Energy efficiency investments not cost-effective

Investments from the EU's cohesion policy funds made in energy efficiency projects over the past twelve years have not been made in a cost-effective manner, according to a damning report released today (14 January) by the European Court of Auditors. Instead, member states have used the funds as an excuse to renovate public buildings.  

“None of the projects we looked at had a needs assessment or even an analysis of the energy savings potential in relation to investments”, said the report's author Harald Wögerbauer. “The member states were essentially using this money to refurbish public buildings while energy efficiency was, at best, a secondary concern.”  

The court found that member states “did not have rational objectives in terms of cost-effectiveness” when they selected the efficiency projects. The projects were not selected based on their potential to produce financial benefits through energy savings. Instead, projects were typically found to be eligible for financing simply if they were in need of refurbishment.  

But the planned payback period for the investments is on average 50 years, and up to 150 years in certain cases. This is longer than the lifetime of these buildings or their refurbished components. The auditors also found that some member states such as Italy did not conduct an energy audit before awarding money and did not require the recipients to monitor energy consumption.  

Last year member states and MEPs agreed new energy efficiency legislation which will require member states to refurbish 3% of public buildings owned by the national government. The auditors recommend that going forward, the European Commission should require member states to conduct a proper needs assessment and regular monitoring on projects in order to receive funding.  

Brook Riley, an energy efficiency campaigner with Friends of the Earth Europe said the report should not distract from the financial savings potential of efficiency. A report from research group Ecofys published last year estimated that meeting the EU's goal of increasing efficiency by 20% by 2020 would deliver net savings of over €200 billion per year.  

“Energy efficiency itself is not a problem but policies designed to achieve energy efficiency are not delivering,” he said. “Member states and the EU must replace voluntary and ineffective policies with binding legislation. The recently agreed Energy Efficiency Directive will – if properly implemented – be a step in the right direction.”  

The largest recipient of energy efficiency funding over the past twelve years was the Czech Republic, followed by Italy. Among new EU entrants, Malta, Cyprus and Estonia received the lowest amount of funding.