Update of RoundBaltic intervention per November 2023
Intervention - Latvia
Highlights of the intervention per Nov. 2022
- Need for sustainable energy finance action
The increased energy prices and uncertainty around the energy supply entail a new awareness and urgency for energy efficiency and finding alternatives to import of fossil fuels. This is to go hand in hand with climate efforts for a green transition.
In Latvia there is a national policy to reduce CO2 by 65% by 2030 to achieve climate changing goals. In accordance with Recovery and Resilience Facility there are 37% of available finances for achieving these goals. Government to become the stakeholder to be actively involved with both public authorities and industry associations and, in close cooperation with the financial institutions sector, coordinate and implement concerted action to develop instruments to encourage private finance for energy efficiency projects. State institutions and organizations owned by Ministries are providing financial support by distributing loans, grants and implementing different financial instruments to promote energy efficiency in public/private buildings.
May 25, 2022, LEIF organized its Second National roundtable gathering key players for a dialogue on attracting private funding to finance energy efficiency financing and to identify common challenges and potential improvements that could be achieved in the current policy context and business practice. Attracting high-rank representatives from European Commission, Finance Latvia Association, Ministry of Finance, Ministry of Economics and ALTUM as well as representatives from state, municipal and banking institutions and from SME made it possible to focus around specific actions within the three target areas described above. Following this RoundBaltic will proceed with regional roundtables to create momentum for sustainable energy finance. For Kurzeme region actions are planned in public buildings and municipal companies, such as “Airport Liepāja”, municipal public transport company. Another aspect is to promote energy efficiency in multi-apartment buildings sector with certain regulation approved by city council, communication strategy with inhabitants and practical help to apply for available grants mixing public-private finance. For Vidzeme region actions are planned in municipal companies and promote the engagement of private funding as well as to promote the basic principle of ESCO service where ESCO service does not create additional budget expenditures for the local government. Overall actions intend to establish a national sustainable energy efficiency competence center that collects and coordinates all energy efficiency related processes, standardize the documentation of energy efficiency implementation projects and through laws and regulations give more power to multi-apartment building managers.
The intended state of enabling actions for public, multi-apartment buildings and SME are as follows:
- There is a need for greater explanation by banks on why data is needed. At present, this level of explanation is insufficient, but it is essential to meet a number of requirements and to be able to finance the greenest possible projects, thus measuring future benefits (energy efficiency, CO2, longer loan terms, better interest rates, etc.).
- There is a need to share responsibilities and set goals, and public policy makers need to work even more closely together to set a positive example.
- The availability of data enables banks to know and understand what they are financing and what they want them to finance.
- The various aid elements must be combined and varied: loan / grant / own contribution (EE currently 55% loan / 40% grant / 5% self-financing).
- A clear signal from the state is needed, such as “no gas”, indicating that the market for fossil fuel solutions will shrink, while the market for RES and energy efficiency will grow.
- Data tracking and availability is critical for both simple consumptions recording and comparison and decision making.
- At the national level, search for ways to address the cyclical nature of financial support for energy efficiency
- Extend the loans for energy efficiency improvement projects to a term of 20–25 years
Intervention - Denmark
Highlights of the intervention per Nov. 2022
- Need for sustainable energy finance action
The increased energy prices and uncertainty around the energy supply entail a new awareness and urgency for energy efficiency and finding alternatives to import of fossil fuels. This is to go hand in hand with climate efforts for a green transition.
In Denmark there is a national initiative called DK2020 where municipalities develop energy and climate plans to steer the development. Driven by the urgency the Danish Government is currently putting efforts into accelerating the green transition and as part of this supporting the municipalities in making local heat planning and giving subsidies for green solutions.
September 22, 2022, RoundBaltic organized its second roundtable gathering key players for a dialogue on financing energy efficiency in buildings and businesses in Denmark, with a view to discuss the needed supportive framework and concrete initiatives and measures. Following this RoundBaltic will proceed with regional roundtables to create momentum for sustainable energy finance. The intended state of enabling actions is as follows:
Private homes
A key intention is to be catalyst for establishing one-stop-shops as driver of energy renovations and green heating of the private homes. The consultations at the roundtables show that municipalities can serve anchor points for one-stop-shops as the municipalities have good trustworthiness among the building owners. The financing institutions are motivated to engage and can benefit from the one-stop-shops as an effective entry point.
RoundBaltic succeeding in being instrumental for establishment of one-stop-shops in the Region of South Denmark where 7 municipalities committed to host one-stop-shops for green heat and energy renovations. The neighbour region of Central Denmark aims to establish a regional one-stop-shop setup that coordinates efforts and resources across municipalities to motivate and enable home-owners to carry out energy renovations. In Eastern Denmark the efforts interacted with the EU City Facility, where the Municipality of Kalundborg has received a grant to make an investment concept for energy renovations and RoundBaltic is assisting on scaling up this initiative to an ELENA project with a significant investment scope.
