Latest developments in energy
efficiency finance:
Building the jigsaw
Dr. Steven Fawkes
EMANZ
May 2016
European Commission Disclaimer
This project has received funding from the European Union’s Horizon 2020 research and innovation programme
under grant agreement No 649836.
The sole responsibility for the content of this presentation lies with the authors. It does not necessarily reflect the
opinion of the European Union. Neither the EASME nor the European Commission are responsible for any use that may
be made of the information contained therein.
There is big money in energy efficiency
Status report on EE financing
• Scale of market potential recognized
• Non-energy benefits increasingly recognized
• Growing interest from institutional investors
• Slow development of the EE financing market – leading to frustration
✔
✔
✔
✗
“The ratio of conferences to deals is too
high!”
Energy financing - now
Standardized
Mainstream
Large volume
Multiple sources
Standardized
Mainstream
Large volume
Multiple sources
NOT standardized
NOT mainstream
SMALL volume
FEW sources
The energy efficiency funding gap
Projects & Potential
• Untapped market
opportunity
• Good returns
• Established industry
• Proven technologies
Investors
• Search for yield
• Risk/return ratio good
• Growing emphasis on
Impact Investing
• Growing interest in EE
Investing in energy efficiency is hard
• Projects are small
• Savings are hard to measure (and hard to see)
• Lack of confidence in the results
• Lack of standardization in development & documentation
• Lack of capacity within financial institutions to assess projects
• Not a defined asset class
• Balance sheet issues in corporates
• Lack of demand for financed solutions
• Lack of a secondary market
Energy efficiency is economic but hard to invest into
“energy efficiency is low hanging fruit”
Investing in energy efficiency is hard work
The jigsaw of energy efficiency financing
Lack of standardization
Lack of standardization (in project
development and documentation) is
one of the major barriers to
increasing investment into energy
efficiency
Energy efficiency projects do not yet
meet the requirements of capital
markets. No two projects or
contracts are alike.
Michael Eckhart, MD & Global head of Sustainable Finance
Factories need standardization
Financial institutions are factories
Lack of standardization results in:
Greater performance risk
Uncertainty limiting demand
Higher transaction costs
Difficult to build capacity
Difficult to aggregate
Investor Confidence Project Protocols
BASELINING
• Existing Building
• Drawings
• Weather File
• Energy Usage
• Energy Rates
• Occupancy
SAVINGS
• Model File
• Calibration Data
• Bid Packages
• Certifications
OPERATIONS
• BMS Points
• Fault Plan
• Maintenance Plan
MEASUREME
• M&V Model
• Regression
Model
• Adjustments
• Impact
• Baseline
Adjustments
COMMISSION
• Cx Plan
• Cx Authority
• Test Procedures
• Facilities Req.
C
x
Protocols standardize best
practice in project development
and documentation.
ICP Protocol development process
Organize market leaders to provide input into the development of the protocols
– Financiers
– Building owners
– Developers, installers, ESCOs
– Government agencies
– Utilities
Investor Confidence Project Protocols
Large Tertiary
Standard Tertiary
Targeted Tertiary
Large Apartment
Standard Apartment
Targeted Apartment
6 Protocols published.
Now being applied.
US & European versions.
Open source.
Investor Ready Energy Efficiency
Ecosystem of Project
Developers, Software Providers
and Quality Assurance Providers
being built in US and Europe.
ICP Europe Network Members
Join here:
http://europe.eeperformance.org/
join-icp-europe.html
ICP projects across US and Europe
Number & size of projects &
programmes growing
ICP Investor Network
United States Europe
Investor Days
Bringing together investors, lenders
and project developers
The jigsaw of energy efficiency financing
Different ways of building the jigsaw
Procurement frameworks
– RE:FIT
– Carbon & Energy Fund
ESCO facilitation
- Berlin Energy Agency
Super ESCOs
- Etihad Super ESCO
Retrofit Accelerators
- New York City
Retrofit Accelerator
Development
finance
Project finance
Commitment from
public sector
Active marketing
ICP Protocols
IREE
Contracts
Reporting
Training for:
Project
Developers
Owners
Banks
Now seeking partner cities and
regions for ICP Retrofit Accelerators
ICP – The future The future
Investing in energy efficiency is hard work
Standardization & automation
Energy financing - now
Standardized
Mainstream
Large volume
Multiple sources
Standardized
Mainstream
Large volume
Multiple sources
NOT standardized
NOT mainstream
SMALL volume
FEW sources
Energy financing – the future
Standardized
Mainstream
Large volume
Multiple sources
Standardized
Mainstream
Large volume
Multiple sources
Standardized
Mainstream
Large volume
Multiple sources
Top Related