Brussels, 14/01/2013 (Agence Europe) - Around four billion euros of the five earmarked in the cohesion policy for improving the energy efficiency of buildings are thought not to have been correctly used. The European Court of Auditors has flagged up the scattering funds from the cohesion policy in renovation work carried out in 2007-2011 and notes that just 10 to 20% of the funds have brought actual improvement in energy efficiency. The Court of Auditors expects the Commission to act to redress the situation in the forthcoming financial programming period 2014-2020, particularly as this time, it could be no less than €17 billion pledged for eco-energy work.
Returns in question. On Monday 14 January, the Court of Auditors presented a special report on the cost-effectiveness of investment in energy efficiency under the cohesion policy. The Court closely analysed a sample of 24 projects in public buildings in Italy, Lithuania and the Czech Republic, the three countries which benefit most from the cohesion fund and the European Regional Development Fund (ERDF) in this area. Its assessment reveals that the European money made available was indeed used, but more for renovation work to improve comfort than for energy efficiency. Work to install insulation or replace windows, doors and roofs was carried out, but the funds were not allocated as a priority on the basis of the best cost-benefit ratio for eco-energy measures. National authorities, the report says, did not even carry out needs assessments, and actual energy savings cannot even be verified in many of the projects; energy audits were not even provided for in Italy and Lithuania. Cost-effectiveness in terms of energy efficiency, therefore, was not even part of the process of allocating funds, although this is what the money was earmarked for.
50-year return on investment. Another grey area is that the return on investment stretches out over an average of 50 years, a period longer than the life of the buildings or materials themselves! The time taken to recoup investments is around 30 years in the Czech Republic, more than 200 years in Italy and up to 90 years and Lithuania, even though better performing countries, Denmark and Belgium, have set limits of five years and seven years respectively for returns on investment.
Recommendations. In light of these observations, the Court of Auditors is therefore sending a signal to the Commission to avoid this lack of return in future, with a forthcoming new programming period of the cohesion policy starting in 2014. The Court suggests the best possible assessment of energy needs, laying down performance indicators common to all 27 member states for eco-energy measures, and the use of transparent criteria to select projects, such as the standard investment cost per unit of energy to be saved.
Commission cautious. The Commission remains critical but cautious in its response to the Court of Auditors' findings. It stresses the fact that in-depth renovations with longer returns on investment would help to prevent additional work in the future from adding to the bill. It also argues that it does not believe that it is possible to establish universal indicators (due to differences in climate and energy prices). However, the Commission stresses that it is working along the lines of the recommendations made by the Court. It has proposed, in its reform of the cohesion policy post-2014, to bring in energy efficiency performance indicators (reducing consumption of public buildings) into the ERDF. Partnership contracts will therefore be based on the needs analyses. (MD/transl.fl)