More effective use of the 2021-2027 Cohesion Funds for energy efficiency in the V4 countries

Written by Energiaklub

The Summary Analysis and Policy Recommendations "More effective use of the 2021–2027 Cohesion Funds for energy security of the Visegrad" analysed how EU Cohesion Policy Funds were used in energy efficiency investments in Czech Republic, Hungary, Poland and Slovakia. In these countries 75% of the building stock is inefficient and the main source of the renovations are the Cohesion Funds.

Despite of the recommendations of the European Commission, the Funds are used as non-repayable grants in all V4 countries, in most cases with high (Slovakia: 50-95%, Hungary: 90-100%, Poland: 85-100%) support intensities; for example, all public building programmes are 100% funded in Hungary. However, this is an ineffective way to use the funds, from several aspects. The amount of funds available are not enough to finance significant volume of renovations in the residential sector, therefore, combining with private financial instruments can boost up the number of residential renovation projects. Furthermore, low co-financing rates are not supporting the “good manager aspect”, cost-efficient projects based on proper planning, rational decisions and cost analysis. Beyond these disadvantages, households and municipalities are often postponing investments in energy refurbishment and are waiting for further call of projects with 100% intensity rate.

The analysis highlights several more practices in the V4 region, which does not explicitly help to carry out cost-effective and quality building renovations, but also provide 15 concrete recommendations to successfully change them ("More effective use of the 2021–2027 Cohesion Funds for energy security of the Visegrad").

An ideal programme would provide grants with 30-70% intensity, which is typically enough to carry out a renovation. It allows private funding, allowing combining financial instruments, while motivating the good manager aspect as well. For proper planning, long-term, continuous calls with stable conditions would be preferable, where all renovations could happen when the building owners are ready for them and have their best possible ideas and plans.

It is of utmost importance to shift the focus from a "technical change" to a more complex action when planning and supporting renovations. The calls should promote complexity – therefore deep renovations – and quality, but not only regarding the equipment directly connected to energy efficiency. A renovation is improving the overall quality of the building, where the benefits are not only energy, financial savings and less environmental effects: more comfort, better indoor environment, adaptation for climate change are factors to keep in mind as motivation and also as factors for planning. Therefore, beyond awareness raising, financial support should motivate complex and more ambitious renovations – e.g. with higher non-refundable financing rate – if higher energy efficiency or energy savings are achieved, climate adaptation measures or sustainable materials are applied, or better indoor environment is ensured.

The design of the next programming period is happening right now in most of the EU countries; therefore, it is highly recommended to get know the 15 recommended points of the IVF study to be able to channel them into the national planning processes.