PROMOTION OF ENERGY EFFICIENCY THROUGH THE HOUSING MODERNISATION IN LITHUANIA

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1 PROMOTION OF ENERGY EFFICIENCY THROUGH THE HOUSING MODERNISATION IN LITHUANIA Daiva Matonienė Vice-Minister Ministry of Environment Vilnius, Lithuania September,2013

2 RESIDENTIAL ENERGY EFFICIENCY 2 Lithuania key statistics: Population approx. 3 mln. 66% of population lives in multi family buildings built before 1993 (> 38,000 multi family buildings and > 800,000 apartments) 97% privately owned, only 3% municipal rental stock 65% of buildings supplied by district heating system Problems: poor Soviet construction standards and little maintenance inefficient heating systems and engineering equipment bad quality windows, roofs, seals between panels huge energy losses most buildings in poor condition, lack of proper management > most of Lithuanian households are not satisfied with their homes

3 THE LITHUANIAN HOUSING STRATEGY 3 Main goals are: Expand housing possibilities for all social groups Approved at January 21, 2004 by the Lithuanian Government English version available on the internet site Ensure effective use of existing housing, maintenance, upgrading and modernization, including the rational use of energy resources - Program for modernization of multifamily buildings (approved in 2004) - Program for social housing development (approved in 2004) Strengthen the capacity of the housing sector in the housing market 3

4 ENERGY SAVINGS POSSIBILITIES 4 Experience from energy efficiency upgrading projects in Lithuania shows that a combination of measures: - replacement of windows and external doors - insulation of external surfaces: roofs and walls - modernisation of heating substations and balancing of heat distribution around the building reduce energy consumption by around 50%. Verdict Good for home-owners: greater comfort, lower bills, added value Good for Lithuania: reduced gas purchases, better security of supply Good for the Planet: lower carbon emissions, resource conservation

5 PROGRAM FOR MODERNIZATION OF MULTIFAMILY BUILDINGS Supported implementation of energy efficiency measures After modernization possibility to reduce energy consumption up to 70 % By implementing the Programme also are solved environmental protection issues (reduction CO² emission, urban environment, cities regeneration plans, etc.)

6 6 FUNDING CONDITIONS FOR RENOVATION OF MULTI- APARTMENT BUILDINGS (1) Majority of home-owners vote for modernisation 50%+1 Constructed before 1993 at least Energy Efficiency Class D 100% of costs for technical documentation 15% of modernisation costs if at least 20% of energy savings achieved additional 25% if energy savings 40% achieved (Climate Change Programme support till Dec. 2014) 100% of all costs for low income households Energy performance certificates

7 Distribution of costs to consumers under the new Programme Fig.1 Heating 100% 0-10% 50% - 40% SAVING Upgrading Repayment 50% Heating Before Upgrading After Upgrading No additional payments to owners of apartments after the upgrading

8 JESSICA HOLDING FUND JESSICA (Joint European Support for Sustainable Investment in City Areas) is an initiative of the European Commission in cooperation with the European Investment Bank (EIB) and the Council of Europe Development Bank (CEB) in order to promote sustainable investment and growth of jobs in Europe s urban areas. Lithuania - one of the first countries in the European Union which uses the initiative of JESSICA for the improvement of energy efficiency in multifamily buildings.

9 FUNDING CONDITIONS FOR RENOVATION OF MULTI-APARTMENT BUILDINGS (2) 9 Maturity 20 years Interest rate fixed for the entire loan period at 3% p.a. Self-financing bank may require a down payment (not more than 5%) Maximum monthly instalment determined for each multi-apartment building Insurance no loan insurance requirements Guarantees no third party guarantee requirement

10 PROGRAMME IMPLEMENTATION MODELS (1) 10 There are two possible implementation models for housing modernisation in Lithuania 1. Home-owners on their own initiative prepare investment projects, take loans and implement modernisation The main problems of this model: - lack of home-owners initiative - psychological fear to take a loan - mistrust of the quality of the upgrading At the end of May 2013, amount signed by UDFs with final beneficiaries is about EUR 15m. This corresponds to almost 100 projects signed/renovations of multi-apartment buildings financed.

11 PROGRAMME IMPLEMENTATION MODELS (2) Investment projects are implemented based on the Energy Efficiency Programmes approved by the municipalities : - investment projects initiated by the municipalities - projects are implemented by the Programme Administrator appointed by the municipality - loan is taken by the Programme Administrator - Programme Administrator is organising procurement as well taking all the responsibilities with respect of implementation and financial management of the project The energy savings (Fig. 1) are used for repayment of upgrading costs by the owners 11

12 New Programme participants National: Ministry of Environment / Ministry of Finance / JESSICA Holding Fund, managed by EIB Housing Energy Saving Agency (HESA) Financial institutions administering JESSICA funds (selected by JESSICA Holding Fund managed by EIB) Central Procurement Office (CPO) Local: Municipalities (Programme preparation, approval, appointment of Programme Administrator, supervision of implementation) Programme administrators (Housing Maintenance company or other responsible company) Engineering consultant companies (Investment Project preparation, supervision of works) Contractors Home-owners New Programme model implementation (based on Municipalities programmes) started in 2013 two municipalities already started with upgrading of 85 ( ) buildings

13 13 Example: JESSICA project (Vaišvilos 9, Plungė) Area of apartments 2590 m 2 Number of floors 5 Number of apartments 50 Year of construction 1978 Date of completion September 20, 2011 Investments Implemented measures ,16 EUR Heating and hot water system upgrading; replacement of windows and exterior doors; roof insulation; wall insulation; basement ceiling insulation; insulation of base; drinking water pipelines and equipment replacement; repair works of sewage system; floor insulation on the ground; electrical wiring repair works; and stairwell repair works Energy efficiency class (according to Energy Performance Certification classification) before upgrading E, planned value C, achieved value B Heating before upgrade 293,94 kwh/m² Heating after upgrade 121,01 kwh/m² Energy saving 65%

14 14 PLANS AND EXPECTATIONS OF THE NEW MODEL, Municipalities (out of 60 in Lithuania) started with participation in the new model. - selection of 839 inefficient multifamily buildings (already selected approx buildings consuming more than 150 kwh/m²/ year) 150 investment plans are approved by HEEA (from 13 municipalities) 800 investment plans are expected to be approved in August, 2013 Most active Municipalities Ignalina, Zarasai, Druskininkai Second stage for renovation is launched

15 2013- EXCEPTIONAL YEAR! In February, 2013 we created a New Model; In May, 2013 we signed 56 agreements on renovation of 839 buildings; In June, a new legislation regarding modernisation of multi apartment houses will come into force; 50 multifamily buildings are currently being renovated We excpect that renovation of half a thausand buildings will start in 2013! Before After

16 COOPERATION IS THE MAIN CONDITION OF SUCCESS Thank you very much for your attention Vice-Minister of Environment Daiva Matonienė