THEenergy efficiency: princess or cinderella of European and national politics? According to the EU principle "Energy Efficiency first", princess, as a privileged tool for achieving the energy transition. But certainly Cinderella because even in a context of energy crisis, the EE1 principle is substantially ignored, and even the efficiency measures contained in the Repower Eu they are in fact entrusted to the good will of the citizens and are not binding. Instead, with a redesign of the energy efficiency support framework, which corrects the critical issues without upheavals, decisive interventions for the energy system, the competitiveness of the industrial system and, last but not least, the spending capacity of families would be unblocked.
This is what emerges from the CESEF Report 2022 di Agici Corporate Finance "Energy Efficiency at the center. New policy framework for an evolving energy context”, which proposes reforms to facilitate key interventions on a national scale. Such reforms would bring both a reduction of the energy consumption to 2030 is to cut millions of tons of CO2 emissions. All generating investments for 405 billion euros and an overall benefit for the country of 594 billion euros (and net benefits of 189 billion euros).
Energy efficiency: the crux of the Superbonus
According to the report, to give impetus to this type of investment, however, broad-based structural policies are needed that give certainty to operators in the sector and to the financial world. From this point of view, the support framework for EE in Italy has been well defined and stable for several years, but seems to have lost its "moment" and is unable to lead the country to achieve the ambitious 2030 goals. Alone. Italy has to deal with the gradual exit from the system Super bonus, which has extemporaneously driven interventions in the building sector for almost three years. And it is essential to give continuity to investments in the residential sector which risk blocking due to the drop in deduction rates and the difficulties in transferring credits.
“It is a measure that has generated a significant improvement in the efficiency of the building stock and relaunched a central sector for the economy such as the building sector. The challenge is to make the instrument - which has cost over 80 billion to date - sustainable for the state budget and avoid a blockage of interventions that would have dramatic consequences on the economy and on the possibility of achieving climate objectives", he explained Stefano Clerics, director of CESEF and managing director of Agici. “There are the elements to continue in the right direction: operators are ready to invest and in these three years they have increased their skills and ability to intervene: they need to be given a stable regulatory framework.”
To fight the energy crisis, focus on the revival of efficiency
La energy crisis of the 2022 it involved all of Europe. The fear of a shortage of supplies and the sharp rise in prices influenced government decisions. But, if on the one hand this crisis has had the merit of relaunching the energy transitionon the other hand has not produced a leap in efficiency. "The need to reduce and rationalize the energy consumption of households, businesses and the public administration has returned to the center of attention - reads the Report - but with an effort to reduce consumption based on voluntary measures, unable to trigger circuits virtuous and which lead to growing energy independence”. “To do this – added Clerici – it is necessary to inaugurate a new season of investments in energy efficiency, ie interventions that make it possible to reduce consumption while maintaining the same level of output in the services provided. This also applies to the industrial sector, which must be significantly stimulated through simple and long-term policies”.
The solution? Rethink energy efficiency support policies
Focus policies on the principle of Energy Efficiency First
Focusing the policies on the principle of EE1 means, from the point of view of CESEF, prioritizing the measures of EE in the strategies of decarbonizationacting on two levels. First, at the central level, policy makers should build the national energy strategy to achieve climate goals starting from demand efficiency. Secondly, economic operators should adopt an approach to investment decisions regarding decarbonisation solutions that starts from the optimization of energy consumption.
To give substance to this approach, theoretically central to the policy making process, but actually little applied both at EU and national level, CESEF has defined 4 principles which should inspire an energy policy geared towards putting EE first.
- The principle of rewarding provides for the definition of incentives proportional to the results of energy savings obtained.
- The principle of simplicity aims to direct policies in order to: i) simplify the methods for accessing incentives, guaranteeing streamlined and clear procedures and certain deadlines; ii) to go back to providing incentives – particularly in the industrial sector through the mechanism of White Certificates – even simple interventions from a technological point of view, and not just the most innovative ones.