Termonet
Termonet is a fairly new concept in Denmark that provide some interesting opportunities for green heating, as it can introduce district heating in areas where traditional district heating is too expensive. The municipal energy planners are now making new heat plans to phase out oil and gas and RoundBaltic help to pave way for Termonet in areas outside traditional district heating and where it is an attractive alternative to individual heat forms.
A recent regional roundtable in Eastern Denmark, 31st October 2022, explored these opportunities, incl. undertaking a site visit to a new Termonet installation. There are several projects underway around the country that RoundBaltic will support in its upcoming regional roundtables and associated enabling actions.
SME/industry sector
RoundBaltic is pursuing efforts towards promoting and strengthening inter-municipal collaborations on financing energy efficiency measures in the target regions. Ideally, this collaboration will function as regional one-stop-shops that assist SMEs throughout the value chain and through a permanent local process consultant who regularly visits and guides companies throughout the process. It is needed to create an appropriate interface for SMEs that can motivate and facilitate the implementation of measures, including ensuring the connection of all relevant actors, as well as the use of the necessary tools and documentation that can ensure implementation and quality of energy efficiency measures in SMEs.
The recent national roundtable, September 22, revealed a need for standardization, for instance in relation to green business models, meaning there is a potential to coordinate matters around standardization and documentation across the banks. As follow-up there is planned a regional roundtable in the Region of Central Denmark, with focus on how cross-municipal cooperation in the region can be further strengthened in relation to a one-stop-shop structure.
Social housing
Within social housing sector RoundBaltic held a separate national roundtable on 11th May 2012 that focused on the need for financing the green transition in the social housing sector and will address the possible integration of ESCO related solutions, the interaction with new Green Guarantee Scheme, and the possibility of using green loans from the financial sector (mortgage and pension companies) supplementing the National Building Fund. The efforts interact with the parallel EU-funded SUPER-i project that aims to help increase investment and data collection on energy efficiency in the social housing sector, which will be done in relation to three pilot projects in Denmark, Italy and Slovenia.
In the upcoming period RoundBaltic will seek to bring the learning of the national roundtable to the stakeholders operating in the target regions South Denmark, Central Denmark and Eastern Denmark aiming to catalyze specific investments in energy renovations of the social housing sector.
Intervention - Poland
Highlights of the intervention per Nov. 2022
Second National Round Table on Financing Energy Efficiency in Poland took place in May 2022. Proceedings ( in polish) and presentations are available at the event website https://sape.org.pl/roundbaltic-drugi-okragly-stol/
- Need for sustainable energy finance action
Russia’s aggression against Ukraine has caused significant perturbations on the fuel market. As for the supply of natural gas, the launch of the Baltic Pipe on September 27, 2022, which is to pass 10 billion m3 of natural gas annually, will completely replace imports from Russia. Hard coal imports from Russia, mainly for heating purposes, have been replaced by imports from other directions (Colombia, Australia). Prices of electricity and heat as well as of solid fuels for households have been guaranteed at the level of social acceptance.
At the same time, there is an acceleration of various legislative works related to financial support programs for improving the efficiency of energy use. A number of changes and new initiatives result from the recommendations submitted by participants of the RoundBaltic roundtables – national on May 25, 2022 and regional in 7 regions during the first half of 2022:
Private homes
Changes have been introduced in the Clean Air program consisting in increasing the intensity of support and the use of prepayments for contractors of thermomodernization projects in the houses of low-income and energy-poor households. A platform of energy experts has also been launched, whose services can be used by building owners and municipalities and paid for from the program budget. Three banks joined in with a loan offer supplementing non-repayable financing and with technical and economic consulting in several hundred branches throughout the country.
The third pillar of the “Clean Air” program was also built under the name of “Warm Apartment”, covering support for owners of premises in multi-family houses in order to replace inefficient heat sources with effective or renewable ones.
SME/industry sector
In connection with the approval on September 27, 2022 by the European Commission of the new Operational Program Funds for the Economy (FENG), new instruments of financial support for SMEs will be launched in the form of loans with subsidies intended both for improving the efficiency of energy use by their buildings in processes technological.
In October 2022, Bank Ochrony Środowiska became the fourth bank in Poland that offers technical assistance in the preparation of energy efficiency improvement projects by SMEs and owners of public, private and municipal buildings.
Social housing
Changes in the system of supporting thermo-modernization and renovation of multi-family buildings were adopted, consisting in increasing the intensity of support in the repayable financing instrument used since 1998. New forms of support were introduced in the form of grants for bringing renovated buildings to the nZEB standard and for introducing renewable energy sources in buildings that do not require renovation.