The Gordian Knot of energy efficiency: A message to Europe's financial community
The Gordian knot is a knot that gave its name to a proverbial term for a problem solvable only by bold action. In 333 BC, Alexander the Great, on his march through Anatolia, reached Gordium, the capital of Phrygia. The key point is bold action. We are no longer in 333 BC. One could say we are in the dawn of the low-carbon energy transition. But we have a problem, many intertwined problems that need bold action, says Rod Janssen. Janssen is heading the work on financing for Energy Efficiency for Industrial Processes (EEIP
ICP Europe does provide a bold solution, but it is not a simple solution at the moment because many elements have to be put in place: Project developers need to be made aware of the approach, he says. And it is taking time to put it in place, he writes. Increasing the flow of investment into energy efficiency project developers.
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The Gordian knot is a knot that gave its name to a proverbial term for a problem solvable only by bold action. In 333 BC, Alexander the Great, on his march through Anatolia, reached Gordium, the capital of Phrygia. As the Encyclopaedia Britannica states, “In the popular account, probably invented as appropriate to an impetuous warrior, Alexander sliced through the knot with his sword, but, in earlier versions, he found the ends either by cutting into the knot or by drawing out the pole. The phrase “cutting the Gordian knot” has thus come to denote a bold solution to a complicated problem.”
The key point is bold action. We are no longer in 333 BC. One could say we are in the dawn of the low-carbon energy transition. But we have a problem, many intertwined problems that need bold action.
Paving the way
I have been heading the work on financing for Energy Efficiency for Industrial Processes (EEIP) since 2011 when we started with a roundtable exchange of expertise and ideas between the broad range of stakeholders from businesses, investment funds, banks, ESCOs, with European decision and policy-makers. Since then, EEIP has used its social network platforms to maintain a dialogue and help disseminate best practice.
EEIP is an active member of the Energy Efficiency Financial Institutions Group and was proud to be part of the first major report in 2015. Since then, interest in financial issues relating to energy efficiency has grown in Europe but the Gordian knot has remained. In 2017, EEIP became a partner in the Investor Confidence Project, funded by Horizon 2020, that expanded to cover industry, district energy and street lighting. The Investor Confidence Project Europe unlocks access to financing by standardising how energy efficiency projects are developed, documented and measured. It was a simple decision to join because EEIP realised that there had to be new ways of addressing the Gordian knot. ICP Europe does provide a bold solution. But it is not a simple solution at the moment because many elements have to be put in place:
- The range of stakeholders need to be made aware of the approach.
- Protocols need to be developed with the support of stakeholders.
- Project developers need to be credentialed.
- A quality assurance network needs to be in place.
- Asset owners need to be convinced.
- The financial community needs to be assured that a properly certified project (the Investor Ready Energy Efficiency™ (IREE™) international certification) is worth financing.
This approach, that is taking time to be put in place, will reduce many of the concerns that the financial community has raised over the years. There is a standardisation of the project development process, not of the technologies. There is, as the title of the project states, more confidence for investors.
The bold solution also needs endorsement
ICP Europe’s Investor Network offers investors a means to promote ICP Europe while extending brand awareness and connecting with project originators and programme partners. The core feature and requirement of the programme is the Investor Network endorsement. This endorsement consists of agreeing to formally recommend the use of the ICP Europe Protocols and Credentialing System as best practices for originating energy efficiency projects. As an Investor Network member, organisations consent to the use of the member’s logo and name in the ICP Europe Investor Network page on europe.eeperformance.org. It is also highly encouraged that participating organisations display the Investor Network logo and declaration on participant’s website.
This is an opportunity to be part of the solution. Bold action is needed address a complicated problem. We all know that more energy efficiency measures need to be implemented. That takes financing. The Gordian knot awaits.
For more information, do not hesitate to contact me at rod.janssen(at)ee-ip.org.
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