Presentation Low-carbon Economy

8/22/2019 Presentation Low-carbon Economy

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Regional

Policy

Thematic seminar:

Sustainable growth

Thematic objective IV: Supporting theshift towards a low-carbon economy in

all sectors

30 May 2012



Regional

Policy

Outline

• Europe 2020 flagships and relevant headlinetargets

• Overall context for cohesion policy investments insustainable energy, including links to investmentsin research and innovation and ESF investments

• General implementation principles

• ERDF and CF investment priorities, with keyactions, related ex ante conditionalities andguidance

• Common indicators



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Policy

Europe 2020 flagships and relevantheadline targets



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Policy

Europe 2020: 7 flagship initiativesSustainable energy included in all (except the one on youth)

Smart Growth Sustainable Growth Inclusive Growth

Innovation

« Innovation Union »

Climate, energy and

mobility

« Resource efficient

Europe »

Employment and skills

« An agenda for new

skills and jobs »

Education

« Youth on the move »

Competitiveness

« An industrial policy

for the globalisation

era »

Fighting poverty

« European platform

against poverty »Digital society

« A digital agenda for

Europe »



Regional

Policy

Europe 2020 headline targets onclimate change and energy

• A reduction in EU greenhouse gas emissions of at

least 20% below 1990 levels (30% if conditionsare right)

• 20% of EU energy consumption to come fromrenewable resources

•

A 20% reduction in primary energy use comparedwith projected levels, to be achieved byimproving energy efficiency



Regional

Policy

Overall context for cohesion policyinvestments in sustainable energy,

including links to investments inresearch and innovation and ESFinvestments


http://slidepdf.com/reader/full/presentation-low-carbon-economy 7/50Regional

Policy

Cohesion Policy investments inSustainable Energy – Context

• Cohesion Policy provides the major EU level

investment framework for EE/RES, accompanyingthe EU regulatory framework

• CSF: "The ERDF, Cohesion Fund and EAFRD cancontribute to accelerating the implementation ofEU legislation on renewable energy and energyefficiency, in particular the Energy Performanceof Buildings Directive, the Energy ServicesDirective, the Renewable Energy Directive andthe Strategic Energy Technology Plan."



Policy

│ 8

Less developed regionsMore developed & transition

regions

PROPOSED FOR 2014-2020: MINIMUM SHARE OFERDF INVESTMNETS ON:

- Shift towards a low carbon economy- Research & innovation

- Competitiveness of SMEs

Based on overall amounts proposed: Min. EUR 17 bn for low carboneconomy in 2014-2020 (ERDF) – Large increase from 2007-2013 when EUR9.4 bn allocated to energy efficiency (EE) and renewable energies (RES)

No more ceiling for investing in energy in housing (currently max 4% of ERDF)

80%

20%

50%

6%



Policy

Investments insustainable energy

for socio-economic developmentthrough Cohesion Policy (CP)

Research &Innovation

Regional / NationalR&I Strategies for

Smart Specialisation Specific CPfunding on

sustainableenergy

IntegratedSustainable

UrbanDevelopment



Policy

Links to investments in research and innovationProposed ex ante conditionality for investments in RTDI:

Research and Innovation Strategies for Smart Specialisation

National/regional strategies which are integrated, place-based

economic transformation agendas that:

1) Focus policy support and investments on key national/regional

priorities, challenges and needs for knowledge-based development;

2) Build on each country's/region’s strengths, competitive advantagesand potential for excellence;

3) Support technological as well as practice-based innovation and aim tostimulate private sector investment;

4) Get stakeholders fully involved and encourage innovation and

experimentation;

5) Are evidence-based and include sound monitoring and evaluation

systems.



Policy

= evidence-based: all assets

= no top-down decision, butdynamic/entrepreneurialdiscovery process inv. keystakeholders

= global perspective on potentialcompetitive advantage &potential for cooperation

= source-in knowledge &technologies etc. rather than re-inventing the wheel

= priority setting in times of scarce

resources= getting better / excel with

something specific

= focus investments on regionalcomparative advantage

= accumulation of critical mass= not necessarily focus on a singlesector, but cross-fertilisations

What is Smart Specialisation ?



