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Energy Efficiency a Top Strategy For European Businesses

Improving energy efficiency in buildings is the top European strategy for reducing carbon footprints, according to a new study from Johnson Controls, and the resulting cost savings paired with government incentives are what is driving energy efficiency initiatives. The report, “2011 Energy Efficiency Indicator Study: European Regional Results Summary,” surveyed 857 private- and public-sector leaders responsible for energy-related decisions for nonresidential buildings in six of Europe’s largest economies: the United Kingdom, Germany, France, Spain, Poland and Italy.

Respondents ranked energy cost savings as the no. 1 influencer on energy efficiency decisions in both 2010 and 2011, while government and utility incentives ranked second, up from no. 6 in 2010. Additionally, nearly 3 in 4 decision-makers (73 percent) believe the price of energy will increase over the next 12 months.

A growing number of respondents – 61 percent versus 55 percent in 2010 – indicated that energy management was either “extremely important” or “very important” to their organizations. This is ahead of the expectation – held by 78 percent of respondents — that a national policy mandating energy efficiency or carbon reductions is likely within the next two years.

The survey also found that improving energy efficiency in buildings is a top strategy for reducing an organization’s carbon footprint, but a lack of internal funding and technical expertise within organizations are among the top barriers to taking action. Some organizations reported that by seeking external financing they have successfully completed projects that produce deep energy savings.

For example, 55 percent looked for external financing for heating, ventilation and air conditioning systems; 36 percent used financing for building enclosure improvements, such as roofs, insulation, windows and seals; 29 percent reviewed onsite renewable energy investments with external financing.

Overall, sustainable buildings are gaining traction among European facilities, with 32 percent of respondents having certified at least one green building and an additional 22 percent having incorporated green building elements.

Johnson Controls released the European EEI survey results during the second annual Energy Efficiency Forum, which focused on the steps necessary to achieve European Climate and Energy objectives, which include a 20 percent reduction in greenhouse gas emissions and a 20 percent increase in energy savings by 2020. The survey is managed by the Institute for Building Efficiency, a Johnson Controls initiative.

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3 thoughts on “Energy Efficiency a Top Strategy For European Businesses

  1. If these are significant orgs – why bother looking for outside financing, energy efficiency is supposed to have a fast payback – why not just finance it internally. Something not quite right here.

  2. @Mike – The ‘something that is not quite right’ is embedded within the corporate cultures of the comanies involved. And in the beliefs and attitudes exhibited by their leadership.

    Companies just don’t choose to invest in something if the payback, as calculated using strictly financial measures, is longer than about 3 or 4 years. Management generally has no longer term outlook than that. Since paybacks for many conservation actions are often longer, management decides not to pursue them. That is the plain truth. And until society begins to charge a financial price for the external impacts of CO2 emissions, companies will continue to make short-term choices based on their well-worn financial metrics.

  3. And the question of internal vs. external funding worsens this picture still further. Companies that have no internal funding readily available for efficiency improvements (and this includes most companies) might try to seek outside funding. But outside funding imposes even higher costs – interest on the loan, for example. So when considering external funding, the financial payback period stretches even farther into the future, and the project is even less likely to get a go-ahead.

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