Financing and realising energy efficiency and renewable energy projects in industry

Internal reports

This page summarises the internal deliverables and confidential reports produced by the TrustEE consortium in support of the European Union's Horizon 2020 research and innovation programme under grant agreement No 696140. Public reports may be optained in the TrustEE Library.

Deliverable#

Summary


D2.3




 

 

 

 

 

 

This report provides an analysis of the investment eligibility and assessment criteria. It describes the general eligibility criteria based on TrustEE’s mission as described in the Grant Agreement. The second section addresses the methods used to assess the financial and technological soundness and risks of projects (end users and suppliers), to determine the eligibility of a project for financing. Based on eligibility criteria, the report contains a quick and cost-effective preliminary screening of the projects and stakeholders involved. Projects admitted to the second stage are subject to a detailed project analysis and development review. This preliminary screening will work semi automatically using the data the project sponsor (supplier or end-user) will submit via the TrustEE platform and a categorized preliminary risk assessment.


 

D3.1

 

 

 

 

 

The objective of this report is to identify EU and applicable laws, regulations, and technical quality requirements applicable to process heat efficiency and sustainability (PHES) equipment/systems. TrustEE supported projects installing PHES equipment and systems shall meet these minimum, pre-established certifications and quality standards. The report scope covers EU legislation, certifications, and minimum quality requirements that are applicable to the equipment and components used in biomass, biogas, solar heating and energy efficiency systems.


 

D3.3

 

 

 

 

 

 

 

This report introduces and explores the concept of a Guarantee Facility, funded by contributions of suppliers, to support innovative SME projects that otherwise lack the financial strength to provide creditworthy warranties. The report concludes that, while such a concept cannot implemented the way it was originally conceived, there is a proposed financing scheme whereby TrustEE can purchase the receivables arising from successfully launched and commissioned projects through a newly established “Securitisation Vehicle”. This new method would exert a similar effect for SME-suppliers, providing them with better access to credit lines or loan guarantees. In this way, it will enable them to provide project guarantees themselves as necessary.


 

D3.6

 

 

 

 

 

 

 

 

The report analyses specific risk management approaches for energy efficiency and renewable energy projects in industry. It proposes to categorize risks according to technical risks affecting energy production/energy savings, cost risks affecting investment and operating cost and price risks affecting energy prices.

The most important risk management tool in EE/RE projects is the allocation of project risks to stakeholders and their distribution in the phases of the project life cycle. In this manner, financial investors can avoid the least controllable technical risks involved in the design, construction and commissioning phase altogether. Insurance products are available to transfer many of the project risks. Credit risk insurance is of paramount importance to cover end-user default risks.


 

D4.1

 

 

 

 

 

 

 

 

 

This report covers the scope of operations of the financial vehicle of TrustEE and the legal and regulatory requirements to proliferate the services and functions of the project in a legally permanent structure.

The TrustEE Platform as a project analysis and project development platform for energy efficiency and renewable energy projects in industrial heat-processes should be incorporated as a limited liability company rendering its services to the “Trust”.

The “Trust” should be established separately as a “Securitization Vehicle” (SV) domiciled in Luxemburg. The SV will act as a forfaiting fund and will define origination rules for the purchase of low-risk receivables resulting from Energy Efficiency and Renewable Energy Projects. The forfaiting operations will be refinanced by bonds or credit notes issued by the SV to institutional investors.


 

D4.5

 

 

 

 

 

 

 

  

D5.1

The report reviews the basic models of Energy Performance Contracting (EPC) propositions (payment for metered energy savings; fixed repayment terms after performance testing; payment for renewable energy production), and the consequences those propositions have on the risk position and the financial position of the supplier and, consequently, on the risks transferred to the forfaiting fund of TrustEE. As this financing vehicle can only take well controlled operational and production risks, it can only refinance payment schemes with fixed installment’s or at least with a fixed minimum payment component. EPC propositions must also take into account specific organizational structures of the customer and specific information asymmetries, which could impair the functioning of EPC projects because of principal-agent situations or information deficits susceptible to adverse selection or moral hazard behavior. The report describes some typical situations and recommends analyzing not only the financial and technical aspects of projects, but also the occurrence of such adverse effects.


This report summarises the access conditions of the European Trading System (ETS), and addresses whether tradeable carbon quotas may be a source of revenue for TrustEE projects.