On 24 June, the Policy Learning Platform hosted an e-workshop on the topic of 'Championing sustainable energy in SMEs'. The workshop focused on how to support SMEs in improving their energy performance, presenting the European policy framework, proven and successful policy instruments, and opportunities available to public authorities.
Moderation and conception by Low-carbon economy Thematic Experts Katharina Krell and Simon Hunkin.
01:39:03 Jan Špale presented the implementation case: MALFINI – Hybrid photovoltaic system with accumulation in batteries
01:52:04 Alejandro Donnay presented the updated guidelines on state aid for Climate, Environmental Protection and Energy (CEEAG)
02:15:46 Oronzo Daloiso presented the European support for the low-carbon transition of SMEs
The SME transition will be essential for meeting our carbon reduction targets. The European Union has put the reduction of emissions at the forefront of its policy agenda, pledging to be carbon neutral by 2050 with an interim reduction target of 55% by 2030 (from 1990 base level). To achieve this, all parts of society and the economy will have to play their part, including SMEs, who face numerous barriers, including a lack of resources and knowhow. To counter this, the EU’s energy framework has made specific provisions for SMEs, including the need for member states to set up instruments for SMEs to undergo energy audits (Article 8, Energy Efficiency Directive) and create enabling frameworks for renewable energy communities and self-consumption (Renewable Energy Directive).
The road to net-zero by 2050 will require significant effort and connected policy-making. Decarbonisation will require all sectors to be reformed, and policy-makers need to be ambitious. Energy efficiency alone, the primary focus for SMEs so far, will only go so far – the challenge will be also to increase use of renewable energy, develop carbon capture and storage and invest in green hydrogen. The approaches will need to be integrated, with changes in the power operating system, demand and supply side management technologies, and behaviour change. Public-private sector co-operation will be needed to ensure the right incentives are in place, to develop businesses cases, and to co-ordinate actors at the local level.
SMEs still need to be convinced of the benefits of energy efficiency. They often do not see, or understand, the benefits of taking part in the transition and have a lack of technical understanding. Messaging to SMEs should focus on competitiveness and cost savings, and not just lecture on the importance of carbon reduction. Energy audits are an essential tool, but ‘audit’ can be a scary term for SMEs – it’s important to emphasis that the audit is there to help, not to judge. Having a holistic approach is also encouraged – take account not only of energy performance, but also resources and overall sustainability, to make recommendations on multiple aspects of performance. Messages can be passed on to SMEs using existing networks and connections, such as chambers of commerce, to build on existing trust.
Local and regional policy levels have a vital role. The European and national levels can set the framework, but action is taken locally. Local and regional authorities know their situation best and can make direct contact with key stakeholders to find out their needs and tailor support instruments. But for many, supporting SMEs is a new activity, and one where they have limited experience. Capacity building for public authorities is therefore essential, and policy-makers need to be proactive in creating new instruments. Policy-makers can learn from proven cases and success stories and take advantage of capacity-building support programmes offered at European and national level.
The workshop gave the opportunity to present and discuss five good practices identified by the SMEPlus, SME POWER and RESINDUSTRY projects, which have proven successful in helping SMEs to reduce their carbon emissions by implementing energy efficiency measures and using renewables.
- Energig - Energy Efficiency SME Network: Energig has set up seven networks of industrial companies, each with 5-10 SME participants, to support learning on sustainable energy. The networks create relationships between companies to work together, with support from public bodies including ICT tools and databases of energy improvement measures. In the networks, SMEs averaged 16% energy efficiency improvements. Discussion focused on how to get SMEs on board and the tools provided by the public bodies. In this case, a dedicated outreach manager was hired to promote the programme, and the tools provided included energy auditing and management tools.
