Exciting new models of financing for sustainable energy are emerging – and supported by the European Commission’s EUR 80 billion funding program Horizon 2020. Granted EUR 2 million in funding under the Horizon 2020 call EE-20, the RESCOOP MECISE project plans to trigger EUR 111 million of investment into sustainable energy.
RESCOOP MECISE Project (2015-2019) stands for Renewable Energy Sources Cooperatives Mobilizing European Citizens to Invest in Sustainable Energy A three-fold approach is planned in the project; providing renewable energy and energy efficiency improvements for municipalities; deep renovation for one thousand households, and improved financial support for cooperatives and communities working on sustainable energy.
Local authorities are a key target for RESCOOP MECISE. Across Europe, local and regional authorities account for two-thirds (€178.9 billion in 2011) of total public investment expenditure. Local governments in more than 300 regions and 91,000 municipalities have a major role to play in key sectors such as education, the environment, transport and economic development.
More than 3,000 local governments now have sustainable energy action plans in place – and the political and legislative support for decarbonising local and regional public services.
Dirk Vansintjan, representing the European Federation of Renewable Energy Cooperatives RESCOOP, explains the approach to investment in sustainable energy:
“Firstly, we will set up a pipeline of renewable energy investment projects and link these investments to energy efficiency in the municipalities where we invest. We should consider renewables and energy efficiency investments as a total package. This is because renewable energy projects have a positive cash flow [for example, from the feed-in tariff] but energy efficiency has a different investment profile [where investment is recouped through savings].’
“We have been doing this already – just outside of Brussels, in the municipality of Hasselt, we are building four wind turbines which should be up and running in about one week’s time. We employ a half time engineer to help with energy efficiency measures alongside the electricity generation from renewables. When there is a public tender we always offer this energy efficiency element as part of the package – and it works.”
The RESCOOP-MECISE project aims to trigger further investment in sustainable energy by supporting householders to optimise the energy efficiency renovation of their homes – otherwise known as ‘deep renovation’.
Successful energy efficiency programmes at local level include Opower in the U.S. , KFW in Germany and KredEx in Estonia. Improved comfort is a major motivation factor for homeowners, perhaps more so than cost savings on fuel bills. Wider socio-economic benefits include jobs and positive returns for the local economy.
Vansintjan says: ‘People are ready and willing to invest in future-proofing their homes – normally to the value of around EUR 10 000. When you provide financial support to citizens for deep renovation of their homes, additional investment comes from the public sector, citizens’ own funds and energy cooperatives.’
RESCOOP-MECISE will support 1000 households to renovate their homes.
A range of funding supports for sustainable energy projects is available at national and European level; however the RESCOOP MECISE project will be looking at whether these existing tools are suited to the needs of citizen-financed projects. Depending on the findings of this investigation, it is proposed that the project may even set up its own European cooperative investment fund.
To enable bigger projects to remain wholly citizen-financed, some bridging financing must be provided to allow citizens the time to come forward with their own investment, says Vansintjan.
‘When you get a permit to start your project you need finances in place and your financial plan must be concluded. Say for example you have a permit for three wind turbines and it will cost EUR 10 million – most people don’t come with their money at that moment. They will only come when the wind turbines are up and running.’
‘So we need we think a timeframe of about three years to attract citizen financing and to give local people the time to put their money on the table. What we want to do is offer these local initiatives the time to raise as much local capital as possible.’
Vansintjan is optimistic about the prospects of working with the institutions to enable citizen-owned sustainable energy:
“Together with the European Investment Bank (EIB) we will see if we can solve this problem. Ultimately, we would like to see an EIB financing tool for communities and cooperatives.’
To learn more about innovative financing for energy efficiency and renewables, watch tomorrow’s webstream from the ManagEnergy workshop http://managenergy.net/networking_meetings/2118