Energy Efficiency and Cohesion in an EU Energy

Energy Efficiency and Cohesion in an EU Energy Policy perspective Dr. Tudor Constantinescu Principal Advisor European Commission - Energy

European Energy Policy Cohesion Technology External Objectives & Targets Decarbonisation Internal Market Energy Legislation

• Energy strategy 2020 – Five priorities • Efficient use of energy • Integrated energy market • Secure, safe and affordable energy for consumers • Technological leadership • Strong international partnership Energy

Meeting our “ 20 -20 -20 by 2020” goals Reduce greenhouse gas levels by 20% Current trend to 2020 Increase share of renewables to 20% Reduce energy consumption by 20% Current trend to 2020 -20% Current trend to 2020 20% Energy 100% -10%

A NEW ENERGY EFFICIENCY DIRECTIVE Public sector Indicative national EE targets Sectoral measures New EED Monitoring & Reporting Energy Households Services Energy supply General measures promoting EE Industry

Looking to the future - Energy Roadmap 2050 • Basis: 20/20/20 objectives of the EU energy policy • Roadmap 2050: Cutting GHG emissions until 2050 down to 80 – 95 % below the level of 1990 • The Energy Roadmap 2050: the basis for the elaboration of a low carbon 2050 strategy ØSupported by multiple scenario analyses, to show to reach the 80 % / 95 % goal while at the same meeting other policy objectives (Competitiveness and Security of Supply) Ø Containing robust assumptions for all possible scenarios Energy

Fuel Ranges (primary energy consumption) 2030 75% 2050 75% 50% 25% 0% 0% RES Gas Nuclear Oil Solid fuels 2005 Energy RES Gas Nuclear Oil Solid fuels

Conclusions and “no regret options” • Energy efficiency gains throughout the system • Major role of renewables • But all options can contribute Ø EE, RES, Nuclear, CCS, Gas • Act in time and together – timely investments cost less • Gas – important role until 2030/35 - more uncertainties after that period Ø Contribution after 2030 depends on (delayed) CCS Energy

European funding mobilised • Structural funds/ERDF (incl. JESSICA) • Intelligent Energy – Europe Programme • ELENA Facility • European Energy Efficiency Facility • Smart cities • (within the 7 th Framework programme for Research) • Public Private Partnerships • (within the 7 th Framework programme for Research Energy

Cohesion Policy 07 -13 (€ 347 billion) European Regional Development Fund Cohesion Fund European Social Fund (ESF) (ERDF) DG REGIO Energy DG EMPLOYMENT

Cohesion Policy Convergence objective: regions with GDP per capita under 75% of the EU average. 81. 5% of the funds are spent on this objective. Regional competitiveness and employment objective. Energy

Functioning of Cohesion Policy • European Commission & Member States negotiated / agreed National Strategic Reference Framework (NSRF) and Operational Programmes (OPs) at national and/or regional level for 2007 -2013. • Member States alone select and implement the projects in line with priorities of the OPs (principle of ‘shared management’). • Major Projects: Investments of more than € 50 million are submitted and approved by the Commission. • EU funds always completed by national, regional, EIB funds. Energy

“Green economy” investments 2007 -2013 Eco. Innovation € 3 bn Renewables € 4. 8 bilion Energy Efficiency € 4. 4 billion Low Carbon Economy € 48 bn Environmental Rulebook € 54 bn Energy = € 105 billion 30% of Cohesion Policy funding

Cohesion Policy allocations to Energy efficiency, cogeneration, energy management 39% Electricity (TEN-E) Natural gas (TEN-E) Electricity 3% Natural gas 3% 3% 6% Petroleum products 2% Wind 7% Solar 10% Biomass 17% Hydroelectric, geothermal and other 10% 2007 -2013 total = € 11 billion (3 % of total) € 9. 2 billion EE & RES plus € 1. 8 billion traditional energies & interconnectors. Energy