Policy

Innovation for Green Growth Innovation and Green Growth are interdependent: two

sides of same coin!

Develop regional strategy/approach to foster green growth

though innovation.

Key areas such as energy efficiency and renewables, eco-

innovation, resource efficiency, water, transport, eco-

construction, bio-based products…

Upcoming Guide by DG REGIO on “Innovation for Green

Growth” will provide practical guidance on HOW regionscan build synergies between innovation and green

economy to boost growth, jobs and preserve the

environment.



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Policy

Links to ESF investments

• "The ESF should contribute towards the shifttowards a low carbon economy through supportfor the early detection of labour and skill needsand shortages, the reform of education andtraining systems, the adaptation of skills andqualifications, the up-skilling of the labour force

to improve its employability, and enhancing thecreation of new jobs in sustainable low carbonindustry and energy sectors."



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General implementation principles



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Policy

CSF: General implementationprinciples – low-carbon economy (1)

• The bulk of investment in this area should bemade by the private sector . MS and regionsshould ensure that public fundingcomplements private investment , leveragingit, and not crowding it out.

• In the EE sector, the option of creating value

for energy savings through marketmechanisms (energy saving obligations, energyservice companies, etc) should be consideredbefore public funding.



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Policy

CSF: General implementationprinciples – low-carbon economy (2)

• Financial instruments should be supportedwhere the potential for private revenue or

cost savings is large , including revloving fundsand guarantee schemes.

• In case of physical investment, grants shouldbe used primarily to address market failures

or support innovative technologies andinvestments goind beyond cost-efficient EE

performance , thus making sure that energysavings and GHG emission reductions are abovethose attainable with business as usual.



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Policy

Financial instruments• Forthcoming JESSICA "horizontal studies":

• Urban Development Fund handbook

• Energy Focused Urban Development Funds

• Housing in JESSICA operations

• JESSICA for Smart and Sustainable Cities

• Marketing and Communication

• Socio-Economic Performance

All expected by end July 2012



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Policy

ERDF and CF investment priorities,

with key actions, related ex anteconditionalities and guidance



Regional

Policy

Investment priority (a): Promotingthe production and distribution ofrenewable energy sources

•

CSF–

Key actions for the ERDF and the CF:• Innovative renewable energy technolgies, in

particular technologies mentioned in the SET-Planand in the energy Roadmap 2050, along with

second and third generation biefuels• Supporting marine-based renewable energy

prioduction, including tidal and wave energy



Regional

Policy

Ex-ante conditionality RES*• Actions have been carried out to promote the production

and distribution of renewable energy sources (OJ L 140,5.6.2009, p. 16)

Criteria for fulfilment:

• Transparent support schemes, priority in grid access orguaranteed access and priority in dispatching, as well asstandard rules relating to the bearing and sharing of costsof technical adaptations which have been made public arein place consistent with Article 14 (1) Article 16 (2) and 16

(3) of Directive 2009/28/EC: √ support schemes in place inall MS; grid access/cost sharing rules: work in progress/degree of progress varies

• A Member State has adopted a national renewable energyaction plan consistent with Article 4 of Directive

2009/28/EC: √ 27 EU MS * Presidency compromise text, April 2012



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Policy

The EU Emissions Trading System (ETS) – asystem based on the "cap and trade"principle

• CP regulatory proposal: The ERDF and the CF shall

not support the reduction of greenhouse gasemissions in installations falling under Directive2003/87/EC establishing a scheme for greenhouse gasemission allowance trading within the Community

• This point on exclusion of funding for emission

reductions in the ETS sector is important for ensuringconsistency and complementarity with the ETS .

• As the ETS is capped, there is no benefit in fundingemission reductions in this sector, since the overallcap (and therefore emissions) do not change.



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Policy

Context – Financing of RESCSF: "Support from CSF funds … should complement

support schemes for renewable energy."



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Policy

RES policy commitments (1)

• Key EU documents:

• Renewable Energy Directive (MS binding targets, RESuse in buildings and public infrastructure).

• Strategic Energy Technology plan: wind, solar,bioenergy (including 2nd generation biofuels),geothermal, marine energies.

