EE NATIONAL FUNDS

(SLOVENIA’S IMPLEMENTATION OF EED ARTICLE 7 THROUGH FINANCIAL INCENTIVES OF ECO FUND,

SLOVENIAN ENVIRONMENTAL PUBLIC FUND)

Tadeja Kovačič, Eco Fund Councilor Workshop on Annual energy savings generated through EE obligation schemes and alternative measures implemented under EED Article 7

Brussels, 15-16 November

EED Article 20 (Energy Efficiency National Fund, Financing and Technical Support) Member States may set up an Energy Efficiency National Fund. The purpose of this fund shall be to support national energy efficiency initiatives. Member States may provide that obligated parties can fulfil their obligations set out in Article 7(1) by contributing annually to the Energy Efficiency National Fund an amount equal to the investments required to achieve those obligations.

SLOVENIA – EED ARTICLE 7

Slovenia’s decision: 1. Obligation of energy savings under EED Article 7 shared between: • energy suppliers (1/2 of savings), required to reach energy savings from

their own funds; EE measures mostly in industry. • Eco Fund, Slovenian Environmental Public Fund (1/2 of savings),

providing public financial incentives (non-repayable subsidies – grants) mostly for measures of households in buildings and transport. The government will guarantee Eco Fund annual amount of funds equal to the investments required to achieve Eco Fund’s part of energy savings.

2. The energy efficiency obligation concerning final customers will increase gradually from 1 % in 2014 to 1.5 % in 2020: 1 % (2014 and 2015), 1.25 % (2016 and 2017) and 1.5 % (2018 to 2020). The exemption permitted by Article 7(2) of the Directive will be applied in a manner that enables suppliers to achieve energy savings in the heat production and distribution sector.

SLOVENIA – EED ARTICLE 7

Transposition of EED Articles 7 & 20 into Slovene law Energy Act (2014) (Articles 314, 317): The Eco Fund shall draw up and implement the programme for improving energy efficiency at the national level. The Eco Fund shall provide financial incentives. Funds for the implementation of the Eco Fund programme shall be provided through an energy consumption fee for increasing energy efficiency. The energy efficiency fee shall be charged on district heating, electricity and solid, liquid and gaseous fuels. Final customers will pay the contribution on top of the price of energy or fuel to the operator or supplier of energy or fuel, which pays the funds collected to Eco Fund. Decree on energy savings requirements (2014) - determines the height of the fee to be paid to Eco Fund per unit of fuel / energy Rules on the method of determining energy savings at final customers - calculation of energy savings for different EE measures

SLOVENIA – EED ARTICLE 7

Decree on energy savings requirements provides a continuous financial source for Eco Fund‘s grants (EE fee paid by all final energy users of electricity, solid, liquid and gas fuels) Eco Fund‘s obligation in energy savings: 262 GWh/year Government determined the price of fee that goes to Eco Fund (currently 0,08 €c/kWh) so that their total amount equals the investments required to achieve obligatory energy savings (current est.: 37-40 million EUR of grants/year).

SLOVENIA – EED ARTICLE 7

Established in 1993 by the Government, Eco Fund is a public (100% state-owned) fund (works as an institution similar to a bank). Its business policy, yearly business and financial programme and yearly reports have to be approved by the Government. Currently employing 40 people (public employees), director of Eco Fund appointed by the Government, supervisory board: (1m) Ministry of finance, (1m) Ministry of Infrastructure (responsible for the impl. of EED), (2m) Ministry of Environment and Spatial Planning Specialized in providing financial incentives for a broad range of different environmental investments:

• (since 1994) soft loans with favourable interest rates - financial source: own funds (revolving fund)

• (since 2008) grants (non-repayable subsidies) • financing and coordination of free energy efficiency advisory network

„ENSVET“ for households with offices all over Slovenia Financial source for grants and “ENSVET” since 2014: Decree on energy savings requirements / Art 7 EED • financial support to different awareness-raising activities (conferences,

environmental projects of NGOs etc.) - financial source mostly own funds

ABOUT ECO FUND

All investments eligible for Eco Fund’s grants are also eligible for its soft loans (combination is possible). Legal entities: grants and loans are disbursed in accordance with the legislation on state aid. Grants are disbursed on the basis of public calls that are published publicly (on Eco Fund’s website and in the official journal of the Republic of Slovenia). Each public call determines total amount of funds available, eligible persons, eligible investments (high EE and other requirements), amount of grant possible for each investment etc. All applications fulfilling all the criteria of the public call get the grant until the total amount of the public call is disbursed. The public call is then closed and a new one is opened if funds are available. 1995 – 2015: • total of 56 published public calls • 17,300 disbursed loans in the amount of over 451 million EUR • 78,400 disbursed grants in the amount of over 141 million EUR

