Overcoming barriers to investing in industrial energy efficiency

Panel: 5. Business models, finance and investment in the age of digitalisation

Author:
Oleg Dzioubinski, UN Economic Commission for Europe Sustainable Energy Division, Switzerland

Abstract

The presentations shows analysis of a survey among energy efficiency practitioners on barriers to investing in energy efficiency and ways to overcome them. Part of the survey specifically addressed issues related to investing in energy efficiency in industry. The main conclusions derived from the responses are as follows. A majority of companies have either internal or compliance driven energy efficiency/energy intensity goal. Energy efficiency decisions in companies are often made by the same people as core business decisions. At the same time, low priority of energy efficiency as it is not part of the core business is one of the main barriers faced by a company when considering investment in industrial energy efficiency. The other two significant barriers are lack or high cost of capital and lack of government incentives. About half of companies have some kind of energy management system (EnMS) but no more than one-fifth has EnMS that is ISO 50001 certified. Almost all companies implement some measures or projects to improve energy efficiency. Most common measures to improve energy efficiency are implemented to enhance energy efficiency of buildings and to improve energy efficiency of plant and equipment. As the main business benefits from implemented energy efficiency measures, companies consider improved production efficiency and quality, followed by general cost control, demonstration of corporate social responsibility, and compliance with legislation. In the general part of the survey, low awareness about the multiple benefits of energy efficiency projects is viewed as the main barrier to increasing investment and financing flows to energy efficiency projects. Next important factors are lack of understanding of energy efficiency financing by banks and other financial institutions; administrative barriers and bureaucracy; and low energy prices. Self-financing remains the most widely used type of financing of energy efficiency projects.

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