Key Member State documents: • National Renewable Energy Action Plans for meeting

the 2020 RES targets (MS technology choices;support measures)

• National Renewable Energy Progress reports (2011)



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Policy

RES policy commitments (2)

• Capacity increase needed in all RES technologies.By 2020*:• Wind the main RES technology in electricity (40%

compared to 25% 2010)

• Solar/PV electricity 9% (3% 2010)

• Biomass in heating and cooling 80% (90% 2010)

• Solar thermal in heating and cooling 6% (2% 2010)

• Transport: 2nd generation biofuels + RES-E

• Innovative renewable energy technologies - SET-Plan

* Source: NREAPs of 27 EU MS



Regional

Policy

SET Plan Industrial perspective • Focus on technologies

with market impact upto 2020•

Wind • Solar

• Electricity grids

• CCS

• Bioenergy

• Nuclear

• Smart Cities and Communities

• Fuel cells and hydrogen

• Industrial applications

• Financing



Regional

Policy

69%

7%

24%

Corporate R&D investment (2007)

Public EU (FP6; annual average)

Public R&D spending of EU Member States (2007)

ca. €2.38 billion

SET Non nuclear technologies R&D spending 2007• Most of the R&D energy spending is focused in 4

countries: Germany, France, Italy and Spain

• More can be done in other Member States

SET Plan technologies R D investments



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Policy

Future perspective• Horizon 2020 – Energy Challange: EUR 6.3 billion (2014-

2020), including ca EUR 1 billion for the IEE III

• Risk Sharing Financing Facility: EUR 1.1 billion (2014-2020)

• Focus suggestions for Cohesion Policy

• Wind: Testing and manufacturing infrastructures

• Solar:

Potovoltaics: Testing and manufacturing infrastructures

CSP: First of kind projects/first commercial scale projects

• Bioenergy: First of a kind projects for second generation

biofuels

• Smart cities and communities: Energy efficiency in districtsof buildings, energy networks and local supplies, transport,

ICT



Regional

Policy

Links to Research and InnovationStrategies for Smart Specialisation

• In assessing their position and assets in the

context of the development and the subsequentimplementation of their strategies, MS andregions are invited to make full use of theknowledge developed in the framework of theSET-Plan and the Intelligent Energy Europe

Programme.• A certain number of regions can be expected to

decide that they will focus Cohesion Policyresources for RTDI in the area of RES.



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Policy

Investment priority (b): Promotingenergy efficiency and renewableenergy use in SMEs

• CSF – Key actions for the ERDF and the CF:

• Energy efficiency measures and renewableenergy use in SMEs (including information

campaigns)



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Policy

Existing experience• A body of experience available through the

Intelligent Energy Europe Programme database

http://www.eaci-projects.eu/iee/page/Page.jsp

• Energy audits pre-condition for investments

• Setting minimum requirements on energysavings/RES generation to be achieved highlyrecommended

• Financial instruments providing loans/guaranteesalong with the TA and incentives – good way toimprove the access of SMEs to EE/RESinvestment financing and mobilize the provision

of credits



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Policy

Investment priority (c): Supporting energyefficiency and renewable energy use inpublic infrastructures (ERDF and CF) and inthe housing sector (only ERDF)

• CSF–

Key actions for the ERDF:• Investment in the wider use of Energy Performance

Contracting in the public buildings and housing sectors

• CSF – Key actions for the ERDF and the CF:

•

Energy efficiency and renewable heating and coolingin public buildings, in particular the demonstration of zero-emission and positive-energy buildings, as wellas deep renovation of existing buildings to beyondcost-optimal leves



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Policy

Ex-ante conditionality EE*• Actions have been carried out to promote cost-

effective improvements of energy end use efficiencyand cost-effective investment in Energy efficiencywhen constructing or renovating buildings.

Criteria for fulfilment:The actions are:

• Measures to ensure minimum requirements are in place related to theenergy performance of buildings consistent with Article 3, Article 4 andArticle 5 of Directive 2010/31/EU.

• Measures necessary to establish a system of certification of the energy

performance of buildings consistent with Article 11 of Directive2010/31/EU.

