On 11 and 12 May, Energynomics together with the Romanian Energy Efficiency Fund – FREE and the Directorate for Energy Efficiency of the Ministry of Energy, have organized in Brașov the first conference of the “Energy Efficiency for Energy Transition” campaign, part of a large energy efficiency communication project funded by Norway Grants 2014-2021.
Let’s start with buildings and public transport
The energy efficiency of public buildings and the reduction of pollution from public transport should be the priorities of any municipality, said Eng. Camelia Rață, energy manager for localities, during the conference. “For municipalities, buildings must be the zero priority, because they are the number 1 consumer. Transport is the second largest polluter. We are talking about the redesign of the systems, not just the 1-to-1 replacement,” said Rață.
At the same time, the energy transition in the local public administration cannot be done without a close collaboration between the administration and the Ministry of Energy. One of the crucial steps that municipalities must consider in allocating funds for the energy efficiency of buildings is the creation of complete databases. Such databases are currently missing and this makes the energy efficiency projects of public buildings difficult.
“In the local public administration, so much money is needed that the structural funds will never cover what is needed. But the administration needs to make databases to have a basis on which to apply for these funds. You have to go step by step. There are still problems with the registration documents, there are situations when not all the buildings were known, problems with the property documents”, added Rață.
Money from ADR for public buildings
The Regional Development Agency Centru, which encompasses the counties of Alba, Brașov, Covasna, Harghita, Mureș, and Sibiu, has 1.4 billion euros available for energy efficiency improvements between 2021 and 2027. “We have an aged, non-modernized and, in particular, non-energy-efficient stock (of buildings – no), which leads to high consumption, very high CO2 emissions and, in general, to a lack of efficiency. There are a lot of public buildings that require efficiency measures, consolidation and modernization”, said Adrian Purcaru, Councilor in the Urban Development Department, with the Regional Development Agency Centru.
Auxiliary measures up to 15% of the value of the basic investment will be supported as part of energy efficiency projects. These will be carried out strictly in accordance with the needs of the buildings, such as structural consolidation works, fire protection, accessibility, and/or other works that are complementary to the basic investment and ensure the durability, operational safety, and functionality of the buildings.
The maximum value of each project is 15 million euros for public buildings and 2.5 million euros for residential buildings. Purcaru added that the first call for such projects will be launched in June for public buildings. In the case of residential buildings, the guide for attracting financing will be launched for public debate in the same month.
Through these projects, the Agency aims to improve the energy performance of 3,800 buildings, reduce energy consumption after the renovation of some public buildings with an area of 72,600 square meters and reduce CO2 emissions. The financial allocation for these projects is 101.61 million euros, of which 80.61 million euros are grants and 21 million euros come from the IF (FEDR). Potential beneficiaries are the UATs, central and local public authorities.
The future of energy lies in decentralized production
The future of the energy sector lies in the decentralized production of energy, in the use of a mix of energy resources, as well as in the storage and use of carbon in industry, said Mihai David, president of the COGEN Romania association.
“Everyone talks about decarbonization, but less about decentralization. All ministries, when they talk about investments, think of ‚mausoleums’ [large production units, as were of those built in the first wave of Romania’s industrialization, e.n.]. The question is, can we not make energy in another way? The distributed energy of the future will be produced in small plants that help you be more efficient because you have lower technological losses because you transport the energy over shorter distances and put the plant as close as possible to the end user. The future is also about the energy mix and the capture and use of carbon in industrial applications,” said David.
Distributed power generation is necessary for the future balancing of the national power system and can be achieved with smaller and more flexible solutions, argued Cristian Athanasovici, Business Development Manager, Kawasaki Gas Turbine Europe. Currently, the balancing of the energy system is mainly achieved with the help of hydropower plants operated by the state company Hidroelectrica. For the situation where hydropower plants are unavailable, fossil fuel or natural gas units are needed.
“We cannot build large power plants. Then a distributed production is needed, which favors cogeneration. The more renewables there are, the more cogeneration there will be,” added Athanasovici.
