Energy Efficiency – the First Fuel for the EU Economy: How to Drive New Finance for Energy Efficiency Investments

Energy efficiency investment is the most cost effective manner to reduce the EU’s reliance, and expenditure, on energy imports costing over €400 billion a year. While energy efficiency investments have been gradually taking place for decades, the EU today finds itself in a place where these investments have become strategically important due to the high level of energy imports required by the EU bloc, energy price instability and the need to transition to a competitive low carbon and resilient economy. Energy efficiency investing has a fundamental and beneficial role to play in the transition towards a more competitive, secure and sustainable energy system with an internal energy market at its core.
The Energy Efficiency Financial Institutions Group (“EFFIG”) identifies the need to engage multiple stakeholder groups, scale-up the use of several financial instruments within a clear and enforced “carrot and stick” legislative framework. This report identifies a number of approaches and instruments that have proven to encourage investments and multiple market barriers that stand in the way of an energy efficient Europe. The scaling up of these successful approaches and removal of these barriers will require a range of identified actions from policy makers and market stakeholders to mobilize the millions of different actors in the EU that will build, finance and benefit from this market. This needs to be driven by an active structural reform agenda that can deliver economies of scale to drive down costs and improve supply capacity and ensure new opportunities for business and investment growth exist across all Member States.