COP29: Energy efficiency as a service model launched
From left to right: Ambroise Fayolle (Vice President in charge of climate action, EIB), Ditte Juul Jørgensen (DG of Energy, EU Commission), Bertrand Piccard (Founder, Solar Impulse Foundation), Elina Roine (Deputy DG, Operations, EIB) . Image courtesy Solar Impulse Foundation
The European Investment Bank Group (EIBG), the European Commission and the Solar Impulse Foundation (SIF) have presented a pilot initiative to bolster energy efficiency investments benefitting small and mid-sized enterprises (SMEs).
The Energy Efficiency for SMEs initiative, launched during COP29 this week in Baku, Azerbaijan, has been developed based on market testing with several fund managers and is expected to attract investment platforms and funds.
In cooperation with the Solar Impulse Foundation, it will support the establishment of pilot projects, which will serve as proof of concept. Some of them are expected to change the way businesses operate, particularly through an approach known as “servitisation”, or energy efficiency as a service.
In this servitisation model, companies pivot from selling products to selling outcomes. For example, rather than buying energy efficient heating or lighting equipment, SMEs pay for the warmth or light they need, while the provider of these services retains ownership of the equipment.
This allows businesses to implement energy efficiency measures without the usual upfront costs, thereby turbocharging the transition.
Speaking with Enlit media from the floor at COP29, Bertrand Piccard, Initiator and Chairman of the Solar Impulse Foundation, commented that COP29, functioning as the finance COP, was the “perfect place to launch the initiative, as it is all about mobilising finance.”
Through the initiative, said Piccard, “there are a lot of advantages – for the environment, for business, for the investors.
“It’s a new investment tool and we are very happy to have this partnership with the EIB and the European Commission. This first stage is going to be a test, a pilot project for a year and I hope that in one year we can open it to a lot of private investors, corporate investors and institutional investors.”
In the coming months, the partnership aims to bear its fruit in the form of concrete pilots and expanded strategies.
Debt strategies and the power of public guarantees will be explored, attracting stable, long-term revenues for investors such as pension funds and insurance companies. Effectively, the pilot aims to serve as a proof of concept, enabling future exploration into alternative funding strategies including co-investments and equity funds.
In the coming years, these strategies could be scaled beyond SMEs, to tackle energy efficiency across the European industrial landscape and within municipalities.
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Through the initiative, the EIBG will partner with the Solar Impulse Foundation (SIF), who has developed the “Solar Impulse Efficient Solution” label, promoting a portfolio of over 1,600 clean technologies. The SIF will bring its network and market knowledge to the initiative.
“Studies show that small and medium-sized businesses find it much harder to invest in energy efficiency than large companies,” said Ambroise Fayolle, EIB vice president in charge of climate action, in a release.
“At the same time SMEs generate about 60% of Europe’s emissions, and unless we help them to become more efficient, it will be impossible to achieve EU climate goals. Our initiative will support a host of energy efficiency measures, contributing to a more sustainable future.”
The Commission’s Director General for Energy, Ditte Juul Jørgensen, added: “The EU has been intensifying its efforts to promote energy efficiency.
“The Commission is pleased to work with the European Investment Bank and the Solar Impulse Foundation to facilitate further investments in energy efficiency and help SMEs to reap the benefits of the clean energy transition. This is essential to ensure the competitiveness of our industry and to achieve our climate and energy targets.
“This further contributes to the global goal of doubling energy efficiency improvements by 2030, as agreed at COP28. The successful launch of the European Energy Efficiency Financing Coalition is a proof to this end. I also look forward to the 10th Anniversary IEA Global Annual conference on Energy Efficiency, which will be co-hosted by the European Commission next year.”
Originally published on Smart Energy International.
