Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer...
Transcript of Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer...
![Page 1: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/1.jpg)
Latest developments in energy
efficiency finance:
Building the jigsaw
Dr. Steven Fawkes
EMANZ
May 2016
![Page 2: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/2.jpg)
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.
![Page 3: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/3.jpg)
There is big money in energy efficiency
![Page 4: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/4.jpg)
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!”
![Page 5: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/5.jpg)
Energy financing - now
Standardized
Mainstream
Large volume
Multiple sources
Standardized
Mainstream
Large volume
Multiple sources
NOT standardized
NOT mainstream
SMALL volume
FEW sources
![Page 6: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/6.jpg)
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
![Page 7: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/7.jpg)
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
![Page 8: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/8.jpg)
“energy efficiency is low hanging fruit”
![Page 9: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/9.jpg)
Investing in energy efficiency is hard work
![Page 10: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/10.jpg)
The jigsaw of energy efficiency financing
![Page 11: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/11.jpg)
![Page 12: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/12.jpg)
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
![Page 13: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/13.jpg)
Factories need standardization
![Page 14: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/14.jpg)
Financial institutions are factories
![Page 15: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/15.jpg)
Lack of standardization results in:
Greater performance risk
Uncertainty limiting demand
Higher transaction costs
Difficult to build capacity
Difficult to aggregate
![Page 16: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/16.jpg)
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.
![Page 17: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/17.jpg)
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
![Page 18: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/18.jpg)
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.
![Page 19: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/19.jpg)
Investor Ready Energy Efficiency
Ecosystem of Project
Developers, Software Providers
and Quality Assurance Providers
being built in US and Europe.
![Page 20: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/20.jpg)
ICP Europe Network Members
Join here:
http://europe.eeperformance.org/
join-icp-europe.html
![Page 21: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/21.jpg)
ICP projects across US and Europe
Number & size of projects &
programmes growing
![Page 22: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/22.jpg)
ICP Investor Network
United States Europe
![Page 23: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/23.jpg)
Investor Days
Bringing together investors, lenders
and project developers
![Page 24: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/24.jpg)
The jigsaw of energy efficiency financing
![Page 25: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/25.jpg)
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
![Page 26: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/26.jpg)
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
![Page 27: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/27.jpg)
ICP – The future The future
![Page 28: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/28.jpg)
Investing in energy efficiency is hard work
![Page 29: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/29.jpg)
Standardization & automation
![Page 30: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/30.jpg)
Energy financing - now
Standardized
Mainstream
Large volume
Multiple sources
Standardized
Mainstream
Large volume
Multiple sources
NOT standardized
NOT mainstream
SMALL volume
FEW sources
![Page 31: Latest developments in energy efficiency finance: Building ... · European Commission Disclaimer This project has received funding from the European Union’s Horizon 2020 research](https://reader036.fdocuments.in/reader036/viewer/2022071211/6022e7bae0752d1a4168ee8c/html5/thumbnails/31.jpg)
Energy financing – the future
Standardized
Mainstream
Large volume
Multiple sources
Standardized
Mainstream
Large volume
Multiple sources
Standardized
Mainstream
Large volume
Multiple sources