ECO FUND

The majority of investments eligible for Eco Fund’s grants are currently in the fields of: • the building sector, which has the

biggest potential for delivering significant and cost-effective emissions reductions

• sustainable mobility (transport)

ECO FUND‘S GRANTS

2016 (est.) - 40 million € • to households for energy efficiency and renewable energy sources in

residential buildings (repayment up to 30 % of the eligible costs and up to 50 % of eligible costs on certain areas with high PM10 pollution), total: 15.8 million EUR

– solar heating systems – biomass boilers – heat pumps – connection to district heating on renewable energy sources – energy efficient wooden windows – facade insulations – roof insulations – heat recovery ventilations – new nearly-zero-energy buildings (nZEBs) – full retrofits – purchases of apartments in nZE multi-residential buildings (full retrofits)

• to households and legal entities for energy efficiency and renewable energy sources in multi-residential buildings (up to 50 % of eligible costs), total: 10 million EUR

• to municipalities for nZEBs (schools, kindergartens etc.) total: 6 million EUR • to Ministry of defence for energy efficiency in buildings, total: 0.5 million EUR • to legal entities for electric cars (up to 7,500 EUR), total: 2.0 million EUR • to households for electric cars (up to 7,500 EUR), total: 0.5 million EUR

CURRENTLY AVAILABLE GRANTS FINANCED FROM THE DECREE ON EN. SAVINGS

1. To get the grant for eligible investments, the eligible persons have to respond to the public call before making the investment by sending an application for grant to Eco Fund, including relevant documents such as pro-forma invoice, building permit, technical information about the investment proving its adequacy with the high EE requirements of the public call, specified separately for each investment (e.g. windows replacement: wooden frames, triple glazing, heat transfer UW ≤ 1,1 W/m2K acc. to SIST EN 14351-1:2006+A1:2010, 3-level sealing of windows compliant with RAL). Energy advisory network „ENSVET“ can help households to choose appropriate investment and to complete the application for Eco Fund’s grant for free.

2. Completed applications are evaluated according to the criteria of the public call.

3. Decision and contract are issued by Eco Fund. 4. When Eco Fund receives signed contract and proof of investment

conclusion, the grant is paid to the eligible person’s bank account.

ECO FUND’S GRANTS – PROCEDURE

Eco Fund reports the energy savings calculated on basis of the Rules on the method of determining energy savings at final customers to the Ministry of infrastructure, which is responsible for EED implementation. Eco Fund checks 0,25 % of subsidized investments within every public call on field (random sample; Eco Fund‘s employees and independent energy advisors). List of those who receive grants is published publicly. Monitoring and verification of energy suppliers (representative sample): Energy Agency

MONITORING AND VERIFICATION

Eco Fund - existing public institution (fund) with necessary knowledge and experience (Article 7: Member States may combine obligation schemes with alternative policy measures, including national energy efficiency programmes) To provide support for strategically important investments which would not have happened with engagement of energy suppliers alone. Focus of energy suppliers: measures in industry Focus of Eco Fund: measures of households in buildings with high domestic value added and other positive economic and social (multiplier) effects:

• grey economy decrease • budgetary revenues increase • employment increase (green jobs) • adaptation of the building business in a sustainable direction • improved international competitiveness of companies • encouraged use of strategic resources (wood biomass in Slovenia) • improvement in the quality of life, living conditions, public health • less energy dependency (on fossil fuels), more stability • a popular policy instrument among Slovenian voters

FACTORS INFLUENCING THE USE OF ECO FUND UNDER EED ARTICLES 7 & 20

ANALYSIS OF SAVINGS

Savings through Eco Fund were achieved with EE measures in households, public sector, electric cars and energy advisory network „ENSVET“. Table: Energy savings from energy consumption fee for increasing energy efficiency in 2014 and 2015 Savings

