EU Energy Efficiency
European Court of Auditors: investment targets not achieved; average pay back period exceeds 50 years (in extreme cases 150 years)
The cost of increased energy consumption, the depletion of fossil fuel reserves and the effect of human activities on global climate change are drivers of recent energy efficiency policies. Since 2000, the European Union, through its Cohesion Policy funds, spent almost €5 billion for co-financing energy efficiency measures in the Member States. The European Commission and the Member States are both responsible for the sound financial management of these funds.
The European Court of Auditors has assessed whether Cohesion Policy investments in energy efficiency were cost-effective.
The Court found that the projects selected by Member State authorities for financing did not have rational objectives in terms of cost-effectiveness, i.e. cost per unit of energy saved. Their objectives were to save energy and improve comfort, but they were not selected for financing on the basis of their potential to produce financial benefits through energy savings, but rather that the buildings were typically regarded as being ‘ready’ for funding if they were in need of refurbishment and their documentation complied with the requirements.
“None of the projects we looked at had a needs assessment or even an analysis of the energy savings potential in relation to investments”, said Harald Wögerbauer, the ECA member responsible for the report, “The Member States were essentially using this money to refurbish public buildings while energy efficiency was, at best, a secondary concern.”
The planned payback period for the investments was 50 years on average, and up to 150 years in certain cases. This means that these funds were not spent in a sensible way because the lifetime of the refurbished components or buildings is lower and can, to a large extent, be considered to be lost on the energy efficiency point of view.