Today, the Energy Efficiency Financial Institutions Group (EEFIG), co-convened by the European Commission and UNEP Finance Initiative (UNEP FI), launched the De-risking Energy Efficiency Platform (DEEP): the largest pan-EU open-source database containing detailed information and analysis of over 7,800 industrial and buildings related energy efficiency projects1.
DEEP is a direct response to the EEFIG recommendation from its report2 “Energy Efficiency – the first fuel for the EU Economy: How to drive new finance for energy efficiency investments” of the need to better understand the real risks and benefits of energy efficiency investments based on market evidence and track record. By disclosing thousands of data points showing the real technical and financial data from a large number of implemented energy efficiency projects across the economy, the DEEP platform is a new source of operational risk management information, which will help project developers, financiers, and investors better assess the risks and benefits of energy efficiency investments across Europe.
Dominique Ristori, Director General for Energy at the European Commission, welcomes the launch of DEEP: "DEEP is an important element of our Clean Energy for all Europeans package, which aims to speed both the clean energy transition and growth and job creation. By disclosing the real benefits of energy efficiency projects, the DEEP platform will facilitate the mobilisation of private financing and help putting energy efficiency first. I encourage all project promoters and investors to support this initiative by sharing their data and performance track records."
EEFIG’s Rapporteur, Peter Sweatman underlines that: "The launch of DEEP demonstrates that EEFIG, supported by its co-conveners and its 100+ supporting institutions, is turning its words into actions: DEEP is the direct result of our implementation of the 2015 EEFIG report’s recommendation on the need for greater transparency and an evidence base to help reduce the risk of energy efficiency investing. EEFIG promotes proactive collaboration between financial institutions, market stakeholders and policymakers in order to help resolve the remaining barriers hindering an up-scaling of energy efficiency investment and finance in Europe."
DEEP’s evidence from over 7,300 projects in Europe, and 560 others, with an aggregate investment total of Euro 1.5 billion shows that the median avoidance cost of saving energy is very attractive (below EU energy prices and also delivering CO2 emissions reductions): Euro 0.012 /kWh in industry and Euro 0.025 /kWh in buildings. It also shows attractive business cases with relatively quick repayments: In industry the median payback from DEEP contributed projects is 2 years, while the story is more complex for buildings where single measures such as lighting repay in 3 years and deeper renovations with multiple measures (including building fabric) typically require over 11 years to be paid back3. However, EEFIG members also interpret these findings as a sign that energy efficiency investing continues to be seen as “discretionary” by industrialists and buildings owners, who have tended to focus on the “low hanging fruits” and not on Energy Efficiency as a strategic investment for the future. EEFIG welcomes the increased policy focus provided by the Clean Energy for all Europeans package launched today and notes the critical role of financial instruments, de-risking activities and project development support for mobilising private and public financial sources at larger scale.
Underpinned by a solid energy efficiency policy and target framework and a number of public schemes at regional, national or European level such as the European Fund for Strategic Investments (EFSI), Europe is keen to unlock the multiple benefits of energy efficiency investments. Interestingly, these multiple benefits of energy efficiency investments (including energy security, competitiveness, social and territorial cohesion, job creation, well-being and greenhouse gas emissions reductions) as well as asset value increase were only recorded in 12% of buildings projects and just 5% of industrial projects submitted to the DEEP evidence base. EEFIG experts believe that important investment drivers like increased market value, rentability, comfort, health, reduction of payment defaults for lenders, emissions reductions and other social factors continue to be under reported, not well recorded nor measured by business and buildings owners and other potential energy efficiency investors. More market evidence of the multiple benefits of energy efficiency is needed to further mobilise private financing for energy efficiency, and DEEP is making an important contribution to this key challenge.
EEFIG members note that the data and results vary greatly between segments within the buildings and industry classifications and between Member States. Also, while the data templates allow for data providers to be very specific about energy returns, the economic and policy context in the Member State is also a strong driver for investment which the raw data may not properly capture. The Consortium supporting DEEP notes that the distribution of projects around the medians are broad and that there are payback periods of under 1 year as well as over 25 years in some cases.
DEEP already has 25 data providers including large companies, public banks, private investment funds, financial institutions and ESCOs who have placed their trust in DEEP. Today the DEEP evidence base contains 7,800 projects, and the EEFIG consortium will add new projects on a quarterly basis. The DEEP welcomes all new users and data providers to trial the platform which offers benchmarking, tracking, fact sheet and project comparison functions for all types of user. High-level DEEP functions provide investors with summary portfolio data to help understand projects in specific sectors or the economics of particular measures or technologies. DEEP’s fact-sheet function allows users to download data outputs and record the results of tailored searches and queries. EEFIG wishes to thank all contributors to DEEP, particularly highlighting the following launch data providers:
EEFIG was established as a specialist expert working group by the European Commission and United Nations Environment Programme Finance Initiative (“UNEP FI”), in late 2013, as a result of the dialogue between Directorate-General for Energy (“DG Energy”) and UNEP FI, as both institutions were engaging with financial institutions to determine how to overcome the well documented challenges inherent to obtaining long-term financing for energy efficiency. EEFIG’s 2015 landmark report was the consensus effort of over 120 active participants from around 100 organizations whose current professional experience is representative of one of the following stakeholder groups:
The development of DEEP was supported by a consortium led by COWI with the Buildings Performance Institute Europe (BPIE), Fraunhofer, the National Technical University of Athens (NTUA), Climate & Strategy Partners, and EnergyPro as partners. The work is funded by DG Energy which also chairs the EEFIG meetings that are moderated by the EEFIG rapporteur, Peter Sweatman, CEO of Climate Strategy & Partners.
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