Energy

Energy Efficiency in the “Recovery Package” • Amendment to ERDF regulation 2009) (May • Up to 4% of the national ERDF allocation can go to energy efficiency and renewable energy in housing, potentially € 8 billion • Member States define eligible categories of existing housing, to support social cohesion • June 2010: Further regulatory amendment to facilitate the use of innovative financial instruments in this area, in addition to JEREMIE and JESSICA (JESSICA initiative also delivering EE & RES investments in the urban context) Energy

Uptake of the regulatory amendments • Only EL making immediate use of the new financial engineering opportunity by establishing a revolving fund of EUR 300 million to provide repayable assistance for energy efficiency in housing. • However, it seems like the amendment has triggered further MS interest, as the set-up of additional financial engineering instruments with an energy efficiency and/or renewable energies component is currently considered in BG, DE, HU, SK, UK. • Also eight JESSICA funds with energy component set up in seven MS: EE, LT, ES, IT, PL, PT, UK. Energy

Refurbishment of social housing (FR) • Investments of € 320 M of ERDF in whole country • Average support by ERDF = € 2, 886 per dwelling (14% of total needs) • Impacts: • generated over € 1 billion in investment in energy performance in social housing in FR • helped to create and maintain 15, 000 local jobs & potentially 31, 000 with measures in the pipeline • 50, 000 households with modest incomes supported to fight energy poverty (heating costs reduced on average by 40%) 18 Energy

Proposed EU budget 2014 -2020 MFF 2014 - 2020 Cohesion Policy 33% (€ 336 billion) Other policies (agriculture, research, external, …) 63% (649 billion) Connecting Europe Facility 4% (€ 40 billion) "Ambitious but realistic" proposals issued by the Commission in June 2011 for a Multiannual Financial Framework 2014 -2020 European Union Cohesion Policy Energy │ 19

Concentrating resources to maximise impact Concentration of ERDF investments on: energy efficiency & renewable energy research & innovation competitiveness of SMEs 6% 60 % 44% 20% More developed & transition regions Less developed regions flexibility – different regions have different needs special arrangements for ex-convergence regions European Union Cohesion Policy Energy │ 20

How will funding be allocated? Less developed regions/MS Cohesion Fund¹ Less developed regions Transition regions More developed regions 68. 7 162. 6 Transition regions 38. 9 More developed regions 53. 1 European Territorial Cooperation 11. 7 Outermost regions and sparsely populated areas Total 0. 9 336. 0 ¹ € 10 billion from the Cohesion Fund will be allocated to the Connecting Europe Facility Budget allocation (in %) European Union Cohesion Policy Energy Population covered (in millions) │ 21

ROMANIA, NSRF 2007 -2013 (http: //www. fonduri-ue. ro/) Energy Efficiency in ERDF Operational Programmes 2007 -13: 100 MEUR • Large enterprises/SMEs (Increase of the Economic Competitiveness programme) • • Total allocation: 100 M€ (245) Implementation: European Regional Development Fund supports investments in installations/ equipments of industrial operators leading to reducing the energy consumption. Calls: on going • • Public buildings for Regional, Local and Municipal Authorities programme) • • No separate energy-efficiency measures are taken. European Regional Development Fund supports the rehabilitation of public buildings (schools, hospitals, social buildings); the projects are required to comply with reinforced energy efficiency national legislation; • Housing • • Total allocation: 0 M€ Implementation: this was not a priority for the Romanian authorities and no programme included this type of projects. Discussions are on-going on the possibility and opportunity to set up a financing scheme for energy efficiency projects in housing under the Regional Operational programme. • • (Regional operational Contacts Intermediate Body for Energy from the Ministry of Economy, Trade and Bussiness Environment, http: //oie. minind. ro, Tel: (+40 21) 202 53 88. Managing Authority for Regional Operational Programme from the Ministry of Regional Development and Tourism http: //www. inforegio. ro/, Tel: (+40 37) 211 14 09. Energy

• Thank you • tudor. constantinescu@ec. europa. eu Energy