Bos, director general of the European Insulation Manufacturers Association (EURIMA), said the research and experience showed that deep renovation of buildings are fully adapted to the main EU priorities.

“They reduce greenhouse gas emissions and import dependence, and provide great returns in terms of growth and jobs, as recognised in the recently adopted Energy Union strategy,” he said.

“The EU institutions must follow suit by ring-fencing a sub-fund in the EFSI, which would be devoted to investments on large, deep renovation programmes,” he added.

Bertrand Cazes, secretary general of Glass for Europe, an industry association, added, “Building renovation projects should be given high priority if we take our building stock as an essential part of our energy infrastructure.”

Šef?ovi?: ‘huge opportunity’ in buldings efficiency

Speaking at a European Policy Centre event last week, Commission Vice-President Maroš Šef?ovi? said that part of the Juncker investment plan should go to energy efficiency in buildings.

About 29% of the projects proposed by Member States for package funding were for energy infrastructure, which was underinvested as a result of the crisis, he said.

He said, “Only 10% of our buildings are energy efficient so there is a huge opportunity for us to save, investors to invest, and for our apartment owners, households, and administrative bodies to save a lot of energy if we invest in the technology available on market.”

Šef?ovi? said that the Energy Union, the EU’s initiative to bolster its resilience to shortages, would also play a role in incentivising investment.

“I had a meeting with the representatives of pension funds, which are ready, and willing, and interested in investing in energy efficiency projects,” he said. “They proudly told me that they are representing assets of nine trillion euros.”

“What they need is the help on how to prepare these kinds of projects, how to package them for institutional long-term investors and how to guarantee the regulatory stability which is always important for these types of projects,” he added.

Šef?ovi? said the review of EU energy efficiency regulation – part of the project’s roadmap – would give investors the certainty they need.

The Energy Union’s Smart Financing for Smart Buildings initiative would also make it easier for actors to access existing EU funding instruments.

The creation of an investment advisory hub, under the Juncker investment plan, would also help renovation projects get EU funds, he said. The hub will be a single portal for investors, public authorities and project promoters to get advice and technical support.

The Renovate Europe campaign says that, thanks to modern technology, buildings' energy demands can be cut by 80%. But, it adds, in order for that to happen, there needs to be an effective regulatory and legislative framework in place.

The Energy Union will cut across a number of policy sectors including energy, transport, research and innovation, foreign policy, regional and neighbourhood policy, trade and agriculture, according to the EU executive's plans. 

Plans for the Union have developed beyond questions of security of supply to encompass issues such as fighting climate change.

President of the European Commission, Jean-Claude Juncker, announced an investment plan to mobilise €300 billion in an effort to kick-start the European economy.

Jyrki Katainen, the Commissioner for Jobs, Growth, Investment and Competitiveness, has said that the growth package should include public and private partnerships, increased lending capacity for the EIB and other EU lending bodies, more “future investment” by EU nations in areas such as infrastructure and the completion of the single market.

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