Such prospects for green energy investment will never arise again
Companies and municipalities in Romania will never again encounter the financing opportunities for renewable energy projects that exist now and, for this reason, they need to attract as many funds as possible. ” Such prospects for green energy investment will never arise again “, said Roxana Mircea, Managing Partner at REI Grup. Răzvan Ilie, Area Sales Manager at Volt, warned that many solar panel installation projects fail due to erroneous or incomplete information and lack of expertise of suppliers and installers. “Most of the beneficiaries receive erroneous or incomplete information, including due to newly appeared providers who have no experience and mislead them. In addition, there are also design and implementation mistakes identified in the market”, stated Ilie.
In turn, Areta Rîpeanu, Sales Manager at Lapp Romania, has brought attention to the quality of cables and accessories used in photovoltaic energy production installations. “Cables and cable accessories are only 5% of the investment in a photovoltaic project, but if we don’t use the right ones, they can cause up to 15% of defects”, she said.
“Just as in the industrial field we are interested in having very reliable equipment, in not having stoppages in production, in the same way in the area of photovoltaic systems, considering the investment costs, we must also take into account the products we use. The weakest link in the system leads to the destruction of the entire system,” said Rîpeanu.
Small chances without public money
On a more general level, the representative of the Ministry of Energy complained about the “extremely poor” quality of projects submitted for energy efficiency funding. “On energy efficiency in the industry, at the moment, there is very little absorption. From what we see in the requests received, the quality of the submissions leads to a very small share of the projects that will be successful”, stated Matei Dimitriu, adviser in the Energy Efficiency Directorate of the Ministry of Energy. The institution is considering outsourcing some responsibilities for attracting available EU funds.
A solution to remedy this could be, beyond better communication, the Ministry of Energy to attract of associative partners from the industrial sector, with whom the institution can create more coherent and predictable policies in the energy efficiency sector. With the disappearance of the concept of 100% aid intensity in the energy efficiency area, coupled with the application of the counterfactual scenario for determining the amounts settled, it is likely that the new axes for industry should be launched with calls with continuous submission, because investment decisions are lengthy processes, including group-level approvals with laborious impact studies.
At the same time, as a possible solution, companies in the industrial sector could be stimulated to carry out energy efficiency projects, if the financing axes were built together with regional development agencies that know the potential local beneficiaries.
Reducing the carbon footprint of the industrial sector is impossible without subsidies from the European Commission, but banks can contribute to this expenditure through credits or pre-financing. “We believe that decarbonisation and the energy transition can only be achieved with subsidies and we, as a bank, want to be co-financiers,” said Sebastian Staicu, Structured and Sustainable Finance at BCR.
“We want to support serious, achievable, sound plans. We don’t want to compete for European funds, we want to co-invest. In order to achieve decarbonisation it is extremely important that industry takes energy efficiency measures. It is the easiest and cheapest way for the industry to do this. And we want to help industry.”
In recent years, BCR has developed a financing strategy for public authorities and companies in Romania interested in investing in energy efficiency and carbon footprint reduction solutions in line with European directives in this field. The starting point for this process was the European Union’s sustainable financing strategy, which created the conditions for banks to redirect capital towards green and sustainable investments.
Other sectors that BCR finances are investments in building renovation, renewable energy projects, waste management and use, and sustainable agriculture.
The conference in Brașov was the first of a series of 5 scheduled by the Energynomics communication platform, the Romanian Fund for Energy Efficiency – FREE and the Directorate for Energy Efficiency within the Ministry of Energy. The project is financed by Norway Grants 2014-2021. The goal of the program is to raise awareness of energy efficiency and renewable energy in the general public, industrial environment, and public authorities, to inform, educate, trigger awareness and empower the decision-makers in the Romanian public authorities and companies, as well as the general public, with a focus on the young generation, to take positive actions for contributing to the green energy transition, through energy efficiency and secure integration of renewable energy.