• Measures consistent with art. 13 of Directive 2006/32/EC on energy end-use efficiency and energy services to ensure the provision to finalcustomers of individual meters in so far as it is technically possible,financially reasonable and proportionate in relation to the potential energy

savings.* Presidency compromise text, April 2012



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Policy

Why focus Cohesion Policy support onSustainable Energy in Buildings?

A WIN-WIN-WIN OPPORTUNITY:

Regional Development/Social Cohesion/Energy Savings

• Creating new and sustainable jobs;

• Building local and regional capacities;• Creating local opportunities for R&D and

innovation;

• Lowering energy consumption and improvingsecurity of energy supply;

• Reducing energy costs and alleviating energypoverty (in the case of residential buildings);

• Improving the quality of residential/public/commercial buildings;

• Reducing greenhouse gas emissions and

improving the local environment.



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Policy

Energy Performance of BuildingsDirective

• Setting the framework for investments through;

• Minimum energy performance requirements (EPRs) fornew buildings and buildings undergoing majorrenovation

• Cost-optimal methodology requiring minimum EPRs tobe set at cost optimal levels

• Energy performance certification of buildings andinspections for heating and air-conditioning systems

• System requirements for new, replacement andupgrading of technical building systems at least forheating, hot water, air conditioning and ventilation



Regional

Policy

… while ensuring an integrated approach! • Importance of energy efficiency of buildings, but

linking to – and ensuring coherence with – general elements which ensure the investments'

sustainability (with respect to occupation andobsolescence)

• Importance of the other investments whichdetermine the environment of buildings or houses:

public spaces, shopping areas, schools,accessibility of transport and services, etc.

• Modernising houses and buildings is a"necessary but not sufficient" condition to

guarantee the quality of life in cities



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Policy

What is Energy Performance Contracting (EPC)?• A procurement model which supports demand-

side EE measures in buildings.

• Brings a customised and integrated approach to

delivering EE projects encompassing planning,construction, financing, and operation andmaintenance of energy conservation measures.

• Benefits for property owners:• No upfront capital investment;

• Transferring technical and performance risk to a third party(Energy Service Company, ESCO);

• Guaranteed cost savings in line with energy reduction;

• Providing a means of renewing obsolete assets; and

• Overcoming public procurement barriers.



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Policy

Illustration of "Guranteed savings" EPC model



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Policy

Further assistance/experience• Number of innovative projects demonstrated

under ELENA Facility and Intelligent EnergyEurope Programme

•

Guidelines for MAs on evaluation of EE projects inbuildings under development – Timing?

• EIB-EPEC is on awareness-rising tour for MAs – contacts in MS needed

•

Specific action on capacity building of MAsforeseen in the IEE WP 2012

• Build-up skills: Potential for expansion throughthe ESF (MS roadmaps for workforce

qualification)



Regional

Policy

Links to Research and InnovationStrategies for Smart Specialisation

• Public authorities expected to take an exemplaryrole, e.g. in engaging in state-of-the-art

renovation of public buildings for improvedenergy efficiency (demand side).

• In doing so, they are invited to build on resultsfrom research projects under the Energy-efficient

Buildings (EeB) PPP and other relevant EU leveland national research.

• A certain number of regions can be expected todecide that they will focus Cohesion Policy

resources for RTDI in the area of EE of buildings.



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Policy

Investment priority (d): Developingsmart distribution systems at lowvoltage levels

• Key actions for the ERDF and the CF:

• Integrated low-carbon strategies and sustainableaction plans for urban areas, including publiclighting systems and smart grids



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Policy

Why Smart Grids/Metering systems?• Smart Grids are the key enabling solution

for the low-carbon economy: • Smart grids integrate energy supply, digital information,

communication and services among all actors connected to the

grid: prosumers, market actors and grid operators.

• Bidirectional communication of smart grids increase the flexibilityof the energy systems and makes possible large-scale integrationof distributed energy resources (RES, electric vehicles,cogeneration, storage, etc.), demand response and home

automation systems.• It creates jobs and economic growth at local/regional level and

enhance competitiveness, security of supply and energy saving atall levels.

• Implementation of smart metering systems are a first steptowards the deployment of smart grids.



