Demand response, energy efficiency and distributed generation all form part of the components to move to a more sustainable, low carbon energy system. But in Europe progress towards their implementation is mixed, with some countries faring better than others.
For example, in the Smart Energy Demand Coalition’s (SEDC) latest mapping, only six countries – Belgium, Finland, France, Great Britain, Ireland and Switzerland – are found to have reached a level where demand response is a commercially viable product offering. Indeed, in most European countries demand response still remains illegal or its development is “seriously hindered”.
Energy efficiency for SMEs
Across the region this points to huge potential for demand response but also for other sustainable energy assets. But in trying to tap this potential, in particular the needs of small and medium enterprises aren’t being met, according to Jessica Stromback, chairman of the energy efficiency financier Joule Assets. The main reason, she says, is difficulties in financing such initiatives, which can go up to €1.5 million for typical SME sized building management, lighting and thermal control, efficiency system and solar panel projects but are mostly in the range of €30,000 to €500,000 – too small for most funds to engage.
“We are seeing viable projects involving standard energy efficiency offerings projecting up to 22% return but they can’t get funding, as the SME and/or the project are too small for banks or most investment houses,” Stromback told Engerati in a recent interview.
This is the niche, focusing on the energy service companies (ESCOs) that will undertake such projects, that Joule Assets is now starting to fill, with Stromback spearheading the New York-based company’s reach into Europe.
As an example of an initiative Joule Assets is working on, she cites the case of an ESCO with a project involving 50 stores of an Italian chain requiring changes to lighting and HVAC controls that previously had been unable to obtain the €500,000 swatches required to complete a total €20 million investment. The projects were acceptable but the ESCO was too small.
"This invisible barrier to finance for SMEs is slowing healthy growth in many member states and with the sort of funding we are offering, the ESCOS can build their businesses,” she says.
Sustainable energy asset evaluation
Alongside its funding activities Joule Assets is participating in EU projects such as Flexiciency, which aims to develop a regional marketplace for energy services. [Engerati-Building The Energy Services Marketplace]
The company is also heading up a new project, Sustainable Energy Asset Evaluation and Optimization Framework (SEAF), with support from the Horizon 2020 research and innovation programme.
The aim of the 2-year project is to develop a streamlined software platform to support SMEs to access funding for energy efficiency projects. The platform will enable independent project valuation, insurance and design standardization, in this way seeking to bridge the gap between the contractors and investors. It will be designed to function in ten European member states – Austria, Belgium, Finland, France, Germany, Ireland, Italy, Portugal, Spain and the UK.
Consortium members include academics from the Aristotle University of Thessaloniki and University of Manchester, and representatives from HSB Engineering Insurance Limited, the Italian ESCO Servizi Energia Ambiente (SEA) and the energy advisory company Verco.
Commenting on the project, Stromback says there is an over €8 billion energy efficiency project opportunity in Europe, which the platform should help address.
“We are truly excited to develop this platform to support market development by lowering barriers to project finance,” she says. “We look forward to supporting SME contractors and other small enterprises to reach their potential, for energy efficiency, job creation and healthier working environments.”
An investment of €10-15 million in sustainable energy assets is estimated to be able to save up to 30-45GWh of primary energy – corresponding to a range of 12-18GWh of electricity – per year.