Energy financing is a topical issue that affects the energy sector across the whole of the EU. For example, the Regulation on the Union Renewable Energy Financing Mechanism issued by the European Commission in September this year aims at raising funds to meet the Green Deal's commitments. However, this is not the only way – companies can also use the opportunity to fund energy transformation through a very advantageous EPC method (Energy Performance Contracting). Learn how businesses and consumers are aware of the transformation of the sector and how energy leaders themselves see the transition to renewables.
Take a look at other topics that we address in our EnviLaw newsletter #3:
New Commission’s regulation introduces a mechanism for raising funds for renewable energy projects
On 15 September 2020, the European Commission issued a Regulation on the Union Renewable Energy Financing Mechanism. Its main aim is to “ensure the achievement of the objectives of the Energy Union and the long-term Union greenhouse gas emissions commitments consistent with the Paris Agreement, and, in particular, of the targets and objectives in the field of greenhouse gas (‘GHG’) emission reduction, energy from renewable sources and energy efficiency.”
In particular, the Regulation supports new renewable energy projects by creating a special mechanism, whose aim is to achieve the set objectives for the share of renewables in total energy production under the Green Deal. The mechanism is intended to make it easier for member states to raise funds for renewable energy projects. The European Commission will manage this system, which will start in early 2021, by issuing regular tenders and connecting investors with project creators.
EPC contracts – guaranteed energy and finance savings
In summer’s dReport, experts from Deloitte’s energy team described the Energy Performance Contracting (EPC) method. This consists in the possibility of modernising the company’s energy infrastructure without having to invest equity. Most of the risks are borne by the energy services supplier, which is the only entity that provides funds and guarantees both the amount of savings and the return on investments.
The method can be particularly advantageous for companies and institutions with high energy costs, which should be simultaneously ensured for a longer period of time. In the above-mentioned article, the technical and operational director of the National Theatre described his positive experience with EPC, also mentioning the possibility of combining it with grant titles.
Consumer and businesses’ awareness of the use of renewable energy is increasing
A recent Deloitte study based on an analysis of historical data showed how the way energy and resources are used in businesses and households has changed over the past nine years. The study confirms an increasing awareness and interest of the general public – both consumers and companies – in the use of renewable energy, as well as in the human impact on climate change.
Furthermore, the study presents possible trends that could affect energy use, while identifying possible obstacles to these trends. However, the question is how the current COVID-19 pandemic will affect the conclusions and possible prospects of the study.
Transition to renewables from the perspective of energy sector leaders
The new Deloitte report shows that 89% of energy and industry leaders are looking for a low-carbon future. The authors then discuss the future of the energy sector, the possible impact of the COVID-19 pandemic and the subsequent recession. The debate is also available in the form of a podcast.
The authors also point to the obvious impact of reducing the carbon footprint in the energy industry. As Stanley Porter points out, the main driver of these trends is the influence of customer demand. This was confirmed by the majority of the energy industry leaders surveyed, who had to incorporate environmental aspects into their companies’ business strategy over time. The existence of these trends is also evidenced by long-term contracts for the purchase of energy from renewable sources.
In addition, the authors also point to the need for a deeper insight into energy savings and measures from the point of view of the carbon footprint. Examples are different ways of charging electric vehicles (energy from (non-)renewable sources) or different ways of processing and using natural gas as fuel.
Finally, the authors also point out that the indicators from the Deloitte report may currently be affected by the pandemic and the related recession, which is likely to slow down the amount of investment in new technologies and the transition to renewable energy sources.
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