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Policy

Experiences and future perspectives• Smart Grids enable reductions of global emissions by 15% and

can reduce EU primary energy consumption by 9%.

• Over € 5.5 billion invested in some 300 Smart Grid projects overthe past decade in Europe. Consumers with smart meters have

reduced their consumption by 5-10% in many cases. Some pilotssuggest that actual energy savings can be even higher.

• Low carbon energy industry to date has generated 1.4m jobs inEU. Research in US has indicated that up to 280 000 new jobscould be created by Smart Grid deployment, with more than 50%retained beyond the deployment phase.

• Only about 15% of EU households have some sort of smart meterinstalled; the cumulative investments in the EU are estimated atup to 40bn in next 5-8 years by installing 200m of smart meters.

• It is estimated that expected investments are roughly 15% forsmart metering deployment and 85% to upgrade the rest of thesystem towards Smart Grids (ca. € 280bn).



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Policy

Legal framework for the roll-out of Smart Metering

Transposition of Art. 3 and Annex 1.2 of Directives 2009/72/EC and2009/73/EC on internal energy market for electricity and gas:

• MS shall develop a plan for implementation of smart meteringsystems

• It might be subject to a long-term cost/benefit analysis, readybefore 3September 2012

• At least 80%of smart electricity meters should be installed by2020

•

Investments should be in line with Commission RecommendationsC(2012)1342 on preparing the roll-out of smart metering systems,covering:

• Data privacy and security

• Methodology to carry out the cost/benefit analysis

• Common minimum functionalities of smart metering systems



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Policy

Why Cohesion Policy should supportinvestments on Smart Grids

• Public investments in local/regional smart grid pilot projects will substantially help to remove existingtechnical and non-technical uncertainties associated

to the full deployment at national/EU level• Investments on Smart Grids will have substantial

cross-cutting impacts at local/regional level• Stimulating innovative investments in LV-DSO systems by opening

business opportunities to new/local entrants, of both ICT and Energysectors

•

Promoting new energy services at local level which improves localmarket transparency and retail market competition

• Empowering local consumers by active energy management and demandresponse services

• Optimising local/regional exploitation of large-scale distributed energyresources

• Improving flexibility, quality and reliability of the LV-DSO systems



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Policy

Investment priority (e): Promotinglow-carbon strategies for urban areas

• Key actions for the ERDF and the CF:

• Integrated low-carbon strategies and sustainableaction plans for urban areas, including publiclighting systems and smart grids.



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Policy

Reference Framework for Sustainable Cities(RFSC)

• Joint initiative of MS, urban stakeholderorganisations and the Commission (REGIO) to

create a web-tool for cities that promotesintegrated sustainable urban development.

• The RFSC is an attempt to put the principles ofthe Leipzig Charter, adopted in 2007 by EU-27Ministers in charge of urban and spatial planning,into practice.

• Call for tender has been published by theCommission to contract services to support theRFSC dissemination phase in 2012/2013.



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Policy

Covenant of MayorsSmart Cities & Communities

– Delivering low-carbon strategies• 3965 cities involved in development and implementation of

sustainable energy actions

• More than 1300 Sustainable Energy Action Plans (lowcarbon strategies) submitted, visible athttp://www.eumayors.eu/actions/sustainable-energy-action-plans_en.html

•

100 Coordinators involved (mostly regions and provinces)visible at www.eumayors.eu

• Regular capacity building of signatories and coordinators,efficient vehicle for future MFF

• Link to the Smart Cities and Communities initiative

(technology driver)



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Policy

Common indicators



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Policy

Common indicators – Low carbon economy

• Additional capacity of renewable energy production (MW)

• Number of households with improved energyconsumtion classification

• Decrease of primary energy consumption of public buildings (kWh/year)

• Number of additional energy users connected tosmart grids

• Estimated decrease of GHG in CO2 equivalents(tonnes of CO2eq)

Upcoming guidance by DG REGIO also on a CO2 assessment tool ofOPs; will enable authorities to assess CO2 impacts of investments.



For more information

Thematic Task Force Sustainable Growth:

http://myintracomm-collab.ec.europa.eu/dg/REGIO/Sustainable%20Growth/default.aspx

Documents

Presentation Low-carbon Economy