- ECO Fund – Energy Audits and Energy Management System: Energy audits are the basis for improving energy performance, but SMEs do not have the funds, time or capacity to implement them. The ECO Fund provides a non-refundable financial incentive for implementing an energy audit and establishing an energy management system (EMS), in co-operation with energy agencies and other relevant experts who implement the audits. Discussions revolved around the challenge of motivating SMEs and the requires of the EMS. If an SME wants to apply for any public grant, they must have an energy audit, which results in an increased take-up. The energy management system is in line with ISO 50001, and must present the current situation, energy goals and targets, and the long-term path for energy savings.
- Business Energy Efficiency Project (BEEP): The BEEP provides support to SMEs in County Durham, a region with a history of industry and mining. The BEEP team is in-house, employed by the Council, and visit SMEs in the region to perform an energy audit and produce a follow-up advice report. The audit covers the premises, production technology, transport and other sustainability aspects, and BEEP then provides a grant for implementing improvements identified in the audit. As well as the auditing staff, the programme also has an engagement officer, responsible for outreach to SMEs. The lack of upfront costs for the SME was noted as a real benefit of the programme, as was ongoing engagement with SMEs, even after project implementation. While each county currently has its own SME support schemes, it would make sense to merge the different schemes, using the features of the best performing, such as BEEP, as a blueprint for a larger regional or even national scheme. This would allow for scale economies and harmonise the support landscape for SMEs, while still having the local support teams in place to liaise and work with their local companies.
- PIUS Programme: The Production Integrated Environmental Protection (PIUS) programme and the accompanying PIUS Invest fund, advise SMEs in Hessen (making use of external consultants) and provide funding to SMEs to hire the consultant and implement the identified savings in both process and organisational innovations. The funding rate for the advisor is 50% and 30% for implementation. The programme is accompanied by the Hessen Invest Loan (70%) to fund the most ambitious investments, with funding levels tied to the amount of CO2 savings achieved. This very complete support scheme is managed directly by the State Ministry and has already helped multiple SMEs to save energy and other resources while innovating and improving their competitiveness.
- MALFINI – Hybrid photovoltaic system with accumulation in batteries: This implementation case demonstrated an ambitious use of decentralised energy by a textile SME in Czechia. Making use of funding under the Enterprise and Innovation for Competitiveness Operational Programme, the SME, the company secured 50% co-financing for PV and battery storage, and took a subsidised bank loan for two combined heat and power units. The company is 82% self-sufficient in energy from on-site demand, and benefits from a feed-in tariff from excess generation.
With the EU aiming for net-zero by 2050, many support instruments are available for regional authorities and SMEs to make the transition, including a significant amount of funding under the European Structural and Investment Funds (ESIF). The European Commission is currently updating its guidelines on state aid to demonstrate how public authorities can achieve the goals of the green deal, without distorting the single market. These updated Guidelines on State Aid for Climate, Environmental Protection and Energy (CEEAG) will be adopted by December 2021.
As well as the opportunities under the ESIFs, there are a number of direct funding options (e.g. LIFE, Horizon Europe, InvestEU). The LIFE programme, in particular, targets public authorities to develop projects that foster market uptake of energy efficiency measures and renewables, implement energy audit recommendations, facilitate industrial symbiosis, address non-technological barriers to electrification in industry, and develop financial tools to support SMEs to invest in clean energy. Calls are expected to open in July 2021. A clear trend in EU support schemes can be detected towards building pipelines of projects and project development assistance, compared to funding for individual projects. There is now an expectation for a radical increase in the uptake of sustainable energy measures, not only in SMEs but across all stakeholders in the present funding period.
In addition to this, the Interreg Europe Policy Learning Platform can help public authorities to address policy challenges. The platform provides several services, including access to good practices, a knowledge hub with policy briefs and webinars, and on demand services: specifically, matchmaking sessions and peer reviews which can provide regions with experiences and in-depth knowledge from other regions that have successfully found solutions for similar challenges. Visit the expert support page to find out more and contact us.
Policy Learning Platform resources
- Policy Brief on championing sustainable energy in SMEs
- Story on assisting SMEs in the low-carbon transition
- Matchmaking follow-up report on resource and energy efficiency support schemes for SMEs
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