(MWh/year)

2014 2015 Sum

Grants to

households

117,617 84,805 202,422

Grants to

public sector

1,786 0 1,786

Electric cars 86 194 280

ENSVET 18,557 17,343 35,900

Sum 138,046 102,342

ANALYSIS OF SAVINGS

Pie chart: Allocation of Eco Fund‘s grants according to different measures (left) and Allocation of energy savings according to different measures (right) (2015)

SLOVENIA PERFORMANCE – EED ARTICLE 7

Energy savings

GWh / year

Energy

suppliers

Alternative

measure – Eco

Fund

Goal 2014 87 262

reached 66 138

Goal 2015 126 262

reached 502 102

Goal 2016 283 262

reached ? ?

Overall Eco Fund

REASONS FOR LOW ENERGY SAVINGS IN 2014 AND 2015

1. The Decree on energy savings finally ensured enough funds to Eco Fund but:

1.1. the public calls in 2014 and 2015 were published too late (April/May) and

1.2. did not stimulate enough applications/investments – in 2015, only 13.7 million EUR were used instead of 37-40 required to reach the 262 GWh goal

(probable reasons: economic and financial crisis and cautious potential investors, saturation of the market with some measures in buildings due to high demand for grants in the previous years, financial incentives not adapted/attractive enough)

2. Methodology changes had a small negative impact

CHALLENGES FOR THE FUTURE (POSSIBLE ADJUSTMENT OR CORRECTIVE ACTION)

To reach the 262 GWh goal in 2016 and the following years, investments in EE co-financed by Eco Fund need to be accelerated. We need:

1.1. Enough funds to ensure the continuity of public calls

1.2. Adaptation/attractiveness of financial incentives:

• New eligible measures and persons (grants also for legal entities e.g. municipalities investing in nZEBs, companies refurbishing buildings, companies investing in energy audits, PV for own use of households, …)

• Higher grants (for refurbishments of buildings)

• „More for more“ principle: higher grants for bigger investments in refurbishments of buildings which generate bigger energy savings

1.3. Methodology revision?

HOUSE OF A WORLD CHAMPION: ONE OF THE MOST FAMOUS HOUSES IN SLOVENIA: „ENERGY-PLUS“ HOUSE PETKOVSEK; QH(PHPP)=10 KWH/M2A; PREFABRICATED WOODEN CONSTRUCTION BY LUMAR; NATURAL INSULATION MATERIALS; SOLAR POWER PLANT

HOUSE BABSEK (BEFORE AND DURING FULL RECONSTRUCTION)

AFTER RECONSTRUCTION: LOW ENERGY HOUSE BABSEK; QH(PHPP): 20 KWH/M2A; WOODEN WINDOWS; MINERAL THERMAL INSULATION MATERIALS; CONDENSING GAS BOILER; HEAT RECOVERY VENTILATION

MULTI-RESIDENTIAL BUILDING IN LJUBLJANA: THERMAL INSULATION OF THE FACADE

KINDERGARTEN VRHNIKA (BEFORE AND DURING FULL RECONSTRUCTION)

AFTER RECONSTRUCTION: LOW-ENERGY KINDERGARTEN AT VRHNIKA; WOODEN WINDOWS; MINERAL AND SYNTHETIC THERMAL INSULATION MATERIALS (INSULATED FROM WITHIN); HEAT PUMP AIR TO WATER

PASSIVE KINDERGARTEN MORAVCE: PREFABRICATED WOODEN CONSTRUCTION; NATURAL THERMAL INSULATION MATERIALS; WOODEN WINDOWS; WOOD BIOMASS DISTRICT HEATING PLANT PROVIDING HEAT FOR THE KINDERGARTEN, OTHER PUBLIC BUILDINGS AND HOUSEHOLDS IN THE NEIGHBORHOOD

PASSIVE KINDERGARTEN MARKOVCI, PREFABRICATED WOODEN CONSTRUCTION BY JELOVICA; NATURAL THERMAL INSULATION MATERIALS; WOODEN WINDOWS

ELECTRIC CARS

Thank you for your attention!

tadeja.kovacic@ekosklad.si Eco Fund

Bleiweisova cesta 30

1000 Ljubljana

Slovenia

www.ekosklad.si