Interviews with Valérie Plainemaison (EFIEES) and Peter Hug (eu.esco) about the European Code of Conduct for Energy Performance Contracting
10. 04. 2015
“The main role of the European EPC Code of Conduct is to bring confidence to the EPC market”
Ms. Valérie Plainemaison, Secretary General for the European Federation of Intelligent Energy Efficiency Services (EFIEES), presents her views on the EPC market and the European Code of Conduct for Energy Performance Contracting.
What are the main barriers/challenges on the current market for EPC in Europe?
- The market of EPC as well as the energy-efficiency services market in general faces several regulatory and non-regulatory barriers in Europe, depending on Member States.
A list of the main non-regulatory barriers involve: lack of awareness and information; lack of knowledge of public purchasers on energy-efficiency actions that may be complex in nature and lack of targeted financing instruments such as guarantees and low-interest loans (long-term) enabling affordable financing. Among the regulatory barriers, the most important obstacles are: rules on public procurement (split tenders hindering overall contracts), heat pricing regulation which does not enhance energy-efficiency actions in some Member States and rules on VAT discriminatory to energy-efficiency services favouring equipment-only purchase in some MS. Split incentives between owners and tenants or among owners is another essential barrier which is linked to both regulatory and non-regulatory aspects.
- The European Commission is empowered by the Energy Efficiency Directive (2012/27/EU) to require Member States to take appropriate measures to remove regulatory and non-regulatory barriers to energy-efficiency services.
It is fundamental that Member States identify existing barriers and propose measures to address them and that the European Commission takes action to assess this process, possibly by developing an "Energy Efficiency Barriers and Solutions Rating" presenting problems and measures in different Member States.
How can the European Code of Conduct for EPC support the EPC market?
- The main role of the European EPC Code of Conduct is to bring confidence to the EPC market in the EU taking into account its variety across Member State. The European Code of Conduct has a potential to overcome capacity building, information and awareness issues, which is extremely important for the further development of the EPC market in Europe.
From your point of view, what is the added value of becoming a signatory of the European Code of Conduct for EPC?
-The European Code of Conduct reflects the values and principles which our members consider essential to the development of high-quality energy-efficiency services markets in Europe. Becoming a signatory of the European Code of Conduct for EPC is a confirmation of our commitment to further support the growth of the energy-efficiency services market in Europe.
What do you think the market for EPC in Europe will look like in five years?
- It is difficult to predict the future in general, but EU energy efficiency policy has the potential to transform the energy market into one which focuses on the delivery of energy services - i.e. the useful outcome of using energy - rather than purely on the delivery of energy itself. Companies and business models which are organised in this way already exist, but so far market conditions and the legislative framework are not as supportive or effective as they could be. The European Code of Conduct for EPC may be a great tool to raise awareness on energy-efficiency services as a successful and consumer-friendly business model within the market actors and policy makers.
“This is a positive sign towards the market and a resilient foundation for long-term business development”
Dr. Peter Hug, Managing Director for the European Association of Energy Service Companies (eu.esco) presents his views on the EPC market and the European Code of Conduct for Energy Performance Contracting.
What are the main barriers/challenges on the current market for EPC in Europe?
- Performance contracting has been in place in Europe since the early eighties. However, the market remains underdeveloped despite increasing and volatile energy prices, federal and state energy savings mandates, the continued lack of capital and maintenance budget, and growing awareness of the need for large-scale action to limit greenhouse gas emissions. Several factors, respectively key barriers, are holding back the growth of the EPC market and have to be addressed and subsequently removed to boost the EPC market in Europe:
• Although, EU funded initiatives are active in this direction, there is still a lack of awareness, information and trust in both the private and public sectors of most European Member States.
• The low level of market development is also provoked by the lack of specific policies and government-backed support mechanisms designed to promote performance contracting respectively the intention to remove any impediments which hinder the rapid and fruitful implementation of the business model.
• Uncertainty and confusion has been caused by a lack of homogeneous service descriptions and definitions of EPC contract scopes as well as different implementation process sequences in the EU Member States. This creates confusion and prevents the development of best practice examples, harmonised framework for procedures through the entire project life cycle and economies of scale.
• One of the biggest disadvantages and contradictions is the limitation of public sector companies - existing within some European Member States - to leverage financing based on future energy savings.
How can the European Code of Conduct for EPC support the EPC market?
- It supports our work in respect to the positioning of all companies, committed to Code of Conduct, as diligent, prudent and reliable partner towards potential customers. This is a positive sign towards the market and a resilient foundation for long-term business development, which is
extremely important in times of economic and financial insecurity. The Code of Conduct helps to overcome most of the above mentioned obstacles, however more actions should focus on mitigating the lack of awareness, information and trust, which if removed could help to initiate a stronger market pull if EPC providers are able to provide policymakers and the private sector with a more in-depth understanding of energy efficiency in buildings.
A positive effect is that EPC providers who become signatories will cause a significant ramp-up in energy efficiency activities occurring at local, regional, and federal levels and - hopefully - will spill out in the private sector. This will generate business for players in the EPC market place independently of their size.
From your point of view, what is the added value of becoming a signatory of the European Code of Conduct for EPC?
- Using so far gained experience for building a successful, professional and transparent implementation of EPC projects on this common foundation of EPC values and principles will allow EPC providers to speak with one voice which we call the "magic phrase". EPC providers' services include a variety of activities, such as energy analysis and audits, energy management, project design and implementation, maintenance and operation, monitoring and evaluation of savings, property management, and energy equipment supply up to financing models.
