Energy efficiency financing: The role of public programmes

Panel: 6. The role of financing to improve industrial efficiency, global perspective

This is a peer-reviewed paper.

Authors:
Thibaud Voïta, International Partnership for Energy Efficiency Cooperation (IPEEC), France
Amit Bando, IPEEC, France

Abstract

This presentation will examine how public policies can promote Energy Efficiency (EE) finance. Case studies from France, India, Japan, Russia and the USA will be used to demonstrate the “lessons learned” in the area of EE finance. Improved energy use can lead to 17 - 33% energy savings compared to “business as usual” between 2006 and 2050. Still, most of this EE potential remains untapped due to the underdeveloped state of traditional EE investment delivery mechanisms. Renewed efforts are required to access the existing financing mechanisms and to develop new financial instruments. This presentation will examine the barriers to accessing traditional financing programs such as credit enhancements and partial risk-guarantees. Case studies focusing on key financing mechanisms (tax incentives, subsidies, lending programs, performance contracting and carbon financing) will be used to illustrate the key role played by public policies in the IPEEC member nations. The results of a cross-country analysis will be used to present the “best practices” aimed a securing private financing of large scale EE initiatives.

Table: Public Policy tools to promote industrial EE finance

France

- Energy saving certificates

- Tax incentives for EE equipment

India

- State energy conservation fund

- Small Industrial Development Bank of India’s Micro, Small & Medium Enterprises program

Japan

- Tax incentives to promote the reform of energy supply & demand structure

- Domestic CDM program

Russia

- Sustainable Energy Financing Facility

USA

- Local initiatives: Regional Greenhouse Gas Initiative, Sonoma Country Energy Independence Program

- US Department of Energy’s Loan Guarantee

Note: IPEEC is a high-level international forum. It provides global leadership to identify and facilitate government implementation of policies and programs that yield EE gains. Its 15 member states account for over 75% of world GDP and energy use and greenhouse gas emissions.