- The principle ofintegration it wants to respond to the need to structure policies that simultaneously pursue the collective decarbonisation objectives and the need to contain energy costs for households and businesses.
- The principle of continuity refers to the need, when revising the policy framework, to guarantee the stability of support for EE over time.
The energy efficiency potential in the reference macro-sectors
After defining the method to be used to rethink EE policies, the report identifies the potential for energy efficiency in the 4 reference macro-sectors:
- Residential sector: 9,1 Mtoe/year. This is the result of the sum of 3 interventions: i) thermal insulation with replacement of the winter air conditioning systems with efficient condensing boilers; ii) electrification of heating and DHW systems; iii) extension of district heating systems.
- Service industry: 0,3 Mtoe/year. This is the result of the thermal insulation of three types of buildings: offices, hotels, schools. Naturally, the potential thus identified constitutes only a part of the overall potential of the macro-sector.
- Industrial sector: 3,2 Mtoe/year. This is the result of a set of efficiency measures carried out in the 12 most energy-intensive manufacturing sectors, carried out by all energy-intensive companies and by a portion of non-energy-intensive companies. The potential thus identified is well representative of that of the entire macro-sector.
- Transport sector: 2,9 Mtoe/year. This is the result of the replacement of 4 million traditional cars with full-electric cars (BEV), in line with the PNIEC's objective on the matter. The potential deriving from this measure is only partial compared to the overall potential of the whole sector
Review of incentive tools in force
CESEF identifies fields of action on which to intervene immediately. The first is the unification of the vast corpus of tax benefits in the construction sector in a single deduction tool, which harmonizes the current regulatory complexity. Then a modular rate linked to the energy savings obtainable, to maximize their effectiveness and guarantee the continuity of investments. Furthermore, to overcome the gradual exit from the 110% Superbonus system and continue to offer citizens interventions at no cost, Cesef proposes to integrate the deductions tool with the Energy Plus Service, the type of contract that allows the initial costs of the intervention to be transferred to the company, which will then share the economic benefits of the energy savings obtained with the end customers.
On the chapter incentives, the 2022 study proposes a revision since in the 2014-2020 period Italy did not achieve the goal of reducing energy consumption set by the Pniec. Specifically for CESEF, action should therefore be taken on:
• White Certificates: they play a central role in the industrial sector and "it is crucial to ensure greater simplicity and promote liquidity, stimulating the implementation of both small-medium-sized projects and large-scale and innovative interventions, thanks to an auction system integrated with the mechanism ”.
• Thermal Account: today provides for the allocation of 900 million for interventions related to the energy requalification of buildings. "A reform of the mechanism is desirable", making it a "specialized tool for the Public Administration".
• The National Energy Efficiency Fund. Born in 2019 as a support tool to facilitate access to credit by companies, ESCos and PAs, it should be focused more on SMEs, to which specific initiatives and more resources should be dedicated.
• Renewable Energy Community (CER). The tool has so far been rather limited because the implementing decrees are still missing and limits have been set for the participation of ESCos and Utilities and it is dedicated solely to the promotion of renewable self-production. Instead, it should be rethought in a logic of integration between EE interventions and generation from RES, recognizing additional rewards for those who make both components.
And for the Superbonus?
As regards the performance of the operators and their strategies, in 2022 these experienced a significant expansion thanks to the support for the energy requalification operations of buildings through the Superbonus 110%. Analyzing the Business Plans and financial statements for 2021 and 2022 of a sample of energy companies and large local multiutilities, thanks also to the market drive towards electrification, there emerges growing attention from a strategic and commercial point of view towards the business of AND AND. To overcome the constraints on the transfer of credit, which partially slowed down the execution of energy efficiency projects during 2022, the major players are focusing on strategies to enhance the customer portfolio, with the aim of developing a commercial offer of goods and services with high added value to integrate with the traditional sale of the commodity.
