50-year payback on EU-funded retrofits

16th January 2013

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Billions of Euros aimed at helping member states improve energy-efficiency are being spent on uneconomical refurbishment of public buildings, warn auditors

In a report examining energy-efficiency programmes co-funded by the EU, the European Court of Auditors (ECA) concluded that member states were failing to consider payback times or whether energy-saving measures were cost effective when investing in retrofitting public buildings. It found that the average payback time for projects was 50 years.

It also claimed that the need to refurbish buildings was generally seen as “a more important consideration” than energy efficiency in projects, resulting in just 10%–20% of support earmarked for energy-saving directly funding such measures.

The ECA looked at energy saving programmes and projects in the Czech Republic, Italy and Lithaunia, which received more than 41% of the €5 billion available for energy-efficiency during 2007–2013 under EU “cohesion policies” (the Cohesion Fund and the European Regional Development Fund).

The auditors found that the member states examined did not have the baseline data they needed to make informed decisions as to which sectors held the most cost-effective opportunities for cutting energy consumption, and that none of programmes considered cost-effectiveness as a determining factor in allocating funds.

The report also argues that the member states had inadequate energy auditing and monitoring programmes, revealing that in 18 of the 24 projects examined energy savings could not be verified due to a lack of reliable data.

“Energy efficiency is the cheapest way to reach the EU’s goal of a 20% reduction of CO2 emissions by 2020, that’s why we should only invest in energy saving measures and not in others like refurbishment or renovation,” said Harald Wögerbauer, co-author of the report.

The ECA recommends that the European Commission set maximum acceptable payback periods for projects; require national governments to collect data on energy savings from EU-funded programmes; and ensure that member states examine the energy needs of their entire economy and cost-effective solutions for each sector.

Responding to the ECA’s findings, the commission argued that the funds were not solely aimed at energy efficiency improvements and that projects should be considered as “leading to the overall improvement of a particular building”.

It did, however, acknowledge that the commission is working to improve the performance of programmes, including proposing new monitoring indicators for all member states in the next funding period (2014–2020). Under the proposals, national governments would have to report the number of households that had improved energy consumption; the decrease in primary energy consumption of public buildings; and the number of additional energy users connected to smart grids.

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